Annual Workplace Class Action Litigation Annual Report

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Annual
Workplace
Class Action
Annual
Litigation
Report
Workplace
2014 EDITION
Class Action
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Litigation
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2014 EDITION
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Important Disclaimer
Thematerial inthisreport is of thenature of general commentaryonly. It isnot offeredas legal
advice on anyspecificissue or matter and shouldnot betaken as such. The views expressed
are exclusivelythose of the authors. Theauthorsdisclaim anyand all liabilityto anypersonin
respect of anything andthe consequencesof anything doneor omittedtobe done whollyor
partlyin reliance uponthe contentsof thisreport. Readersshould refrainfrom acting onthe
basis of anydiscussion contained in this publication without obtaining specificlegaladvice on
the particularfactsand circumstancesat issue. Anysort of comprehensive legal advice on any
particular situationis beyond thescopeof thisreport. While theauthorshave made everyeffort
to provide accurateandup-to-dateinformationon laws, cases, andregulations, thesematters
are continuouslysubjectto change. Furthermore, theapplication of thelaws depends on the
particular facts andcircumstances of each situation, andthereforereaders should consult with
an attorneybeforetaking anyaction. Thispublication is designedtoprovide authoritative
informationrelative tothe subject matter covered. It isofferedwith the understanding that the
authorsarenot engagedin rendering legal advice or other professionalservices.
• From a Declaration of Principles jointlyadopted bya Committeeof theAmerican Bar
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AnnualWorkplaceClass Action Litigation Report: 2014 Edition
Seyfarth ShawLLP
SeyfarthShawLLP
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January2014
Dear Clients:
Thelast fewyears have seen an explosion in class action and collective action litigation
involving workplaceissues. This cametoa headin 2012 and2013 with several major class
action rulingsfrom theU.S. Supreme Court. Likewise, thepresent economic climate is likelyto
fuel even more lawsuits. The stakesin thesetypes of employment lawsuits can beextremely
significant, asthefinancial risks of such cases are enormous. More oftenthannot, class
actions adverselyaffect the market share of acorporation andimpact itsreputation inthe
marketplace. It is alegalexposure which keepscorporate counseland business executives
awake at night.
Defense of corporations in complex, high-stakesworkplace litigation is one of thehallmarksof
Seyfarth Shaw’s practice. Throughthat work, our attorneys areontheforefront of themyriad of
issues confronting employers in class action litigation.
In order toassist our clients in understanding andavoiding such litigation, we are pleased to
present the2014 Editionof the Seyfarth Shaw AnnualWorkplaceClass Action Litigation Report.
This edition, authoredbytheclass action attorneys in our Labor & Employment Department,
contains acircuit-by-circuit and state-by-statereviewof significant classaction rulingsrendered
in 2013, andanalyzes the most significant settlementsover the past twelve monthsin class
actions andcollective actions. Wehopethis Annual Report will assist our clients in
understanding class action and collective actionexposures andthe developing case lawunder
bothfederal andstatelaw.
Verytrulyyours,
J. Stephen Poor
Firm Managing Partner
Author’s Note
Our Annual Report analyzes the leading classaction and collective actiondecisions of 2013
involving claimsagainstemployers brought infederal courtsunderTitle VII of the Civil Rights
Act of 1964(“Title VII”), the AgeDiscrimination inEmployment Act (“ADEA”),the Fair Labor
StandardsAct (“FLSA”), the Employee Retirement IncomeSecurityAct (“ERISA”), anda host of
otherfederal statutes applicable to workplaceissues. The Report also analyzes class action
and collective action rulingsinvolving claims brought against employers in all 50 statecourt
systems, including decisions pertaining toemployment laws, wage & hour laws, and breach of
employment contract actions. Thekeyclass action and collective actionsettlementsover the
past year are alsoanalyzed, both intermsof gross settlement dollarsin private plaintiff and
government-initiatedlawsuits aswell as injunctive relief provisions in consent decrees. Finally,
the Report alsodiscusses important federal andstatecourt rulingsin non-workplace cases
which are significant intheir impact onthedefense of workplaceclass action litigation. Intotal,
thereare1,123decisions analyzed in the Report.
Thecasesdecided in 2013foreshadowthe direction of classaction litigation in thecoming year.
One certainconclusion is that employment lawclass action andcollective action litigation is
becoming ever moresophisticated andwill continue tobe asource of significant financial
exposure to employers well into thefuture. Employers also can expect that class action and
collective action lawsuits increasinglywill combine claims under multiple statutes, thereby
requiring thedefense bar tohave a cross-disciplinaryunderstanding of substantive employment
lawas well as the procedural peculiarities of opt-out classesunder Rule 23 of theFederal Rules
of Civil Procedure andthe opt-in proceduresin FLSA and ADEA collective actions.
Thisreport representsthe collective contributionsof a significant numberof our colleagues at
Seyfarth ShawLLP. Wewish to thank andacknowledgethose contributions byRichard L.
Alfred, Lorie Almon, Raymond C. Baldwin, BrettC. Bartlett, EdwardW.Bergmann, Daniel
Blouin, Rebecca Bromet,William M. Brown, Michael J. Burns, Robert J. Carty, Jr., Mark A.
Casciari, JohnL. Collins, Ariel Cudkowicz, Catherine M. Dacre, Joseph R. Damato, Christopher
J. DeGroff, Pamela Devata, Ada Dolph, AlexDrummond,William F. Dugan, Noah A. Finkel,
TimothyF. Haley, David D. Kadue, Lynn Kappelman, Raymond R. Kepner, Daniel B. Klein,
MaryKayKlimesh, Ronald J. Kramer, RichardB. Lapp, RichardP. McArdle, JonMeer, Ian H.
Morrison, Camille A. Olson, AndrewPaley, Katherine E. Perrelli, ThomasJ. Piskorski, George
E. Preonas, David Ross, JeffreyK. Ross, David J. Rowland, JeremySherman, Frederick T.
Smith, AmandaSonneborn, DianaTabacopoulos, Joseph S. Turner, Peter A.Walker, Timothy
M.Watson, Robert S.Whitman, and Kenwood C. Youmans.
Ourgoal isfor thisReport toguideclientsthroughthethicket of classaction and collective
action decisional law, and toenable corporate counsel tomakesoundand informed litigation
decisions while minimizing risk. Wehopethat youfindthe Seyfarth Shaw AnnualWorkplace
Class Action LitigationReport tobe useful.
Gerald L. Maatman, Jr./General Editor
Co-Chair, ClassAction LitigationPracticeGroupof
Seyfarth ShawLLP
January2014
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Guide To Citation Formats
As corporatecounsel utilize the Reportfor research, we have attemptedto citetheWest bound
volumes wherever possible (e.g., Scott, et al. v. Family Dollar Stores, Inc., 733 F.3d105(4th
Cir. 2013)). If adecision is unavailable in boundformat, we have utilized a LEXIS citefrom its
electronic database(e.g., EEOCv. Kaplan Higher Education Corp., 2013U.S. Dist. LEXIS
11722 (N.D. Ohio Jan. 28, 2013)), andif aLEXIScite isnot available, then toaWestlawcite
from its electronic database (e.g., Odle, et al. v.Wal-Mart Stores, Inc., 2013WL66035(N.D.
Tex. Jan. 7, 2013)). If aruling isnot containedinan electronicdatabase, thefull docketing
information is provided (e.g., Stargel, et al. v. Suntrust Banks, Inc., CaseNo. 12-CV-3822(N.D.
Ga. Aug. 7, 2013)).
Search Functionality
This Report isfullysearchable. Casenames, Rule 23terms, andclass action topics canbe
searched byselecting Edit andthen Find(or Ctrl+F), andthenbytyping in theword or phraseto
be searched, andthen either selecting Next or hitting Enter.
eBook Features
The2014WorkplaceClass ActionLitigation Report is also available as aneBook. The
downloaded eBook is accessible via freelyavailable eBook reader apps likeiBook, Kobo,
Aldiko, etc. The eBook provides a rich andimmersive reading experienceto theusers.
Some of the notablefeatures include:
1. TheeBook iscompletely searchable.
2. Users canincreaseor decreasethefont sizes.
3. Active links are set for the table of contentstotheir respective sections.
4. Bookmarking is offeredfor notable pages.
5. Readers candrag tonavigatethrough various pages.
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A Note On Class Action And Collective Action Terms
And Laws
ReferencesaremadetoRule 23 of theFederal Rules of Civil Procedure and 29 U.S.C. § 216(b)
throughout this Report. Thesearethetwo mainstatutorysourcesfor class actionand collective
action decisional law. Both are proceduraldevices used infederal courtsfor determining the
rights andremedies of litigants whose casesinvolve commonquestionsof lawandfact. The
following summaryprovides a brief overviewof Rule 23 and §216(b).
Class Action Terms
TheReport usestheterm classaction tomeananycivil case in which parties indicatedtheir
intent tosue onbehalf of themselves as well as others not specificallynamed in thesuit at some
point prior tothefinalresolution of thematter. This definition includes acase in which a class
was formallyapproved bya judge(a certified class action), as well as a putative class action, in
which a judgedenied amotionfor certification, inwhich a motionfor certification had been
made but adecision was still pending atthetimeof finalresolution, or in which noformal motion
had beenmade but other indications were present suggesting that classtreatment was a
distinct possibility(suchas a statement in acomplaint thatthe plaintiffs intendedto bring the
action on behalf of others similarly-situated).
Althoughcertified classactionsmayreceive considerable attentionif theyarereported publicly,
defendantsalsomust confront putative class actions that containthe potentialfor class
treatment asaresult of filing amotionfor certification or because of allegations in theoriginal
complaint that assert that the named plaintiffsseek torepresent otherssimilarly-situated. Even
if suchcasesarenever actuallycertified, thepossibilityof thelitigation expanding intoaformal
class actionraisesthestakessignificantly, perhaps requiring amoreaggressive (and costlier)
defense or resulting inasettlement on anindividual basis at a premium.
Rule 23
Rule 23governs classactions infederalcourts, and typicallyinvolves lawsuits that affect
potential classmembersin different states or that have a nexus with federal law. Rule 23
requires apartyseeking class certificationtosatisfythefour requirementsof section(a) of the
rule and at least oneof three conditionsof section (b) of therule. UnderU.S. SupremeCourt
precedent, adistrict court must undertakea“rigorous analysis of Rule 23prerequisites” before
certifying a class. General Telephone Co. of Southwest v. Falcon, 457U.S. 147, 161(1982).
More oftenthan not, plaintiffswill support their motionfor classcertification with deposition
testimony, declarations of putative classmembers, andexpert opinions intheform of affidavits
of expert witnesses. Courtsoften observe that the appropriate analysis inreviewing this
evidence is not equivalent to anexamination of the meritsor a battle between the parties’
experts. Rather, thesalient issueis whether plaintiffs’legaltheoriesandfactualmaterials
satisfytheRule 23requirements.
TheRule 23(a) requirements include:
• Numerosity–The individuals who would comprise theclassmust beso numerousthat
joinder of them all intothe lawsuit would be impracticable.
• Commonality–Theremust bequestions of lawandfact commontotheproposed class.
• Typicality– Theclaims or defenses of therepresentative partiesmust betypical of the
claims and defensesof putative classmembers.
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• Adequacyof Representation –Therepresentative plaintiffsandtheir counsel must be
capable of fairlyand adequatelyprotecting theinterestsof the class.
Thestandardsfor analyzing the commonalityrequirement of Rule 23(a)(2) were tightened in
2011 with the U.S. Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, et al., 131 S. Ct.
2541 (2011). Asaresult, a“common” issue is one that is“capable of class-wide resolution –
which meansthat determination of itstruth or falsitywill resolve an issue that is centraltothe
validityof each of the claims in onestroke.” Id. at 2551.
Once aplaintiff establishes thefour requirementsof Rule 23(a), heor shemust satisfyone of
thethreerequirements of Rule 23(b). Inpractice, a plaintiff typicallyestablishes theproprietyof
class certificationundereither Rule 23(b)(2) or Rule 23(b)(3) in an employment-relatedcase.
Because application of each rule depends onthenatureof theinjuries allegedandtherelief
sought, and imposesdifferent certificationstandards ontheclass,the differences between Rule
23(b)(2) and(b)(3) arecritical in employment-related class action litigation. Inthewords of the
rule, aclassmaybe certifiedunder Rule 23(b)(2) if the partyopposing theclass “hasacted or
refusedtoact ongroundsgenerallyapplicable tothe class, therebymaking appropriatefinal
injunctive relief or corresponding declaratoryrelief with respect totheclass as awhole.” In
other words, plaintiffs seeking tocertifyclass actions under Rule 23(b)(2) arerestrictedtothose
cases where theprimaryrelief sought is injunctive or declaratoryin nature. Rule 23(b)(2) does
not extendtocasesin which the appropriatefinalrelief relatesexclusivelyor predominantlyto
moneydamages. Rule 23(b)(2) providesfor abinding litigation order astoall classmembers
without guaranteesof personal noticeandthe opportunitytoopt-out of thesuit.
Rule 23(b)(3) isdesignedfor circumstancesin which class action treatment is not as clearly
calledfor as in Rule 23(b)(1) andRule 23(b)(2) situations, when aclass action may
nevertheless be convenient anddesirable. Aclass maybe certified under Rule 23(b)(3) if the
courtfindsthat questionsof lawor fact commonto themembers of the class predominateover
anyquestionsaffecting onlyindividual members,and that aclass action issuperior toother
available methodsfor thefair and efficient adjudication of the controversy. Pertinent
considerations includethe interest of themembers of theclassin individuallycontrolling the
prosecutionof separateactions; theextent and natureof anylitigationconcerning the
controversyalreadycommenced bymembersof the class; thedesirabilityof concentrating the
litigation of theclaims inone particular forum; andthedifficultieslikelytobe encountered inthe
management of a classaction.
Toqualifyfor certificationunder Rule 23(b)(3), therefore, a classmust meet not onlythe
requirementsof Rule 23(a), but alsotwo additional requirements: “(1) commonquestionsmust
predominateover anyquestions affecting onlyindividual members; and(2) classresolution
must besuperior toother available methodsfor thefair and efficient adjudication of the
controversy.” Amchem Products, Inc. v. Windsor, 521U.S. 591, 615(1997). Whilethe
commonquestion requirement of Rule 23(a)(2) and thepredominancerequirement of Rule
23(b)(3) overlap, thepredominancerequirement is morestringent thanthecommonquestion
requirement. Thus, even thougha casemaypresent commonquestions of lawor fact, those
questionsmaynot always predominateand classcertification would be inappropriate.
Rule 23(b)(3) applies tocases where theprimaryrelief sought ismoneydamages. The
SupremeCourt hasdetermined –in Ortizv. Fibreboard Corp., 527U.S. 815 (1999) –that unlike
in Rule 23(b)(2) class actions, eachclassmember in a Rule 23(b)(3) classactionfor money
damages isentitledas amatter of due processtopersonal noticeand anopportunitytoopt-out
of the classaction. Accordingly, Rule 23(c)(2)guaranteesthoserightsforeach member of a
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class certified under Rule 23(b)(3). There are nocomparable proceduralguaranteesfor class
members under Rule 23(b)(2).
29 U.S.C. § 216(b)
Thisstatutegovernsmulti-plaintiff lawsuits under the ADEA andtheFLSA. Generally, such
lawsuits areknown as collective actions (asopposed toclass actions).
Under 29 U.S.C. §216(b), courtsgenerallyrecognize that plaintiffs andother “non-party”
individuals maynot proceed collectivelyuntil theyestablishthat that theyshould be permittedto
do so asaclass. Under § 216(b), courtshave held that “similarly-situated” individuals may
proceed collectivelyas a class. Thefederal circuits have not agreed onthe standard according
to which such aclass should be certified. Two competing standardsfor certification are
recognized.
Thefirst approachadopts theviewthat the“similarly-situated” inquiryiscoextensive with the
procedureused inclassactions brought pursuant toRule 23. Using thismethodology, the court
analyzes the putative classfor factorsincluding numerosity, commonality, typicality, and
adequacyof representation. This typicallyoccurs after somediscoveryhas takenplace. This
approach isunusual andis notfavored.
Thesecond approachisa two-tieredapproachinvolving afirst stageconditioned certification
processand asecondstagepotential decertification process. It ismorecommonlyused andis
the prevailing test infederal courts. Inpractice, it tendsto bea“plaintiff-friendly” standard.
Inthe context of thefirst stage of conditional certification, plaintiffstypically movefor conditional
certification and permission tosend noticestoprospective classmembers. Thisgenerally
occursat an earlystageof the case, and oftenbeforediscoveryeven commences. Courts have
held that a plaintiff’s burden at thisstageisminimal. Aruling atthis stageof the litigation often
is based uponallegations in thecomplaint andanyaffidavitssubmittedinfavor of or in objection
to conditional certification.
Courtshave not clearlydefined thequalitative orquantitative standardsof evidence that should
be applied at thisstage. Courtsareoftenreluctant togrant or denycertification onthemerits of
a plaintiff’scase. Thisfrustrates defendants withclearlymeritoriousargumentsin defense of
the litigation, suchasthose based oncompelling proof that would establish theexempt statusof
the plaintiffs andother employees allegedto besimilarly-situated.
Instead, courts appear tofindthemost convincing proof that certificationisimproper basedon
evidence that putative classmembers perform different jobs indifferent locations or facilities,
under different supervisors, and potentiallypursuant to differing policies and practices. Courts
also have held that certification is inappropriatewhen individualized inquiries into applicable
defenses arerequired, such as when theemployer assertsthat therelevant employees are
exempt.
Whereconditional certification isgranted, adefendant hastheopportunityto request that the
class be decertifiedafterdiscoveryis whollyor partiallycompleted inthesubsequent, second
stage of decertification. Courtsengage in amorerigorousscrutinyof thesimilarities and
differencesthat exist amongst membersof theclass at the decertificationstage. Thescrutinyis
based upon amoredeveloped, if not entirelycomplete, recordof evidence. Upon an
employer’s motionfor decertification, acourt assessesthe issueof similaritymorecriticallyand
mayrevisit questionsconcerning thelocationswhere employees work, the employees’
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supervisors, their employment histories, thepolicies and practicesaccording towhich they
perform work and are paid, andthedistinct defenses that mayrequireindividualized analyses.
Opt-In/Opt-Out Procedures
Certificationproceduresare different under Rule23 and 29U.S.C. §216(b). Under Rule
23(b)(2), acourt’s orderbinds theclass; under Rule 23(b)(3), however, aclass membermust
opt-out of the classaction (after receiving a classaction notice). If heor she does not doso,
theyare boundbythejudgment. Conversely, under §216(b), a classmember must opt-in to
the lawsuit beforeheorshe will be bound. Whileat or near 100% of classmembersare
effectivelybound bya Rule 23 order, opt-in ratesin most § 216(b) collective actions typically
rangefrom 10% to 30%.
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TABLE OF CONTENTS
I. OVERVIEW OFTHE YEAR INWORKPLACE CLASS ACTION LITIGATION....................1
A. SignificantTrendsInWorkplace Class Action Litigation In2013................................3
B. Impact Of Changing Rule 23 StandardsOnWorkplace ArbitrationIssues.................8
C. ImplicationsOf TheseDevelopments For 2014.........................................................9
II. SIGNIFICANT CLASS ACTION SETTLEMENTSIN 2013................................................11
A. TopTen Private Plaintiff-Initiated MonetarySettlements..........................................11
B. TopTenGovernment-Initiated MonetarySettlements..............................................15
C. NoteworthyInjunctive Relief Provisions In Class Action Settlements.......................17
III. SIGNIFICANT FEDERAL EMPLOYMENT DISCRIMINATIONCLASS ACTION
AND EEOC PATTERNOR PRACTICE RULINGS...........................................................23
A. Employment Discrimination Class ActionsUnderTitle VII Of The Civil Rights
Act Of 1964.............................................................................................................23
B. EEOC PatternOr Practice Cases............................................................................37
IV. SIGNIFICANT COLLECTIVE ACTION RULINGS UNDER THE AGE
DISCRIMINATIONINEMPLOYMENT ACT...................................................................139
A. Cases CertifyingOr Refusing ToCertifyADEA Collective Action Claims...............139
B. Other Federal RulingsAffecting TheDefenseOf ADEA Collective Actions............141
(i) ProceduralIssuesInADEA Collective Actions................................141
(ii) Government RegulationIssuesIn ADEA Litigation.........................141
(iii) Adverse Impact Litigation Issues....................................................142
(iv) Employee Benefit Plan LitigationUnder TheADEA........................143
(v) Arbitration Of ADEA PatternOr Practice Claims.............................144
(vi) Public Employee Age Discrimination Litigation...............................144
(vii) Tolling InADEA Collective Actions.................................................146
V. SIGNIFICANT COLLECTIONACTIONRULINGS UNDER THE FAIR LABOR
STANDARDS ACT149
A. Cases CertifyingOr Refusing ToCertifyFLSA Collective Action Claims................149
B. Other Federal RulingsAffecting TheDefenseOf FLSA Collective Actions............258
(i) Notice IssuesIn FLSACollective Actions.......................................258
(ii) Mootness In FLSA Collective Actions.............................................263
(iii) Individual Executive LiabilityIn FLSA Collective Actions.................265
(iv) Awards Of Attorneys’ Fees InFLSA Collective Actions...................267
(v) Application Of TwomblyPleading StandardsIn FLSA
Collective Actions...........................................................................269
(vi) FLSA Collective Actions For Donning And Doffing..........................271
(vii) Exemption IssuesIn FLSA Collective Actions.................................273
(viii) DiscoveryIn FLSA Collective Actions.............................................278
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