Articles Posted in Class actions

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Last week the U.S. House of Representatives passed a bill called the “Fairness in Class Action Litigation Act of 2017.” This bill would significantly weaken workers’ ability to band together and bring class actions. Some have argued that it would essentially eliminate certain types of class actions.

Class actions are a far more effective way to hold companies fully accountable for widespread violations of workers’ rights than individual actions. When companies commit widespread violations of workers’ rights, individual cases are inadequate to fix the problem. In an individual case, the company can compensate the one victim who sued, claim that the victim’s case is an isolated incident, and continue to engage in widespread violations of workers’ rights. Class actions seek compensation for all workers that a company harmed through its systemic or widespread rights violations. Class actions, unlike individual actions, can force companies to make systemic changes to prevent future violations of workers’ rights.

The bill that the House passed does many things to undermine workers’ ability to bring class actions. One of the most egregious provisions of the bill relates to the burden on classes of workers to prove that they basically all suffered identical harms in order to pursue a class action. The bill says that the workers who represent the class must have suffered the “same type and scope of injury” as all workers in the proposed class. This is a huge barrier to class actions.

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Last week, a settlement was announced in the class action lawsuit against Uber covering its drivers in California and Massachusetts.  The lawsuit centered around the issue of whether the law required Uber to classify its drivers as employees instead of independent contractors.  Uber and the law firm representing the drivers have issued statements describing the terms of the settlement.

Due to the settlement, the legal classification of Uber drivers is still unresolved.  Indeed, there is still a case wending its way through the California court system on this issue.  Nevertheless, the settlement, if the court approves it, will produce some significant changes at Uber.

The issue of whether a worker is an independent contractor or employee oftentimes boils down to how much control the company has over the worker.  Some of the reforms that Uber has agreed to in the settlement seem to push Uber drivers closer to the definition of independent contractors, including an agreement that Uber will no longer deactivate drivers because they choose not to accept riders.  This will give Uber drivers more control over rides they accept.  They will be able to decide, for instance, to only pick up riders who want to go certain places.  That way, if a driver wants to start making their way home at the end of the day, they won’t have to accept a rider that wants to go in the opposite direction of the driver’s home.

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This week a court in California ruled against the car ride service provider Uber in a class action regarding its classification of drivers as independent contractors.  Some Uber drivers filed the class action because they believe Uber should have classified them as employees, which would entitle them to benefits such as expenses they incurred while discharging their duties and more of the tips that customers paid for the drivers’ services.  In the court’s order, it certified the class and, thus, held that the case could proceed as a class action.

The attorneys representing the class of drivers originally wanted to bring the case as a nationwide class action.  However, the court limited the case to just drivers in California.  The class was also limited by Uber’s practice of asking drivers to agree to arbitration agreements that prohibit them from participating in a class action.  Uber drivers in California began to agree to those arbitration agreements in June 2014.  So, California Uber drivers who have driven for Uber since June 2014 and did not opt-out of the arbitration agreement are not part of the class.  Those drivers would need to bring their own claims in arbitration.  The firm representing the class, however, is also offering to represent these drivers in arbitration.

One of the lawyers representing the class of drivers, Shannon Liss-Riordan, said that the class certification order “will allow thousands of Uber drivers to participate in this case to challenge their misclassifications as independent contractors, as well as to attempt to recover the tips that Uber advertised to customers are included in the fare, but are not in fact distributed to the drivers.” 

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Earlier this month, the U.S. Fourth Circuit Court of Appeals, in Virginia, held that a race discrimination class action against Nucor Corporation could proceed. This decision marked the second time that this appellate court has reversed the trial judge’s decision not to let the class action proceed.

The case centers around a plant in South Carolina where workers melt, form, finish, and ship steel products to customers. The plaintiffs represent a class of black employees at that plant. Before the plaintiffs initiated legal action, the plant had 611 employees; 71 of those 611 employees were black but only one supervisor in the entire plant was black.

The plaintiffs have alleged that systemic discrimination existed at the plant that (a) worked to deprive them of equal opportunities for promotions and (b) led to a hostile work environment. The trial judge decided to let the hostile work environment claim go forward as a class action but had refused to permit the promotion claim to go forward. The Fourth Circuit considered the statistical evidence that the plaintiffs presented as well as anecdotal evidence of discrimination against black workers at the plant. The Fourth Circuit held that this anecdotal evidence not only supported the hostile work environment claim but also supported the promotions claim. Some of this anecdotal evidence was as follows:

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Earlier this year, a federal appeals court in the Midwest issued a decision that allowed an employer to potentially escape liability for illegally depriving its employees of wages.  The case involved a chain of restaurants called Gusano’s Pizza that allegedly used an illegal tip pooling scheme to deprive employees of lawfully earned wages.

A group of former employees filed the case against Gusano’s as a “collective action” under the federal Fair Labor Standards Act (FLSA).  In a FLSA collective action, workers must express their desire to join the case as a plaintiff, which is sometimes called “opting in” to the case.  This “collective action” procedure differs from a traditional class action.  In a traditional class action courts presume that workers want to be part of the case unless the workers express their desire to “opt out.”  FLSA does not allow workers to bring a traditional “opt out” class action; they must use the “opt in” collective action procedure in order to band together in a case against the employer.

After the former employees filed their FLSA lawsuit against Gusano’s, the restaurant chain made its employees enter into an arbitration agreement that required the employees to bring FLSA claims in arbitration.  Unless a Gusano’s employee openly defied the wishes of his employer and refused to agree to this arbitration agreement, he could no longer opt in to the former employees’ collective action because the agreement required him to bring his wage theft claims in arbitration.

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This week, protesters in the Chicago-area community of Forest Park reportedly decried racial discrimination against African Americans in hiring at Ferrara Candy.  Ferrara Candy makes candies such as Red Hots and Lemonheads.  The company and two staffing agencies it uses have been accused of discriminating against African American laborers in favor of Latino laborers.

There is a pending class action lawsuit against Ferrara and these two staffing agencies.  A federal judge rebuffed the companies’ motion to dismiss the class action lawsuit this past July.  The plaintiffs in that class action have alleged that the vast majority of laborers sent to work at Ferrara from the two staffing agencies at issue were Latino.  The plaintiffs believe that Ferrara instructed the staffing companies to send them only Latino laborers to work in the Ferrara factory.  This would explain why, according to the plaintiffs, the staffing agencies recruit laborers primarily through Spanish-language media; and one of the staffing agencies conducts employee orientations in Spanish.  Some Latino witnesses have also stated that where they work at Ferrara all of the employees are Latino.

“Ferrara Candy makes millions of dollars, particularly in the Halloween season, on the folks in this community.  We want them to ensure the people who make their candy in this community are the folks that actually live in this community,” said Elce Redmond, organizer with the South Austin Coalition Community Council. About 32% of the population of Forest Park is African American.

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The Mexican American Legal Defense and Education Fund (MALDEF) and a private law firm represent Ruben Juarez in a first-of-a-kind lawsuit against Northwestern Mutual, an insurance company.  Mr. Juarez was brought to the United States illegally as a child.  However, he has a work permit, a social security number, and he is authorized to live and work in the United States under a program called the Deferred Action for Childhood Arrivals (DACA) law, which is an executive order.  Despite the fact that Mr. Suarez was legally authorized to work in the United States, Northwestern Mutual allegedly refused to hire him because he is not a U.S. citizen and he does not have a “green card.”

In the lawsuit filed against Northwestern Mutual, Mr. Juarez’s attorneys have expressed that they intend to pursue the case as a class action on behalf of persons who are legally authorized to work in the United States, but who were denied the right to work by Northwestern Mutual at any time since July 9, 2010, because they are not citizens or permanent residents (“green card” holders).

Victor Viramontes, of MALDEF, said, “this lawsuit should serve as a warning that employers cannot pick and choose which verification documents or residency histories they will accept from prospective employees who are otherwise excellent employment candidates and meet their obligations under the law.”

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Yesterday, the U.S. Supreme Court refused to hear an appeal from Merrill Lynch over a race discrimination class action that a class of black stockbrokers filed against it. We previously reported on this case on February 24, 2012 when the Seventh Circuit Court of Appeals ruled against Merrill Lynch. Now that the Supreme Court has refused to hear Merrill Lynch’s appeal, the case will return to the trial court where it will be determined whether Merrill Lynch actually engaged in the racially discriminatory practices the class has alleged occurred.

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A group of black United Airlines employees have sued the company for race discrimination. The employees allege that United Airlines utilizes uncontrolled subjective criteria to select applicants for promotions. The suit also alleges that United operates two tracks for the promotion of employees — one for minorities and one for non-minorities. These practices allegedly work to disproportionately deprive promotions to black employees.

“We have endured a habitual, longstanding pattern of discriminatory behavior at the hands of United Air Lines,” Terry Haynie, a United pilot said in a statement. United denies that it has discriminated against the plaintiffs and says it plans to fight the lawsuit.

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Today, the First Circuit Court of Appeals, the federal appeals court that covers Maine and other New England states, held that a class action against the Caritas Christi hospital network could go forward. The plaintiffs in the case allege that Caritas failed to pay them, and employees like them, for work performed during meal breaks, for work performed before and after shifts, and for time spent at training sessions.

Caritas successfully persuaded the trial judge to dismiss the lawsuit because it argued that the complaint the plaintiffs filed was not detailed enough. The First Circuit rejected this argument recognizing that in this case, like most employment cases, the employer likely possessed information that the plaintiffs will need to prove their case. The court also recognized that it is sometimes difficult for plaintiffs to predict what facts a judge will find essential to a valid complaint. So, the court advised the trial judge, when the case comes back before him, to provide the plaintiffs an explanation of what information must be added to the complaint.

This case is an example of a growing trend. Employers have increasingly tried to get cases against them thrown out on technicalities rather than fighting them on the merits. If you have an employment case, you should seek representation from an experienced employment lawyer who is familiar with these tactics and has experience fighting them.