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/.

Class Action Trends Report Spring 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:

  • Who gets notice of a collective action – and why it matters
  • Arbitration agreements
  • Considerations regarding whether to adopt or continue an arbitration program
  • Recent court decisions and other class action developments
  • Jackson Lewis’ biometric privacy team

Click here to download the most recent issue.

Snooze and Lose: Defendants Need to Raise Plaintiffs’ Failure to File Charge Early in Litigation

The requirement under Title VII of the Civil Rights Act that a complainant file a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) prior to filing suit in federal court is a prudential, claim-processing rule that does not determine whether a court has subject-matter jurisdiction over the dispute, the U.S. Supreme Court has held in a unanimous ruling. Click here to access our article discussing this.

County in PA Faces up to $68 Million in Privacy Related Damages

No industry or sector is immune to privacy or security issues.  This week a jury in a district court in Pennsylvania awarded $1,000 to each of the 68,000 class members who claimed that Bucks County, a county just outside Philadelphia, and several other municipal entities, violated state law by making their criminal records public, in Taha v Bucks County. Bucks County potentially faces up to $68 million in damages. Click here to access our Workplace Privacy, Data Management & Security Report discussing this important issue.

Federal Law Preempts California’s Meal and Rest Break Laws for Commercial Drivers

Judge George H. Wu of the United States District Court for the Central District of California recently dismissed meal and rest break claims brought under the California Labor Code in a class action against motor carrier U.S. Xpress.

Click here to access our California Workplace Law blog discussing this important issue.

California’s “ABC” Test for Independent Contractor Analysis to be Applied Retroactively

California employers were dealt another setback in the responding to claims of misclassification of independent contractor status for violations of the Industrial Welfare Commission Wage Order (“IWC Wage Orders”). Noting California’s “basic legal tradition” that “judicial decisions are given retroactive effect,” the U.S. Court of Appeals for the Ninth Circuit has held that the State’s recently-adopted “ABC” test, used in the employee-versus-independent contractor analysis in cases involving IWC Wage Orders, must be applied retroactively. Vazquez v. Jan-Pro Franchising Int’l, Inc., 2019 U.S. App. LEXIS 13237 (9th Cir. May 2, 2019). In so holding, the Court of Appeals reversed the grant of summary judgment to an international janitorial franchising company in a class action lawsuit brought by several franchisees, claiming that they are in fact employees of the franchising company.

Click here to access our article discussing this recent decision.

Older Applicants Cannot Utilize ADEA to Challenge Neutral Hiring Criteria, Seventh Circuit Rules

The Age Discrimination in Employment Act does not permit non-employees to bring claims under a disparate impact theory, the Seventh Circuit has ruled. Kleber v. CareFusion Corp. (7th Cir. Jan. 23, 2019). Accordingly, in Illinois, Indiana, and Wisconsin, job applicants will not be able to challenge hiring decisions that are neutral, but which disproportionately exclude job applicants over 40.

Divergence of ADEA from Title VII
Title VII was enacted in 1964 and the ADEA was enacted in 1967. For approximately 25 years, courts generally treated standards of proof under the ADEA and Title VII as interchangeable. Thus, the Supreme Court’s 1971 Title VII ruling in Griggs v. Duke Power Co. also applied to ADEA claims. The Court found a cause of action in Title VII for non-intentional disparate impact where neutral “practices that are fair in form, but discriminatory in operation.”

That began to change for ADEA plaintiffs in 1993, when the Supreme Court, in Hazen Paper Co. v. Biggins, cast doubt on whether the ADEA permitted any disparate impact claims. Finally, in 2009, the Supreme Court, in Gross v. FBL Financial Services, Inc., ruled that unlike Title VII, ADEA disparate treatment plaintiffs face a “but-for” standard to establish discrimination.

Facts and Procedural History
After Dale Kleber, then 58, was not hired for a senior in-house position at CareFusion’s law department, he filed an ADEA lawsuit. The job description required applicants to have three to seven years’ legal experience. Kleber had more than seven years’ of relevant experience. One of Kleber’s claims was that CareFusion’s maximum experience requirement had a disparate impact on him, an older attorney. The district court dismissed Kleber’s disparate impact claim. On appeal, a three-judge panel reversed the dismissal. The Seventh Circuit then granted en banc review.

Opinion
The eight-judge majority focused on the plain language of Section 4(a)(2) of the ADEA, which makes it unlawful for an employer “to limit, segregate or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s age.” In light of “any individual” being surrounded by “employees,” the Court said the essential meaning of Section 4(a)(2) was that it protected employees only. The Court also drew distinctions between the text of the ADEA and that of Title VII (which does permit applicants to bring disparate impact claims).

There were two separate dissenting opinions among four dissenting judges.

Petition for Supreme Court Review
Kleber has recently filed a petition for writ of certiorari in which he has asked the U.S. Supreme Court to review the Seventh Circuit’s decision.  In his petition, Kleber relies extensively on the Supreme Court’s 1971 opinion in Griggs, arguing that the Seventh Circuit’s interpretation of the ADEA conflicts with the Griggs Court’s interpretation of “identical” language in Title VII as permitting disparate impact claims by job applicants under that statute.  In addition, Kleber also argues in his petition that the Seventh Circuit’s holding thwarts the ADEA’s fundamental purpose of eliminating age-based discrimination in the workplace.

Implications
The Seventh Circuit joins the Eleventh Circuit in ruling that the ADEA does not provide disparate impact protections for job applicants.  It remains to be seen if the Supreme Court will accept Kleber’s petition for writ of certiorari and resolve this developing circuit split.

Regardless, ADEA disparate impact plaintiffs already face other challenges in such claims. Unlike race and gender, employers are less likely to collect age information from applicants. Without readily available age information about an employer’s applicant pool, ADEA plaintiffs are forced to use alternative sources of information about the availability of workers over 40.

U.S. Supreme Court: Employment Class Arbitration Must Be Expressly Addressed in Contract

Class action arbitration is such a departure from ordinary, bilateral arbitration of individual disputes that courts may compel class action arbitration only where the parties expressly declare their intention to be bound by such actions in their arbitration agreement, the U.S. Supreme Court has ruled in a 5-4 decision. Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019). The Supreme Court said, “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis.”

Please click here to access our article discussing this recent decision.

Bill Which Would Expand the CCPA Private Right of Action Moves Forward

As we reported, in late February, California Attorney General Xavier Becerra and Senator Hannah-Beth Jackson introduced Senate Bill 561, legislation intended to strengthen and clarify the California Consumer Privacy Act (CCPA). This week, the Senate Judiciary Committee referred the bill to the Senate Appropriations Committee by a vote of 6-2. This move came despite concerns raised about the scope of the amendment’s expanded private right of action. It is worth noting that a restricted private right of action is believed to have been fundamental to the compromise that led to the CCPA becoming law.

Please click here to access our Workplace Privacy, Data Management & Security Report blog discussing this important issue.

Illinois BIPA Defendants May Soon Be Getting Relief

Many businesses currently are defending a wave of class action lawsuits filed under the Illinois’ Biometric Information Privacy Act, popularly known as “BIPA” ).  The floodgates to litigation were opened earlier this year when the Illinois Supreme Court ruled that individuals need not allege actual injury or adverse effect, beyond a violation of his/her rights under BIPA, in order to qualify as an “aggrieved” person and be entitled to seek liquidated damages, attorneys’ fees and costs, and injunctive relief under the Act.  Potential damages are substantial as the BIPA provides for statutory damages of $1,000 per negligent violation or $5,000 per intentional or reckless violation of the Act. The majority of BIPA suits have been brought as class actions seeking statutory damages on behalf of each individual affected, exposing businesses to potentially crushing damages.

Please click here to access our Workplace Privacy, Data Management & Security Report blog discussing this important issue.

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