By Gerald L. Maatman, Jr. and Gina R. Merrill

Deciding yet another discovery battle in Wellens v. Daiichi Sankyo Inc., Case No. 3:13-CV-00581 (N.D. Cal. April 11, 2014), the U.S. District Court in the Northern District of California has shut down defendant’s request to secure discovery regarding the 17 opt-in putative class members. (We first blogged on the last discovery battle here.) The decision emphasizes the lenient standard for conditional certification of classes under the Equal Pay Act (“EPA”) and is a stark reminder that courts routinely certify a proposed class without affording defendants a meaningful opportunity to explore facts that might weigh against class treatment.


The putative class in Wellens v. Daiichi Sankyo Inc. consists of female pharmaceutical sales employees. The complaint accuses the company of undercompensating women sales employees as compared to men and imposing a glass ceiling on female advancement. The complaint brings claims under Title VII and the EPA as well as California state law claims.

The company sought discovery regarding the 17 putative class members who have opted-in to the class, specifically seeking written discovery responses regarding all of the women and the depositions of ten of them. Plaintiffs opposed the discovery requests and, last month, filed a motion for conditional collective action certification of the EPA class. That motion is pending.

The Court’s Decision

Emphasizing the “lenient” standard for conditional certification under the FLSA, the Court refused to allow Daiichi the requested discovery. The Court recited the familiar two-step process for maintaining a collective action under the FLSA consisting of: (i) a first stage during which the Court applies a “fairly lenient standard” to determine whether putative class members are similarly situated, and (ii) after discovery is complete, the defendant moves to decertify, thus inviting the court to make a factual determination as to whether the putative class members are similarly situated. The Court quoted approvingly decisions holding that at the first stage the plaintiff has only a “very light burden.”

Since plaintiffs have only a “very light burden,” the Court held that Daiichi’s attempt to discover facts showing that the individuals are not similarly situated was unnecessary at this stage of the litigation. The Court explained that the requested evidence would be relevant to the second stage of the class certification analysis, when Daiichi inevitably moves to decertify the class, but would be “premature” at this stage. While the decision acknowledged that some other courts have allowed discovery regarding opt-in plaintiffs prior to conditional certification, the Court did not engage in any meaningful analysis of those decisions, instead simply stating that, “[i]n this case, the requested discovery … is premature.”   

The Court also seemed moved by plaintiffs’ argument that allowing the depositions of opt-in class members prior to conditional certification might cause some individuals to be deposed on multiple occasions — at this stage regarding the EPA claims, and at a later date regarding the Title VII claims — and the Court was disinclined to require plaintiffs to defend out-of-state depositions more than once.

Implications For Employers

No matter how strong an employer’s arguments opposing class certification may be, courts routinely apply the “lenient standard” to conditionally certify classes that have little chance of surviving a decertification motion. (See here for our prior reporting on one such case.) The effect of this “lenience” is to force defendants to undergo costly discovery or pay a premium to settle a case that ultimately does not deserve to be tried on a class basis. The decision of the Northern District of California, while not a class certification decision, follows suit and reflects an unwillingness by many courts to allow defendants to effectively present their case against class treatment at the initial stages of litigation.

By Gerald L. Maatman Jr. and Howard M. Wexler

Discovery battles in high-stakes employment discrimination class actions are costly, contentious, and oftentimes can serve as a “game changer” that alters the entire landscape of a case.  A recent decision from Magistrate Judge James C. Francis IV in Chen-Oster, et al., v. Goldman, Sachs & Co., 2013 U.S. Dist. LEXIS 148318 (S.D.N.Y. Oct. 15, 2013), highlights this the wide-ranging discovery that courts may force employers to turn over in the face of a large scale class action.


As we previously blogged about here, three female employees commenced this lawsuit in 2010 by filing a Rule 23 class action accusing Goldman of gender bias and having a “corporate culture” that allegedly favors men over women for pay and promotions. Namely, the plaintiffs contend that they have been discriminated against with respect to compensation, promotion, and performance evaluation. Id. at 2.

During the course of discovery the parties – not surprisingly – reached an impasse regarding several categories of documents which Goldman refused to produce, arguing that they were not relevant to plaintiffs’ claims. Specifically, Goldman refused to produce the following categories of documents: (1) all internal complaints made by putative class members during the discovery period that relate to compensation, promotion, or performance evaluation; (2) unredacted copies of all discoverable complaints; and (3) internal complaints made by female employees who are not in the class. Id. at 3. Plaintiffs sought their production by a motion to compel.

Court’s Decision

Prior to addressing the precise issues before him, Judge Francis – setting the tone for the rest of his decision – remarked that courts “typically apply more ‘liberal civil discovery rules’ in employment discrimination cases, giving plaintiffs ‘broader access to employers’ records in an effort to document their claims.’” Id. at 6. Judge Francis noted that even “broader discovery” is warranted when a plaintiff has asserted that a pattern or practice of discrimination exists at the organization-wide level as opposed to allegations levied against an individual supervisor. Id. at 8.

With respect to the first open issue – all internal complaints made by putative class members during the discovery period that relate to compensation, promotion, or performance evaluation – Judge Francis held that Goldman must produce this information despite Goldman’s assertion that they “have nothing to do with gender concerns.” Id. at 9. While complaints containing relevant “buzzwords” such as “sex discrimination,” “gender,” “glass ceiling,” or “women’s work” are clearly gender-related, Judge Francis held that “buzzwords are not required at the discovery stage in a disparate treatment case” given the broader scope of discovery in pattern or practice cases. Id. at 13. Attempting to strike an appropriate balance, Judge Francis held that Goldman “must provide plaintiffs any internal complaints regarding compensation, promotion, or performance review where a female who is a member of the putative class drew a comparison between herself or another putative class member and one or more of her male colleagues.” Id. at 15.

With respect to the second issue – unredacted copies of all discoverable complaints- Judge Francis also held that Goldman must provide this information to plaintiffs as it is relevant to the case and so that plaintiffs are able to  “contact potential witnesses and develop anecdotal evidence of the alleged gender discrimination” Id. at 19. While Goldman objected based on the fact that producing these unredacted complaints would violate the privacy interest of its current and former employees, and therefore undermine the integrity and effectiveness of its internal complaint process, Judge Francis held that the parties’ Protective Order and Confidentiality Agreement addresses such concerns. Id. at 23-24.

With respect to the final issue – internal complaints made by female employees who are not in the class – Judge Francis held that Goldman is not required to product such information since complaints by non-class members “will be overly burdensome” and that such a burden “outweighs the scant possibility of uncovering admissible evidence.” Id. at 27. However, Judge Francis granted a partial win for plaintiffs, ordering Goldman to disclose complaints made by women who are not members of the putative class but work within the same business units as the putative class members (e.g., analysts or administrative assistants). Id. at 29. Judge Francis held that since these employees “have worked closely with the putative class members” they may be able to “provide anecdotes and information regarding their interactions with common managers, experiences utilizing the same internal complaint process, or the general culture of these divisions.” Id.

Implications For Employers

Discovery disputes are often hotly contested matters. Motions to compel can be particularly vital to a party’s case because one answer has the ability to un-hinge a massive trunk of pertinent information. In other words, “knowledge is power.” Here, given the wide-ranging discovery that Judge Francis ordered Goldman to produce – including complaints made by individuals outside the putative class – it remains to be seen what additional theories or claims plaintiffs may pursue based on the wide-ranging discovery it will receive. Stay tuned.

120px-US_DC_NorCal_svg.pngBy Gerald L. Maatman, Jr. and Laura J. Maechtlen

As our blog readers may remember, the fourth amended complaint filed by plaintiffs in Dukes v. Wal-Mart Stores, Inc., No. 3:01-CV-02252 (N.D. Cal.), alleges class-based gender discrimination claims very similar to those originally alleged (before plaintiffs suffered their defeat before the U.S. Supreme Court in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011)), but with two important changes: (i) the plaintiffs narrowed the scope of the class claims to current and former female employees who worked in Wal-Mart regions centered in California only; and (ii) the plaintiffs attempted to establish commonality by alleging that the source of bias was a “discrete group of California District and Regional Managers who provided common direction, oversight, and approval of the challenged discriminatory pay and promotion practices.”   

Following denial of Wal-Mart’s motion to dismiss (discussed in a previous post here), and denial of Wal-Mart’s request for certification of an interlocutory appeal following the same (discussed in a previous post here), the parties are now preparing for class certification briefing. Although extensive discovery had been completed prior to the filing of plaintiffs’ fourth amended complaint, and plaintiffs had allegedly informed the court that they were already in possession of sufficient evidence to proceed with class certification briefing, plaintiffs sought additional discovery, and disputes have ensued. In correspondence dated December 18, 2012 to Magistrate Judge Jacqueline Scott Corley, the parties jointly submitted two discovery issues related to class certification discovery: (i) the geographic scope of discovery; and (ii) the reopening of pre-certification discovery.

Both issues and the Court’s disposition of the issues frame the key challenges faced by employers in dealing with extensive discovery in employment discrimination class action litigation.

Geographic Scope Of Discovery

In the its briefing, Wal-Mart attempted to limit the geographic scope of discovery by agreeing to produce data as of a date certain — June 2004.  Dukes v. Wal-Mart Stores, Inc., No. 3:01-CV-02252, Dkt. 827 (N.D. Cal. Dec. 21, 2012). The company argued that this “snapshot” approach was necessary because the organizational alignment of stores changed frequently throughout the putative class period (of December 1998 through June 2004), the date would capture close to two-thirds of the relevant stores that fell within the “California Regions” during the class period, producing information related to individuals who were employed at stores that fall outside the proposed class definition for significant periods of time would unnecessarily increase the cost and burden of discovery, and any stores excluded by this “snapshot” approach were either not included in the class period for the entire time, and/or on the geographic “fringes” of the geographic definitions of the class. Id. at  4-6. Wal-Mart further argued that Plaintiffs could seek additional discovery after class certification, if they were able to certify a class using the “snapshot” data. Id.

Plaintiffs disagreed, arguing that the date Wal-Mart selected was at the close of the class period, and ignored the many stores and districts that had been in the regions since the opening of the class membership period, omitting 37% of the total 415 stores at issue during the period. Plaintiffs further argued that Wal-Mart’s proposed date would limit (and truncate) statistical analysis, excluding many stores that were subject to regional control during the relevant period.  Id. at 3-4. Plaintiffs further agreed to limit discovery to stores that had been in the California Regions for two years or more. Id.

In her order, Magistrate Judge Corley agreed with plaintiffs, finding that Wal-Mart’s date limitation “excludes potentially relevant evidence and could skew the statistical evidence sought.” Dukes v. Wal-Mart Stores, Inc., No. 3:01-CV-02252, Dkt. 837 (N.D. Cal. Jan. 10, 2013). Accordingly, the Court ruled that plaintiffs are entitled to discovery for all stores which were within the three Regions for at least two years during the class period. Id. at *2. 

Pre-Certification Discovery

Both parties also expressed concern about the scope of pre-certification discovery. The Court previously limited discovery to certification-related issues, subject to appropriate limits, and Wal-Mart complied by providing responses to plaintiffs’ discovery within that limit. However, following the U.S. Supreme Court’s seminal ruling in June of 2011, Plaintiffs argued that additional discovery dating back to 1998 was necessary to meet the class certification requirements. Wal-Mart countered, arguing that it already agreed to supplement certain discovery, and that plaintiffs had not sought modification of the court’s prior order limiting discovery. 

The Court found that there was not a specific dispute before the Court regarding pre-certification discovery, but that plaintiffs were entitled to pre-certification discovery subject to the proportionality of Rule 26 of the Federal Rules of Civil Procedure, and a finding by Judge Charles Breyer (presiding over the case) that the plaintiffs should not be denied the opportunity to marshal and present evidence in support of their class allegations in accordance with the U.S. Supreme Court decision clarifying Rule 23. Id. at *2. 

The parties were ordered by Magistrate Judge Corley to meet and confer to develop an appropriate discovery plan. 

We will continue to watch these issues develop, not only because of the high-profile nature of the case, but also as rulings in the case continue to raise issues employers face every day in litigation of complex discrimination actions. These issues include the way an employer can reasonably limit pre-certification production of information, including information that is not wholly relevant to class certification issues and/or overly burdensome, like production of information related to 418 Wal-Mart stores during a lengthy period of time. 

With or without further discovery briefing, the plaintiffs in Dukes were originally ordered to file a class certification motion on or before January 11, 2013, but the date was continued to April 11, 2013. We will keep our readers updated with further developments as they break from the Northern District of California.    

tug-of-war.jpgBy Gerald L. Maatman, Jr. and Rebecca Bjork

In EEOC v. Freeman, 2012 U.S. Dist. LEXIS 179183, at *6 (D. Md. Dec. 19, 2012), Magistrate Judge Day of the U.S. District Court for the District of Maryland noted that “there simply is no more aggravating action than a lawyer improperly instructing a deponent not to answer a question.” Nevertheless, in the most recent deposition in EEOC v. Freeman, the EEOC continuously instructed its representative in a Rule 30(b)(6) deposition not to provide defense counsel with an answer to their questions. Defendant left the deposition with numerous unanswered questions, lost time, and lost money. Insistent that the EEOC did not follow the applicable Federal Rules of Civil Procedure that govern depositions, Defendant filed a motion to compel the EEOC to provide a Rule 30(b)(6) designee for a second deposition on the unanswered questions, with the costs and sanctions to be paid by the EEOC. The EEOC, adamant to conceal its information, vehemently opposed the Defendant’s motion.  

Facts Of The Case – Round One

The EEOC has a mixed track record of success in EEOC v. Freeman. The lawsuit arose out of a charge of discrimination filed by an African-American woman in January 2008, who claimed that the Defendant discriminated against her on the basis of her race when it rejected her employment application based on her credit history (discussed here in our previous posts on this lawsuit). After the EEOC began investigating the charge, it expanded its investigation to include Defendant’s use of criminal history information for all applicants. The EEOC filed suit alleging a nationwide pattern or practice of discrimination based on the Defendant’s use of criminal background checks. In August 2012, the Defendant brought a motion for partial summary judgment, which the Court granted – and about which we previously blogged here. Defendant contended that, for claims that were not part of the original charge, the 300-day statute of limitations in Section 706 of Title VII should run – not from the date of the original charge – but from the date that the EEOC notified the company that it was expanding its investigation to encompass new clams. The Court granted partial summary judgment and held that the relevant date for purposes of the 300-day time bar was the date of notice of the new charges. The Court’s grant of partial summary judgment was a victory for the Defendant.

Round Two

The story does not end there, however. In March 2012, Defendant served the EEOC with its Notice of Rule 30(b)(6) Deposition requiring the EEOC to produce a representative to discuss a number of topics – about which we previously blogged here. The EEOC argued that Defendant’s requested deposition would not reveal relevant information relevant to its claims and defenses, and the EEOC asked the Court for a protective order. The Court denied the EEOC’s motion and found that the Defendant’s deposition could produce information relevant to its argument that considering applicants’ criminal backgrounds and credit histories is a business necessity. Similarly, the Court was not persuaded by the EEOC’s argument that the Court should prohibit deposition questioning regarding the Commission’s own hiring procedures. The Court relied on facts that showed that the EEOC is involved in the hiring process. Thus, the Court reasoned that Defendant’s depositions would provide relevant information. Finally, the Court denied the EEOC’s third contention that a protective order was appropriate because the EEOC was already deposed on similar issues in another case – EEOC v. Kaplan Higher Educ. Corp., No. 10-CV-2882 (N.D. Ohio May 26, 2011). In a resounding defeat for the EEOC, Judge Day held that the EEOC’s claim was without merit because Defendant did not participate in the EEOC v. Kaplan deposition and that case involved different issues. Thus, the Court denied the EEOC’s motion for a protective order. This marked the Defendant’s first discovery triumph in EEOC v. Freeman.

Round Three

Most recently, Defendant deposed one of the EEOC’s witnesses, Carol Miaskoff, regarding the matters discussed above. At the deposition, Defendant asked pointed questions regarding the EEOC’s policy guidance and regulations pertaining to the legal standard applicable to a Title VII disparate impact challenge to an employer’s use of arrest or conviction records in making hiring and other selection decisions. Id. at *2. The Defendant also attempted to question Miaskoff regarding the EEOC’s policies relating to the applicable legal standard to challenge an employer’s use of credit history or other financial records in making hiring and other selection decisions. Id. at *3. During the deposition, on five occasions the EEOC’s counsel instructed Miaskoff not to answer questions posed by Defendant’s counsel. The EEOC’s challenges left the Defendant without answers to critical questions. Accordingly, Defendant moved to compel the EEOC to provide a designee for a second deposition to answer the challenged questions. Defendant argued that the EEOC’s counsel improperly instructed Miaskoff not to answer its questions. The EEOC responded that the requested information should not be compelled because it was outside the scope of the Rule 30(b)(6) deposition, not relevant, and privileged. Id. at *8.

The Court’s Ruling

At first, Magistrate Judge Day’s ruling appeared deferential to the Defendant. Magistrate Judge Day began his ruling by noting that Federal Rules of Civil Procedure provide that “[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense” and “the witness must answer the question subject to the objection which is thereby preserved for trial.” Id. at *6. In a turn for the EEOC’s benefit, however, Magistrate Judge Day held that “[n]onetheless, a court is not required to grant a motion to compel merely because an attorney gave an improper instruction not to answer.” Id. at *7. Magistrate Judge Day relied on the fact that courts enjoy substantial discretion in the management of discovery and reasoned that three of the Defendant’s question were plainly outside the scope of the Rule 30(b)(6) notice of the deposition. Id. at *10. As for the fourth question that the EEOC challenged, Magistrate Judge Day held that it was proper for the EEOC to instruct Miaskoff not to answer because “privilege is an appropriate ground for instructing a deponent not to answer a question.” Id. at *12. Magistrate Judge Day held that the fifth and final question that the EEOC challenged was reasonably calculated to lead to the discovery of admissible evidence and therefore the EEOC was not justified in instructing Miaskoff not to answer on relevancy grounds. Id. at *11. Nevertheless, Magistrate Judge Day held that it was unnecessary to compel an additional deposition because “further questioning would be redundant…” Id. at *26. Additionally, the Magistrate Judge Day denied the Defendant’s request for sanctions. 

Implications For Employers

Discovery disputes are often hotly contested matters. Motions to compel can be particularly vital to a party’s case because one answer has the ability to un-hinge a massive trunk of pertinent information. In other words, “knowledge is power.” Thus, Magistrate Judge Day’s ruling limits Defendant’s available arguments against the EEOC in this case. 

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

3rd_Circuit_seal.jpgBy Gerald L. Maatman, Jr. and Jennifer Riley

On September 14, 2012, the U.S. Court of Appeals for the Third Circuit issued another opinion in EEOC v. Kronos, Inc., No. 2:09-MC-00079 (3d Cir. Sept. 14, 2012) (“Kronos II”), addressing an ongoing controversy concerning the scope of the EEOC’s subpoena power. (Click here for our previous post on this issue.) 

As the EEOC continues to ratchet up its systemic investigations, it increasingly issues requests to employers for nationwide data concerning their personnel and employment practices, and increasingly the Commission has resorted to its subpoena power to force employers to turn over their data. Third parties are not immune from these efforts.   

In a case of significant importance, the Third Circuit weighed in for a second time in Kronos II on the EEOC’s attempt to obtain broad discovery from a third party. In a mixed opinion, the Third Circuit upheld the EEOC’s efforts to subpoena a broad array of information and refused to cabin the EEOC’s use of such information to the operative administrative charge. 

On the bright side for employers, however, the Court approved broad confidentiality protections and an order directing the EEOC to share the cost of complying with its requests.  


The EEOC’s investigation arose from a charge of discrimination filed by Vicky Sandy with the EEOC on June 30, 2007. Sandy, who is hearing and speech impaired, applied to work as a cashier, bagger, and stocker at a Kroger grocery store in West Virginia. As part of the application process, Sandy took a Customer Service Assessment test created by Kronos. Sandy received a score of 40%, and Kroger relied, at least in part, on the test when it decided to reject Sandy’s application. 

The Ruing In Kronos I

During its investigation of Sandy’s charge, the EEOC issued a third-party administrative subpoena to Kronos. The EEOC sought information regarding the nationwide use of Kronos’ assessment tests and information regarding their impact on both minority and disabled applicants. See EEOC v. Kronos, Inc., 620 F.3d 287, 294 (3d Cir. 2010) (“Kronos I”). After Kronos objected, the EEOC filed a motion to enforce the subpoena in the district court. 

The district court limited the scope of the subpoena to documents related to Kroger’s West Virginia operations, and the positions at issue, from January 1, 2006 to May 31, 2007, and refused to allow discovery related to racial discrimination. Id. at 295. 

The Third Circuit reversed the district court’s geographical, temporal, and position-related limitations, but agreed that the EEOC’s request for documents related to adverse impact on the basis of race was improper because Sandy alleged only disability discrimination. Id. at 301. The Third Circuit also vacated the confidentiality order entered by the district court and remanded for the district court to conduct a “good cause balancing test.” Id. at 301-02.

The Ruling In Kronos II

On remand, the district court entered an order directing Kronos to comply with a modified subpoena. Among other things, the district court limited production of nationwide data to studies or evidence that “were relied upon in creating or implementing the test for Kroger” and information that related to “disabilities, persons with disabilities, or adverse impact upon persons with disabilities.” Kronos II, at 11. It also entered a modified confidentiality order and a cost-sharing order that directed the EEOC to reimburse Kronos for 50% of the estimated $75,000 cost of complying with the subpoena. The EEOC subsequently appealed.

In Kronos II, the Third Circuit again rejected the limitations imposed by the district court. The Third Circuit held that documents discussing any potential adverse impact were relevant – even if not connected to Kroger –  because they could assist the EEOC in evaluating whether Kroger’s use of the test constituted an unlawful employment action. Id. at 17.  

The Third Circuit also held that communications between Kroger and Kronos regarding the test — or any other tests purchased by Kroger — were relevant even though they might not directly relate to any applicant’s disabilities. Id. at 20. The Court noted that, even though the EEOC could not target documents related to race, if the documents happened to reveal a racially-related impact, the EEOC need not ignore such evidence. Id. at 21.

The Third Circuit also upheld the district court’s decision to enter a confidentiality order, noting that the EEOC’s interest in information-sharing could not outweigh the tremendous harm to Kronos that could result from the disclosure of Kronos’ proprietary information. Id. at 26. The Court of Appeals, however, modified the order to remove any presumption that information disclosed by Kronos automatically would be exempt under FOIA, and it also removed any limitation on the EEOC’s use of the data disclosed by Kronos. Id. at 27-29. It reasoned that “once we have decided the documents sought are relevant to the charge of discrimination, any other improper behavior discovered during the course of the EEOC’s investigation may be pursed.” Id. at 29.

Finally, the Third Circuit upheld the district court’s order requiring the EEOC to reimburse Kronos for half the cost of producing the subpoenaed information. The Court of Appeals recognized that such a cost-sharing order was within the district court’s discretion and noted that, because its order likely would lead to additional costs, the district court could reconsider the allocation upon remand. Id. at 32-33. 


Kronos II is a mixed bag for employers and those unfortunate enough to be dragged into systemic investigations by the EEOC. Most notably, the Third Circuit reaffirmed the EEOC’s broad subpoena power and refused to limit Kronos’ production to information concerning the target of the investigation. On the upside for employers, however, the Third Circuit approved the bulk of the district court’s confidentiality order, as well as a cost-sharing plan that could shift upwards of $40,000 to the EEOC. While a bright spot, the Third Circuit noted Kronos’ “non-party” status, and it remains to be seen whether the courtesy of cost-sharing will be extended to others.

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

600px-US-DeptOfLabor-Seal_svg(8).pngBy Alex S. Drummond and William Miles

The Fourth Amendment to the U.S. Constitution guarantees the “right of the people to be secure in their persons, houses, paper, and effects against unreasonable searches and seizures,” and provides that no warrant shall issue with probable cause. In a recent decision in Bank of America v. Hilsa L. Solis, 1:09-CV-2009 (D.D.C. December 13, 2011), the Court extended these protections to an Office of Federal Contract Compliance request for documents during an investigation into an employer’s employment practices under Executive Order No. 11246. The ruling underscores the stakes – and considerable legal issues – underlying governmental workplace enforcement actions.

Overview Of Executive Order No. 11246 And How It Is Enforced

Executive Order No. 11246 provides that government contractors are prohibited from discriminating against any employee or applicant for employment because of race, color, religion, sex, or national origin. Contractors covered by Executive Order No. 11246 must develop and maintain affirmative action programs for each of their facilities. The Office of Federal Contract Compliance Programs (“OFCCP”) was established to enforce this Executive Order per 41 C.F.R. §§ 60-1.2, 60-1.20(a). The OFCCP is within the U.S. Department of Labor (“DOL”).

To enforce this Executive Order, the OFCCP is authorized to conduct compliance evaluations. One compliance evaluation investigation procedure used by the OFCCP is a “compliance review,” which is comprised of a “comprehensive analysis of the hiring and employment practices of the contractor, the written affirmative action program, and the results of the affirmative action efforts undertaken by the contractor.” 41 C.F.R. § 60-1.20(a)(1). 

A compliance review may proceed in three stages, including: (i) a desk audit; (ii) an on-site review; and (iii) when necessary, an off-site analysis. Id. A desk audit is normally conducted at OFCCP offices, and involves a request by the OFCCP of specific documents from the contractor, including the contractor’s affirmative action plan and supporting documentation, and a review of those documents to determine whether all elements required by the regulations are satisfied.  41 C.F.R. § 60-1.20(a)(1)(i). If the OFCCP determines that a follow-up investigation is needed based on the information received during the desk audit, it can demand an on-site review be conducted at the contractor’s establishment.  41 C.F.R. § 60-1.20(a)(1)(ii). These on-site reviews usually involve examining the contractor’s personnel and employment policies, inspecting and copying documents related to employment actions, and interviewing employees, supervisors, managers, and hiring officials. Id.

To select contractors for the compliance review, the OFCCP maintains a random computer-generated list of government contractors in a given geographic area. Under its internal regulations, the OFCCP is supposed to select contractors from the list in strict sequential order. In other words, the OFCCP is required to start at the top of the list and work its way through each contractor one-by-one before going on to the next name of the list.

Under the Obama Administration, the DOL has stepped up the OFCCP’s enforcement efforts relative to employers covered by Executive Order No. 11246.

Facts Of The Bank Of America Case

In early 2004, the OFCCP notified Bank of America that it had selected the bank’s facility located in Charlotte, North Carolina for a compliance review, and it requested a number of documents from Bank of America as part of its proposed desk audit. In the notice, the OFCCP warned that it could file an enforcement action if Bank of America refused to cooperate in the desk audit.   

In response to the OFCCP’s letter, Bank of America agreed to cooperate with the OFCCP, but it requested that the OFCCP first provide it with information about how the OFCCP had come to select this facility for the desk audit. The OFCCP responded that it had selected the facility based on its internal selection procedures. Based on the OFCCP’s representation, Bank of America provided the documents requested by the OFCCP. 

After reviewing these documents, the OFCCP requested that an on-site investigation be conducted because it determined that the initial information provided by Bank of America demonstrated preliminary evidence of pay discrimination between men and women. When the OFCCP requested the on-site investigation, Bank of America refused to cooperate further until the OFCCP could show definitively how it chose this facility to be selected initially for the desk audit.

Rather than provide this information to Bank of America, the OFCCP filed an enforcement action with the DOL to gain access to Bank of America’s facility. During the discovery stages of the enforcement action, Bank of America learned that the OFCCP had not complied with its internal selection regulations because there were 20 other employers above Bank of America on the OFCCP’s selection list that the OFCCP had made no attempt to investigate prior to contacting Bank of America about the desk audit. Bank of America argued that the information the OFCCP obtained from the employer was in violation of the Fourth Amendment because the OFCCP had no specific evidence of a violation of the Executive Order and because the OFCCP had selected the facility without relying on neutral criteria (i.e., by correctly using the selection list).

In response, the OFCCP argued that the Fourth Amendment did not apply to the desk audit portion of the compliance review. As to the on-site portion of the compliance review, the OFCCP conceded that the Fourth Amendment applied to this portion of the compliance review, but it argued that the on-sight review was supported by probable cause based on the information it had secured as part of the desk audit. Additionally, even if the Fourth Amendment applied to the desk audit portion of the compliance review, the OFCCP argued that Bank of America waived its Fourth Amendment rights by voluntarily producing the documents requested.

The DOL rejected Bank of America’s arguments, and its Administrative Review Board upheld the administrative enforcement complaint over the materials sought from Bank of America. The DOL likewise notified the employer that its failure to comply with the order would subject the company to termination or suspension of its current governmental contracts. Id. at 11. Subsequently, Bank of American filed an action in the U.S. District Court for the District of Columbia pursuant to the Administrative Procedure Act, 5 U.S.C. § 702 et seq., seeking relief from the DOL’s order.

The Court’s Analysis

Relying upon holdings in other contexts from the Supreme Court in Donovan v. Dewey, 452 U.S. 594, 598 (1980), and Marshall v. Barlow’s Inc., 436 U.S. 307, 311 (1978), the Court began its analysis by agreeing with Bank of America’s position that the OFCCP’s desk audit amounted to an “administrative search” and that Fourth Amendment’s protections applied to this portion of the compliance review. Id. at  13-14. According to the Court, the Government can satisfy the Fourth Amendment’s standards only if can demonstrate that the request is based on “specific evidence of an existing violation” or a showing that the search is pursuant to “an administrative plan containing specific neutral criteria.” Id. at 27. Because the OFCCP could not show that it had specific evidence of a violation (prior to receiving the information from the desk audit) and because the OFCCP could not demonstrate that it selected the bank’s facility based on neutral criteria, the Court determined that the OFCCP was not entitled to the information requested as part of the desk audit under the Fourth Amendment. Id. at 29.

Nevertheless, the Court determined that the OFCCP had legally obtained the information as part of the desk audit because Bank of America had voluntarily consented to the search by producing the documents initially requested by the OFCCP. The Court rejected two additional arguments raised by Bank of America on the waiver issue. First, Bank of America argued that it was coerced to consent to the search based on the OFCCP’s threat of litigation if it did not comply with desk audit. Second, Bank of America argued that it only produced the documents based on the OFCCP’s misrepresentation that the OFCCP had selected Bank of America based on neutral criteria. In rejecting these two contentions, the Court reasoned that Bank of America was a sophisticated company, it knew its rights under the DOL regulations, and it should have made greater effort to protect those rights before producing the documents to the OFCCP. Id. at  31-34.

Implications For Employers

Notwithstanding the result, the Bank of America decision is a positive development for employers because it extends the Fourth Amendment’s probable cause requirement to the Government’s requests for documents during workplace investigations. If the Government selects an employer for an OFCCP desk audit, an employer can demand that the Government prove that it selected the employer through a neutral selection process; thus, the Government cannot arbitrarily chose an employer for an OFCCP compliance review. The decision makes clear, however, that an employer must be diligent in protecting these Fourth Amendment rights or else it risks a ruling in a future enforcement action that that it has waived those rights. 

By Alex Drummond and Laura Maechtlen

The Supreme Court’s decision in Dukes v. Wal-Mart Stores, Inc., 131 S. Ct. 2541 (2011), continues to find its way into briefing for the nuts and bolts of many class actions. The latest is a discovery dispute in Artis, et al. v Deere & Co., Case No. 10-CV-5289 (N.D. Cal. Aug. 8, 2011), in which the Court rendered a plaintiff-friendly ruling bearing upon the type of discovery that an employer must face in a nationwide workplace bias class action.

Plaintiff Holly Artis filed a putative class action against defendants Deere & Company and John Deere Landscapes, Inc. for alleged nationwide gender discrimination in hiring. The putative class comprised “all female job applicants and deterred applicants for entry level sales, customer service and shipping and receiving employment by Deere’s Equipment Operations divisions.” 

A discovery dispute arose when Plaintiff sought various categories of documents from Defendants, including job applications and other sources of names, addresses, telephone numbers, and email addresses of putative class members and percipient witnesses. Plaintiff argued that she was entitled to an order compelling Defendants to produce the contact information because it was necessary to assemble information needed to meet the elements required for class certification under Rule 23. Specifically, Plaintiff argued the discovery could lead to information that would substantiate the class allegations, including: “(1) that the class is sufficiently numerous; (2) that Defendants provide female applicants and potential applicants discriminatory, inconsistent, or inaccurate statements about the job requirements and qualifications; (3) that Plaintiff’s claim of injury resulting from Defendants’ actions is typical of the class; and (4) that Defendants engage in a pattern or practice of discriminating against female applicants.” 

Defendants argued that, under Dukes, the individualized information that putative class members may possess is irrelevant to class certification. Specifically, Defendants argued that Plaintiff must identify a company-wide evaluation method that can be charged with bias or offer significant proof of a general policy of discrimination and, without that, Plaintiff is not entitled to the discovery at issue.  Defendants also argued that Plaintiff offered no evidence to suggest that her experience is anything other than the experience of one applicant who applied for one position at one branch in Northern California, and that if her experience was anything other than the experience of one individual, she should have evidence of the foundational policy upon which her claims are based. Defendants further claimed that individuals who applied for employment had a legitimate expectation of privacy in their identity and contact information.

A Magistrate Judge issued an order compelling defendants to produce the contact information of all putative class members. Defendants sought review of the Order, and Judge William Alsup upheld the ruling. The Court disregarded Defendants’ arguments that the information violated third parties’ rights to privacy, on the basis that the Magistrate “carefully balanced” the “compelling public need” for discovery with the “fundamental right to privacy.” Id. at 3. Moreover, the Court noted, Defendants were free to request a protective order.

More importantly, the Court held that pre-certification discovery of putative class members’ contact information is proper when plaintiff either makes a prima facie showing that Rule 23 is satisfied or when plaintiff shows “that discovery is likely to produce substantiation of the class allegations.” Id. at 2. The Court found that the Magistrate Judge had found that plaintiff had established a prima facie case for class certification, by making findings as to numerosity, commonality, typicality, and adequacy representation under Rule 23(a), as follows: (1) the complaint alleged that hundreds of former female job applicants were discriminated against, making a prima facie showing of numerosity; (2) a prima facie showing of commonality was made among female applicants who allegedly were provided with “discriminatory, inconsistent, or inaccurate statements about the job requirements and qualifications;” (3) the complaint presented a prima facie showing of typicality in that plaintiff’s claim of injury –  denial of employment, wages, and benefits – was typical of the class; and (4) the interests of the putative class members were implicated by plaintiff’s allegations that defendants engage in a pattern or practice of discriminating against female job applicants. Id. Notably, in addressing Defendants’ arguments based on Dukes, the Court found that this argument tended to go “to the merits of Plaintiff’s claims, which are not appropriately addressed in the context of this discovery dispute.” Id.

This ruling, however, appears to ignore the key holding in Dukes, namely that plaintiffs seeking to certify a class under Rule 23 must show significant proof of a company-wide evaluation or general policy of discrimination. Dukes further recognized that inquiry into the merits is entirely permissible when making determinations under Rule 23; thus, any concern that this showing would “tend to go” toward the merits appears inconsistent with the Supreme Court’s analysis. Indeed, based on Dukes, judges should consider and resolve any issues of fact that are necessary to determine whether one or more elements of Rule 23 are satisfied, regardless of whether those issues may overlap or be identical to one or more issues to be decided in ruling on the merits of the plaintiff’s claims. 

For these reasons, the Court’s decision in Artis overlooked key aspects of Dukes and arguably allowed overly broad discovery without requiring the plaintiff to produce “significant proof” of a company-wide policy that affected the discrimination claims. Plaintiff lawyers in class cases will certainly look to Artis as justification for broad discovery requests post-Dukes.  

By Kari Levine and Laura Maechtlen

In a ruling on April 25, 2011, the California Court of Appeal for the Fourth Appellate District in Starbucks v. Superior Court (Lords), No. G043650 (Cal. App. Apr. 25, 2011) [link to ruling], overturned a trial court’s order allowing a fishing expedition to find class representatives in a “headless” class action. The ruling is instructive for defense of class actions.

On behalf of an estimated 135,000 job applicants, three named plaintiffs sought $26 million in statutory penalties from Starbucks alleging that a preprinted Starbucks’ job application violated provisions of the California Labor Code, which prevent employers from seeking “from any source whatsoever” any records pertaining to minor marijuana convictions sustained by job applicants or employees. In an earlier opinion, Starbucks Corp. v. Superior Court, 168 Cal.App.4th 1436 (2008) (Starbucks I), the California Court of Appeals held that the plaintiffs did not have standing to represent the proposed class because none of the plaintiffs had been convicted of a marijuana-related crime.

Following Starbucks I, the named plaintiffs were dismissed as class representatives on summary judgment. However, on a discovery motion, the trial court permitted the plaintiffs to file an amended complaint to include only job applicants with marijuana convictions. The trial court then allowed class counsel to conduct further discovery to find a “suitable” class representative for the “headless” class action. To achieve this, Starbucks was ordered by the trial court to randomly review job applications until it identified job applicants with prior marijuana convictions. Starbucks was then required to disclose the names to plaintiffs’ counsel, unless the individuals with marijuana convictions affirmatively opted out to a neutral administrator.

Starbucks appealed the discovery order that permitted discovery of the identities of potential class members who may become substitution plaintiffs in the place of the named plaintiffs. The Court of Appeal reviewed the decision by acknowledging that, before allowing class counsel to find a viable class representative, trial courts must apply a balancing test – called the “Parris balancing test” after a leading case titled Parris v. Superior Court, 109 Cal. App. 4th 285 (2003) – and weigh the actual or potential abuse of the class action procedure against the potential benefits that might be gained.

The Court of Appeal acknowledged that plaintiffs “admittedly have made no showing that any of some 135,000 Starbucks applicants have been ‘aggrieved’ as a result of the job application form” and “not a single person has stepped forward who fits within the statutory criteria.” The Court of Appeal further acknowledged that plaintiffs’ counsel underscored the need to protect the privacy rights of marijuana offenders and to avoid any situation where they would be compelled to “relinquish privacy.” The Court of Appeal then recognized the obvious: “we are at a loss to understand how plaintiffs can square these concerns…with the proposed discovery. One can only imagine the potential consternation in a household where a Starbucks applicant with a marijuana-tinged past is ‘outed’ to a spouse, child or roommate who opens the letter and reads about a lawsuit involving job applicants with prior marijuana convictions.” On this basis, the Court of Appeal concluded that the trial court abused its discretion in allowing the discovery.

The Court of Appeal distinguished CashCall, Inc. v. Superior Court, 159 Cal.App.4th 273 (2009),  a case filed against a collection agency, alleging that the company secretly monitored debtors phone calls. In that case, the plaintiffs who filed the action did not have their calls monitored. The Court of Appeal in CashCall approved a procedure by which those whose calls had been monitored would be informed of that fact and permitted to join the litigation. In that case, the aggrieved debtors had no alternative means of protecting their rights because they would not otherwise know that their calls had been monitored. In contrast, the Starbucks’s job applicants were free to “effectuate the legislative purposes underlying Labor Code section 432.8 by bringing individual actions, filing, if necessary, through Doe pleadings, and recovering not only actual damages or a statutory penalty, whichever is greater, but also attorney fees.”

Counsel for Starbucks asked that the Court of Appeal go further, seeking a ruling that plaintiffs without standing should never be allowed to conduct discovery to find a plaintiff with standing, arguing that it was necessary to prevent “encouraging attorney-driven lawsuits and sham lawsuits filed in the names of plaintiffs who are placeholders until discovery can turn up a viable plaintiff.” However, the Court of Appeal refused to flatly prohibit “headless class discovery.”

The Starbucks ruling provides guidance on the scope of discovery allowed in “headless” class actions in California, and may assist employers to limit pre-certification class discovery to find a viable class representative.

WCA2011.jpgThe year just ended was a seismic one for employment-related class action litigation, paving the way for more far-reaching judgments, court rulings, and changes to class action law in 2011. Furthermore, in 2010, the value of major employment discrimination class action settlements increased four-fold over the prior year and the top ten settlements of wage & hour, ERISA, and governmental enforcement class actions increased to $1.16 billion, the highest amount ever.

The “tipping point” aspect of these changes is featured in the 2011 edition of Seyfarth Shaw’s Workplace Class Action Litigation Report. The 664-page Report, our Seventh Annual Edition, examines 849 decisions rendered in 2010 against employers in state and federal courts, including private plaintiff and government enforcement actions. The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become to “go to” research and resource guide for businesses and their corporate counsel facing complex litigation.

A preview copy is available here, and can be ordered here.

While shareholder and securities class action filings experienced only a slight uptick in 2010, employment-related class action filings increased dramatically.  Anecdotally, surveys of corporate counsel confirm that workplace litigation – and especially class actions, multi-plaintiff lawsuits, and government enforcement litigation – continues to drive corporate legal budget expenditures, as well as the type of legal dispute that causes the most concern for their companies.

In terms of key decisions, there was no class action ruling in 2010 quite like Dukes, et al. v. Wal-Mart Stores, Inc., 603 F.3d 571 (9th Cir. 2010), a Title VII gender discrimination case challenging pay and promotions involving 1.5 million class members.  On April 26, 2010, an en banc panel of the Ninth Circuit affirmed the certification order in Dukes by a 6 to 5 vote.  A detailed analysis of the Ninth Circuit ruling in Dukes is contained in Appendix I at page 617 of the Report.  Wal-Mart subsequently filed a petition for certiorari with the U.S. Supreme Court, which was granted on December 6, 2010.  A future ruling by the Supreme Court in Dukes is likely to be one of the top class action developments in 2011 and beyond.

Employment discrimination, ERISA, and FLSA litigation filings increased over the past year.  FLSA and employment discrimination cases spiked sharply, and outpaced ERISA filings.  Based on statistics from PACER filings with the Administrative Office of the U.S. Courts, employment discrimination lawsuits increased to 14,559 in 2010 from 13,720 in 2009; ERISA lawsuits increased to 9,038 in 2010 from 8,944 in 2009; and FLSA lawsuits increased to 6,761 in 2010 from 6,120 in 2009.  Since the majority of FLSA filings were on behalf of groups of employees, wage & hour class actions and collective actions out-paced filings of class actions for employment discrimination and ERISA violations.  In turn, while plaintiffs continued to achieve initial certification of wage & hour collective actions, employers also secured several significant victories in defeating conditional certification motions and obtaining decertification of § 216(b) collective actions.  Given the trickle-down phenomenon of class action settlements (and the increased awareness of wage & hour issues by workers), it is expected that the pursuit of nationwide FLSA collective actions by the plaintiffs’ bar will continue in 2011.

A new case law trend in 2010 focused on workplace arbitration agreements and their enforceability and impact in the class action context. While no one suggests that the sun is setting on workplace class actions, the Supreme Court’s ruling in Stolt-Nielsen S.A., et al. v. Animalfeeds International Corp., 130 S. Ct. 1758 (2010), arms employers with additional ammunition to confront class action litigation through drafting of comprehensive workplace arbitration programs. Stolt-Nielsen quickly spawned several rulings in employment discrimination and wage & hour class actions, thereby demonstrating the importance of this development for employers utilizing arbitration agreements.  This development is likely to accelerate, as the Supreme Court considers state law limits on class action waivers in Concepcion, et al. v. AT&T Mobility, a case scheduled for decision in the Spring of 2011.

On the wage & hour front, a confluence of factors contributed to an ever-increasing number of claims. In one respect, 2010 might be termed the “Year of the Misclassified Worker” class action lawsuit based on end-of-the-year figures that show a sharp increase in crackdowns this year by state and federal authorities, and filings by class action lawyers in pursuing private lawsuits against companies that allegedly misclassify employees.  Employers utilizing independent contractors were the focus of intense litigation scrutiny on these fronts. Approximately 20 states and scores of municipalities passed laws in the past two years that make it easier to force employers to reclassify independent contractors as employees and seek unpaid taxes, or authorizing claims for “wage theft.”  Likewise, the DOL’s enforcement litigation resulted in employers paying $6.5 million in back wages to 5,261 employees in fiscal 2010, up sharply from $2.6 million obtained for 2,190 employees in 2009.  The DOL and Internal Revenue Service (“IRS”) also increased their budgets and staffs to identify and audit employers and their classifications of workers, as well as implementing its new “Plan/Prevent/Protect” enforcement strategy.

Due to the enormous financial stakes, trials of class actions continue to be rare, and verdicts in these trials rarer still.  However, 2010 witnessed the largest employment discrimination class action trial verdict ever – the $250 million verdict in Velez, et al. v. Novartis Pharmaceuticals Corp., Case No. 04-CV-9194 (S.D.N.Y.) following a seven-week trial in the Spring of 2010.  After the verdict, the parties promptly settled the class action for $175 million on July 14, 2010.  The settlement is one of the largest employment discrimination class action settlements ever.

If trials of class actions were rare, settlements of class actions in 2010 reflected a continuing trend from past years, in which significant monetary payments were made in mega-class actions with nationwide classes.  Settlements in FLSA collective actions and ERISA class actions once again outpaced employment discrimination class action settlements in terms of overall settlement values.  In turn, settlement amounts in wage & hour class actions and government enforcement lawsuits experienced significant increases over 2009 figures.  In closing the year, plaintiffs secured a $57 million verdict in a wage & hour class action in Rekhter, et al. v. Washington Department of Social And Health Services, Case No. 07-895-5 (Thuston County, WA), on December 20, 2010.

Finally, case law developments under the CAFA accelerated in 2010.  The statute has had profound effects on litigation strategy and the structuring of underlying class actions.  In this context, the CAFA’s impact on workplace class actions is both varied and evolving.  Class actions and collective actions under Title VII, the ADEA, the FLSA, and ERISA typically are brought in federal court.  The CAFA may have limited impact on strategic decisions in those cases relative to choice of venue in a federal court or state court.  Class actions in state law-based wage & hour litigation are another matter.  The plaintiffs’ bar and defense bar alike continue to confront novel CAFA issues in wage & hour cases, as the fight over venue is often a key driver of exposure and risk.  On the one hand, employers sued in state law wage & hour class actions are increasingly confronted by plaintiffs’ lawyers seeking to avoid removal to federal court by various stratagems, including prayers for relief of less than $5 million, the filing of multiple “baby” class action claims on behalf of fewer than 100 plaintiffs, and limiting the scope of the class to residents of one state.  On the other hand, defense counsel seeking (often successfully) to dismiss state law claims pursued by plaintiffs with FLSA claims in “hybrid” wage & hour class actions in federal court argue that judges should not exercise supplemental jurisdiction over the state law claims.  Federal courts, in turn, are increasingly confronted with questions of whether original jurisdiction exists under the CAFA over such hybrid state law claims, and employers also may face a two front litigation war – one in federal court and the other in state court – depending on resolution of those CAFA issues.  These litigation issues continue to shape class action practice and defense strategy, and are likely to do so for the foreseeable future.


WCA2011.jpgSeyfarth Shaw’s 2011 Workplace Class Action Report is coming soon! The report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation. Our loyal readers can expect to receive their copy in several weeks, with rulings and case law developments reviewed and analyzed through December 31, 2010.

To say the least, 2010 was a significant year for workplace class action litigation. We will address these developments in detail in the upcoming Report, and this post provides a preview.


Key developments over the past year manifest multiple trends that impact employers.

First, 2010 was the year of big headlines in employment discrimination class actions.  Those headlines involved the biggest class action trial verdict ever – the $250 million verdict in Velez, et al. v. Novartis in May of 2010 – and its subsequent settlement two months later for $175 million.  As success by the plaintiffs’ bar often prompts copy-cat litigation filings, these headlines are likely to encourage more class actions in the future, as well as enhanced settlement demands by the plaintiffs’ bar to resolve their cases.

SupremeCourt.jpgSecond, 2010 also spawned landmark Rule 23 decisions; none was more momentous than the ruling by the Ninth Circuit in Dukes, et al. v. Wal-Mart Stores, Inc. on April 26, 2010, and the subsequent grant of certiorari in the case by the U.S. Supreme Court on December 6, 2010.  In a 6 to 5 en banc opinion, the Ninth Circuit upheld, in part, certification of the largest employment discrimination class action ever – a pay and promotions class of approximately 1.5 million female workers.  The Supreme Court’s grant of certiorari put the Ninth Circuit’s decision in flux and other decisions on hold, while the class action bar awaits the next chapter in the litigation.  The Supreme Court’s expected ruling in Dukes in 2011 is apt to be a bellwether decision in areas that the Supreme Court has left mostly to federal circuit courts of appeals in recent years. 

Third, the continued economic challenges and low hiring rates during 2010 fueled more class action and collective action litigation.  Most significantly, the plaintiffs’ bar increased the pace of FLSA collective action filings seeking recovery for unpaid overtime wages.   These conditions spawned more employment-related case filings, both by laid-off workers and government enforcement attorneys.  In turn, this resulted in higher settlement numbers (especially in government-initiated lawsuits and wage & hour litigation).  Even more class action litigation is expected in 2011, as businesses continue to re-tool their operations.

Map.jpgFourth, by sheer numbers, wage & hour litigation continued to far out-pace all other types of workplace class actions.  This trend was also manifest in more wage & hour class action and collective action decisions by federal and state court judges than any other area of workplace litigation.  It also reflected the fact that in terms of case filings, collective actions pursued in federal court under the Fair Labor Standards Act (“FLSA”) outnumbered all other types of private class actions in employment-related cases.  As a result, FLSA collective actions produced more rulings in 2010 than class actions for employment discrimination or under ERISA.  Significant growth in wage & hour litigation also was centered at the state court level, and especially in California, Florida, Illinois, New Jersey, New York, Massachusetts, Minnesota, Pennsylvania, and Washington. This trend is likely to continue in 2011.

Fifth, as Democratic legislative initiatives for labor and employment reform stalled, in the wake of Republican Congressional gains, the Obama Administration continued to ramp up its enforcement efforts through the U.S. Equal Employment Opportunity Commission (“EEOC”) and the U.S. Department of Labor (“DOL”).  The Obama Administration’s emphasis on administrative regulation and enforcement lead to more government-initiated litigation over workplace issues.  Those efforts are expected to intensify as the Administration’s policy goals, which may be thwarted in the Congress, are advanced through agency regulation and government enforcement litigation.  Many state labor departments are following this lead. Increased funding for the DOL and the EEOC also resulted in the recruitment and training of more DOL and EEOC attorneys and investigators.  It is expected that employers will encounter more investigations – and more governmental enforcement lawsuits – in 2011 as the augmented staffs of the DOL and EEOC carry out their law enforcement functions.  Likewise, when measured by monetary recoveries, government enforcement litigation resulted in higher settlement amounts for workplace litigation than past years.  Even more aggressive government enforcement litigation is likely in the coming year.

scalesofjustice.jpgSixth, the Class Action Fairness Act of 2005 (“CAFA”) continued to have significant effects on workplace litigation, and most significantly on wage & hour class actions filed in state court.  The past twelve months saw evolving case law developments on jurisdictional issues under the CAFA.  As the plaintiffs’ bar continues to devise techniques to adapt to the CAFA, rulings on the scope, meaning, and application of this law, of relatively recent vintage, have occurred at a surprising rate.  In this respect, the development of CAFA-related law continued to mature quickly in the Ninth Circuit, as the high volume of California-based wage & hour class action filings resulted in a deluge of CAFA removals in California federal courts in 2010.

Seventh, and finally, the financial stakes in workplace class action litigation increased in 2010.  Plaintiffs’ lawyers have continued to push the envelope in crafting damages theories to expand the size of classes and the scope of recoveries.  These strategies resulted in a series of massive settlements in nationwide class actions, particularly in the context of wage & hour litigation.  This trend is also unlikely to abate in 2011.