A recent decision underscores how employers facing workplace class actions need to consider all avenues of attack early on to best position themselves to avoid costly discovery and class certification litigation. In Harrison v. The Progressive Corp., et al., No. 1:12 CV 625, 2012 U.S. Dist. LEXIS 136719 (N.D. Ohio Sept. 25, 2012), an argument made by the defense in a Rule 12 motion – which to many might have seemed like a technicality that would go nowhere – but ended up making all the difference in the Court’s decision to eliminate class allegations.
In Harrison, the named Plaintiff, an African-American man over the age of 40, alleged that he worked in Progressive’s human resources department until 2011. Id. at *2, 4. His First Amended Class and Collective Action Complaint (“FAC”) – which purported to bring a nationwide Rule 23 Title VII class action and ADEA collective action – contended that Progressive “knowingly and intentionally” adopted a company-wide system for evaluating employee performance that it knows, based on internal studies, discriminates against African-Americans, other ethnic groups, and older workers. Id. at *3-4. He brought four causes of action, including disparate treatment and disparate impact discrimination under both Title VII and the ADEA. Id. at *5-7. He sought injunctive relief, in addition to back pay, front pay, compensatory damages, and punitive damages. Id. at 7.
The defendants challenged the class and collective allegations in the FAC under Rule 12, arguing that the face of that pleading itself revealed that a class and collective action had not been properly alleged. Focusing on the Rule 23 requirements, they argued that the named Plaintiff could not adequately represent absent class members due to inherent conflicts within the class; that he did not adequately plead allegations sufficient to satisfy the commonality requirement of Rule 23(a); that Rule 23(b)(2) could not provide a vehicle for his monetary claims; and that the Rule 23(b) predominance requirement could not be met even with discovery on his claims. Id. at *12, n.4. Further, they also independently argued that the class and collective action claims in the FAC were barred due to the fact that the named Plaintiff failed to exhaust his administrative remedies as to those claims by including them in his EEOC charge. Id. at *15.
Judge Patricia A. Gaughan of the U.S. District Court for the Northern District of Ohio granted the defendants’ motion to dismiss in part. Interestingly, she entirely sidestepped the Rule 23 arguments. Instead, she rested her decision on the fact that the EEOC charge filed by the named Plaintiff, on its face, made allegations about his treatment alone, and therefore did not put Progressive on notice that he would pursue litigation on behalf of a putative class. She explained that “[t]he Sixth Circuit has made clear that class action claims under Title VII and the ADEA are barred where the plaintiff did not express any intent to file class claims in his dealings with the EEOC.” Id. at *15-17 (citing McKnight v Gates, 282 Fed. Appx. 394, 398 (6th Cir. 2008)). She then examined – and reprinted in full – the charge Mr. Harrison filed with the EEOC, id. at *18-19, concluding that it was “brought in plaintiffs’ name only and makes no reference whatsoever to any other Progressive employee or similarly-situated individual.” Id. at *21. To make the point crystal clear, she highlighted, in bold face type, the problems she saw with attempting to piggy-back a class action onto such a charge: “[d]uring my employment . . . I was subject to discriminatory corporate-wide policies, practices, and treatment through which Progressive discriminated against me in all terms and conditions of my employment. . . .” Id. at 21-22. She rejected the argument that merely by complaining to the EEOC of “discriminatory corporate-wide policies, practices, and treatment,” Harrison had reasonably put Progressive on notice of class action allegations, and/or prompted the EEOC to launch an investigation of class-wide claims of discrimination at the company.
This ruling demonstrates how it behooves every employer facing a class or collective action lawsuit to focus not only on the adequacy of the Rule 23 allegations in the complaint, but also to pull the charging party’s personnel file and read his or her EEOC charge very, very carefully. The ruling in Harrison undoubtedly will save the employer much heartache and expense in defending the lawsuit.