By:  Gerald L. Maatman, Jr. and Matthew J. Gagnon

Seyfarth Synopsis: On April 5, 2021, in Abe v. Virginia Department of Environmental Quality, the U.S. District Court for the Eastern District of Virginia held that Fourth Circuit precedent supports the use of prior salary by employers as an affirmative defense to an Equal Pay Act claim. In so doing, it rejected the Ninth Circuit’s holding in Rizo v. Yovino, which held that prior salary, by itself, can never justify a pay disparity because allowing that defense would only serve to perpetuate the historical sex-based pay disparity that the Equal Pay Act was meant to rectify. The ruling is a must read for all employers for purposes of compliance strategies on equal pay issues.

Background

One of the most hotly contested issues in Equal Pay Act litigation over the past few years has been the extent to which employers can point to employees’ past salaries to justify a pay disparity among employees who perform “equal work,” as defined by the Equal Pay Act (“EPA”). The issue was framed recently by the Eastern District of Virginia in Abe v. Virginia Department of Environmental Quality, No. 3:20-CV-270 (E.D. Va. Apr. 5, 2021), this way: “Does using prior salary as a factor in setting an employee’s starting salary constitute a per se violation of the Equal Pay Act . . .?” Id. at 1.

The Ninth Circuit recently held in Rizo v, Yovino, 950 F.3 1217 (9th Cir. 2020), that prior salary history can never, by itself, amount to a “factor other than sex” to justify a pay disparity because the use of such salary history would only serve to perpetuate the historical sex-based pay disparity that exists between men and women. According to the Ninth Circuit, this would undermine the purpose of the EPA because that historical pay disparity is the very evil that the EPA was meant to counteract. The Seventh Circuit and other Courts of Appeals have held the opposite, that prior salary history can be a legitimate “factor other than sex” justifying a pay disparity.

In Abe, four named plaintiffs and twenty opt-in plaintiffs alleged that their employer’s “past practice of using pay history to determine new hire’s salary perpetuates the gender wage gap and violates the EPA.” Abe, No. 3:20-CV-00270, at 2. They argued that the Court should adopt the reasoning of the Ninth Circuit and hold that prior salary history can never constitute a “factor other than sex” under the EPA, either alone or in combination with other factors. Id. at 3.

The Court’s Decision

The Court in Abe declined to do so. The Court agreed with plaintiffs that the Fourth Circuit “has not delineated the precise circumstances under which an employer may rely on prior salary as an affirmative defense in an EPA case.” Id. at 4. But it nevertheless held, relying on Spencer v. Virginia State University, 919 F.3d 199, 202-03 (4th Cir. 2019), that the Fourth Circuit “has clearly indicated that it does not prohibit an employer from doing so.” Abe, at 4 (emphasis in original).

The Court in Abe noted that Spencer involved a female sociology professor who alleged that she had been discriminated against in terms of her compensation because she was paid less than two comparable male professors whose salary was set as a percentage of their previous salaries as administrators at the same university. The Fourth Circuit determined that the university’s decision to set starting salaries for those purported comparators in that way established that the alleged pay differential was due to a factor other than sex. The Court in Abe interpreted this to mean that “at minimum, the Fourth Circuit does not prohibit employers from raising prior salary as an affirmative defense in an EPA case.” Id. at 4-5.

The Court further rejected plaintiffs’ argument that the employer should at least have to prove that its use of salary history is job-related, as they argued the Fourth Circuit held in another case, EEOC v. Maryland Insurance Administration, 879 F.3d 114 (4th Cir. 2018). The Court in Abe sidestepped the issue. It opined that it need not resolve that question because it was not necessary to do so to decide the narrow issue before the Court; namely: “May [defendant] raise prior salary as an affirmative defense?” Abe, at 6. Based on the Fourth Circuit’s decision in Spencer, the Court held that it could and denied Plaintiff’s motion to strike the employer’s affirmative defense that was based on prior salary.

Implications For Employers

The use of prior salary history to justify a pay disparity continues to be a hot button issue in Equal Pay Act litigation. As noted above, the Courts of Appeals are divided over this issue. The implications for employers are difficult to overstate. First, employers often rely on prior salary to set starting salaries and, in fact, often argue that they must do so in order to attract top talent to their company. Employees do not often leave their current positions for less money. Second, if the use of prior salary was widespread within a company, that potentially presents a ready-made method to bind claims of putative collective or class action members together, making it easier for plaintiffs and their counsel to certify class or collective actions and to keep them certified through trial. A more in-depth analysis of this issue, and many other issues impacting equal pay litigation, can be found in Seyfarth’s annual publication, Developments in Equal Pay Litigation.

 

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

Seyfarth Synopsis:  In Handloser v. HCL Technologies LTD, No. 19-CV-1242, 2021 U.S. Dist. LEXIS 45183 (N.D. Cal. Mar. 9, 2021), Plaintiffs alleged that an Indian-based company with its U.S. headquarters in California gave preferential hiring treatment to foreign visa-holders over U.S. citizens.  Citing the U.S. Supreme Court’s landmark decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 352 (2011), a California federal court denied Plaintiffs’ motion for class certification, holding that plaintiffs seeking to litigate a class action involving a large number of individual employment decisions must establish “some glue holding the alleged reasons for all those decisions together” in order to satisfy the commonality requirement of Rule 23(a)(2).  Id. at *9.

For employers facing class actions alleging discriminatory hiring practices, this ruling provides an excellent roadmap to defend such cases, especially when hiring decisions are made by a large number of managers across a vast geographic area.

Factual Background

Defendants were an Indian consulting and information technology company, with their headquarters in Noida, India, and their United States headquarters in Sunnyvale, California.  Plaintiffs, a group of job applicants from the United States who did not obtain positions, alleged that during the hiring process Defendants screened local applicants through “culture fit interviews.”  Id. at *3.  According to Plaintiffs, “culture fit” was a pretext for screening out non-Indian local candidates.  Plaintiffs further alleged that Defendants employed a uniform, companywide policy regarding how to prioritize candidates for open onsite positions, gave first consideration for open positions to visa-ready Indian candidates, and only considered local United States candidates if no visa-ready Indian candidates were available.

Plaintiffs filed a lawsuit against Defendants on March 7, 2019, alleging three claims, including: (1) disparate treatment on the basis of race and citizenship in violation of 42 U.S.C. § 1981; (2) disparate treatment on the basis of race and national origin in violation of 42 U.S.C. § 2000e, et seq.; and (3) disparate impact on the basis of race and national origin in violation of 42 U.S.C. § 2000e, et seq.  Id. at *5.

Plaintiffs moved for class certification, seeking to represent a class comprised of, “[a]ll individuals who are not of South Asian race, or Indian national origin, or visa holders who applied for positions with (or within) HCL in the U.S. and were not hired.”  Id.

The Court’s Decision

The Court denied Plaintiffs’ motion for class certification.  First, the Court held that Plaintiffs satisfied numerosity under Rule 23(a)(1) since Plaintiffs alleged that the putative class would have roughly 43,000 members.  Id. at *8.  Defendants did not dispute that Plaintiffs’ putative class was sufficiently numerous under Rule 23(a)(1).

Most significantly, however, the Court held that Plaintiffs failed to establish commonality under Rule 23(a)(2).  Id. at *9.  Citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 352 (2011), the Court explained that in the context of an employment discrimination class action, plaintiffs seeking to litigate a class action involving a large number of individual employment decisions must establish “some glue holding the alleged reasons for all those decisions together” in order to satisfy the commonality requirement of Rule 23(a)(2).  Id. at *9-10.  Plaintiffs argued that they had established commonality for the putative class for both their disparate treatment and disparate impact claims by alleging that: (1) Defendants had a companywide policy of prioritizing visa-ready Indian candidates when filling open United States positions at HCL; (2) when hiring United States job applicants, Defendants had a companywide policy of screening out non-Indian local candidates through “culture fit” interviews; and (3) gross statistical disparities evinced the systematic discrimination at HCL.

The Court rejected Plaintiffs’ arguments and held that they did not establish commonality, “for at least seven reasons.”  Id. at *11.  Some of those reasons included: (1) over 1,000 job requests during the proposed class period explicitly excluded visa holders from consideration, including some that were required by law to be filled with a citizen or green card holder; (2) for roughly 50% of job requests, HCL did not fill an open position with any candidate because either the client withdrew the job request, the client filled the job request with its own direct applicant, or the position was filled by a competitor; (3) there were reasons that job candidates were not hired that are independent of Defendants’ alleged discriminatory hiring practices; (4) Plaintiffs failed to provide the requisite “glue” because Defendants’ hiring processes took different forms for job candidates depending on the positions for which they applied and the different hiring managers involved; (5) Defendants utilized roughly 1,800 different hiring managers across the country, each of whom was empowered with discretion to make staffing and hiring decisions; (6) employment decisions took place in 47 states, involved roughly 16,000 job searches, and concerned approximately 200 job types; and (7) Plaintiffs failed to establish that Defendants’ employment policies and procedures constrain discretion or follow a “common direction” from HCL’s management.  Id. at *11-15.  Accordingly, the Court held that Plaintiffs failed to establish commonality under Rule 23(a)(2).

The Court also opined that Plaintiffs failed to establish typicality under Rule 23(a)(3).  One named Plaintiff worked in sales since 2003, had experience with the outsourcing services offered by HCL, and unsuccessfully applied to work at HCL five times between 2017 and 2018.  The second named Plaintiff was an engineering professional with 35 years of experience, who unsuccessfully applied to work at HCL on four occasions between 2018 and 2019.  The Court held that the named Plaintiffs failed to establish that they were injured by the same conduct that injured other class members.  Id. at *17 (citations omitted).  Accordingly, the Court held that because Plaintiffs have failed to satisfy the requirements Rule 23(a)(3).

The Court further concluded that Plaintiffs failed to establish predominance under Rule 23(b)(3).  Id. at *18.  The Court determined that the unique experiences of the two named Plaintiffs alone exemplified the need for individual inquiries, which would predominate over common questions of law or fact to the putative class.  Id. at *18-19.  The Court further noted that many putative class members were evaluated by an HCL client as part of the hiring process, and the candidate’s adverse employment decision may be attributable to a client’s feedback.  Accordingly, the Court held that individual inquiries will predominate over common questions of law or fact to the putative class.  Id. at *19-20.

Finally, the Court ruled that Plaintiffs failed to satisfy the requirements of Rule 23(c)(4), which provides that, “when appropriate, an action may be brought or maintained as a class action with respect to particular issues.”  Id. at *20 (citing Fed. R. Civ. P. 23(c)(4).)  The Court noted that Plaintiffs devoted only a single paragraph to their justification for certification under Rule 23(c)(4), which it found to be a perfunctory argument.

In sum, the Court denied Plaintiffs’ motion for class certification, holding they failed to satisfy the requirements of Rules 23(a)(2), 23(a)(3), and 23(b)(3) with respect to their putative class, and that Plaintiffs likewise failed to satisfy the requirements of Rule 23(c)(4).  Id. at *21-22.

Implications For Employers

The decision in Handloser v. HCL Technologies LTD is noteworthy for employers for two primary reasons.  First, it signals that the U.S. Supreme Court’s landmark Wal-Mart v. Dukes decision from 2011 remains a primary defense in major employment discrimination class actions.  When plaintiffs attempt to increase the size of such cases by seeking to certify nationwide classes with thousands of putative class members  who were allegedly harmed by thousands of managers, employers can point to Wal-Mart v. Dukes (and now, the decision here) to illustrate why class treatment is not appropriate.

Second, the facts in Handloser involved an emerging trend of reverse discrimination lawsuits.  Some businesses, especially in the technology sector, have been confronted with similar lawsuits alleging that visa-holders from foreign countries are given preferential treatment in hiring situations over United States citizens.  Businesses defending such claims would be prudent to keep this decision tucked away in the event they are faced with a similar class action.

By Karla Grossenbacher, Thomas E. Ahlering & Andrew R. Cockroft

Seyfarth Synopsis: Both Portland and New York City have followed the example set by Illinois’ Biometric Information Privacy Act (“BIPA”), a statute that has spawned thousands of cookie-cutter class action suits regarding the alleged collection of biometric information. Like BIPA, these new ordinances create a private right of action for individuals that could subject local businesses to potentially millions of dollars in liability. Businesses in these cities should carefully review these new ordinances as well as any technology they be using that has the potential to collect biometric information.

For several years now, businesses operating in Illinois have become well accustomed to the myriad lawsuits being filed, and harsh and unwavering penalties being imposed, under Illinois’ Biometric Information Privacy Act (“BIPA”). Despite the toll on businesses imposed by the ever-increasing class action and appellate litigation brought on by the statute, other jurisdictions have enacted similar legislation.

As of January 1, 2021, Portland, OR and New York City have become the newest jurisdictions to pass laws placing restrictions on the collection and/or use of biometric technology by businesses. Although the Portland and New York City ordinances differ from each other (as well as BIPA) in significant ways, they each share a common feature: a private right of action. Accordingly, these new laws have the potential to bring on a rash of high-stakes class action litigation in each of these cities.

The specifics of each ordinance are detailed below:

Portland, OR

Portland’s ordinance bans private entities from using any “facial recognition technology” in any “places of public accommodation,” with limited exceptions, such as when it is necessary to comply with federal, state, or local laws, for individuals to access their smart devices (like facial recognition on iPhones) and for use in social media applications.

The ordinance creates a private right of action “against the Private Entity in any court of competent jurisdiction for damages sustained as a result of the violation or $1,000 per day for each day of violation, whichever is greater and such other remedies as may be appropriate,” as well as attorneys’ fees to a prevailing party.

While at first reading it may appear that the law only covers the use of facial recognition in public places, the ordinance is not so narrowly drafted. Private entities are subject to the ordinance if they constitute a “place[] of public accommodation,” which is defined in the ordinance to include “any place or service offering to the public accommodations, advantages, facilities, or privileges whether in the nature of goods, services, lodgings, amusements, transportation or otherwise” but excludes “an institution, bona fide club, private residence, or place of accommodation that is in its nature distinctly private.”

Accordingly, if a facility constitutes a “place of public accommodation,” then it could be liable for facial recognition technology employed anywhere in the facility regardless of whether it is public facing. Although a narrower reading of the statute may be more reasonable, courts in Illinois have routinely broadened the scope of BIPA and it is possible Portland courts would do the same.

New York City

New York City’s newly passed biometric privacy legislation has been pending before the city council for several years. Indeed, Seyfarth previously detailed this ordinance while it was still pending legislation.

The ordinance orders that “[a]ny commercial establishment” that collects biometric information from “customers” must disclose such collection “by placing a clear and conspicuous sign near all of the commercial establishment’s customer entrances notifying customers in plain, simple language” that customers’ biometric information is being collected. The ordinance further makes it “unlawful to sell, lease, trade, share in exchange for anything of value or otherwise profit from the transaction of biometric identifier information.”

The law provides that individuals “aggrieved by” a violation of the ordinance may file a private right of action, but places some conditions on this right.

  • If the individual alleges the business collected their biometric information without making the required disclosures, the individual can only initiate a private action if they first provide written notice to the business of their intent to sue and provide the business 30 days to cure the violation by placing clear and conspicuous notice at their establishment. If the business does not cure within 30 days, the individual may sue and recover $500 for “each” violation.
  • If the individual alleges the business shared their biometric information in exchange for something of value or otherwise profited from the “transaction,” then the individual may sue without any prior notice to the business. The individual may recover $500 for “each” negligent violation of this section and may recover $5,000 for “each” intentional or reckless violation of this section.

Only the biometric information of “customers” is protected under the law and the law also makes clear that “‘customer’ means a purchaser or lessee, or a prospective purchaser or lessee, of goods or services from a commercial establishment.”

*****

Businesses in Portland, OR, and New York City should be mindful of these new laws and act accordingly. Such businesses with compliance questions should contact a member of Seyfarth’s Biometric Privacy Compliance & Litigation Practice Group.

 

By: Gerald L. Maatman, Jr.Christopher DeGroffMatthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis: The EEOC recently released its enforcement and litigation statistics for Fiscal Year 2020. Notably, the statistics indicate that 2020 saw a dramatic drop in filed charges, with the lowest number of charges filed in over 20 years. For example, despite the #MeToo movement remaining an enforcement priority for the Commission in 2020, the number of gender discrimination charges fell even lower than last year, which was the lowest number since 1997. However, monetary benefits recovered by the Commission in FY 2020 surged. Given the flip of the White House from red to blue and the commitment of the Biden Administration to enhanced enforcement of workplace bias laws, the EEOC’s enforcement data is a “must-read” for all employers.  

On February 26, 2021, the EEOC released its comprehensive enforcement and litigation statistics for Fiscal Year 2020 (available here). In addition to enforcement and litigation activity, the data breaks down charge statistics by allegation and state – showing which charges are being filed and where. The dip in the number of charges that employers saw in 2018 and 2019 continued through 2020, with the number of charges reaching its lowest point since 1997. The prominence of gender discrimination charges seen in 2018 due to the #MeToo movement has all but disappeared, with sex discrimination charges remaining in the fourth-place position and dropping to their lowest number in over 20 years.

Charges Were Down Overall

In total, 67,448 charges were filed in FY 2020, down from 72,675 charges filed in FY 2019 and 76,418 charges that filed in FY 2018. FY 2019 previously saw the fewest charges filed for all fiscal years going back to FY 1997 (the second lowest, 75,428 charges, occurred in FY 2005). Putting these numbers in perspective, the number of charges filed exceeded 80,000 per year in every year from FY 2007 until FY 2018, sometimes by wide margins.

Consistent with this overall decline, there was a decrease in almost every category of charges in FY 2020 as compared to FY 2019, with the exception of a modest increase in charges alleging claims under the Americans with Disabilities Act (“ADA”), charges alleging claims of color discrimination under Title VII,  and, most notably, charges alleging claims under the Genetic Information Non-Discrimination Act (“GINA”), which doubled since FY 2019 and reached the highest number of charges filed since the Act was passed in 2008. The categories that decreased the most were race and sex discrimination. That this does not necessarily mean that fewer individuals are reaching out to the EEOC. This dip could be attributed, at least in part, to the agency’s implementation of new charge intake procedures in an effort to increase efficiencies or as a result of the COVID-19 pandemic. The dramatic change in workplace environments could have also contributed to the charge drop.

Texas And Florida Are Still Hot Spots, And Illinois Falls From The Top Five

Looking at the states where the most charges were filed, the hot spots largely remained the same in FY 2020 as in FY 2019 and 2018. Like FY 2019, Texas (with 10.2 % of all charges filed) and Florida (with 8.7%) were the top two states for charges in FY 2020.

Texas and Florida are no surprise, given their relative populations.

But population is still not everything when it comes to charges. For example, Pennsylvania (at number 3) and Georgia (at number 5, behind California) have more charges filed than New York. Notably, Illinois remained out of the top five states this year, at sixth place with 5.5% of all charges filed.

Retaliation Charges Remain Predominate, With Disability Discrimination Charges Remaining At Second

In total, 37,632 retaliation charges were filed with the EEOC in FY 2020. As has been the case for over six years, this made retaliation the most frequently filed charge in FY 2020. Behind retaliation were disability, race, and sex discrimination charges, each alleged in approximately 32%-36% of the charges filed with the EEOC. As the EEOC’s report noted, the percentages total more than 100 because some charges allege multiple bases of discrimination.

Disability discrimination was again the second-most-often alleged theory of discrimination, seeing the highest percentage of charges filed since 1997 at 36.1%. Race discrimination came in a close third. Interestingly, sex discrimination charges (which would include pregnancy discrimination, gender discrimination, and sexual harassment) remained as the fourth most frequently filed charge, which was where it was in FY 2017, despite continued media attention on such issues.

EEOC Saw A Surge in Overall Recoveries

As we reported here, during FY 2020, the EEOC recovered a record amount of $535.4 million on behalf of alleged discrimination victims. By comparison, the EEOC recovered approximately $486 million in FY 2019; approximately $505 million in FY 2018; and approximately $484 million in FY 2017. However, despite the EEOC’s efforts to enhance and improve its mediation and conciliation programs during FY 2020, the amount recovered through mediation, conciliation, and settlement dropped again from $354 million in FY 2019 to $333.2 million in FY 2020. Conversely, litigation recoveries increased from $39.1 million in FY 2019 to $106 million, the highest in 16 years. The EEOC credits this surge in litigation recovery to its resolution of 165 lawsuits in FY 2020 and states that it achieved “favorable results” in approximately 96% of district court resolutions.

Implications For Employers

Despite the dips in the overall number of charges, the EEOC’s enforcement efforts should not be considered as waning. Employers should treat these statistics as an early warning system that shows where the Commission’s enforcement efforts may be heading next – to that end, it is notable that retaliation and disability discrimination issues are firmly in the forefront, particularly in light of the issues caused by the COVID-19 pandemic. By continuing to set the culture in their workplaces with sound human resources practices, employers can guard against these issues and avoid hefty settlements and litigation with the EEOC.

 By Gerald L. Maatman, Jr. and Thomas E. Ahlering

Seyfarth Synopsis: Following in the footsteps of New York, Maryland recently introduced a standalone biometric information privacy bill, House Bill 218, that mirrors Illinois’ highly litigious Biometric Information Privacy Act (740 ILCS § 14/1 et seq., “BIPA”) in many respects.  Most notably, as presently drafted, Maryland’s proposed bill, like Illinois’ BIPA, provides for a private right of action, statutory penalties, and plaintiffs’ attorneys’ fees – which has spawned thousands of class actions in the Land of Lincoln.  If enacted, the Maryland bill would become only the second biometric privacy act in the United States to provide a private right of action and plaintiffs’ attorneys’ fees for successful litigants.  This represents a significant development for companies and employers operating in Maryland in light of the explosion of class action litigation that has arisen from Illinois’ BIPA in recent years.  Moreover, the recent introduction of such bills in Maryland and New York signal that states are increasingly modeling proposed biometric privacy litigation on Illinois’ BIPA.  Employers must take notice and monitor such developments to avoid being subject to a class action lawsuit – particularly as the purposes for utilizing such technology continue to expand.

Details of Maryland’s Proposed Legislation

Like New York’s proposed legislation that mirrors Illinois’ BIPA in many respects which we previously blogged about here, Maryland has proposed a similar bill entitled “Commercial Law – Consumer Protection – Biometric Identifiers and Biometric Information Privacy.”  The proposed law, like Illinois’ BIPA, prohibits private entities from capturing, collecting, or storing a person’s biometrics without first implementing a policy and obtaining written consent, implements standards of care for the handling of biometrics, and prohibits disclosure of biometrics without consent.  Most notably, the proposed bill provides for identical remedies to BIPA, whereas an aggrieved person under the proposed bill will be afforded a private right of action with the ability to recover $1,000 for each negligent violation, $5,000 for each intentional or reckless violation, and reasonable attorneys’ fees and costs. 

However, Maryland’s proposed legislation does differ from Illinois’ BIPA in a couple of respects.  For example, the definition of “biometric identifiers” is arguably even broader, extending to “data of an individual generated by automatic measurements of that individual’s biological characteristics such as fingerprint, voiceprint, genetic print, retina or iris image, or any other unique biological characteristic that can be used to uniquely authenticate the individual’s identity.”  Moreover, the proposed legislation also clarifies that the broader definition of “biometric information,” which includes “any information regardless of how it is captured, converted, stored, or shared based on an individual’s biometric identifier used to identify an individual,” does not include “information derived from an item or a procedure excluded under the definition of a biometric identifier,” such as photographs or information captured from a patient in a health care setting or information collected, used, or stored for health care treatment, payment, or operations under HIPAA.  Unlike Illinois’ BIPA, the proposed Maryland legislation also clarifies that a policy regarding retention/destruction of biometrics need not be made “publicly available” if the policy “applies only to the employees of the private entity,” and “is used solely for internal company operations.” 

Implications For Companies

Companies that are already familiar with the Illinois BIPA are undoubtedly aware of the threats that the proposed Maryland biometric privacy bill poses.  While the Illinois BIPA was enacted in 2010, it has seen an explosion in class action litigation over the past few years brought by employees and consumers alleging that their biometric data was improperly collected for timekeeping, security, and consumer transactions.  In fact, between 2015 and 2020 alone, there were over 1,000 Illinois BIPA class action complaints filed across the United States, with additional new filings continuing to be initiated every day. 

It remains to be seen if Maryland’s biometric privacy bill will pass as drafted.  However, if enacted as it is currently drafted, companies in Maryland can also expect to experience an onslaught of biometric privacy litigation.  Compliance is key, and there no better time to think about your company’s biometric privacy compliance than right now.  Companies with Maryland operations that are utilizing anything that could be considered biometrics, for any reason, should consider audit their practices, policies, and procedures to avoid potentially costly exposure in the event that the bill ultimately passed.   Businesses with compliance questions should contact a member of Seyfarth Shaw’s Biometric Privacy Compliance & Litigation Practice Group.

While this proposed bill was only recently introduced, Seyfarth Shaw will provide immediate updates on its progress when available.

By: Gerald L. Maatman, Jr., Ian Morrison, Brett Bartlett, and Kerry Friedrichs

Seyfarth Synopsis: Please join us on Tuesday, February 23rd for the 17th Annual Workplace Class Action Litigation Report webinar! Register now to secure your spot and review the workplace class action developments of 2020 and what employers should expect for 2021.

In Seyfarth’s 17th Annual Workplace Class Action Litigation Report Webinar, speakers will provide an interactive analysis of 2020 class action decisions and emerging trends in 2021. The developing trends in workplace class action litigation continue to evolve, morph, and adjust to the modern realities of the American workplace. These trends require corporate counsel to plan and re-order their compliance strategies to stay ahead of and mitigate these risks and exposures throughout the year.

Click here to register and attend!

The Report’s author, Gerald L. Maatman, Jr., along with Kerry Friedrichs, Ian Morrison, co-chair of our ERISA class action group, and Brett Bartlett, co-chair of the Wage & Hour group, will cover this changed national landscape in workplace class action litigation.

Date/Time:

Tuesday, February 23, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

Speakers:

Gerald L. Maatman, Jr., Partner, Seyfarth Shaw LLP
Brett C. Bartlett, Partner, Seyfarth Shaw LLP
Kerry M. Friedrichs, Partner, Seyfarth Shaw LLP
Ian H. Morrison, Partner, Seyfarth Shaw LLP

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

Seyfarth Synopsis:  In EEOC v. JBS USA, LLC, No. 10-CV-2103, 2021 U.S. Dist. LEXIS 13012 (D. Colo. Jan. 25, 2021), an EEOC-initiated lawsuit alleging a meatpacking engaged in a pattern or practice of discrimination on the basis of race, national origin, and religion, the U.S. District Court in Colorado denied the EEOC’s motion to reconsider the previous dismissal of the EEOC’s pattern or practice claims, thereby rejecting the Commission’s argument that a recent Tenth Circuit decision changed Title VII religious-accommodation law. 

This latest ruling in an 11-year legal battle brings the employer/defendant one step closer to defeating one of the largest pending EEOC pattern or practice of discrimination lawsuits. The latest ruling is instructive for corporate counsel dealing with EEOC litigation issues.

*  *  *

As we have previously blogged about (here, here, here, here, here, here, here, here, and here), the EEOC filed its lawsuit August 30, 2010, alleging a pattern or practice of discrimination on the basis of race, national origin, and religion, as well as raising claims of retaliation.  On August 8, 2011, the Court issued an order bifurcating the case.  Id. at *5.  Phase I of the trial was to address three issues, including: (1) whether defendant engaged in a pattern or practice of unlawfully denying Muslim employees reasonable religious accommodations to pray and break their Ramadan fast from December 2007 through July 2011; (2) whether defendant engaged in a pattern or practice of disciplining employees on the basis of their race, national origin, or religion during Ramadan 2008; and (3) whether defendant engaged in a pattern or practice of retaliating against a group of black, Muslim, Somali employees for engaging in protected activity in opposition to discrimination during Ramadan 2008. The Court presided over a 16-day trial for Phase I from August 7 to August 31, 2017.  Id. at *6.

On September 24, 2018, the Court issued its Phase I Findings.  Id.  It found that: (1) while defendant had denied Muslim employees a reasonable religious accommodation to pray during Ramadan (other than in 2009 and 2010), the EEOC had not made a requisite showing that any employees suffered a materially adverse employment action as a result of defendant’s policy denying unscheduled prayer breaks; (2) the EEOC had failed to prove that defendant’s disciplinary actions during Ramadan 2008 were motivated by a discriminatory animus; and (3) the EEOC had failed to demonstrate that defendant’s discipline of employees during Ramadan 2008 was for a retaliatory purpose rather for engaging in a work stoppage.  As a result, the Court dismissed the EEOC’s Phase I pattern or practice claims.  Id. at *7.  The EEOC moved the Court to reconsider.

The Court’s Decision

The Court denied the EEOC’s Second Motion for Partial Reconsideration of the Phase I Findings of Fact and Conclusions of Law.  The EEOC had asked the Court to reconsider its findings pursuant to the Tenth Circuit’s recent en banc decision in Exby-Stolley v. Bd. of Cnty. Comm’rs, 979 F.3d 784 (10th Cir. 2020), a disability-accommodation case brought under the ADA.  The EEOC argued that Exby-Stolley was an intervening change in Title VII religious-accommodation law.

First, the Court opined that Exby-Stolley was an ADA case where the jury was instructed that, in order for the plaintiff to make out an ADA accommodation claim, the plaintiff had to show that she had suffered an adverse employment action.  Id. at *8-9.  In holding that the ADA did not require that plaintiff prove that she suffered an adverse employment action, the Tenth Circuit compared the elements of an ADA accommodation claim with a religious accommodation claim brought under Title VII.  Exby-Stolley explained that, while ADA claims do not require that a plaintiff show an adverse employment action, in Title VII religious-accommodation cases, the prima facie case requires the employee to show among other things that “he or she was fired or not hired for failure to comply with the conflicting employment requirement.”  Id. at *9 (quoting Exby-Stolley 979 F.3d at 739).

Applying Exby-Stolley here, the Court explained that in its Phase I Findings, and as the Tenth Circuit stated in Exby-Stolley, the adverse employment action requirement for Title VII religious-accommodation claims, “is not new.”  Id. at *10.  The Court supported its position by quoting Exby-Stolley, and noted that, “In fact, the Tenth Circuit explained that the fact ‘[t]hat a disparate treatment claim — under Title VII or the ADA — would require an adverse employment action is wholly unremarkable.’” Id. at * (quoting Exby-Stolley, 9 F.3d at 793 n.3).

Accordingly, the Court held that the law concerning religious accommodation claims under Title VII remained the same as it was before the Exby-Stolley decision, and therefore denied the EEOC’s second motion for reconsideration.

Implications For Employers

This ruling represents the latest chapter in the seemingly never-ending EEOC v. JBS saga, where the employer once again received a favorable ruling from the Court.  In essence, the Court rejected the EEOC’s attempt to apply post-dismissal case law to change the Court’s mind about its previous ruling.

For employers who are mired in year-long litigation battles with the EEOC, this ruling illustrates that one of the Commission’s strategies will be to closely monitor dockets and seek to overturn prior adverse rulings when new case law precedent provides a window for that opportunity.  Employers would be prudent to similarly monitor court rulings – even after a court dismisses part of a case – to stay ahead of the EEOC’s anticipated tactics.

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

By Jennifer A. Riley and Michael L. DeMarino

Seyfarth Synopsis: The ABA’s “anti-contact” rule prohibits attorneys from communicating with represented parties concerning the subject matter of the case. In Moore, et al., v. Club Exploria, LLC, No. 19-CV-2504, 2021 WL 260227 (N.D. Ill. Jan. 26, 2021), the court sanctioned defense counsel for calling plaintiff’ s cell number as part of investigating whether the number was associated with another individual in defense of plaintiff’s claim that the Defendant caused telemarketing calls to be made to his phone without consent in alleged violation of the Telephone Consumer Protection Act. (“TCPA”).  While defense counsel dodged most of the sanctions that plaintiff sought, the Court ordered defense counsel to pay the attorneys’ fees of plaintiff’s counsel associated with bringing the motion for sanctions.

This case is a valuable reminder of the ethical boundaries surrounding contacting represented parties in general and in class actions in particular – even in the absence of intentional bad faith conduct. When in doubt whether conduct amounts to an ethical violation, the rules require a conservative, rather than aggressive approach.

Background

In Moore, et al., v. Club Exploria, LLC, No. 19-CV-2504, 2021 WL 260227 (N.D. Ill. Jan. 26, 2021), plaintiff George Moore alleged in the putative class action that the Defendant caused telemarketing calls to be made to his phone without consent, in violation of the TCPA. After its initial investigation, the Defendant believed that a vendor had consent from someone named Donald Jorgensen to make calls to the phone number at issue, and its investigation later revealed Jorgensen was recently associated with the number.

As a result, defense counsel called Moore’s alleged phone number to test the research indicating that Donald Jorgensen, and not Moore, would answer the call. Moore answered the call and defense counsel asked to speak to “Don” at which point Moore indicated there was no one named “Don,” and asked who was calling and if “Don” had recently provided him with his number. Defense counsel identified himself and responded affirmatively. Moore, then identified himself as George Moore and asked which company defense counsel was with, and he responded that he was not with any company and was just “an individual.” The call concluded shortly thereafter.

Moore then informed his counsel of the phone call and later filed a motion for sanctions asserting that the phone call violated ABA Model Rule 4.2, the so-called “anti-contact” rule, and requested that the Court: (1) disqualify defense counsel; and (2) order defense counsel to produce “all of its work product concerning Don Jorgensen’s alleged use or ownership of the phone number at issue.” Id. at 3.

The Decision

The Court concluded that defense counsel violated the ABA’s “anti-contact” rule. “While his phone call with Moore was brief,” the Court observed, defense counsel “purposefully called a number that was repeatedly disclosed in this litigation as Moore’s phone number, without the consent of Moore’s counsel.” Id.  While defense counsel may not have had actual knowledge prior to the call that he calling Moore, the Court opined that he nevertheless “knew, prior to initiating the call, that there was a significant risk that Moore would answer a call placed to the subject phone number.”  Id. at 8. The Court thus concluded that defense counsel should have proceeded with “caution” rather than the “aggressive approach that results in an ethical violation.” Id. at 16. Ultimately, the Court concluded that the conduct of defense counsel violated ABA Model Rule. 4.2.

Although the Court found that the call violated the ethics rule, it concluded that disqualification and production of work product were “too severe of remedies, given the lack of prejudice, the quickness of the phone call, and the absence of any intentional bad faith conduct.” Id. at 23. Instead, the Court held that the attorneys fees’ and costs award “strikes the appropriate balance and is proportional” to defense counsel’s conduct. Id.

Implication For Employers

This decision in Moore is a reminder to proceed with caution when conducting an investigation that might implicate contact with represented parties. This particularly true in employment cases where represented parties may be presently employed by a defendant and inadvertently contacted. Employers should exhaust all other avenues of discovery before considering to initiate contact with a potentially represented party and even then should proceed conservatively.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: In its recent review of Seyfarth’s 2021 Annual Workplace Class Action Litigation Report, EPLiC Magazine called the Report a “must-have resource,” the “only publication of its kind,” and that no corporate counsel “should be without it.”

We are humbled and honored by the recent review of our 2021 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation.” Further, the article noted that “No practitioner who deals with employment claims, whether as an underwriter, broker, risk manager, consultant, or attorney should be without it.”

EPLic stated: “The encyclopedic 850-plus-page 2021 Seyfarth Shaw Annual Workplace Class Action Litigation Report insightfully examines and analyzes an array of class action decisions. In addition, the federal cases examined in the Report are indexed by federal circuit – an invaluable feature that further enhances the Report’s utility. The Report is also available in e-Book format and is fully searchable.”

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

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

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

Our class action practitioners contribute to the process of building the database and analyzing decisional law on a daily basis.

We have being doing this on a 24/7 basis for over 17 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

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

Thanks for the kudos EPLiC – we sincerely appreciate it!

We look forward to making the 2022 Report more comprehensive than ever, and including important information regarding the impact of COVID-19 on workplace class action litigation.

By: Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis:  On January 19, 2020, the EEOC released its second-ever Annual Performance Report (“APR”) for Fiscal Year 2020 (see here). In essence, it is a report card on the Commission’s activities, including its record relative to enforcement litigation. That said, 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 future targets of heightened enforcement activity. It is a “must read” for all employers.

This is only the second year that the EEOC has published an Annual Performance Report. The EEOC previously published one annual Performance Accountability Report (“PAR”) shortly after the end of its fiscal year. Starting last year, the PAR was bifurcated into two separate reports. The first report was published in November 2020, entitled “Fiscal Year 2020 Agency Financial Report” (“AFR”). It was focused on the Commission’s financial health, overall initiatives, and objectives (see more here). The second report is this month’s publication, the APR, which discusses the agency’s Strategic Plan and performance results. The APR is an important tool for employers to gauge the Commission’s enforcement priorities and trends.

The APR is organized around the three Strategic Objectives outlined in the EEOC’s Strategic Plan for Fiscal Years 2018-2022 (“Strategic Plan”). The Strategic Plan should not to be confused with the EEOC’s Strategic Enforcement Plan – which specifically deals with litigation and other enforcement mechanisms. Those enforcement issues encompass just one of the three strategic objectives outlined in the Strategic Plan. The other two objectives are: (1) preventing employment discrimination and promoting inclusive workplaces through education and outreach; and (2) achieving organizational excellence increased its focus on robust outreach to vulnerable workers.

Significant Drop In Total Filings And Systemic Case Filings

The APR reports that the EEOC filed 93 merits lawsuits, including 69 suits on behalf of individuals, 12 non-systemic suits with multiple victims, and 13 systemic suits in FY 2020. This is down from 144 merits lawsuits filed in FY 2019, and 199 merits lawsuits filed in FY 2018.

“Systemic” suits are defined as lawsuits having “a broad impact on an industry, company or geographic area.” In FY 2019, the Commission filed 17 systemic suits; in FY 2018, it filed 37 systemic suits; in FY 2017 it filed 30; and in FY 2016 it filed 18. The 13 that were filed in FY 2020 is therefore another drop as compared to previous years. Systemic lawsuits accounted for 13.9% of all merits suits filed in FY 2020, and 20.3% of all merits suits on the EEOC’s active docket (a total of 41 systemic lawsuits). The EEOC obtained relief for 25,000 victims of systemic discrimination, amounting to $69.9 million.

Sex Discrimination And Harassment Continue To Dominate The EEOC’s Filings

Despite another drop in total number of filings, the Commission continued its multi-year focus on sex-based discrimination, especially harassment claims. The APR reports that merits filings broke down along the following lines: sex (37), disability (29), retaliation (26), race (13), religion (5), age (7), and national origin (4).  Further, the EEOC filed 33 lawsuits related to workplace harassment in FY 2020, including 24 cases involving claims of hostile work environment based on sex, eight involving claims of hostile work environment based on race, and one involving claims of hostile work environment based on national origin.  Twenty harassment suits were individual cases, 12 were class cases, and one was a systemic case.  Overall, over one-third of all lawsuits filed by the Commission in FY 2020 included allegations of harassment.

The Commission also resolved 62 harassment suits in FY 2020, recovering around $84.4 million for 902 victims of harassment through the EEOC’s litigation program.

The Commission’s increased efforts in both enforcement and prevention demonstrate its lasting commitment to addressing sexual harassment and sex discrimination in the workplace.

A Pivot To Use Of Litigation As A “Last Resort” And ADR Is Now A Heightened Priority

On February 4, 2020, EEOC Chair Janet Dhillon released the Commission’s 2020 priorities indicating that “litigation is truly a last resort,” signaling a shift towards heightened mediation efforts in place of litigation (read more here). The EEOC has also taken steps to significantly limit the litigation authority of its General Counsel (we reported on the EEOC’s recent approval of this change here). The APR echoed the Commission’s 2020 priorities by continuing to focus on its Alternative Dispute Resolution (“ADR”) efforts. During FY 2020, the Commission conducted 6,272 mediations, resulting in $156.6 million in relief to charging parties. Further, 766 federal sector mediations were conducted, reducing the inventory of federal sector disputes. Overall, approximately $333.2 million in relief was recovered through mediation, conciliation, and settlements.

Implications For Employers

The APR and the EEOC’s related publications provide practical insights into the Commission’s priorities amid an changing political climate. Those publications consistently show that combatting workplace harassment and discrimination against vulnerable workers remain top priorities for the agency. Moreover, the Commission’s APR report card reflects the results of the EEOC’s commitment to using litigation as a last resort and its renewed focus on its ADR programs.

The ongoing changes at the Commission are a must-watch for employers as the EEOC continues in its 2021 fiscal year, and we will be tracking the latest developments here.