By Danielle Kays, Sarah Bauman, and James Nasiri

The Illinois Supreme Court issued its highly-anticipated decision in Tims v. Black Horse Carriers today, ruling that a five-year statute of limitations applies to all claims under the Illinois Biometric Privacy Act (“BIPA”).  The Court’s decision (available here) answers a years-old question regarding the timeliness of BIPA claims, and offers insight into future litigation.

Background On Tims v. Black Horse Carriers

As a refresher, in March 2019, the Plaintiff filed a class action complaint alleging that Black Horse Carriers violated BIPA by using timeclocks that allegedly scanned and stored employees’ fingerprints.  The complaint asserted that the Defendant violated subsection 15(a) of BIPA in failing to institute, maintain, and adhere to a retention schedule for biometric data; and subsections 15(b) and (d), respectively, by obtaining their employees’ biometric data and disclosing it to third-parties without first obtaining their written, informed consent.  The Plaintiff did not allege claims under the remaining subsections 15(c) or (e) of BIPA which prohibit the sale of a person’s biometric data for a profit, and impose a duty of reasonable care in storing and protecting biometric data from disclosure, respectively.

The Defendant moved to dismiss the Plaintiff’s claims as untimely.  The Defendant argued that because BIPA does not contain a specific statute of limitations, the trial court should apply the one-year limitations period set forth in section 5/13-201 for privacy actions.  Under that limitations period, the Plaintiff’s claims would be time-barred.  The Plaintiff countered that the five-year “catch-all” limitations period contained in section 5/13-205 was more appropriate for actions under BIPA.  And under that limitations period, the Plaintiff’s claims would be viable. 

In September 2019, the trial court denied the motion to dismiss, holding that section 13-201 does not apply because the Plaintiff alleged a violation of the Act itself, rather than a general violation of privacy.  As such, the trial court opined that a five-year limitations period applies to the Plaintiff’s claims.  The Defendant appealed the decision to the Illinois First District Appellate Court. 

Illinois Appellate Decision Highlights

In an anomalous ruling on interlocutory appeal, the Illinois Appellate Court held that three subsubsections of BIPA had a five-year time limitation, while the remaining two subsections were subject to a one-year time limitation.  Specifically, the Illinois Appellate Court held that the one-year limitations period in section 201 applies to BIPA subsections 15(c) and 15(d) because these subsections involve “publication” of biometric data, which is a term explicitly used in section 201.  Conversely, the Illinois Appellate Court found that subsections 15(a), (b), and (e) of BIPA were subject to a five-year limitations period to the extent such subsections do not contain the word “publication.”  The Defendant subsequently appealed the Illinois Appellate Court’s decision to the Illinois Supreme Court.

Illinois Supreme Court Oral Argument Highlights

At oral argument, the Defendant—utilizing cannons of statutory interpretation and Illinois Supreme Court precedent—argued that BIPA is a privacy statute and therefore should be governed by the one-year statute of limitations period codified in section 13-201.  The Plaintiff countered that while BIPA is a privacy statute, “publication” is not an element of a claim under BIPA, and thus the five-year catchall limitations period codified in section 13-205 of the Code should apply to all claims under the Act.

The Illinois Supreme Court Justices asked few questions and made few remarks during oral argument.  Notably, Justice Michael Burke (who is no longer on the bench, and did not take part in this opinion) opined that the Illinois Appellate Court’s holding seemed “unworkable.”  For further comment on the oral argument, visit our blog post here.

Illinois Supreme Court’s Landmark Decision

First, the Court observed that both parties: (1) agreed that the Illinois Appellate Court erred in applying two different limitations periods to BIPA; and (2) requested the Court to apply either a one-year or a five-year limitations period to the entire Act.  The Court agreed, holding that the Illinois Appellate Court erred in this respect.  The Court observed that one of the purposes of a statute of limitations is “to reduce uncertainty and create finality and predictability in the administration of justice.”  Echoing Justice Michael Burke’s articulated concern at oral argument, the Court held that two different limitations periods applied to a single Act “does not align with this purpose,” reasoning this would “create an unclear, inconvenient, inconsistent, and potentially unworkable regime.”

The Court next analyzed whether a one-year or five-year statute of limitations period should apply to all BIPA claims by “employing established principles of statutory construction.”  The Court first utilized the “cardinal rule”—i.e., the plain and ordinary meaning of BIPA’s statutory language.  The Court observed that, consistent with the Illinois Appellate Court’s analysis, neither subsection 15(a) (requiring a BIPA-compliant biometric data policy), 15(b) (requiring BIPA-compliant informed consent procedures), nor 15(e) (prohibiting negligence in storing, transmitting, or disclosing biometric information), “contain words that could be defined as involving publication.”  Thus, the Court held that subsections (a), (b), and (e) are subject to the five-year catch-all limitations period contained in section 13-205 of the Code. 

As to subsections (c) and (d), the Court agreed  that a one-year statute of limitations could be applied to those subsections, but ultimately ruled otherwise.  Again utilizing the “cardinal rule” of statutory interpretation, the Court observed that subsections 15(c) and (d) “contain the words ‘sell,’ ‘lease,’ ‘trade,’ disclose,’ ‘redisclose,’ and ‘disseminate,”’ and thus “could be defined as involving publication and would fall within the purview of the one-year limitations period in section 13-205 of the Code.”  However, the Court rejected the Illinois Appellate Court’s choice to apply such a limitations period to those subsections to the extent the Court “consider[s] not just the plain language of [BIPA,] but also the intent of the legislature, the purposes to be achieved by the statute, and the fact that there is no limitations period in the Act.” 

Accordingly, the Court held that a five-year statute of limitations applies to all BIPA claims.  The Court reasoned that a five-year time limitation is appropriate because Illinois courts have routinely applied the catch-all limitations period to other statutes that lack a specific statute of limitations, which BIPA similarly lacks.  The Court also observed the General Assembly’s “thorough list of goals intended to accomplish as well as the ills it intended to ameliorate”—namely, the uniqueness of biometric information and statement that (15 years ago) the “full ramifications of biometric information technology are not fully known.” 

Coming Up Next

Looking ahead, the Illinois Supreme Court will soon resolve the issue of when BIPA claims accrue—upon the first biometric collection (or here, fingerprint scan) versus the final biometric collection—in Cothron v. White Castle System.  Indeed, the decision has been fully briefed and argued as of May 2022—approximately four months before the Tims decision—so we can expect that ruling any day now. 

Additionally, companies continue to appeal to the Illinois Supreme Court to resolve largely untested defenses to BIPA claims, such as the various exceptions to BIPA, e.g., the HIPAA exemption and preemption under the Labor Management Relations Act.  See 740 ILCS 14/10.

Implications For Employers

Thousands of cases have been filed under BIPA over the past few years against companies, and this lengthy statute of limitations continues to make BIPA litigation lucrative for plaintiffs.  While BIPA litigation against Illinois employers largely targeted employee timekeeping systems (such as in the Tims case), the technology targeted under BIPA continues to grow—especially as technologies used by companies continue to evolve.  New technologies being targeted under BIPA include voice-activated headsets, and virtually any technology that may use finger or hand scans, face or eye scans, voice-recognition technology, and other artificial intelligence technology used to scan or recognize photos or videos.  Therefore, employers should continue to review their technology, policies, and procedures before implementing new technological advancements. For more information about the Illinois Biometric Information Privacy Act and how this decision may affect your business, contact the authors—Danielle Kays, Sarah Bauman, and James Nasiri—your Seyfarth attorney, or Seyfarth’s Workplace Privacy & Biometrics Practice Group.

It is with great excitement that we announce the publication of Seyfarth Shaw’s 2023 Edition of its EEOC-Initiated Litigation Report. 2022 was another year of great change at the U.S. Equal Employment Opportunity Commission – and 2023 promises to be a year of even greater change at the EEOC. Seyfarth’s EEOC-Initiated Litigation report features a look ahead – and a look back – at the shifts at the EEOC and what they mean for you.

Notably, the EEOC is poised to achieve a Democratic majority in the coming months, and this political shift will inevitably impact how the EEOC develops and enforces its agenda. Not coincidentally, this imminent political shift aligns with the announcement of the EEOC’s proposed statement of its enforcement priorities for the next five years. The EEOC’s proposal takes aggressive stances on a host of issues, including:

  • a potentially new and progressive stance to expand the scope of workplace equal protection laws;
  • close scrutiny of the ways employers might use – and potentially misuse – technology in the workplace.
  • a reinvigorated interest in large-scale, systemic investigations and litigation;
  • a focus on equal pay protections, including not waiting for charges of discrimination to be filed, but instead initiating investigations directly by the EEOC; and
  • an ongoing but accelerated emphasis on preventing systemic harassment in the workplace.

Upheavals in the global economy are translating to real-world employment issues from coast to coast. The EEOC’s mission to identify and address equal employment opportunity issues is being put to the test in profound and often unique ways.  With a beefed up budget, an emboldened Democratic majority, and fresh priorities, we expect EEOC enforcement efforts to significantly accelerate over the coming year. Our 2023 resource is meant to equip employers with critical information to navigate this ever-changing regulatory and litigation environment.

To access the entire Seyfarth 2023 EEOC-Initiated Litigation Report, please click here.

We will, of course, continue to keep our clients and friends updated on all of these cutting edge developments throughout the year here at https://workplaceclassaction.com

By: Andy Scroggins, Matt Gagnon, Sarah Bauman, James Nasiri, Christopher DeGroff

Seyfarth Synopsis: On Tuesday, January 10, the EEOC released for public comment its draft 2023-2027 Strategic Enforcement Plan, or “SEP” (available here)—a document that will guide the Commission’s enforcement priorities for the next five years. The EEOC’s previously announced Strategic Plan described “how” it would pursue its enforcement goals. (See our prior blog on the Strategic Plan here.) The Strategic Enforcement Plan, on the other hand, describes “what” the EEOC’s enforcement priorities will be, making it a must-read for employers and their attorneys who want to be prepared if their industry or employment practices have them poised for increased government scrutiny.

History of the SEP

The EEOC’s first SEP, which was in effect for its Fiscal Years 2013-2016, identified six broad subject matter priorities:

  1.          Eliminating Barriers in Recruitment and Hiring.
  2.          Protecting Immigrant, Migrant and Other Vulnerable Workers.
  3.          Addressing Emerging and Developing Issues.
  4.          Enforcing Equal Pay Laws.
  5.          Preserving Access to the Legal System.
  6.          Preventing Harassment Through Systemic Enforcement and Targeted Outreach.

The EEOC’s second SEP, which covered Fiscal Years 2017-2022, kept the same six broad priorities but announced additional “areas of focus” within those areas. Consistent with the EEOC’s announcement, employers saw increased enforcement activities in these areas, which included a focus on protecting the rights of the LGBT community; addressing issues related to pregnancy; scrutinizing “complex” employment relationships, such as contingent work arrangements and gig economy roles; and “backlash discrimination,” particularly as it relates to those who are Muslim or Sikh.

The EEOC’s proposed third SEP continues with the same six priorities but with notable additional details that put the employer community on notice of the Commission’s intentions. In particular, the proposal includes robust interest in how employers use technology to recruit, hire, and manage workers; highlights protections for pregnancy-related issues, LGBTQI+ individuals, and those unaware of or unable to exercise their rights; and calls out the construction and technology industries for closer scrutiny.

Subject Matter Priority 1: Eliminating Barriers in Recruitment and Hiring

Prior versions of the SEP announced the EEOC’s focus on recruitment and hiring practices and policies that might give rise to discrimination against members of racial, ethnic, and religious groups, as well as women, older workers, and those with disabilities. The proposed SEP continues to include those groups while adding specific call outs for pregnant workers and those with pregnancy-related medical conditions, and LGBTQI+ individuals.

The EEOC also added far more detail about the types of hiring practices and policies that it intends to scrutinize. For example, prior SEPs described the EEOC’s intention to prevent steering members of protected groups into specific jobs. The proposed SEP goes further to explain that the EEOC also will be examining whether employers are segregating workers in jobs, or by job duties, based on membership in a protected group.

Building further on this, the proposed SEP includes several new but related areas of focus. These include looking at practices that may limit access to work opportunities, such as advertising jobs in a manner that excludes or discourages some protected groups from applying, or denying training, internships, or apprenticeships. The EEOC also intends to scrutinize whether businesses are denying opportunities to move from temporary to permanent roles, including when permanent positions are available.

Likewise, the EEOC modified its earlier focus on screening tools that might disproportionately impact workers based on their protected status, noting explicitly that it is interested in employers’ use of artificial intelligence and automated systems in that regard.

This aligns with the EEOC’s increased interest in how employers use technology to recruit and hire workers. Here, the Commission has emphasized its intent to investigate whether protected groups might be harmed—whether intentionally or not—by automated systems used to target job advertisements to particular populations, recruit workers, or aid in hiring decisions. The proliferation in recent years of electronic tools available to assist employers to find talent in challenging labor markets may provide fertile ground for the EEOC on this issue.

The EEOC also in this section called out a “lack of diversity” in certain industries, naming construction and high tech in particular, and stated its intent to monitor those benefitting from substantial federal investment.

Subject Matter Priority 2: Protecting Vulnerable Workers and Persons from Underserved Communities from Employment Discrimination

For purposes of the SEP, “vulnerable workers” are those who may be unaware of their rights under equal employment opportunity laws, or reluctant or unable to exercise those rights. The EEOC’s proposal adds substantially to this priority as well. In a change from prior versions of the SEP, the EEOC has called out nine different categories of vulnerable workers that it aims to safeguard:

  • immigrant and migrant workers;
  • people with developmental or intellectual disabilities;
  • individuals with arrest or conviction records;
  • LGBTQI+ individuals;
  • temporary workers;
  • older workers;
  • individuals employed in low wage jobs, particularly teen-aged workers employed in such jobs;
  • Native Americans/Alaska Natives; and
  • persons with limited literacy or English proficiency.

Employers in sectors that engage many members of these communities, or who have operations in areas of the country with large populations of such workers, may face increased inquiry.

Subject Matter Priority 3: Addressing Selected Emerging and Developing Issues

Priority 3 has long been a catch-all for the EEOC to address topical issues or push for expansions of the laws that it enforces.

One priority remains largely unchanged from the prior SEP: qualification standards and inflexible policies or practices that discriminate against individuals with disabilities will remain an area of focus.

The EEOC has dropped two priorities that appeared in this section of the prior SEP. These include protecting LGBT people from discrimination, and clarifying the application of workplace civil rights protections in complex employment relationships and structures. However, those priorities have not fallen completely by the wayside and do appear in other areas of the proposed SEP.  This is likely just an acknowledgement that these issues are no longer “emerging” areas, but rather have been fully embraced in the EEO universe.

The proposed SEP elaborates on statements from the earlier document related to pregnancy discrimination to include protection for those affected by pregnancy, childbirth, and related medical conditions and disabilities, as well as requests for reasonable accommodations related to same.

Prior versions of the SEP have discussed “backlash” discrimination, but the new proposed SEP goes further. The EEOC has noted that discrimination against some groups can arise as a backlash in response to local, national, or global events. The EEOC identifies some groups facing such discrimination now, including African Americans; individuals of Arab, Middle Eastern, or Asian decent; Jews; Muslims; and Sikhs, but also notes that the groups at issue, and the practices they are subjected to, can be expected to change over time and in response to current events.

The proposed SEP also calls out discrimination and stereotyping related to COVID-19, noting in particular that persons of Asian descent, older workers, and persons with disabilities have been targeted. This enforcement priority also extends to requests for accommodation by those with disabilities or sincerely held religious beliefs; unlawful medical inquiries and direct threat determinations; and mistreatment based on actual or perceived disabilities, including those associated with long COVID.

The final topic under this priority is “technology-related employment discrimination.” Here, the EEOC is interested in particular in employment decisions based on algorithmic decision-making; as well as automated recruitment, selection, production, and performance management tools. (The EEOC’s recent interest in this area has been the subject of several prior blog posts, including here and here.)

Subject Matter Priority 4: Advancing Equal Pay for All Workers

The proposed SEP revises this priority to make more clear that it intends to focus on pay discrimination based on any protected category. (This prior version was more focused on sex-based differences in pay.)

The proposal departs from prior versions in two other notable ways. First, it includes a statement that the EEOC will not depend on charges from members of the public, but will use its authority to initiate directed investigations and Commissioner’s charges in order to investigate pay differences. Second, the EEOC states its intent to challenge practices that it perceives to contribute to pay disparities, including employer policies and practices that encourage secrecy around pay, reliance on past salary history to set pay, and requiring applicants to disclose expected pay rates during the application stage.

Subject Matter Priority 5: Preserving Access to the Legal System

The EEOC’s fifth priority aims to keep an eye on policies and practices that the Commission believes may limit or discourage individuals from exercising their rights under employment statutes, or hinder the EEOC’s ability to conduct investigations. The proposed SEP is largely unchanged from the prior version and focuses on overly broad agreements, including waivers, releases, non-disclosure agreements, non-disparagement agreements, and arbitration agreements; failure to maintain applicant and employee records; and practices seen as retaliatory against those who engage in protected activity.

Subject Matter Priority 6: Preventing and Remedying Systemic Harassment

Past SEPs have offered robust statements in support of the EEOC’s interest in combatting harassment, and that continues in the new proposal. Of note, the EEOC’s proposal now expressly calls out harassment based on pregnancy, gender identity, and sexual orientation. The EEOC has also articulated more detailed support for employer training, including providing education, technical assistance, and policy guidance.

Continued Focus on Systemic Investigations and Litigation

In the proposed SEP, the “Commission once again reaffirms its commitment to the agency’s systemic program.” The EEOC looks to its SEP priorities to decide what types of systemic investigations and cases to pursue. Indeed, the SEP priority areas are “given precedence over other cases to maximize the EEOC’s strategic impact.”

Implications For Employers

The SEP is still a draft, and the EEOC is accepting comments through February 9, 2023. We will report on the final version once it is available.

However, the proposed SEP is revealing of the EEOC’s intentions. Charges related to pregnancy or issues related to LGBTQI+ individuals are high on the agency’s enforcement radar. So too are employment practices that rely on automated systems, including using technology to find and screen candidates.

On an industry basis, companies in construction, technology, and staffing should be particularly alert to EEOC enforcement activities. The same is true of companies that use contingent workers, or that employ significant numbers of workers from vulnerable communities.

With the EEOC soon to be comprised of a majority of Commissioners appointed by the Biden administration, we anticipate a pronounced uptick in enforcement activity. Employers should expect that the Commission will continue to make good on its promise to litigate large-scale, high-impact, and high-profile investigations and cases that address the issues identified as its enforcement priorities and areas of focus.

By Danielle Kays and Danny Riley, Law Clerk

Seyfarth Synopsis: BNSF Railway seeks a new trial following the verdict against it in the first ever jury verdict in an Illinois Biometric Information Privacy Act (“BIPA”) class action.  BNSF contends that the verdict, which resulted in a court award of $228 million in damages, is unconstitutional and unreasonable given the class members suffered no actual harm.

As a refresher, under BIPA, biometric information is any information “regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual.” 740 ILCS §14/10. The Act provides a private entity may not “collect, capture, purchase, receive through trade, or otherwise obtain” this information without informed consent. 740 ILCS §14/15(b).  To comply with this state law, companies must provide informed, written consent before the capture, use and storage of biometric information, as well as notices specifying the company’s data collection practices. Damages for each negligent violation can rise to $1,000, with reckless or intentional violations being capped at $5,000.

Last month, a Chicago jury heard the first ever jury trial of a BIPA class action in the case Rogers v. BNSF Railway Company.  At issue was whether–and to what degree–BNSF could be held vicariously liable under the BIPA for conduct by a third-party vendor that operated finger scanning technology.  Despite BNSF’s argument that the railway’s vendor was the entity that collected the employees’ biometric data (and not the railway), the jury found that the railway was liable for approximately 45,600 reckless or intentional violations.  Now, in its motion for a new trial, BNSF argues that the “unprecedented judgment awarding plaintiff and the class a nine-figure windfall despite their admission that they suffered no actual harm was not supported by the evidence at trial.”

While BNSF claims that the ruling is unconstitutional, it also argues that the evidence proposed to the jury was not enough to support a finding of liability.  The railway argues that even in the case that there is a finding of liability, any violations would constitute negligence, rather than reckless or intentional violations.  Should BNSF successfully argue that its violations were negligent, damages may still be upwards of $45 million.

BNSF also noted the Illinois Supreme Court’s pending decision in Cothron v. White Castle, which will decide whether BIPA claims accrue “each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, or only upon the first scan and first transmission.” 20 F.4th 1156, 1167 (7th Cir. 2021).  If the Illinois Supreme Court sides with the defendant in White Castle, BNSF argues that the plaintiff’s claim will be dismissed and the class decertified.

Should the Court deny BNSF’s motion for a new trial, the railway previously said it plans to appeal the verdict.

The time is now for employers to conduct internal audits to make sure they are BIPA compliant.

BIPA Compliance

•  Obtain a written consent form from individuals if you intend to collect, use, store, or disclose any personal biometric information.

•  Notify individuals in writing that the information is being collected or stored and the purpose and length of time for which the biometric identifier will be collected, stored, and used.

•  Create and maintain a retention schedule for biometric data retention and guidelines for permanently destroying biometric information.

For more information about the Illinois Biometric Information Privacy Act, and how this development may affect your business, contact the authors, your Seyfarth attorney, or Seyfarth’s Workplace Privacy & Biometrics Practice Group.

By Christopher DeGroff, Andy Scroggins, and Sarah Bauman

Seyfarth Synopsis: On Friday, November 4, the EEOC released its draft 2022-2026 Strategic Plan (available here)—a blueprint of its proposed enforcement plan for the upcoming years. The Plan focuses on strategic objectives accompanied by targeted goals and performance measures. Though each four-year plan differs to some extent, the EEOC’s vision of “justice and quality in the workplace” and mission to “stop and remedy unlawful employment discrimination” remains unchanged. This Strategic Plan is a must-read for employers and their attorneys, as it sheds light on the EEOC’s focus over the next four years for achieving its overall mission. 

Strategic Plan: FY 2022-2026

Every four years, the EEOC is required to publish these plans which serve as a framework for the EEOC in achieving its mission to combat employment discrimination. Through the Strategic Plan, the EEOC identifies three Strategic Goals, which build on those set out in the prior plan.

The Strategic Plan is not to be confused with the Strategic Enforcement Plan, or the “SEP.” The SEP is the “what”—i.e., what priorities the EEOC will focus on—while the Strategic Plan is the “how.” The term of the last SEP expired at the end of Fiscal Year 2021, but it remains in effect until modified or withdrawn. The EEOC has announced its intention to update and release a new SEP sometime in Fiscal Year 2023.

Strategic Goal 1: Enforcement Authority For Preventing And Remedying Discrimination

The EEOC’s first Strategic Goal is to combat employment discrimination through the strategic application of EEOC’s law enforcement authorities. This goal is comprised of two key objectives: (1) having a broad impact on preventing and remedying employment discrimination while providing meaningful relief for victims of discrimination; and (2) exercising enforcement authority fairly, efficiently, and based on the circumstances of each charge or complaint. The EEOC will focus on strengthening the capacity of the Agency in the private, public, and federal sectors. 

Indeed, in the last three years, the EEOC reported an average of 67,000 private sector charges of discrimination, 8,300 requests for federal sector hearings, and 4,300 requests for federal sector appeals—an uptick from the last four-year period for the federal sector hearing and federal sector appeal requests. Given the large number of charges and federal sector requests for hearings and appeals, the EEOC notes it must “think strategically about how to target its resources to ensure the strongest impact possible.” The EEOC highlights a number of strategies for carrying out that goal, such as rigorously and consistently implementing the SEP to focus resources on EEOC priorities, and using administrative and litigation mechanisms to identify and eradicate discriminatory policies and practices. Additional information on these strategies appear on page 15 of the proposed plan.

Some insight into the Agency’s thinking, and potential impact for employers, can be obtained by looking at the performance measures that EEOC has set. (A summary table appears on the last page of the proposed plan.) For example, the EEOC aims to obtain targeted equitable relief in 90% of all conciliation and litigation resolutions by the final year of the plan. It also aims to resolve at least 90% of its enforcement lawsuits annually. The combination of these two measures suggests that employers must expect to provide some monetary relief to end disputes with the EEOC, but the EEOC also may feel some pressure to be reasonable in its demands in order to close enough of its files each year. That pressure may be particularly acute as each fiscal year draws to a close.

The EEOC also intends to measure its performance as a function of its capacity to conduct systemic discrimination investigations.  This includes training more field staff to identify and investigate such claims, and to have staff members in each District who are dedicated to conducting systemic discrimination investigations. This suggests that employers can anticipate more systemic investigations to be opened, and for those investigations to be conducted more rigorously.

The EEOC intends to step up its efforts to monitor compliance with the conciliation agreements it has entered with employers. Employers who thought that conciliation agreements might bring some peace after an investigation may now face greater burdens in demonstrating their adherence to the terms of those documents.

In addition, the EEOC continues to look at streamlining and improving its charge intake, including providing more availability for intake interviews and taking advantage of technological tools. Removing barriers to filing charges could lead to an increase in charge activity.

Strategic Goal 2:  Education And Outreach

The EEOC’s second Strategic Goal is to prevent employment discrimination and advance equal employment opportunities through education and outreach, comprised of two main objectives: (1) public awareness of employment discrimination laws and rights and responsibilities under such laws; and (2) availability of information and guidance to employers, federal agencies, unions, and staffing agencies necessary for advancing EEO, preventing discrimination, and effectively resolving EEO issues. 

Traditionally, the EEOC’s outreach programs were implemented through free education activities and training and, to a lesser extent, fee-based training through the EEOC’s Training Institute. The EEOC now commits to increasing its use of technology and expanding the EEOC’s social media presence to reach the agency’s varied and wide-ranging audiences. The EEOC will continue to enhance its use of social media to promote its education and outreach activities and to encourage greater use of its website. The EEOC’s website provides critical education materials, including information on the laws the agency enforces, the private sector charge and federal sector processes, data, and research.  

Strategic Goal 3: Organizational Excellence

The EEOC’s third Strategic Goal is to strive for organizational excellence through the agency’s people, practices, and technology. This Strategic Goal is operational in nature with an objective of improving management functions with a focus on people and service to the public, among others. There are two primary objectives, including: (1) achieving a culture of accountability, inclusivity, and accessibility; and (2) aligning resources with priorities to strengthen intake, outreach, education, enforcement, and service to the public to protect and advance civil rights in the workplace. This Strategic Goal functions to ensure that the other two Strategic Goals can be carried out effectively, as the EEOC must ensure excellence in its staff and the services it provides.

For example, recruiting and retention is a main highlight of this Strategic Goal as well as advance performance management and diversity and inclusion within its own workplace. After all, how can the EEOC monitor the quality and justice of America’s workplaces if it does not keep its own offices in check? To that end, the Strategic Plan identifies how large-scale industry layoffs or other changes such as the COVID-19 pandemic could trigger a straining of staff capacity to timely resolve an inevitable influx of anticipated charges for the coming years. Further, the EEOC reports that population shifts may result in increased charge receipts at some field offices, but budget constraints may not allow for the hiring of additional staff. 

Here, too, the performance measures offer some clues about how employers may be impacted. Not surprisingly, the EEOC aims to be fully-staffed—to increase the number of employees involved in enforcement and to train those who are in “mission-critical” roles, including EEO Investigators, EEO Specialists, and Trial Attorneys. Employers can expect that larger numbers of investigators and attorneys, with better training, will lead to an increased number of investigations and lawsuits to be conducted in more depth.

Implications For Employers

The EEOC’s Strategic Plan demonstrates yet again that the Commission is keenly focused on identifying and pursuing systemic discrimination claims with more robust tools and strategies. The EEOC’s four-year plan also makes clear that the Commission will expand its efforts to reach currently underserved populations through a more technological approach. At the same time, the EEOC also intends to harness its collective resources to identify, investigate, and litigate large discrimination claims, which it sees as the best use of its litigation budget. The Plan is still a draft, and the EEOC is accepting comments through December 5, 2022. We will report on the final version once it is available. Also stay tuned for our analysis of the EEOC’s SEP, which promises to identify the key substantive focus areas for the coming years.

By: David Rowland and Sarah Bauman

Seyfarth Synopsis: In a wide-ranging opinion on pivotal ADA and EEOC jurisdictional issues, the U.S. District Court for the Eastern District of Pennsylvania in EEOC v. Geisinger Health, et al. called mostly strikes against the EEOC at the motion to dismiss stage, with two exceptions.  Most notably, the EEOC was permitted to pursue a claim under Title V of the Americans with Disabilities Act (“ADA”), a rarely utilized section of the ADA that prohibits “interference” with the exercise or enjoyment of any right granted or protected by the ADA.  This decision is a notable win for employers.  But the court’s willingness to entertain this rare claim past the pleadings stage renders this ruling an especially important read for companies faced with ADA litigation.   

Case Background

In Geisinger Health, the EEOC brought an enforcement action against various Geisinger entities on behalf of a former nurse of Geisinger Wyoming Valley Medical Center, Rosemary Casterline, and other aggrieved former and current employees.  The EEOC alleges the Geisinger Defendants violated Title I of the ADA by discriminating against and failing to accommodate Casterline and others who took medical leave by requiring them to re-apply and compete for employment opportunities to return to work and requiring them to be the “most qualified” applicant.  For similar reasons, the EEOC additionally claims that Defendants retaliated against Casterline and other employees and interfered with their ADA rights, in violation of Title V.  The Defendants moved to dismiss on all counts.

The Court’s Decision

The court ruled in favor of Defendants on all but two issues.  As to those decided in favor of Geisinger, the court held that the EEOC: 1) failed to plead facts sufficient to allege that the various Geisinger entities were a single employer, thus requiring dismissal of four of the seven named Defendants; 2) failed to plausibly allege that Casterline was a qualified individual with a disability, thus eviscerating her individual claim and negating the EEOC’s effort to identify a “class;” 3) failed to sufficiently allege that otherwise untimely claims could move forward under a continuing violation theory, thus limiting claims to those occurring within the 300-day statutory window; and (4) failed to plead a causal connection between Casterline’s alleged protected activity and her termination or Geisinger’s failure to accommodate her, thus requiring dismissal of the EEOC’s ADA retaliation claim.

Though undoubtedly a homerun for employers (for the most part), perhaps most interesting are the issues that are now ripe for summary judgment. Specifically, the court permitted the EEOC to further pursue its claim under the anomalous ADA Title V, as well as its claim that Geisinger’s policy of hiring the most qualified applicants rather than simply reassigning disabled employees into positions for which they are qualified.  Regarding the latter, this legal issue is a hotly contested one across Circuit Courts.  The court deemed it premature to reject it on the pleadings, criticizing Geisinger’s reliance on only summary judgment cases as grounds for dismissal. 

As to the ADA Title V claim, the court first noted the “scant case law” on ADA interference claims pursued under Title V.  Indeed, the Third Circuit has not yet ruled on what a plaintiff must plead to state such a claim.  The court first recognized that courts in other Circuits utilize the test for anti-interference claims under the Fair Housing Act, and in turn, the Third Circuit has held that courts should give the word interference its dictionary definition, or the “act of meddling in or hampering an activity or process.”  Without explicitly holding that such a test should apply, the court found that the EEOC sufficiently pled that Geisinger interfered with Casterline’s rights under the ADA; “in particular,” the EEOC pleaded inter alia that Geisinger “create[d] and maintain[ed] records that associate negative tags or references, such as ‘litigation hold,’ with persons who have engaged in protected activity and/or those seeking a reasonable accommodation or putting [Geisinger] on notice that they need a reasonable accommodation.”  According to the court, the EEOC’s allegations raised an inference that Geisinger “meddles” when employees attempt to exercise their rights under the ADA. 

Implications For Employers

Overall, the decision is an important win for employers, and worthy of instant replay.  However, companies should take particular note of the court’s decision to uphold the ADA Title V claim.  Given its success in Geisinger Health—perhaps in part due to the underdeveloped nature of such claims—employers should celebrate this decision with caution.  Indeed, employers should be especially careful that their policies and practices cannot be construed as “meddling” when employees attempt to assert ADA-protected rights.

By: Christopher J. DeGroff, Sarah K. Bauman, and James P. Nasiri

Seyfarth Synopsis: Last year was one of change and recovery for the EEOC as a result of the pandemic and new leadership.  With the new leadership regime and structural changes at the EEOC came an uptick in filings from FY 2021, with nearly half of those occurring in the month of September alone.  Despite an anticipated busy year for 2022, this fiscal year closed with a strikingly low number of filings,and leaves questions as to whether this filing drought will continue.  However, with a Democratic majority inevitably to come, a generous budget increase (reported here), and several new strategic objectives planned for this FY 2023, a busy year may very well lie ahead.

As we previously reported here, FY 2020 experienced a significant downturn in filings as a result of leadership changes and the COVID-19 pandemic.  This left us questioning as to the gravity of the impact this might have on subsequent years.  Nevertheless, the EEOC quickly rebounded in FY 2021 with 114 total filings at year end (see here).  Though this number was still significantly less than previous years (see here), almost half of FY 2021 filings were in the month of September alone, signaling a busy year for FY 2022.  However, with a mere 94 filings at the time of publication of this blog post, FY 2022 did not live up to that case-filing trajectory.  The EEOC has seen budget boosts in the last two years, and has signaled the hiring of numerous field staff, including lawyers.  The pieces seemed to be in place for a more robust year-end filing spike once again in FY 2022, but the numbers do not show that.

This could be, in part, because the Commission is still led by a Republican majority, and the EEOC attorneys in the field are waiting for the composition to flip to the Democrats to increase the likelihood cases will receive a green light, or that the authority to file actions will once again be delegated to the field entirely.  The EEOC has been mum on the topic, however.  Recent political sparring may lend some insight.  Notably, representatives have recently cried foul that EEOC attorneys are administratively withdrawing matters that have been voted down by the Commissioners so they may live another day (see here).  Ultimately, there is no statistical or anecdotal suggestion that the EEOC has throttled down on enforcement or is more likely to settle cases.  That suggests there is a queue of potential cases waiting to be filed.

Cases Filed By EEOC Districts

The most noticeable trend of this fiscal year is a return of the usual leaders of the pack: the Chicago, Miami, and Los Angeles District Offices, with 12, 8 and 8 filings, respectively.  Chicago experienced a surprising dip in FY 2020 at only 3 filings, shot back up in 2021, but still lagged behind several other districts until this year.  Similarly, the Los Angeles District, which historically has been a leading district for the EEOC, ended the year on top as well.  The Miami District has also been very consistent, lodging at least 8 filings for five years in a row.  Finally, the biggest surprise District in FY 2022 was Charlotte, which filed 10 merit cases this year after accounting for only 4 filings last year and only 1 filing in FY 2020.

Analysis Of The Types Of Lawsuits Filed In FY 2022

Each fiscal year we also analyze the types of lawsuits the EEOC files (i.e., the statutes and theories of discrimination implicated) to hone in on the focus of the EEOC’s current strategic priorities.  Those numbers – when considered on a percentage basis – are in line with the numbers we have seen the last few years.  The graphs below show the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

When considered on a percentage basis, the distribution of cases filed by statute remained roughly consistent compared to FY 2021 and 2020. Title VII cases once again made up the majority of cases filed, accounting for 65% of all filings (on par with the 62% in 2021 and 60% in FY 2020).  ADA cases also made up a significant percentage of the EEOC’s filings, totaling 29% this year, a moderate decline from 36% in 2021 and 30% in FY 2020.  Notably, there were 7 age discrimination cases filed this year, a significant increase from last year’s single case.

March 2022 Budget Justification And FY 2021 Performance Report

On March 28, 2022, the EEOC released its third-annual Annual Performance Report (“APR”) for FY 2021, as well as its budget justification for FY 2023.  The APR is an analysis of the EEOC’s litigation goals and performance results, and contains important data points regarding the EEOC’s changing strategic objectives and potential focus for future enforcement activity.  The FY 2023 budget, on the other hand, outlines how the Commission intends to allocate funds in order to effectuate its goals via its proposed FY 2023 budget of $464,650,000.

In the APR, the EEOC declared that FY 2021 was a successful year for the Commission in terms of advancing its strategic objectives.  Indeed, the EEOC secured more than $485 million in monetary relief for over 15,000 alleged victims of employment discrimination.  By comparison, the EEOC recovered $535.5 million in FY 2020, $486 million in FY 2019, and $505 million in FY 2018.

Moving into 2023, the EEOC justifies its $464,650,000 budget request — a whopping $60 million increase from last year — based on advancing the strategic priorities for the fiscal year.  Commissioner Burrows indicated that those priorities correlate with the Biden Administration’s call for a “whole-of-government approach to addressing systemic discrimination and advancing equal opportunity.”  Perhaps this budget is exactly what the EEOC needs for a comeback from last year’s downturn.

Implications For Employers

Despite the EEOC’s relatively quiet FY 2022, employers should continue to keep a close eye on the Commission’s litigation trends. Specifically, given the EEOC’s notable budget increase and looming change in leadership, we still expect filing numbers to ramp up in the near future.  Moreover, with the EEOC set to adopt a new strategic plan for FY 2023, the timing appears right for a new Democratic-led Commission to implement a new set of priorities and emphasize these priorities through litigation.

We will continue to monitor these changes closely and keep readers apprised of developments.  And, as always, we will keep up-to-date on EEOC data amid the ever-changing political climate, and share lessons learned from FY 2022 to carry employers through the new year.

By: Matthew J. Gagnon

Seyfarth Synopsis: This is the third in a series of posts covering recent trends in equal pay litigation. This post discusses how plaintiffs have sought to expand the possibilities of an equal pay claim by whittling away the defenses allowed to employers. In particular, plaintiffs’ counsel have argued that an employer cannot rely on a policy or practice as a defense if that policy or practice is itself discriminatory in nature or effect. One highly visible example of this trend is plaintiffs’ sometimes-successful efforts to delegitimize the use of salary history to set starting salaries. Some courts and state legislatures have decided that this practice only perpetuates historical pay inequities. More recently, plaintiffs’ counsel have attempted to expand this concept to other seemingly gender-neutral practices that employers often use to justify pay disparities.

This is the third in a series of posts examining the new and developing trends in equal pay litigation identified in Seyfarth’s yearly publication, Developments in Equal Pay Litigation, 2022 Update. Our first and second posts examined the nature of the burden-shifting framework used to decide cases under the federal and state equal pay statutes and, in particular, courts’ efforts to clarify the parties’ respective burdens under that framework. This post examines employers’ available defenses to an equal pay lawsuit, but not as they relate specifically to the burden-shifting paradigm. Rather, this post examines plaintiffs’ recent efforts to expand the logic of a line of cases (and legislative action) that undercuts employers’ use of prior salary to set a new employee’s starting salary. The gist of the argument being pushed by the plaintiffs’ bar is this: employers may not rely on a policy or practice as a defense to an equal pay lawsuit if that policy or practice is itself tainted by bias.

Recent victories for plaintiffs on the salary history issue in some courts and statehouses arguably jump-started this trend. Different federal circuit courts have come to different conclusions about that practice. The Ninth Circuit has arguably taken the strongest stance against it, holding in a recent landmark decision, Rizo v. Yovino, that salary history, by itself, can never justify a wage disparity because that salary history may be reflective of historical wage disparities prevalent in the marketplace. Setting a new employee’s pay based on inequitable past compensation only perpetuates the inequity into the future.

Some equal pay plaintiffs have sought to capitalize on that reasoning to further narrow the scope of an employer’s defenses, arguing that an employer must show that any factor it uses to justify a pay disparity must be free of bias. For example, employers sometimes argue that disparities in starting pay are the result of the fact that some employees negotiate harder for a higher starting salary. Plaintiffs have increasingly challenged that defense, arguing that the negotiation process is inherently biased against women. Although this tactic has found some success in the courts, that is still the exception. Negotiation is still considered a viable defense in most cases where it plausibly explains a pay disparity.

But equal pay plaintiffs are continuing to push this line of argument. In one recent case, Douglas v. Alfasigma USA, Inc., No. 19-cv-2272, 2021 WL 2473790 (N.D. Ill. June 17, 2021), a pair of sales representatives alleged, among other things, that they were underpaid compared to their male colleagues. The employer argued that the complaint was self-defeating in that it acknowledged that the male comparators were given more favorable sales territories, which would explain the pay disparity: “[Employer] argues that Plaintiffs have pled themselves out of court by alleging that [supervisor] gave them unfavorable territory compared to their male counterparts. . . . [Employer] basically reads the complaint as an admission that Plaintiffs were less productive than their male counterparts.” Id. at *10. The court rejected this argument, holding that an employer cannot justify a wage disparity by pointing to actions that are themselves alleged to be discriminatory in nature, explaining that “[t]aking away sales opportunities cannot defeat a sex discrimination claim when taking away sales opportunities was an act of sex discrimination.” Id. at *11.

The reasoning of this decision presents a rather worrisome prospect for employers. In its most extreme form, such an argument would allow plaintiffs an angle to attack any factor justifying a wage disparity, however reasonable, simply by claiming that the factor itself is infected with bias. Thankfully, the state of the law is not yet so dire. Such arguments have been met with a critical eye in some courts. For example, in Spellers v. United States, No. 157 Fed. Cl. 171 (Ct. Fed. Cl. 2021), a female computer scientist brought an equal pay claim against the Department of the Navy. Even though she was paid according to a sophisticated and highly structured merit-based system (“STRL”), she argued that the system could not function properly without good data about her actual duties and her performance, both of which she alleged were infected with gender bias. The court dismissed those arguments, finding them to be nothing more than speculation: “Because plaintiff acknowledges that the STRL pay system is facially gender-neutral when functioning as intended and with good data, . . . she has conceded the viability of defendant’s affirmative defense.” Id. at 177.

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This trend has been developing for several years in the wake of the critical salary history line of decisions. It appeared first with respect to salary negotiation, which seems only slightly removed from the prior salary history issue. But recently, plaintiffs’ counsel are attempting to stretch the boundaries of this line of argument, thereby stretching the limits of a cognizable equal pay claim even further. The advantages for plaintiffs in doing so are clear. If they can sow doubt about an employer’s proffered justification for a wage disparity, they may more easily get their lawsuit over the hurdle of summary judgment. And as most employers know, once an employment case is inexorably headed for trial, the incentives to settle, even at a premium, increase dramatically.

These and other trends impacting equal pay litigation are discussed in much greater detail in Seyfarth Shaw’s yearly report, Developments in Equal Pay Litigation, 2022 Update. We highly recommend that report to any employer facing equal pay litigation, or who may simply wish to learn more about these trends so they can avoid such lawsuits in the future or keep abreast of changes in federal and state equal pay legislation. We look forward to continuing to share our analysis of these issues.

By Gerald L. Maatman, Jr., Jennifer Riley, and Sarah Bauman

Seyfarth Synopsis: On August 8, 2022, the U.S. District Court for the Northern District of Illinois granted Plaintiffs’ motion for class certification for a class of applicants who sought employment with the Cook County Department of Corrections.  The Plaintiffs argued that certain hiring examinations disparately impacted African-Americans, and were therefore discriminatory under Title VII of the Civil Rights Act. 

As we previously predicted here, disparate impact class actions premised on a theory of liability derived from entrance exams, such as physical abilities tests, are no longer flying under the radar.  It is important for employers to be informed on the implications of entrance exams if they require applicants to pass such tests during the hiring process.

Case Background

In Simpson v. Dart, the Plaintiffs initiated a putative class action claiming that the hiring practices of Correctional Officers at the Cook County Department of Corrections were racially discriminatory against African-Americans.  The hiring process at issue consists of various steps conducted by the Merit Board and Sheriff’s Office, including: (1) screening for minimum qualifications; (2) an initial written examination; (3) a second written examination; (4) a physical abilities test; (5) finger printing and drug testing; (6) a personal history questionnaire and follow-up interview; and (7) final review by the Merit Board members.  Applicants must successfully complete this process and obtain certification before they are eligible for hire.

At issue in the Plaintiffs’ motion for class certification were the Merit Board’s hiring examinations, such as the initial written examination, the second written examination, and the physical abilities test.  The Plaintiffs claimed that the hiring examinations disparately impact African-Americans in violation of Title VII.

The Court’s Decision

The Court considered the Defendant’s challenge to the Plaintiffs’ attempted extension of their Title VII class period relative to three of the four sub-classes at issue, by using a start date of July 2014.  Such a start date fell far earlier than 300 days from the filing of the underlying charge of discrimination (i.e., the applicable statute of limitations period).  In support of such a class period, the Plaintiffs relied on Lewis v. City of Chicago, Ill., 560 U.S. 205, 210-11 (2010), claiming that the unlawful hiring practice at issue involves the written and physical examinations, which took place in July 2014.

The Court disagreed. It found that Lewis stands for the proposition that later implementation of a policy that causes a disparate impact can qualify as a new, actionable employment practice.  Critically, the U.S. Supreme Court did not hold that a plaintiff can “reach back” to a testing date that falls outside of the 300-day statute of limitations window.  Accordingly, the Court limited the class period to 300 days from the date the charge was filed — March 2015.

The Court then analyzed whether Plaintiffs met the requirements of Rule 23 for certifying the classes at issue.  First, the Court held that the Plaintiffs established the commonality requirement because the hiring examinations constitute an employment policy that causes racial discrimination not justified by any business necessity.  Critical to the Court’s holding in this respect was that Plaintiffs pointed to employment actions that did not involve the exercise of discretion.  Second, the Court dismissed the Defendants’ argument that the claims of the named plaintiffs were not typical of the putative class.  The Court opined there was “no question the named plaintiffs’ claims arise from the standardized tests and are based on the same legal theory, disparate impact,” and Defendants’ contention that such a requirement could not be satisfied because they “prepared for the standardized tests in different ways” was unavailing.  Such “minor variances” made “no difference to the Court’s certification analysis.”

The Court similarly dismissed the Defendants’ arguments relative to the adequacy requirement.  Specifically, the Defendants claimed that the scope of certain merits issues relative to the charge of discrimination would be addressed at the summary judgment stage, but such issues had clear implications for class certification.  The Court held that since such an argument was — as Defendants admitted — suited for the summary judgment stage, the Court refused to consider the argument and held the Plaintiffs are adequate class representatives.

Finally, the Court considered whether there were common questions of law or fact that predominated over individual questions.  Defendants argued that an individualized analysis of each applicant would be necessary because there are more steps involved in the hiring process than just the standardized tests.  However, the Court held that, in the context of disparate impact cases, Title VII guarantees protected individuals the opportunity to compete equally based on hiring criteria, and losing an opportunity to compete equally (here, via the examinations) were actionable injuries.  Accordingly, the Court granted the Plaintiffs’ motion for class certification.

Implications For Employers

This case doubles down on the long-standing principle that a hiring or employment policy not carefully vetted for discriminatory effect can lead to class action problems.  Employers should be especially careful when subjecting applicants to certain tests or other criteria as a screening mechanism because, as demonstrated here, disparate impact lawsuits based on this theory appear to be making a comeback.

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By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  In Savage, et al. v. The City of Springfield, Case No. 3:18-CV-30614, 2022 LEXIS 124587 (D. Mass. July 14, 2022), a federal court in Massachusetts recently denied Plaintiffs’ motion for class certification, holding that (1) Plaintiffs failed to establish that a putative class of Black and Hispanic firefighters met the numerosity requirement of Rule 23(a)(1); and (2) that the seminal ruling in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011), barred certification of a Rule 23(b)(2) class as sought by Plaintiffs.

This ruling is well worth a read by employers, and will be useful to cite when plaintiffs attempt to certify small class actions that hover near the 40-person threshold, as well as when potential damages may require an individualized analysis.

Case Background

On March 17, 1995, the City of Springfield, Massachusetts (the “City”) implemented an ordinance requiring many municipal employees to reside in the City as a condition of employment.  Id. at *3-4.  In May of 2016, Plaintiffs sued the City, the Springfield Fire Department, the Springfield Fire Chiefs Association, and others, alleging a long-standing non-compliance with the residency ordinance prompted by promotions of non-resident employees of the Fire Department to higher ranking positions.  Id. at *5.

In relevant part, Plaintiffs sought to certify a class of, “all current and former Black and Hispanic firefighters employed by the Springfield Fire Department since March 17, 1995.”  Id. at *26-27.  At oral argument, counsel for Plaintiffs identified the primary class claim as emanating from the City’s alleged arbitrary and capricious enforcement of the residency ordinance.  Plaintiffs further alleged that the City had a practice of maintaining a racially hostile and retaliatory work environment, and sought to include hostile work environment as a claim asserted on behalf of the class.  Following Plaintiffs’ motion for class certification, Defendants sought to exclude various pieces of evidence, including Plaintiffs’ expert declaration and supporting testimony, non-expert declarations, social media posts, and agency decisions.

The Court’s Decision

The Court denied Plaintiffs’ motion for class certification.  First, analyzing the Rule 23(a)(1) class certification requirement, the Court held that Plaintiffs’ calculation of fifty putative class members was insufficiently supported.  Id. a *30.   Specifically, the Court observed that Plaintiffs cited to three paragraphs of their expert’s declaration that were not directed at the question of how many minority firefighters were denied promotional opportunities, but rather, the racial composition of the ranks of lieutenant, captain, and above.  The Court opined that one of Plaintiff’s declarations made no effort to explain how he arrived at the estimate of 50 potential class members, and at most, he established there would be 32 class members, which was below the 40 class member threshold required by Rule 23.  Accordingly, the Court held that the numerosity requirement was not met.  Id. at *35.

Second, the Court addressed the commonality requirement per Rule 23(a)(2).  Id.  Plaintiffs argued “that the common questions of law and facts are whether the City discriminated against Black and Hispanic firefighters in the Springfield Fire Department, in violation of the First and Fourteenth Amendments of the U.S. Constitution, Title VII of the Civil Rights Act of 1964 . . . and 42 U.S.C. §§ 1981, 1983, and 1988 by maintaining a racially hostile work environment and allowing white applicants to violate the City’s valid and enforceable residency law for well over 20 years, and retroactively excusing white firefighters from compliance with the residency law after Plaintiff filed lawsuits challenging the City’s enforcement practices.”  Id.  After addressing and dismissing the constitutional challenges, the Court held in relevant part that pursuant to Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011), it was “not sufficient for Plaintiffs to merely allege ‘that they have all suffered a violation of the same provision of law,’ id., 564 U.S. at 350, which is precisely what Plaintiffs have done in their proposed common question.”  Id. at *37.  After reviewing Plaintiffs’ evidence, the Court held that Plaintiffs allegedly suffered the same injury (deprivation of promotional opportunities), from the same source (non-enforcement of the residency ordinance), and thus established commonality.  Id. at *42.

Third, the Court held that Plaintiffs satisfied Rule 23(a)(4)’s adequacy factor, which dictates that the proposed class representatives must fairly and adequately protect the interests of the class.  Id. at *44-45.  Plaintiffs argued that they were adequate representatives because they had no conflicts of interest with the proposed members of the class; to the contrary, their interests in ensuring that Defendants are held accountable for their discriminatory promotion practices were perfectly aligned.  Id. at *45.  The Court held that Plaintiffs met the adequacy requirement since there appeared to be no conflicts between Plaintiffs and other current and former minority employees of the Fire Department, who would have the same interest in ensuring enforcement of the residency ordinance and recovering unpaid wages and benefits from Defendants.  Id. at *46.

Finally, the Court held that Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011), barred certification of a Rule 23(b)(2) class, as sought by Plaintiffs.  The Court explained that incidental damages that are permissible under Rule 23(b)(2) are those that would flow to the class as a whole by virtue of its securing the sought after injunctive relief.  Id. at *47 (citations and quotations omitted).  Noting that Plaintiffs’ counsel acknowledged at oral argument that the award of damages would require individualized assessment for each minority firefighter denied a promotional opportunity, the Court held that monetary damages Plaintiff seek do not meet these requirements.  Accordingly, because Plaintiffs failed to meet the requirements Rule 23(a)(1) and Rule 23(b)(2), the Court denied Plaintiffs’ motion for class certification.

Implications For Employers

While Plaintiffs may have had potentially strong arguments for a handful of individuals, this ruling illustrates that courts will carefully examine motions for class certification in accordance with Rule 23, regardless of the strength of the claims of the lead Plaintiffs.  In situations where the putative class size is close to 40 members but short of that baseline, and hence numerosity may be in question, employers would be wise to consider citing the Court’s scrutiny here of Plaintiffs’ declaration testimony.  Finally, from a big picture standpoint in the class action litigation landscape, this ruling confirms that the U.S. Supreme Court’s Wal-Mart Stores, Inc. v. Dukes decision remains a cornerstone case for employers to use when attempting to fracture a putative class action.