EEOCBy David J. Rowland and Andrew L. Scroggins

Seyfarth Synopsis:  In a case filed May 8 in federal court in New Jersey, the EEOC sued an IT staffing firm for age discrimination on behalf of a candidate seeking placement into an position with one of the firm’s clients.  If the startling allegations are true, the case may be a lay-up for the EEOC, but even if the allegations are inaccurate, staffing firms and companies that utilize staffing resources should view this as a reminder about the process by which they evaluate candidates, and what NOT to do with potentially unlawful instructions from clients.

In EEOC v. Diverse Lynx, Inc., 3:17-CV-03220 (D.N.J), the EEOC alleges that Kadami Vijaisimh posted his resume on the website Diverse Lynx (DL) maintains for job applicants.  The EEOC alleges that at around the same time Vijaisimh posted his resume, DL was sourcing candidates for an IT project management opportunity available at one of its clients.

According to the complaint, Vijaisimh had substantial IT project management experience and was contacted by DL regarding the position. After several discussions with Vijaisimh regarding the details of the position at issue, DL allegedly wrote Vijaisimh this e-mail:

Thanks for your reply. I check the details of [sic] you. And you [sic] born in 1945. So I discussed with the client side. Age will matter. That why I can’t [sic] be able to submit your profile to client side.

Predictably, DL did not refer Vijaisimh to its client for the IT project management spot and the EEOC alleges it did not do so because of his age.

Taking these facts as true, it is hard to imagine a better case for the EEOC, and it is easy to see why the agency brought it.  But, putting that aside, the alleged actions of the staffing firm in this case serve as a stark reminder of the obligations of staffing firms to comply with employment laws as they work with their clients and candidates to fill open positions.

Here are the top takeaways from the case and some suggested strategies:

Takeaway 1:  In evaluating a candidate, a staffing firm’s recruiters cannot use candidates’ profiles for the purposes of excluding candidates based upon protected statuses.  It is not clear from the complaint what information led DL’s recruiter to conclude that Vijaisimh was born in 1945.  One reasonable presumption is that it was the result of a search of social media sources, such as Facebook, LinkedIn, or Twitter, all of which harbor dangers as a screening tool.  Another reasonable presumption is that it was the result of online searches of publicly available information, which can often be unreliable.

Takeaway 2:  Beware about making assumptions about a client’s wishes.  In this case, if the DL recruiter initiated a conversation with the client about whether age would “matter” for this IT project management job, the staffing firm has not only placed itself in potential trouble, it has also set its client up for a possible legal disaster. It is not clear in this case whether the client actually cared about age, or if that was simply the recruiter’s intuition, but either way, the candidate’s age (specifically or in general) should never have been raised or discussed with the client.

Takeaway 3: A client’s wish is not a staffing firm’s command.  Sometimes a client may make an up-front request for candidates who fit a particular paradigm without considering how the EEOC or plaintiff’s lawyers might construe the language.  Requests like “seeking recent college grads”, “need someone who fits in with our youthful culture”, “inexperienced candidates have been the most successful”, or “fresh blood is needed to replace our aging workforce” are not necessarily intended to be age-based – a recent college grad could be over 40, for example – but they are the sort of quotes that raise the eyebrow of enforcement agencies and may not play well with a jury.

Remedy 1: Publish a written policy.

Staffing firms should memorialize their policies prohibiting employment discrimination against those placed to work with clients, and make the policy available to applicants, employees, and clients.

Remedy 2: Train, train, and train.

Training employees on how and whether to use social media or other online searches is essential for every employer and staffing firm.  Too much can be learned (and put to bad use), and too much of what is learned may be inaccurate.

Staffing firm employees would benefit from training to recognize the types of job “requirements” and messages that could be perceived – rightly or wrongly – as potential problems.

In addition to training to identify potential pitfalls in requests, staffing firm employees would benefit from training on the tools to correct an issue before it becomes a problem.  At a minimum, staffing firm employees should be trained to eliminate questionable phrasing from any job posting or search materials and to fill the position with the most qualified candidate.  Even better, train and empower employees to appropriately counsel (and, where needed, correct) the client who presents a job requisition in less-than-ideal fashion.

Remedy 3: Management support.

Front line staffing employees will be better able to fulfill their duties with management support.  Staffing firm managers should remind their employees to take the extra time to look at how job requirements have been documented to ensure compliance with the letter and spirit of EEO laws.  Staffing firm managers also should lead by example,

Remedy 4:  Staffing agency / client partnership.

In addition to having and sharing a written policy, staffing firms should consider making an explicit statement about the important of equal employment opportunity in its contractual arrangements with clients, ensuring that jobs are filled by the best candidates, without regard to protected characteristics. Periodic reminders to clients will help reinforce this message.

Finally, staffing firms should approach equal employment opportunity matters as an area where their expertise can serve their own and their clients’ interests.  Avoiding potentially problematic requests, and addressing them with clients when questions arise, set up all concerned for future success when staffing.

fireworks-227383_960_720By Gerald L. Maatman, Jr.

Seyfarth Synopsis: In its recent review of Seyfarth’s 2017 Annual Workplace Class Action Litigation Report, EPLiC called it the “must have” resource that corporate counsel “cannot afford to be without it…”

We are humbled and honored by the recent review of our 2017 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”

We are often asked – “How does it happen – how do you produce your Annual Workplace Class Action Litigation Report”?

The answer is pretty simple – we live, eat, and breathe workplace class action law 24/7.

Each and every morning we check the previous day’s filings of EEOC lawsuits and workplace class actions relative to employment discrimination, ERISA, and wage & hour claims. We do so on a national basis, both in federal courts and all 50 states. Then we check, log, and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. This is also done on a national basis.  We put this information in our customized database; we analyze and compare the rulings on class action issues and Rule 23 topics, and then we prepare an analysis of each and every decision.

Our class action practitioners – a group of over 175 Seyfarth lawyers – contribute to the process of building the database and analyzing decisional law on a daily basis.

We have being doing this on a 24/7 basis for over 13 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

The result is a compendium of workplace class action law that is unique in its analysis, scope, and comprehensiveness.

We are particularly proud that EPLiC recognized our Report as the “state-of-the-art report” on workplace class action litigation.

Thanks EPLiC. We sincerely appreciate the kudos.

Now, even less than half way through the year, we have tracked and analyzed more class action decisions to this point in 2017 than at the halfway point in past years. On this pace, our 2018 Report will cover more decisions than ever before.

middle-district-of-florida-stampBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: Following an employer’s reduction-in-force that ultimately led to an ADEA collective action after several employees over 50 years old were terminated, a federal district court in Florida recently granted a motion to conditionally certify a collective action of employees who worked at the employer’s Tampa, Florida location, but denied a motion to certify a nationwide collective action.

***

When employers decide to undertake a reduction-in-force (“RIF”), one of the major pitfalls from a legal perspective involves mass terminations of employees over 40 years of age, leading to potential exposure under the Age Discrimination in Employment Act (“ADEA”).  After multi-discipline design firm RS&H, Inc. (“RS&H”) terminated 23 employees during an RIF, a 53 year old terminated employee brought suit against RS&H under the ADEA, noting that five of the seven employees terminated at the Tampa location where he worked were over 50 years old.  In Jones v. RS&H, Inc. , No. 8:17-CV-54-T-24, 2017 U.S. Dist. LEXIS 60088 (M.D. Fla. Apr. 20, 2017), after Plaintiff moved for conditional certification of a nationwide collective action of employees over 40 who were terminated in the RIF, Judge Susan C. Bucklew of the U.S. District Court for the Middle District of Florida granted the motion for conditional certification for employees who worked at the Tampa location, but denied conditional certification of a nationwide collective action.

While the Court’s grant of conditional certification should serve as a cautionary tale for employers who are considering mass layoffs that may include a significant proportion of employees over 40, the Court’s denial of conditional certification of a nationwide collective action provides insight as to how employers facing ADEA multi-party actions can attempt to minimize exposure.

Case Background

Plaintiff worked for RS&H from 1991 through 2015.  When RS&H terminated Plaintiff, it stated that his termination was part of an RIF.   Id. at *1-2.  After RS&H terminated 23 employees nationwide, including seven from its Tampa location, Plaintiff filed an EEOC charge alleging age discrimination.  Plaintiff stated that he had more work than the projected staffing requirement, and thus there was no reason for his termination.  He further alleged that RS&H rarely allowed non-officers to work until they retired.  In addition, RS&H was alleged to have hired young employees, and then terminated older employees once the young employees were trained.  According to Plaintiff, one RS&H supervisor commented just prior to the RIF that he had been informed that RS&H was looking to reduce staff, specifically older personnel.  Plaintiff further alleged that RS&H agents often said, “young people are our future.”  Id. at *2.

After being issued a notice of suit rights letter and thereafter bringing suit, Plaintiff sought to conditionally certify a nationwide collective action of former employees who were terminated from October 28, 2014 through August 24, 2015 (i.e., within 300 days prior to Plaintiff’s filing of his EEOC charge) and who were at least 40 years old at the time of their termination.  Two opt-in Plaintiffs who also worked at the Tampa location and were terminated during the 2015 RIF filed affidavits in support of Plaintiff’s allegations of age discrimination.  In opposition to the motion for conditional certification, RS&H argued that: (1) Plaintiff was not a proper representative because his ADEA claim was time-barred; (2) Plaintiff’s EEOC charge did not provide sufficient notice of claims from the proposed collective action; and (3) the scope of the proposed collective action was too large.

The Court’s Decision

The Court granted in part and denied in part Plaintiff’s motion for conditional certification.  First, in support of its argument that conditional certification was not warranted since Plaintiff was not a proper representative, RS&H argued that Plaintiff’s suit was untimely because he filed his suit 95 days after the EEOC issued its notice of suit rights.  Id. at *5-6.  The Court rejected this argument, citing evidence submitted by Plaintiff’s counsel illustrating that it did not receive the notice of suit rights letter until over two weeks after it was stamped.

Next,  RS&H argued that conditional certification was not warranted for the proposed nationwide collective action because Plaintiff’s EEOC charge did not give adequate notice that such claims were being asserted.  Id. at *7.  After examining Plaintiff’s EEOC charge, which indicated that “[o]n the day of my termination 5 of the 7 [Tampa, Florida] employees let go were over 50 and had at least 10 years with the company,” the Court found that Plaintiff’s EEOC charge could not be read to give notice that he was asserting claims on behalf of a nationwide group of employees.  The Court agreed with RS&H that, at best, Plaintiff’s charge put RS&H and the EEOC on notice that Plaintiff may be pursuing age discrimination claims on behalf of himself and the four other employees terminated on the same day at his Tampa work location.  Id. at *9-10.  In addition, the Court found that the decision-maker who terminated Plaintiff and the two opt-ins was never involved in a decision to terminate any employee outside of the Tampa location.  Accordingly, the Court declined to certify a nationwide collective action.

The Court then explained that to conditionally certify a collective action, (i) there must be other employees who desire to opt-in; and (ii) those employees must be similarly-situated to Plaintiff.  Given that two former employees had already opted-in, and that three of the five individuals that are over 50 and were terminated during the June 2015 RIF wanted to pursue ADEA claims, the Court found that the first element was met.  Regarding the similarly-situated element, the Court noted that while Plaintiff attempted to assert a company-wide pattern or practice of age discrimination claim, he did not show a sufficient factual basis on which a reasonable inference could be made that RS&H had a pattern or practice of discriminating against all employees at all locations based on their age.  Id. at *15-16.  Plaintiff offered no evidence that any employees outside of Tampa were interested in joining the lawsuit, nor did they identify any decision-makers outside of Tampa who allegedly discriminated on the basis of age during the RIF.  The Court further opined that the evidence that Plaintiff submitted could only support his contention of a pattern or practice of age discrimination within the Tampa location.  As such, the Court denied Plaintiff’s motion to conditionally certify a nationwide collective action of former employees over 40 who were terminated during the June 2015 RIF, but conditionally certified a collective action consisting of the five individuals that were terminated from the Tampa location.

Implications For Employers

While the Court’s grant of conditional certification should serve as an eye opener for employers considering RIFs that may include several employees over 40, the Court’s refusal to certify a nationwide collective action provides guidance for employers as to how to minimize potential RIF exposure.  Here, the Court noted that Plaintiff’s EEOC charge did not identify any aggrieved individuals outside of the Tampa location, nor did it identify anyone involved in the termination decision-making process outside of Tampa.  Employers facing motions for nationwide conditional certification in ADEA collective actions following RIFs should closely review the plaintiff’s EEOC charge to assess the sufficiency of nationwide allegations.  Given the potentially substantial consequences of RIFs involving older workers, the best practice for employers would be to contact their employment law counsel before engaging in this process.

FMLA-300x289By Gerald L. Maatman, Jr. and Thomas E. Ahlering

Seyfarth SynopsisA recent decision has added to the chorus of courts recognizing that FMLA class actions must be pursued under Rule 23 and are often appropriate for class certification.  As a practical matter, this means that FMLA class actions can now be pursued as opt-out – rather than opt-in – actions because the statutory language of the FMLA does not incorporate language requiring that plaintiffs affirmatively consent to join the action.  These recent decisions ultimately make FMLA class actions more attractive to the plaintiffs’ bar and increase the likelihood that employers may face similar actions in the future.

***

Employers who have paid time off (PTO) or short-term leave policies are now at an increased risk of facing a class action under the Family-Medical Leave Act (“FMLA”) due to a recent decision in Carrel v. MedPro Group, Inc., No. 16-130, 2017 U.S. Dist. LEXIS 62969 (N.D. Ind. April 26, 2017).  The decision, which applied Rule 23 to FMLA class action claims and certified a class under Rule 23, serves as the most recent example of how plaintiffs’ attorneys are achieving success in FMLA class actions and may signal that additional and similar actions may be forthcoming.

Case Background

In Carrel, the Plaintiff brought a class claim under the FMLA alleging that she was docked earned PTO and that Defendant failed to pay her unused PTO upon the termination of her employment.  Specifically, the Plaintiff alleged that Defendant’s short-term leave policy violated the FMLA because each employee was provided PTO at the beginning of the year according to Defendant’s PTO policy and thus, PTO was unlawfully “docked” whenever an employee took FMLA leave.  Id. at *2.

Plaintiff filed a motion for class certification under Rule 23 seeking certification of a class defined as “all current and former [Defendant] employees who took FMLA leave at any point since March 29, 2013[.]”  Id. at *5.

The Court’s Decision

The Court granted Plaintiff’s motion for class certification.  First, the Court rejected Defendant’s argument that class certification under Rule 23 was the wrong mechanism for an FMLA class, and that the alleged class-wide  violations of the FMLA must be treated as a collective action instead.  Id. *6.  Although the Seventh Circuit has not weighed in on the applicability of Rule 23 to FMLA actions, the Court noted that other case law authorities in the Seventh Circuit have held that “class violations of the FMLA must be treated as opt-out actions pursuant to Rule 23 because the statutory language of the FMLA § 2617(a)(2) does not incorporate the additional language in the FLSA expressly requiring that plaintiffs affirmatively consent to join the action by opting-in.”  Id. at *7.  Accordingly, the Court held that “Rule 23 is the correct mechanism by which to proceed with the analysis” of the Plaintiff’s class certification motion.  Id. at *8.

Second, the Court proceeded to find that the requirements of Rule 23(a) had been satisfied.  Specifically, the Court found that the “commonality” requirement of Rule 23(a) was satisfied because “Plaintiff and the putative class members were all [Defendant] employees who were subject to the same uniformly applied PTO policy.”  Id. at *12.  Therefore, “[w]hether the Defendant’s PTO policy violated the FMLA presents a common question of law.”  Id.  In so holding, the Court noted that how Defendant’s policy individually impacted each member of the class was an issue relating to the merits and did not defeat commonality.  Id. at *15.

Finally, the Court noted that certification under Rule 23(b)(3) – applicable to classes seeking monetary relief – was appropriate.  In so holding, the Court found that the Rule 23(b)(3) “predominance” factor was satisfied because “causation issues, which here are actually issues concerning what damages, if any, each class member has actually suffered pursuant to the PTO policy applied in his/her own case, will not predominate over common liability issues.  Id. at *22.  Therefore, it did not matter to the Court’s inquiry “how much PTO each employee used or would have used.”  Id. at *23.

Implications For Employers

Employers are at an increased risk of facing similar FMLA class actions in the future in light of the fact that an increasing number of courts have found FMLA class actions to be proper for class certification under Rule 23.  The simple fact that plaintiffs’ attorneys can now pursue FMLA class actions under Rule 23, instead of an opt-in class akin to FLSA claims, may serve to increase the total number of potential class members (and an employer’s total exposure), and likely makes such actions much more attractive to the plaintiffs’ bar.  In addition, the fact that courts have found that individual issues pertaining to employees’ usage of PTO do not predominate over the overarching issue of whether an employer’s PTO policy violates the FMLA also increases the likelihood that more employers may be faced with similar actions in the future.

bassBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis: After a Fifth Circuit decision affirming a ruling by a U.S. District Court in Texas allowed the EEOC to seek compensatory and punitive damages in its high-profile Title VII pattern or practice race discrimination lawsuit against Bass Pro, a deadlocked Fifth Circuit denied Bass Pro’s petition for a rehearing en banc.  The highly contentious dissenting opinion, which prompted a response from the panel in favor of denying the rehearing, is a must-read for employers regarding judicial views on the damages the EEOC can seek in Title VII pattern or practice of discrimination litigation.

***

One of the EEOC’s largest pending nationwide lawsuits, a Title VII pattern or practice race discrimination case concerning retailer Bass Pro’s hiring practices, has resurfaced in an appeal.  In EEOC v. Bass Pro Outdoor World LLC, No. 15-20078, 2017 U.S. App. LEXIS 7628 (5th Cir. Apr. 28, 2017), the U.S. Court of Appeals for the Fifth Circuit was tasked with deciding whether to grant Bass Pro’s petition for a rehearing en banc after it previously affirmed a decision of the U.S. District Court for the Southern District of Texas allowing the EEOC to seek compensatory and punitive damages by bringing claims under § 706 and 707 of Title VII.  Evident in a pair of pull-no-punches opinions, the Fifth Circuit panel of judges was deadlocked in a 7-7 split on whether to grant the rehearing, thus resulting in Bass Pro’s petition being denied.

As employers continue to challenge the EEOC’s willingness to stretch the bounds of pattern or practice Title VII litigation, the highly contentious dissenting opinion (“Dissent”), and equally provocative response from the panel in favor of denying the rehearing (“Panel”), are must-reads for employers.

Case Background

As we have discussed in previous blog posts (here, here and here), the EEOC brought a lawsuit alleging discriminatory hiring practices in violation of Title VII on behalf of a group of individuals allegedly discriminated against on the basis of their gender or race, both as a representative action (under § 706) and based on a pattern or practice theory (under § 707).  The Dissent noted that the 50,000 allegedly aggrieved individuals, Black and Hispanic applicants, was a number “asserted [by the EEOC] in shotgun fashion, with no development or refinement of who or where the individuals are.”  Id. at *4.  Further, the Dissent explained that “[t]he EEOC, after a three-year investigation, could identify zero discriminatees or even potential discriminatees. Upon being pressed by the [D]istrict [C]ourt, the EEOC identified about 100, and later, about 200, of the 50,000 mass.”  Ultimately, the District Court allowed the EEOC to pursue pattern or practice claims on behalf of the 50,000 claimants under § 706, seeking individualized compensatory and punitive damages.  On June 17, 2016, the Fifth Circuit affirmed the District Court’s decision.  Bass Pro thereafter filed an interlocutory appeal.  Id. at *5.

The Fifth Circuit’s Decision

As a result of a 7-7 split between the circuit judges, the Fifth Circuit denied Bass Pro’s petition for a rehearing en banc.  The Dissent initially summarized its argument by matter-of-factly noting “this ‘pattern or practice’ case cannot be brought under § 706 or § 707 as to provide individualized compensatory and punitive damages for a mass of 50,000 persons.”  Id. at *6.  In support of this assertion, the Dissent argued that the plain language and legislative history of the Title VII forbids § 706 “pattern or practice” suits, and the Panel’s contrary holding rendered § 707 of the Act a meaningless appendage to Title VII and hence superfluous.  Second, the Dissent argued that allowing pattern or practice suits for individualized compensatory and punitive damages poses insurmountable manageability concerns, which the Supreme Court has addressed before and rejected such suits.  Finally, the Dissent opined that allowing pattern or practice suits for individualized compensatory and punitive damages for the 50,000 allegedly aggrieved individuals necessarily ran afoul of the Seventh Amendment.

After the Dissent pointedly advocated this array of arguments, the Panel countered with a 16 page response, asserting that Bass Pro ignored “the independent role of the EEOC when it sues on behalf of the United States government . . . [and] asks us to hold as a matter of law that damages authorized by the 1991 amendments to the Civil Rights Act can only be recovered in individual suits.”  Id. at *20-21.  After clarifying the role of the EEOC in light of the 1991 amendments of the Civil Right Act of 1964, the Panel opined that, “Bass Pro’s argument rests upon a fundamental premise: that the EEOC’s enforcement authority and choice of remedies is tethered to the individuals for whose benefit it seeks relief. That premise is false.”  Id. at *23.  The Panel then argued that because the EEOC brought suit under both § 706 and 707, Bass Pro’s argument that the Commission was not entitled to punitive damages failed because it “would be truly perverse to withhold the remedy of punitive damages from the EEOC when it targets discrimination in its most virulent and damaging form: polices intentionally calculated to exclude protected minorities and perpetrated on a large scale.”  Id. at *35.

Finally, the Panel addressed Bass Pro’s argument that even if Congress did grant the EEOC the authority to seek compensatory and punitive damages via the pattern-or-practice model, this grant of authority was unconstitutional.  Noting that Bass Pro’s argument appeared to implicate due process concerns under the Seventh Amendment, the Panel held that Bass Pro’s reliance on Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), was misplaced as that case involved Rule 23 class actions, which  have “no force” in EEOC litigation.  Id. at *36.  After providing a hypothetical analysis as to how a jury may award various types of damages, the Panel concluded by finding Bass Pro’s manageability concerns to be unfounded, and its “claim that this suit cannot be tried is not a statement of fact but an advocate’s prayer.  Seeking to limit its exposure to liability, Bass Pro asks us to shut down this lawsuit before it even gets off the ground.”  Id. at *41-42.

Not to be outdone, the Dissent threw the final punch in a two paragraph dissent to the Panel’s response.  In an effort to clarify the procedural uniqueness of the Panel’s response to the dissenting opinion, the Dissent noted “[l]est there be any mistake, the [P]anel’s ‘response’ must not be confused with a binding opinion on the denial of an en banc petition, because no authority authorizes any such opinion.”  Id. at *42.  As such, the Dissent concluded by instructing that in no way should the Panel’s response be treated as precedential.

Implications For Employers

The Fifth Circuit’s ruling is certainly unfavorable for employers, as this gives the EEOC ammunition to seek a broad range of damages under § 706 and 707, and essentially pick and choose which section’s procedures it wants to follow at various stages of the litigation.  But when reading the tea leaves within the tenaciously written opinions by the divided panel, employers can find encouragement in that many judges – both in the Fifth Circuit and throughout the country – support the Dissent’s belief that the EEOC conflated its rights under § 706 and 707.  As such, employers should continue to follow this case and similar large-scale EEOC pattern or practice cases, which will likely continue to percolate following this government-friendly ruling.

Readers can also find this post on our EEOC Countdown blog here.

 

cubical

Seyfarth Synopsis: Employees are only human — misconduct, theft, harassment, discrimination, and even criminal conduct are a fact of life, even in the workplace.  Companies confronted with allegations of workplace misconduct must consider the manner of responding to the allegations and the means by which they will be investigated.

Businesses suffer millions of dollars in losses each year due to diminished productivity associated with employee misconduct and theft of confidential information, money, and merchandise.  It is for this reason that at one time or another in their careers, management personnel will have to deal with serious employee problems or problem employees.

In a broader sense, the problem employees may have a tendency to “push out” other employees. By and large, poor employee morale is intertwined with poor management techniques. Simply put, bad behavior begets bad supervision and bad supervision creates bad morale – it’s a cycle.

Holding on to the best workers is a process over which front-line managers have a key role.  Aside from a steady paycheck, employees want a boss who offers them a future filled with challenging work, the potential for advancement, and appropriate recognition.  Thus, workers do not quit companies as much as they quit their managers.  The boss of choice is one who inspires an employee to be as successful as possible, and to strive to grow professionally on a continuous basis.  This process starts with a supervisor-subordinate relationship marked by trust and respect. 

Better management of employee performance can eliminate perceptions of unfair treatment and discrimination.  Effective feedback and two-way communication between managers and workers also pays dividends in improved employee relations.  Furthermore, proper decision-making in firing an employee is grounded in sound evaluation and disciplinary practices.  It is for this reason that proper evaluation of employees and use of performance appraisals are especially critical to effective loss control and risk management of employment-related exposures.

Setting out a clear and consistent policy for evaluating and disciplining employees is very important – not only will all employees be equally accountable for their misconduct, and therefore gaining the trust of employees, but it will ensure that if an employee is terminated for their behavior, it will not come as a surprise.

Sound termination decisions, in turn, are dependent on effective evaluations and discipline.  The entire process is premised upon personnel decisions which are fair and non-discriminatory.

Our video provides insight for employers on how to best prevent employee grievances from occurring, and, because grievances are always bound to turn up, how to best manage them. 

 

250px-US-CourtOfAppeals-8thCircuit-SealBy Gerald L. Maatman, Jr. and Michael L. DeMarino

Seyfarth Synopsis:  After thirty-three former employees who signed release agreements requiring individual arbitration of ADEA claims collectively sued their employer for age discrimination, the employer moved to compel individual arbitration. The District Court denied the company’s motion. The U.S. Court of Appeals for the Eighth Circuit reversed because it found that the ADEA did not contain a “contrary congressional command” overriding the FAA’s mandate to enforce arbitration agreements.

***

Case Background

In McLeod, et. al. v. General Mills, Inc., No. 15-3540, 2017 WL 1363797 (8th Cir. Apr. 14, 2017), thirty-three former employees of General Mills (the “Company”) were offered severance packages and signed release agreements in which they agreed to individually arbitrate claims relating to their termination—including, specifically,  ADEA claims. Id. at *1. Despite agreeing to individual arbitration, the employees collectively sued the Company in the U.S. District Court for the District of Minnesota, alleging various ADEA violations. The Company moved to compel arbitration, and the District Court denied that motion.  Id.

On appeal, the Eighth Circuit reversed the District Court’s denial of the Company’s motion to compel arbitration. The Eighth Circuit held that Section 626(f) of the ADEA does not contain a contrary congressional command to override the Federal Arbitration Act’s (“FAA”) mandate to enforce arbitration agreements. Id. at *2-3. At the core of this holding was the Eighth Circuit’s decision that the “right” to a jury trial and the “right” to proceed in a collective action, are not substantive ADEA rights. Id

This decision is important because it addresses the fundamental question of whether employment agreements that require individual arbitration run afoul of the ADEA and its provisions authorizing plaintiffs to sue collectively.

Unlike other decisions involving the clash of arbitration agreements and 29 U.S.C. § 216(b), the Eighth Circuit’s decision in McLeod resolves the tension between, on the one hand the FAA’s mandate to enforce arbitration agreements, and on the other hand, the ADEA’s requirement in  § 626(f) that a party must prove in a “court of competent jurisdiction” that the waiver of ADEA rights was “knowing and voluntary.”

Because the Eighth Circuit determined that the “waiver” of rights in Section 626(f) refers only to the waiver of substantive ADEA rights and because the “right” to a jury trial and the “right” to proceed in a collective action are not “rights” under § 626(f), it held that there was no “waiver” for purposes of  § 626(f).

Case Background

In 2012, the Company terminated 850 of its employees. These employees were offered severance packages in exchange for signing release agreements. Id at *1. The release agreements required the employees to release the Company from all claims related to their termination, including claims under the ADEA. Id.

The release agreements also contained a dispute resolution provision that required the employees to submit any claim covered by the release agreement to arbitration on an individual basis. Id.

Thirty-three of the employees who were terminated in 2012 sued the Company in the U.S. District Court for the District of Minnesota. Specifically, the employees sought a declaratory judgment that the releases were not “knowing and voluntary,” as required by 29 U.S.C. § 626(f)(1). The employees also asserted collective and individual claims for alleged ADEA violations. Id.

The Company moved to compel arbitration of the employees’ claims, and the District Court denied that motion. Id. The Company subsequently appealed to the Eighth Circuit.

The Eighth Circuit’s Decision

On appeal, the employees argued that ADEA §  626(f) contains the necessary “contrary congressional command” to render their release agreements invalid. Id. at *2. Specifically, the employees relied on two related sections of the ADEA to argue that compelling arbitration results is an effective waiver of their substantive rights under the ADEA. Id. These two sections are § 626(f)(1) and § 626(f)(3).

Section 626(f)(1) of the ADEA prohibits the waiver of any ADEA right or claim — unless the waiver is “knowing and voluntary.” 29 U.S.C. § 626(f)(1). Whereas, § 626(f)(3) describes how to prove a “waiver,” requiring that the “the party asserting the validity of a waiver shall have the burden of proving in a court of competent jurisdiction that a waiver was knowing and voluntary . . . .”  Id (citing 29 U.S.C. § 626(f)(3)). (emphasis added). 

The employees argued that, by moving to compel arbitration of their claims, the Company was asserting the validity of a waiver — by forcing them to forego their “right” to a jury trial and their “right” to proceed by class action. Id.

The Eighth Circuit rejected this argument. “In § 626(f),” it explained, ‘“waiver’ refers narrowly to waiver of substantive ADEA rights or claims — not, as the former employees argued, the ‘right’ to a jury trial or the ‘right’ to proceed in a class action.” Id. (emphasis in original).

In reaching that decision, the Eighth Circuit cited 14 Penn Plaza LLC v. Pyett, 556 U.S. 247 (2009). In that case, the Supreme Court interpreted § 626(f)(1)’s references to “‘right[s] or claim[s]’ to mean substantive rights to be free from age discrimination, not procedural ‘rights’ to pursue age discrimination claims in court.” Id. Noting that Penn Plaza controls, the Eighth Circuit explained that the “specific ‘rights’ the former employees cite are not ‘rights’ under § 626(f)(1).” Id. The Eighth Circuit therefor decided that no “rights or claims” are “waived” by agreeing to bring claims in arbitration. Id.

The Eighth Circuit also rejected the employees’ argument that § 626(b), by incorporating 29 U.S.C. § 216(b), gives them a “right” to bring a collective action. Id. at 3. Before making short shrift of this argument, the Eighth Circuit noted that the ADEA borrows the procedural collective action mechanism from § 216(b) of the Fair Labor Standards Act (“FLSA”). Section 626(b) incorporates § 216(b), which allows an employee to sue on behalf of himself “and other employees similarly situated.” 29 U.S.C. § 216(b). Thus, the Eighth Circuit explained that § 626(b) expressly allows employees to bring collective actions for age discrimination. McLeod, 2017 WL 1363797 at *3.

Although the Eighth Circuit acknowledged that the ADEA expressly authorizes employees to sue collectively, it held that § 626(b) does not create a non-waivable, substantive right to do so. Citing its decision in Owen v. Bristol Care, Inc., 702 F.3d 1050, 1052 (8th Cir. 2013), the Eighth Circuit first explained that “[s]tanding alone, § 216(b) does not create a non-waivable substantive right; rather, its class-action authorization can be waived by a valid arbitration agreement.” Id.  The Eighth Circuit then found no convincing reason why § 626(b)’s incorporation of § 216(b) would “elevate the procedural class-action authorization to a substantive § 626(f)(1) ‘right.’” Id.

Ultimately, the Eighth Circuit concluded that the ADEA does not provide a “contrary congressional command” overriding the FAA’s mandate to enforce agreements to arbitrate ADEA claims, and that the District Court should have granted the Company’s motion to compel arbitration. Id.

Next, the employees argued that an arbitration panel could not grant them their declaratory relief — i.e., decide the question of whether their waiver of substantive ADEA rights was “knowing and voluntary.” Id. at 4. Specifically, the employees argued that this question can only be resolved in court because of § 626(f)(1)’s mandatory language “shall have the burden of proving in a court of competent jurisdiction.” Id. (emphasis added).

The Eighth Circuit declined to decide this issue, finding, instead, that the question was not justiciable. Id. Because the Company had not yet asserted that any of the employees had in fact waived their ADEA claims, and because the employees were seeking declaratory relief only “if and to the extent” the Company asserted that defense, the Eighth Circuit concluded that the employees’ declaratory relief was hypothetical. Id. “No Article III case or controversy arises,” it explained, “when plaintiffs seek a ‘declaratory judgment as to the validity of a defense’ that a defendant ‘may or may not, raise.’” Id. Accordingly, the Eighth Circuit held that the District Court did not have jurisdiction to decide whether the employees’ waiver was “knowing and voluntary.” Id.

Implication For Employers

This decision is important for employers, but less so for the reasons one might imagine. The reality is that this decision does little to alter the ADEA judicial landscape. More than two decades ago the Supreme Court held in Gilmer v. Interstate/Johnson Lane Corp. that ADEA claims could be subjected to compulsory, individual arbitration, even though collective actions are permitted under the ADEA by the identical statutory language as the FLSA. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32 (1991). While Gilmer did not specifically touch on the interplay between § 626(f) and the FAA, it is a bit surprising that a discussion of Gilmer is altogether absent from the Eighth Circuit’s decision.

One take away is that employers can remain confident that provisions requiring individual arbitration of ADEA claims will not result in a prohibited waiver of an employees’ rights under the ADEA.

This decision also sheds light on an important strategy consideration. Employers that assert waiver as a defense may find themselves litigating the validity of that waiver (i.e., whether the waiver was knowing and voluntary) in court — even though the employees agreed to arbitrate their claims. Hence, employers will likely need to weigh the advantages and disadvantages of defending an ADEA violation on the merits in arbitration versus adopting a waiver defense in court.

00-money-bagBy Gerald L. Maatman, Jr., Jennifer A. Riley, and Thomas E. Ahlering

Seyfarth Synopsis:  In what is being billed as the “largest and strongest TCPA settlement in history,” Judge Kennelly of the U.S. District Court for the Northern District of Illinois recently granted Plaintiffs’ counsel a minimum of $15.26 million in attorneys’ fees.  However, the Court refused to depart from the “sliding-scale structure,” which has become the standard model in the Seventh Circuit for awarding fees in class actions, and declined to award Plaintiffs’ counsel one-third of the common fund (or $24.5 million) as requested.

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Employers who utilize automated calls and text messages as part and parcel of their business continue to be subject to a considerable risk of class actions under the Telephone Consumer Protection Act (“TCPA”).  This is in no small part a product of the fact that TCPA class actions continue to be extremely lucrative for the plaintiffs’ class action bar.  The Court’s recent award of at least $15.26 million in attorneys’ fees in Aranda et al. v. Caribbean Cruise Line, Inc. et al., No. 12-04069, 2017 U.S. Dist. LEXIS 52645 (N.D. Ill., April 6, 2017), serves as the most recent example of the lucrative success that plaintiffs’ attorneys continue to achieve in TCPA class actions.

Case Background

In Aranda, Plaintiffs alleged that Defendants violated the TCPA by placing millions of automated telephone calls to consumers without their consent.  After roughly four years of “hotly contested litigation,” the parties settled on the eve of trial and the settlement provides that defendants will establish a common fund, in an amount no lower than $56 million and no higher than $75 million, from which class members will be paid.  Id. *3.  Following final approval of the class-wide settlement, Plaintiffs’ counsel petitioned for an award of attorneys’ fees in amount equal to one-third of the final common fund total.

The Court’s Decision

Judge Kennelly of the U.S. District Court for the Northern District of Illinois granted in part the fee request of Plaintiffs’ counsel, noting that while the circumstances of the case warranted a higher fee award than those granted in other TCPA class actions, the Court disagreed that the award should be as high as requested and declined to depart from the “sliding-scale structure” used by courts in the Seventh Circuit to award attorney’s fees in class actions.  Id.

The main question addressed by the Court was whether the fee request should be granted based on Plaintiffs counsel’s proposed “flat-percentage” approach or the “sliding scale” model that district courts in the Seventh Circuit often use to award attorneys’ fees for class action settlements as outlined in In Re Synthroid Marketing Litigation, 264 F.3d 712, 721 (7th Cir. 2001).  Id. *4.  The “sliding scale” model consists of breaking class action settlement funds into tiers or bands and awards class counsel a decreasing percentage of each band.  The rationale behind this approach is that “awarding class counsel a decreasing percentage of the higher tiers of recovery enables them to recover the principal costs of litigation from the first bands of the award, while allowing the clients to reap more of the benefit at the margin yet still preserving some incentive for lawyers to strive for these higher awards.”  Id. at *11 (quoting Silverman v. Motorola Sols., Inc., 739 F.3d 956, 959 (7th Cir. 2013)).  Plaintiffs’ counsel argued that an award amounting to one-third of the net common fund accurately reflected the result of a hypothetical negotiation between the plaintiffs and their attorneys under a “market based approach,” citing their typical contingency fees in TCPA cases, an expert indicating that the request was less than a standard rate for individual TCPA cases, and argued that they generated better-than-average value for the class and should be paid accordingly.  Id. *6-7.

The Court agreed with Plaintiffs that the circumstances of the case warranted a higher fee than those granted in other TCPA class actions that resulted in settlement.  Id. *14.  However, the Court did not agree that the case was not one in which “declining marginal percentages are [not] always best” and therefore, this concern would not provide a reason for class members to deviate from the sliding-scale structure in an ex ante negotiation.  Id. *12.  Specifically, counsel would have had the same or virtually the same incentive to fight for a high award whether they were receiving a flat rate or a sliding-scale rate because up until the very end, class counsel were fighting to get any recovery for the class.  Id. *16  The Court also disagreed with Plaintiffs that class members would accept a flat rate because of its low inherent value or because of the possibility that counsel could generate a high recovery through aggressive litigation because it was “not clear that the hypothetical class members in this case would be faced with the binary choice between a high-percentage fee with a  large recovery, on the one hand, and a sliding-scale fee for a small recovery, on the other.”  Id. *17.

Despite this, the Court was “persuaded that plaintiffs and their counsel faced materially greater risks in this case than those faced in the other recent TCPA class actions” and therefore, added at least a 6% premium to the first “band” of recovery on the sliding scale.  Id. *25. Ultimately, the Court also concluded that counsel’s efforts justified increasing the size of the settlement and therefore, plaintiffs in a hypothetical negotiation might agree to pay a risk premium at each band, but also insist that the size of the premium decrease at each band, as the risk of non-recovery decreased.  Id. *27-28.   Therefore, the Court awarded class counsel 36% of the first $10 million ($3.5 million), 30% of the second $10 million ($3.5 million), 24% of the band from $20 million to $56 million ($8.64 million), and 18% of the remainder.  If the common fund reaches its $76 million ceiling, the Court will adjust the award up, in which case the award would amount to roughly 25.6% of the common fund which is slightly higher than the mean and median recoveries for TCPA cases of similar value.  Id. *30-31.

Implications For Employers

This ruling illustrates that TCPA class actions are alive and well – and most notably – continue to be extremely lucrative for the plaintiffs bar.  Employers should ensure that they are in compliance with the TCPA or else risk becoming a target of TCPA litigation.

gavel on white backgroundBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis:  A federal district court in Illinois recently granted the EEOC’s motion for partial summary judgment in EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), relative to two defenses advanced by an employer, including: (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer. The ruling should be required reading for any employer facing or engaged in litigation with the Commission.

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An increasingly common issue in EEOC litigation against employers involves the scope of the Commission’s lawsuits as related to the charges of discrimination, as well as the EEOC’s conciliation efforts, or lack thereof.  In EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), the EEOC moved for partial summary judgment regarding two defenses enumerated by the defendant, Dolgencorp, LLC (“Dollar General”): (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer.  On April 10, 2017, Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois granted the EEOC’s motion for partial summary judgment as to these defenses asserted by Dollar General.

As Judge Wood acknowledged, many courts across the country have embraced defenses asserted by employers relating to the sufficiency of the EEOC’s investigation.  However, this ruling demonstrates that not all courts may be as receptive to those arguments.

Case Background

Two former Dollar General employees filed charges of discrimination with the EEOC regarding Dollar General’s allegedly discriminatory use of criminal background checks in hiring and firing determinations.  Id. at 1.  The EEOC investigated and determined that there was reasonable cause to believe that Dollar General had engaged in employment discrimination on the basis of race. The parties then engaged in written and oral communications regarding the alleged discrimination, which did not result in a conciliation agreement acceptable to the EEOC.  Id. at 2.  Thereafter, the EEOC brought a lawsuit against Dollar General under Title VII.

Amongst its enumerated defenses, Dollar General asserted that the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation (its 7th enumerated defense), and that the EEOC failed to satisfy the statutory precondition for bringing suit when it failed to conciliate with Dollar General (its 8th enumerated defense). The EEOC moved for partial summary judgment as to Dollar General’s two enumerated defenses.  Id. at 3. The EEOC contended that, on the undisputed facts, these two defenses failed as a matter of law.

The Court’s Decision

The Court granted the EEOC’s motion for partial summary judgment regarding Dollar General’s two enumerated defenses.  Dollar General’s seventh enumerated defense relied upon two separate propositions: first, the EEOC’s claims were barred because they went beyond the claims delineated in the charges of discrimination that generated the EEOC’s lawsuit; and second, the EEOC’s claims were barred because the EEOC failed to investigate those claims adequately prior to bringing suit.  Id. at 4.  The Court rejected the first proposition, holding that when the EEOC files suit, it is not confined to claims typified by those of the charging party, and further, that any violations that the EEOC ascertains in the course of a reasonable investigation of the charging party’s complaint are actionable.  Id.  As to the second proposition, the Court similarly opined that the Seventh Circuit has held that if courts may not limit a suit by the EEOC to claims made in the administrative charge, they likewise cannot limit the suit to claims that are found to be supported by the evidence obtained in the Commission’s investigation.  Id.  Accordingly, the Court rejected Dollar General’s defenses insofar as it sought to dismiss the EEOC’s claims because they went beyond the charges of discrimination or because they were not subject to an adequate pre-suit investigation.  Id. at 4-5.

In addition, the Court addressed Dollar General’s eighth enumerated defense, which contended that the suit could not go forward because the EEOC did not satisfy its pre-suit statutory obligation to conciliate.  The EEOC sent two Letters of Determination to Dollar General that stated that the EEOC found reasonable cause to believe that Dollar General engaged in discrimination in violation of Title VII because, through application of its background check policy, a class of African-American applicants and employees were not hired, not considered for employment, or discharged.  Dollar General argued that this notice of the charge was not specific enough because it failed to identify the persons allegedly harmed and to identify the allegedly discriminatory practice.

Rejecting Dollar General’s argument regarding the specificity of notice, the Court held that the EEOC’s letters clearly set forth that there were African-American applicants and employees who were harmed by the allegedly discriminatory practice.  Id. at 6.  Further, the Court opined that as the Seventh Circuit has explained, the sufficiency of the EEOC’s investigation was not a matter for the judiciary to second-guess.  Dollar General also argued that the EEOC failed to specifically describe the allegedly discriminatory practice, and that merely pointing to the background check policy was not sufficient.  The Court rejected this argument, holding that the EEOC’s notice was sufficient since it identified the two complainants and further put Dollar General on notice that the EEOC’s allegations related to African-American applicants and employees that were not hired, not considered for employment, or discharged due to failing a background check.  Id. at 8-9.

Finally, Dollar General contended that the EEOC’s conciliation discussions were inadequate because the EEOC did not provide Dollar General with an opportunity to remedy the allegedly discriminatory practice.  Id. at 9.  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1655-56 (2015) (which we analyzed here), the Court refused to examine the sufficiency of the EEOC’s investigation, noting it was beyond the scope of its review.  Id.  The Court thus rejected Dollar General’s argument that the EEOC did not adequately engage the employer in conciliation discussions.

Accordingly, the Court granted the EEOC motion for partial summary judgment on Dollar General’s seventh and eighth enumerated defenses.

Implications For Employers

While the Court did not find in the employer’s favor, other courts have routinely held the EEOC accountable in instances where it did not fulfill its pre-suit obligations.  With rulings such as this one, it can be expected that the EEOC will continue to test courts’ willingness to force the Commission to abide by its statutory duties under Title VII.  As such, employers should continue to be aggressive in attacking instances where the EEOC improperly expands its lawsuits beyond charges or fails to conciliate.

Readers can also find this post on our EEOC Countdown blog here.

 

fingerprintBy Gerald L. Maatman, Jr., Thomas E. Ahlering, and Alex W. Karasik 

Seyfarth SynopsisIn a class action alleging that the criminal background policy of Washington D.C.’s local transit authority had a disparate impact on African-Americans, a federal district court recently certified three classes of African-American employees and applicants despite the employer’s workforce being 75% African-American. The ruling – in Little v. Washington Metropolitan Area Transit Authority, No. 14-1289, 2017 U.S. Dist. LEXIS 48637 (D.D.C. Mar. 31, 2017), is a “must read” for employers that use hiring screens.

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One of the hottest areas in workplace class actions involves criminal background checks used by employers.  On one end of the spectrum, employers want to be sure they are not subjecting their businesses, employees, and clients to any potential criminal conduct by their own workers.  On the other hand, many prospective employees with criminal backgrounds may have been adequately rehabilitated through the criminal justice system and merely need an opportunity to prove they can be counted on as an employee.  In Little v. Washington Metropolitan Area Transit Authority, No. 14-1289, 2017 U.S. Dist. LEXIS 48637 (D.D.C. Mar. 31, 2017), Plaintiffs alleged that a criminal background check policy used by the Washington Metropolitan Area Transit Authority (“WMATA”) to screen candidates and employees was facially neutral, but had a disparate impact on African-Americans.  After the Plaintiffs moved for class certification , Judge Collyer of the U.S. District Court for the District of Columbia granted Plaintiffs’ motion in part and certified three classes pursuant to Rule 23(b)(2) and 23(c)(4), finding that Plaintiffs had satisfied Rule 23’s requirements with respect to liability and the availability of injunctive or other declaratory relief, but that the proposed classes failed to meet the predominance requirement of Rule 23(b)(3) because the case involved “more than just the individual determination of damages.”  Id. at *65. 

The Little ruling puts employers on notice that even if their workforce is predominately made up by one protected class, their criminal background policies can still be challenged as having a disparate impact on that class for purposes of class certification.

Case Background

WMATA, the primary public transit agency for the Washington D.C. metropolitan region, adopted its Policy 7.2.3 to govern how and when individuals with criminal convictions can obtain or continue employment with WMATA and its contractors and subcontractors.  Id. at *4-5.  Plaintiffs alleged that although the policy was facially neutral, it had a disparate impact on African-Americans.  WMATA argued that the policy was adopted as a business necessity.  Id. at *6.  Further, WMATA  argued that the make-up of its employee and contractor workforce, which included 12,000 individuals, was 75% African-American, thus demonstrating that no discrimination occurred.

Plaintiffs moved for certification of a hybrid Rule 23(b)(2) and Rule 23(b)(3) class, seeking both injunctive and individual monetary damages for the alleged discriminatory policy.  Id. at *16.  Alternatively, if the Court determined monetary damages were not suitable for class-wide determination, Plaintiffs proposed certification under Rule 23(b)(2) for liability and injunctive relief determinations and the application for Rule 23(c)(4) to allow the question of liability to be answered on a class-wide basis (but with individual hearings on damages owed to each specific class member).

The Court’s Decision

The Court held that certification was proper under Rule 23(b)(2) and Rule 23(c)(4) and certified three classes for a determination of liability and injunctive relief under Rule 23(b)(2), but withheld any individual damages determinations.  Id. at *46.  Beginning with its Rule 23(a) analysis, the Court first noted that as WMATA did not dispute Plaintiffs assertion that the overall class included over 1,000 individuals, and each subclass included at least 200, the Court found that Plaintiffs satisfied the numerosity requirement.  Further, the Court determined that Plaintiffs satisfied the commonality requirement since the policy at issue was mandated for non-discretionary application to all hiring decisions regard the class members, regardless of whether the candidates applied for positions with different contractors, subcontractors, or directly with the WMATA.  Id. at *50.  Regarding typicality, the Court concluded that the class representatives’ claims were typical of the class as they addressed each part of the policy with the exception of one policy appendix, for which Plaintiffs did not present a class representative.  Finally, regarding adequacy, the Court rejected WMATA’s argument that the proposed named Plaintiffs were inadequate because they lacked standing, noting the merits of their allegations were not to be considered as part of the class certification calculus.  Id. at *56-57.

Next, the Court analyzed Plaintiffs’ motion for certification of a hybrid Rule 23(b)(2) and (b)(3) class.  WMATA argued that Plaintiffs failed to identify which parts of Policy 7.2.3 produced a disparate impact, and their failure to identify the particular challenged employment practice prohibited certification.  Noting that each appendix to the policy constituted a separate employment practice, and that Plaintiffs identified three appendices to the policy that allegedly had a disparate impact on African-Americans, the Court found that Plaintiffs satisfied their burden under Rule 23(b)(2).  Id. at *59-60. 

However, the Court held that Plaintiffs failed to meet the predominance requirement under Rule 23(b)(3) and therefore refused to certify the class for monetary damages.  Id. at *65-66.  Specifically, the Court reasoned that the case involved “more than just the individual determination of damages” – namely, the trier of fact must also determine, for each individual class member, whether that class member was not hired or fired due to the Policy 7.2.3., or for some other reason.  Accordingly, the Court granted in part Plaintiffs’ motion for class certification and certified three classes under Rule 23(b)(2) and Rule 23(c)(4) with respect to liability and the availability of injunctive relief.

Implications For Employers

This ruling illustrates that even if a majority of an employer’s workforce is part of a protected class, an employer’s policies potential can still be considered to have a disparate impact on that class for purposes of Rule 23 class certification.  Plaintiffs will likely use this ruling in subsequent motions for class certification in class actions involving the disparate impact of criminal background policies.  As such, employers should be cognizant of the effect of its policies, and continue to ensure they are neutrally applied.