Class Action Trends Report Summer 2020

Employers continue to grapple with an ongoing, unprecedented public health crisis caused by the COVID-19 pandemic and its after-effects, which have profoundly disrupted the nation’s economy and U.S. workplaces. In this issue, attorneys in the Class Actions & Complex Litigation Practice Group discuss the most pressing workplace class action litigation risks arising from the COVID-19 pandemic and how best to minimize them.

Topics addressed in this issue include:

  • Disability leave and related challenges
  • Wage hour pitfalls
  • WARN Act suits
  • COBRA notice actions
  • Other issues related to the pandemic

Click here to download the full report.

Universities Sued for Closing Campuses Amidst COVID-19 Crisis

As of early this week, nearly 70 class actions have been filed by students against colleges and universities challenging their institutions’ responses to the COVID-19 crisis. The students argue they are entitled to refunds because the institution failed to provide them with all the benefits of an on-campus education for which they paid. These putative class action lawsuits generally allege: (i) the students paid for amenities such as room and board, dining plans, and access to facilities, which they cannot receive because they are not on campus; (ii) the quality of their education has been lessened by the forced, online curricula because studies show that students learn better in classrooms than online and because they are unable to gain the benefit of personal connections with faculty and classmates; (iii) their degree will be less valuable to them in the marketplace because a degree from an online program is not as valuable as a degree from an in-person program.

To read more about these cases, including potential defenses, please click here.

Jackson Lewis’ team dedicated to defending these claims for higher education clients nationwide consists of members from the Class Actions and Complex Litigation and Higher Education Groups. Our team includes seasoned class action litigators, as well as higher education attorneys with decades of experience defending claims brought by students against colleges and universities. If you have any questions, please reach out for more information.

Class Action Suit Claims ADA Requires Public Accommodation to Prevent Spread of COVID-19 at Facility

Despite significant legal obstacles, on May 4, 2020, a group of plaintiffs filed a class action complaint alleging the Queens Adult Care Center (QACC) violated Title III of the Americans with Disabilities Act (Title III) and its precursor, Section 504 of Rehabilitation Act (Section 504), by failing to provide a level of care to safeguard their health and safety at its assisted living facility during the COVID-19 pandemic.

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

In Wave of Opinions, Court Rejects ADA Requirement for Braille Gift Cards

On Friday, April 23, 2020, Judge Gregory Woods of the Southern District of New York issued a first of its kind decision rejecting the argument that ADA Title III requires business that offer gift cards to also offer them in Braille. Dominguez v. Banana Republic, LLC, 1:19-cv-10171-GHW (S.D.N.Y. April 23, 2020).  The decision is the first in almost 250 nearly identical cases filed in the Southern and Eastern Districts of New York since the fourth quarter of 2019, and may be persuasive authority for other judges faced with similar claims. In the past few days, Judge Woods dismissed half a dozen Braille gift card cases based on the same legal theory, explaining that there are “virtually no difference[s]” between the cases, dismissing the claims “for all of the reasons identified in Banana Republic.”

Please find the rest of this article on our Disability, Leave & Health Management Blog here.

Ninth Circuit: FCRA Does Not Require Disclosure to be Distinct in Time from Other Employment Documents

The Ninth Circuit recognized that plaintiff’s argument was novel but was thwarted by the statute itself.  Plaintiff below, argued on behalf of a class, that the company violated the Fair Credit Reporting Act (FCRA) by presenting the FCRA disclosure at the same time the company presented other separate documents.  The District Court granted summary judgment and the Ninth Circuit affirmed. Luna v. Hansen and Adkins Auto Transport, Inc., No. 18-55804 (9th Cir. Apr. 24, 2020).

The FCRA does not allow procurement of a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing to the consumer . . . in a document that consists solely of the disclosure.” 15 U.S.C. §1681b(b)(2)(A)(i).

A former employee of a vehicle transportation business received a Commercial Driver Employment Application. This application was a multi-form, multi-page document that included notices and authorizations permitting the company to retrieve safety history and driving records and to conduct drug and background checks. Job applicants signed two documents related to consumer reports. First, the disclosure document appeared on a separate sheet of paper and informed applicants, “[R]eports verifying [applicant’s] previous employment, previous drug and alcohol test results, and [applicant’s] driving record may be obtained on [applicant] for employment purposes.” The second document, the authorization, indicated that an applicant’s signature authorized the company or their subsidiaries or agents to “investigate [applicant’s] previous record of employment.” The authorization appeared at the end of the application and included other notices, waivers, and agreements that were not related to obtaining the consumer report.

The plaintiff filed a putative class action alleging the company’s hiring process violated disclosure and authorization requirements of the FCRA. The plaintiff alleged that because the disclosure was provided together with other application materials, the FCRA was violated. The Ninth Circuit disagreed, finding this argument “stretches the statute’s requirements beyond the limits of law and common sense.”

Further, while acknowledging a disclosure form cannot contain anything other than the disclosure itself, the Court held that no authority suggests that a disclosure must be distinct in time as well. The Court stated that if they were to accept the plaintiff’s argument that a FCRA disclosure cannot be presented together with other employment documents, “it is difficult to see how an employer could ever provide an applicant written application materials without violating FCRA’s standalone document requirement.”

As FCRA class action lawsuits continue to be filed at an increasing rate, the decision is worth a close reading by employers grappling with complying with the highly technical statute. Jackson Lewis attorneys are available to assist employers with their compliance efforts.

Fifth Circuit: Arbitrator Properly Interpreted Arbitration Agreement to Allow for Collective Claims

Consistent with the terms of the arbitration agreement at issue, an hourly fuel tech and driver is entitled to arbitrate collective claims alleging that his employer violated the Fair Labor Standards Act (FLSA), the federal appeals court in New Orleans has ruled.  Sun Coast Resources Inc. v. Roy Conrad, No. 19-20058 (5th Cir. Apr. 16, 2020). This decision highlights the critical need for employers to ensure careful drafting of arbitration agreements.

In this case, pursuant to an arbitration agreement, the plaintiff brought his FLSA overtime claim in arbitration on behalf of a class of similarly situated employees. In a clause construction award, the arbitrator determined “the agreement . . . clearly provides for collective actions.” Sun Coast asked the district court to vacate the award. The district court declined to vacate the award, determining that the arbitrator had not exceeded his powers in interpreting the agreement.

On appeal to the Fifth Circuit, the Court determined that in this instance, the breadth of the agreement and the authorization of “all remedies which might be available in court,” paired with the fact that the employer failed to “carve out” class proceedings suggested that class arbitration was appropriate. The Court said the arbitrator also noted that the parties agreed the American Arbitration Association (AAA) rules for employment disputes would govern arbitration, which permit class proceedings.

The employer’s principal argument was that the arbitration agreement’s terms did not expressly provide for collective proceedings.  As a result, there could be no class arbitration. The Court noted that Sun Coast did not dispute the arbitrator’s authority to decide class arbitrability at any time during the arbitration proceedings. To the contrary, the company stated in its arbitration briefing that the only issue was whether the parties “agreed to authorize” collective arbitration in the first place. Additionally, this authority was not timely challenged before the district court. The Fifth Circuit affirmed the district court’s determination.

If you have questions or if you require assistance in reviewing your arbitration agreements, please contact a Jackson Lewis attorney.

FLSA Collective Action Trimmed Because Court Lacked Specific Jurisdiction

A Minnesota federal district court recently denied FLSA conditional certification over the claims of workers who were not assigned to a Minnesota project at issue or not Minnesota residents due to specific jurisdiction considerations. Vallone et al. v. The CJS Solutions Group, LLC, No. 19-1532 (D. Minn. Feb. 5, 2020).

The court based its decision on a 2017 U.S. Supreme Court decision that held that due process requires a court to have specific jurisdiction over a defendant in a mass action only if the action arises out of or relates to that defendant’s contacts with the forum.

The plaintiffs in Vallone assisted physicians, nurses, and others with transitioning to new computerized patient-management systems in hospitals and other health care facilities nationally. The defendant-company is headquartered and has its principal place of business in Florida. The named plaintiffs traveled to facilities in Minnesota and hospitals in Missouri and New York. The plaintiffs claimed the company did not lawfully pay them for time spent traveling from remote locations to worksites during the workday or for a cancelled day of training for the Minnesota project that required some workers to travel to Minnesota.

The plaintiffs sought conditional certification of “all hourly paid, non-exempt, W-2 employees … whose time was neither paid under the [FLSA]” (1) while engaging in travel wherein the travel was undertaken during the employee’s normal working hours; or (2) for the cancelled training day in Minnesota for workers who did not live in the area.

The defendant-company argued, under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), that the District of Minnesota Court lacked specific jurisdiction over the company as to any putative plaintiff who worked outside the state of Minnesota. Because the plaintiffs in an FLSA collective action must opt-in to be included in a lawsuit, similar to a mass action, the opt-in plaintiffs’ claims establish the underlying controversy against the defendant, the court in Vallone reasoned. The court held that only if the claims arise out of or relate to the defendant’s contacts with Minnesota can it constitutionally exercise jurisdiction over the defendant.

Many courts are applying Bristol-Myers in the FLSA collective action context. Defendants in such actions should consider whether a potential collective may be limited at the conditional certification stage or earlier. Moreover, they should evaluate whether narrowing the size of the collective is possible right away so that they may properly raise the defense in their responsive pleadings. Please contact a Jackson Lewis attorney with any questions.

Seventh Circuit Denies Full Court Review of Class Notice Question

The U.S. Court of Appeals for the Seventh Circuit has denied en banc review of a ruling that created a new framework for when employees who have entered into arbitration agreements receive collective action notices.

Earlier this year, in a case of first impression, the Seventh Circuit developed a required framework for a district court to evaluate a plaintiff’s request that the court authorize notice to putative class members who have entered into arbitration agreements with their employer.  The Seventh Circuit vacated the district court’s order issuing notice and remanded for the lower court to apply the new standard. (A detailed summary of this ruling can be accessed here)

We will be watching closely to evaluate how the district court in this case and other cases applies the Seventh Circuit’s new framework. Please contact a Jackson Lewis attorney with any questions about this case.

Two More Significant Rulings for TCPA Litigation – Eleventh and Seventh Circuits Narrowly Interpret ATDS

In back-to-back decisions bound to have significant impact on Telephone Consumer Protection Act (TCPA) class action litigation, the Eleventh and Seventh Circuit Courts recently reached similar conclusions, narrowly holding that the TCPA’s definition of Automatic Telephone Dialing System (ATDS) only includes equipment that is capable of storing or producing numbers using a “random or sequential” number generator, excluding most “smartphone age” dialers. Each court expressly rejected the Ninth Circuit’s more expansive interpretation from a ruling in 2018, concluding that the TCPA covers any dialer that calls from a stored list of numbers “automatically”. These decisions are significant as most technologies in use today only dial numbers from predetermined lists of numbers.

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