Ninth Circuit Hears Oral Argument in Gender Bias Case

Whether a gender bias case can proceed as a class action is the question the U.S. Court of Appeals for the Ninth Circuit, in San Francisco, will decide.

The Court heard oral argument in Moussouris v. Microsoft Corp. on November 4. Katherine Moussouris appealed from the District Court’s denial of class certification in the gender discrimination action. U.S. District Judge James Robart of the Western District of Washington held that the proposed putative class members were not shown to be victims of a standard companywide policy. To the contrary, his order from June 25, 2018, holds:

Plaintiffs challenge Microsoft’s policy of allowing discretion by lower-level managers but have not identified a common mode of exercising discretion that pervades the entire company. As in Dukes, without some common direction, it is “quite unbelievable” that all Microsoft managers supervising over 8,600 putative class members “would exercise their discretion in a common way.”

The three-judge panel that heard the oral argument on appeal consisted of Circuit Judges Richard Paez and Johnnie Rawlinson and District Judge Leslie Kobayashi (sitting by designation). Moussouris’s counsel argued the District Court erred in denying class certification, claiming that women were locked into lower pay bands than men, and therefore often were paid less than their male counterparts even where they performed at an equal or higher level. Moussouris’s counsel also argued that employees were placed into peer groups composed of employees with similar skillsets, that each peer group had two pay bands, and that women were disproportionately concentrated in the lower pay bands of each peer group.

The judges, particularly Judge Rawlinson, repeatedly queried Moussouris’s counsel to point out the specific Microsoft corporate policy that allowed women to be placed in lower pay bands than men. Judge Paez also asked Moussouris’s counsel for the specific factors that were taken into consideration when evaluating members of each peer group, and whether these evaluations were discretionary. Moussouris’s counsel replied that while there was managerial discretion in evaluating employee performance, managers were restricted by the pay bands that employees were already locked into under corporate policy when determining how much to pay them. Judge Rawlinson repeatedly stated that she was “having a disconnect” because while she didn’t “necessarily disagree that the statistics are there, [] Dukes tells us that there has to be a policy that has resulted in that disparity that we can say applies across the board to every decision that’s made.” Despite asking several times to point to the specific policy Moussouris was challenging, her counsel did not appear to convince Judge Rawlinson of any specific policy in the record.

Counsel for Microsoft argued that, rather than a corporate policy in place, all decisions were made according to a calibration process in which managers would use their discretion to assess an employee’s relative contributions. Microsoft’s counsel argued that Moussouris’s own expert noted that these calibrations were extraordinarily varied and involved extensive managerial discretion. Microsoft’s counsel also pointed out that the alleged policy at issue seemed to change over time and that the current theory espoused by Mourssouris’s counsel was first introduced to the lower court at the hearing on her Motion for Certification and that the record lacked support for what Microsoft argued was the new theory of the putative class. Moreover, Microsoft’s counsel reiterated the difficult standard Moussouris was required to overcome on appeal: a clear abuse of discretion by the District Court in applying the Rule 23 criteria, and that Judge Robart’s decision contained neither an error of law or fact and that he did not abuse his discretion.

The questioning suggested that, without pinpointing a precise companywide policy that perpetuated discrimination, overturning the denial of class certification will be difficult. As this case relied heavily on the Dukes decision, we will be watching to determine whether the 9th Circuit differentiates this case from Dukes or follows Justice Scalia’s opinion.

Illinois Continues to Increasingly Regulate AI in the Workplace

Illinois continues to adopt additional privacy and security legislation. The Prairie State is home to the Biometric Information Privacy Act, first of its kind legislation regulating the collection and possession of biometric information, and also the Personal Information Protection Act, considered one of the more expansive data breach notification laws in the nation. And now, the Illinois state legislature unanimously passed the Artificial Intelligence Video Interview Act (“the AIVI Act”), HB2557, which imposes consent, transparency and data destruction requirements on employers that implement AI technology during the job interview process. The AIVI Act, the first state law to regulate AI use in video interviews, will take effect January 1, 2020.

Given the increase in litigation surrounding similar legislation, employers will want to closely monitor this law.  Please find the rest of this article discussing this legislation in more detail on our Workplace Privacy, Data Management & Security Report here

Jackson Lewis Complex Class Action Summit – November 8th

Join Jackson Lewis P.C.’s Class Actions and Complex Litigation attorneys on November 8th for a full day CLE program where we will discuss key strategies for defending and avoiding class actions. We will also review new trends and challenges facing employers. Click here for a full list of topic descriptions.

Agenda:

8:30 — 9:00 a.m.                Registration and Breakfast

9:00 a.m. — 12:15 p.m.     Program

12:15 — 1:15 p.m.              Lunch

1:15 — 4:40 p.m.                Program

4:40 — 5:45 p.m.                Cocktail Reception

Topics:

  • TCPA, and BIPA, and CCPA, and Breaches Oh My! The Onslaught of Class Actions Designed to Protect Privacy
  • Website Accessibility Lawsuits: How to Protect Yourself from Serial Claims
  • #EqualPay: The Media is Drumming Up Business for the Plaintiffs’ Bar — Are You Ready?
  • Your “Second Chair” at Trial and it’s Always Right! Leveraging Data and Analytics to Defend Class and Collective Claims
  • Going on the Offensive: Strategic Use of e-Discovery in Class and Collective Actions
  • Wage and Hour Class and Collective Actions: What’s Old, What’s New and What’s Next
  • Will the Plaintiffs’ Bar Ever Give Up? Arbitration Agreements and Class Action Waivers after Epic Systems
  • Rules Are Made to be…Followed? Ethical Challenges in Class Litigation

Jackson Lewis reserves the right to limit attendance or deny registration at its discretion.

For information about the firm’s financial hardship policy, please email Adrienne.reiff@jacksonlewis.com

Contact Us for More Information

Please contact Brooke Cassens at Brooke.Cassens@Jacksonlewis.com.

Class Action Trends Report Summer 2019

Our quarterly report discusses new developments in class action litigation and offers strategic guidance and tactical tips on how to defend such claims. This issue covers the following topics:

  • Data privacy: The newest class action threat
  • California Consumer Privacy Act
  • The GDPR is the model
  • State consumer privacy and security laws likely to proliferate

Click here to download the most recent issue.

Eleventh Circuit Ruling May Impact TCPA Class Actions

Last week, the Eleventh Circuit ruled that a single unsolicited text message doesn’t meet the harm requirement necessary to proceed with a Telephone Consumer Protection Act (TCPA) claim.   The Eleventh Circuit ruling, Salcedo v. Hanna, reverses a decision by a lower court allowing the plaintiff to move forward with a TCPA claim on grounds that he received an unsolicited text message from his former attorney.

Please find the rest of this article on our Workplace Privacy, Data Management & Security Report here.

COBRA Notices Potentially Subject to Class Action Litigation if Not Complete

Recently in Florida, three separate class action lawsuits alleged that the employer’s Consolidated Omnibus Reconciliation Act (COBRA) notice did not comply with the Department of Labor regulation.

COBRA, an amendment to the Employee Retirement Income Security Act (“ERISA”), applies to employers with at least 20 employees on more than 50 percent of its typical business days in the previous calendar year who provide a group health plan.  COBRA requires the plan administrator to provide certain notices to plan participants, both upon initial enrollment in the plan and upon a qualifying event, such as a termination of employment or divorce, if that event results in the loss of health plan coverage or an increase in the premiums being charged to the individual.

In the most recent case, the spouse of a former employee of a technology company alleged that the COBRA notice they received failed to identify a termination date for the health care coverage, location of where payments should be sent, and name of the plan administrator.  In the suit, she sought to certify a class of the company’s Group Benefits Plan participants and requested statutory penalties of $110 to each participant or beneficiary per day that the company allegedly failed to comply with the notice requirements.

While this case and another case in Florida have settled, a third case with similar allegations remains pending.

The good news is that compliance with the COBRA notice requirements is straightforward.  The Department of Labor has available a model notice that employers should review for assistance in drafting their own notices.  Given the uptick in litigation surrounding these notices, strict compliance with the model notice is encouraged.

Georgia Supreme Court May Weigh in on Standing in Data Breach Litigation

The Georgia Supreme Court may weigh in on the hot issue plaguing data breach class action litigation across the nation, must a data breach victim suffer actual financial loss to recover damages, or is the threat of future harm enough? On August 20, the Georgia Supreme Court heard arguments in a class action suit stemming from a data breach in September 2017 at Athens Orthopedic, exposing 200,000 of its current and former patients’ personal information including names, addresses, social security numbers, dates of birth and telephone numbers. Upon discovery of the breach, Athens Orthopedic advised patients to place fraud alerts on their credit accounts and seek other advice.

Please find the rest of this article on our Workplace Privacy, Data Management & Security Report here.

Supreme Court’s Epic Systems Decision on Arbitration Interpreted Broadly by Labor Board

An employer may lawfully issue to its employees a new or revised mandatory arbitration agreement containing a class- and collective-action waiver specifying that employment disputes are to be resolved by individualized arbitration, even if it was in response to employees opting into a collective action (such as a wage lawsuit), the National Labor Relations Board (NLRB) has ruled. Cordúa Restaurants, Inc., 368 NLRB No. 43 (Aug. 14, 2019). The NLRB also concluded that the NLRA does not prohibit an employer from threatening to discharge an employee who refuses to sign such an agreement.

Please find the rest of this article on the Jackson Lewis Publications page here.

Personal Anecdotes and Perceived Disparity in the Workplace Insufficient to Certify a Class Action

A federal judge in Kentucky recently ruled that anecdotal accounts alone cannot support a class claim of discrimination without “substantial statistical evidence of company-wide discrimination.”  Freeman v. Delta Air Lines, No. 2:15-cv-160 (WOB-CJS) (E.D. Ky. June 14, 2019).

Federal District Judge William O. Bertelsman denied class certification to a putative class of six African-American part-time baggage handlers for Delta Airlines at the Cincinnati-Northern Kentucky International Airport (“CVG”). The plaintiffs alleged hostile work environment on the basis of racial harassment, race discrimination based on disparate impact and disparate treatment, and retaliation for complaining about discrimination and filing EEOC charges. They sought front and back pay, punitive damages, a declaratory judgment and a permanent injunction for roughly 36 part-time African-American “Ready-Reserve” baggage handlers, ground equipment maintenance workers, and ramp employees employed by Delta Airlines in Hebron, Kentucky.

The Court denied class certification because, among other things, the plaintiffs failed to provide adequate statistical evidence from the putative class over the class period to support their across-the-board theory of discrimination. “Plaintiffs have not directed the Court to a case where an employment discrimination class action was certified based solely on anecdotal evidence.”

The Court found that plaintiffs failed to establish several of the requirements for class certification, including class representative standing; commonality; typicality; and adequacy-of-representation.  Further, the Court stated it was not convinced that certification would be appropriate under either Rule 23(b)(2) or (b)(3). The Court held that Rule 23(b)(2) did not apply to these claims because each individual class member would be entitled to a different injunction or declaratory judgment against Delta. The Court also found plaintiffs failed to satisfy Rule 23(b)(3) as they did not show through reliable statistical evidence that they could produce a common answer to the crucial question of why each plaintiff was individually disfavored and because their allegations involved various managers who exercised discretion over six years. The Court was not impressed with plaintiffs’ statistics expert who only examined data for two of the six years requested by plaintiffs in the class period resulting in a meager sample size (14 and 11 disciplinary corrective actions in 2013 and 2014, respectively).

Ultimately, the Court found that mini-trials would be inevitable even if plaintiffs had presented probative statistical evidence to make a prima facie case of discrimination applicable to every class member. It also found that individual damages calculations would inevitably overwhelm questions common to the class, because the plaintiffs would not be able to prove damages on a class-wide basis. Therefore, the Court denied plaintiffs’ motion to certify the case as a class action.

Please contact Jackson Lewis with any questions about defending class or collective actions.

The Next Wave? Serial Discrimination Filings from Prior Class Claims

Notwithstanding the employers’ victory at the U.S. Supreme Court in Epic Systems Corp. v. Lewis, which made it clear that arbitration and class action waiver regimes do not violate the National Labor Relations Act, employers are now facing another obstacle: serial arbitration filings. These filings, in an attempt by some plaintiffs’ attorneys to overwhelm the system, are intended to pressure employers into waiving their arbitration agreement, as defending dozens or hundreds of individual arbitrations can be extremely expensive.  Indeed, some prominent plaintiffs’ firms are attempting to “staff up” their ranks in order to handle mass arbitrations.  We discuss this issue in greater detail in our Spring Class Action Trends Report.

While many employers are grappling with this phenomenon, the plaintiffs’ bar has recently extended this strategy beyond wage and hour cases into a new space: discrimination claims. In 2011, the U.S. Supreme Court rejected a nationwide suit alleging discrimination filed against Wal-Mart. Wal-Mart v. Dukes, 564 U.S. 338 (2011).  The named plaintiffs in Dukes, who sought to represent a putative class of approximately 1.5 million female employees, alleged the company discriminated against them on the basis of their sex by denying them equal pay or promotions in violation of Title VII. The U.S. District Court for the Northern District of California certified a national class of female employees challenging the pay and management promotion policies as discriminatory against women.  On June 20, 2011, the United States Supreme Court reversed the class certification order. The Court, in a 5-4 decision authored by the late Justice Antonin Scalia held, among other things, that certification of the class was not consistent with Rule 23.  Subsequently, Wal-Mart was sued in numerous class action lawsuits, none of which had class claims successfully advance other than in the Sixth Circuit (which, ultimately, was unsuccessful after the Supreme Court’s 2018 ruling in China Agritech v. Resh).¹

Now, in an attempt to make employers sorry for winning the Dukes case, plaintiffs’ attorneys have turned to filing serial individual discrimination suits against Wal-Mart.  In the past four months, Wal-Mart has been sued at least 18 times in individual pay bias lawsuits, alleging the same claims and brought by the same group of plaintiffs’ attorneys.  To date, the complaints alleging gender discrimination have been brought in eight states: Pennsylvania, Kentucky, Ohio, California, Virginia, Tennessee, West Virginia, and Florida. The complaints expressly state that the lawsuits “spring” from Dukes v. Wal-Mart, the national class action filed more than ten years ago.  According to Christine Webber, a civil rights lawyer and partner with Cohen Milstein Sellers & Toll in Washington, D.C., more are on the way.² Cohen Milstein Sellers & Toll previously worked on the Dukes class action and is coordinating the multiple state suits with local law firms. Corporate Counsel recently reported that preparations are under way for suits in five more states this year: Alabama, Iowa, Illinois, Mississippi and Texas.³

We will continue to monitor and report on this trend of serial filings within the discrimination arena (and other trends related to class actions). Please contact a Jackson Lewis attorney if you have any questions relating to this latest trend or any other employment law issues.

 

[1] Robert Iafolla and Paige Smith, Walmart Faces New Legal Battle From Old Pay Bias Claims, Bloomberg Law (May 24, 2019) available at: https://news.bloomberglaw.com/daily-labor-report/walmart-faces-new-legal-battle-from-old-pay-bias-claims

[2] Id.

[3] Sue Reisinger, Walmart Faces New Round of Gender Discrimination Suits Based on 2001 Dukes Complaint, Corporate Counsel (May 14, 2019) available at: https://www.law.com/corpcounsel/2019/05/14/walmart-faces-new-round-of-gender-discrimination-suits-based-on-2001-dukes-complaint/.

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