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

Seyfarth Synopsis:  On August 3, 2020, the EEOC announced in a press release that it will resume issuing charge closure documents, or “Notices of Right to Sue.” The Commission had previously suspended issuing closure documents as a result of the COVID-19 pandemic in an effort to help preserve the rights of charging parties and employers. The EEOC’s latest announcement indicates that they are pushing to get back to “business as usual.”

On March 21, 2020, the EEOC announced that it would cease issuing charge closure documents, also known as Notices of Right to Sue (“Notices”), in response to the difficulties facing parties in light of the COVID-19 pandemic. Since March, Notices have only been issued upon request of the charging party. As charging parties generally have 90 days from the issuance of a Notice to pursue their claims in court, the suspension of the Notices has meant a downturn in the filing of discrimination and harassment lawsuits against employers over the past several months.

The EEOC’s August 3 announcement now indicates that EEOC managers and supervisors are reviewing charge resolution recommendations and that the EEOC will begin issuing Notices for charges held in suspense and for charge resolutions that occur on and after August 3, 2020.  The Notices that have been held in suspense will be issued over the course of the next six to eight weeks, beginning with those that have been in suspense the longest.  The EEOC has also noted that all Notices will be issued by mail.

Implications For Employers

Now that the EEOC is resuming its issuance of Notices, employers with pending EEOC charges should be on the lookout for Notices closing the charge process to arrive by mail. Once a Notice is issued, a charging party has 90 days from receipt to file their claims in court. Accordingly, employers will also likely see an uptick in discrimination and harassment claims filed in court over the next several months.

This announcement is the latest in a series of high priority press releases issued by the EEOC over the past few months. The ongoing changes at the Commission are a must-watch for employers, as they have considerably impacted the charge investigation and resolution processes at the EEOC.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Seyfarth Synopsis: In the first ruling in response to the slew of room and board refund class actions filed in the wake of COVID-19, on July 29, 2020, in Rosenkrantz v. Arizona Board of Regents, No. 2:20-CV-01203 (D. Ariz.), Judge John Tuchi of the U.S. District Court for the District of Arizona granted the Universities’ Rule 12(b)(6) motion to dismiss for failure to state a claim.  Judge Tuchi held that Plaintiffs failed to comply with an Arizona statute that required them to file a notice of claim with a public entity prior to filing suit.  The Court’s ruling may prove useful for other colleges and universities sued in states with similar prerequisites.  Because the ruling depends on a state-specific technicality, however, it is unlikely to quell the tide of similar class actions filed across the country. 

Factual Background

Plaintiffs, parents of students enrolled at one of three public universities – the University of Arizona, Arizona State University, and Northern Arizona (the “Universities”) – during Spring 2020, filed a putative class action on behalf of all persons who paid the cost of room and board or fees for the Spring 2020 semester at the Universities.  Id. at 2.

Plaintiffs claimed that, in response to the COVID-19 pandemic, the Universities forced students to move out of on-campus housing, moved all classes online, cancelled campus events, and ceased providing various services.  Plaintiffs asserted that, despite these actions, the Universities failed to return or refund the cost of room and board or the fees for services.  Id. at 1-2.

Plaintiffs alleged claims for breach of contract, unjust enrichment, and conversion seeking the return of pro-rated, unused funds, a declaration that the Universities wrongfully kept the monies paid for room and board and fees, and injunctive relief enjoining the Universities from retaining the pro-rated, unused portion of monies paid.  Id. at 2.

The Universities moved to dismiss on the grounds that Plaintiffs failed to file a pre-suit notice of claim as required by A.R.S. 12-821.01(A).  The Court granted the motion.

The Court’s Opinion

At the outset, the Court recognized that Arizona law requires a plaintiff to file a notice of claim with a public entity before suing it for damages.  In the notice of claim, the claimant must set forth “facts sufficient to permit the public entity . . . to understand the basis on which liability is claimed” and “a specific amount for which the claim can be settled and the facts supporting that amount.”  Id. at 3.

The Court noted that, because the statute functions to allow public entities to investigate and assess liability and to “assist in financial planning and budgeting,” which are fiscal considerations, the statute applies only to claims for money damages and does not apply when declaratory or injunctive relief is the “primary purpose of the litigation.”  Id.  A plaintiff, however, cannot circumvent the notice requirement by maintaining claims for monetary damages “under the guise of seeking declaratory relief.”  Id.

Here, although Plaintiffs sought “disgorgement” of the pro-rated unused monies already paid, a “declaration” that the Universities are unlawfully withholding the funds, and an “injunction” enjoining the Universities from retaining them, the Court held that an equitable remedy is inappropriate where, as here, “an adequate legal remedy exists in the form of money damages.”  Id. at 4.  The Court concluded that all six of Plaintiffs’ claims, regardless of the label that Plaintiffs used, directly involved government funds and, therefore, were subject to the notice of claim requirement.  Id. at 5.

The Court concluded that, although Plaintiffs alleged that they demanded the return of money through multiple channels, they did not allege that they had filed a notice of claim.  The Court, therefore, found their action barred.  Id. at 6-7.

Implications

Members of the plaintiffs’ class action bar have filed nearly 200 lawsuits seeking corona-virus related refunds to date, many against colleges and universities for failing to refund tuition, room and board, or other fees.  Although Defendants scored the first win, in the form of a dismissal of one of the largest reimbursement class actions filed to date, the ruling’s usefulness may be limited for defense purposes.  The Court relied upon a state-specific prerequisite to suit and did not reject the claims on their merits.  Thus, it remains to be seen whether the Universities’ strategy of invoking the notice requirement at the motion to dismiss stage will impact the ultimate outcome of similar claims asserted on behalf of these or other putative class members.  As a result, it is unlikely that this bellwether ruling will slow the fervor with which the plaintiffs’ class action bar continues to pursue similar cases.

 

By Jennifer A. Riley, Christina M. Janice, and Alex Oxyer

Seyfarth Synopsis: On July 14, 2020, Judge James Donato of the U.S. District Court for the Northern District of California became the latest to deny appointment of class counsel in a class action based on lack of diversity, including lack of diversity in gender (all male) and experience (too much). He issued that order in the case entitled In Re Robinhood Outage Litigation, No. 20-CV-01626 (N.D. Cal. July 14, 2020).  Although the latter reason may seem counter-intuitive, particularly because Judge Donato noted that such experience was likely to benefit the putative class, the ruling is part of a growing trend by federal judges to demand diversity in the lead counsel ranks and is, perhaps, the genesis of a new angle of attack for defendants.   

Background

Robinhood provides an internet/cloud-based platform for users to trade in stocks, funds, and options through a mobile phone application.  On March 2, 2020, the Dow Jones Industrial Average rose by over 1,294 points, the S&P 500 rose by over 136 points, and the Nasdaq rose by 384 points.  On the same day, however, Robinhood experienced downtime across its platform that affected functionality, including users’ ability to trade.  See Taaffe v. Robinhood Markets, No. 8:20-CV-513, 2020 U.S. Dist. LEXIS 55980, at *1-2 (S.D. Fla. March 31, 2020).  Robinhood thereafter became the target of numerous putative class action lawsuits.

On July 14, 2020, District Judge James Donato of the U.S. District Court for the Northern District of California entered an order consolidating 13 separate actions filed against Robinhood and considering the appointment of interim class counsel.  Although the request for appointment of lead counsel was unopposed, Judge Donato denied the request without prejudice in In Re Robinhood Outage Litigation, No. 20-CV-01626 (N.D. Cal. July 14, 2020).

The Court’s Ruling

Although it had “no doubt” that plaintiffs’ firms Kaplan Fox and Cotchett Pitre, and the individual lawyers identified as lead counsel would provide “highly professional and sophisticated representation to plaintiffs,” the Court ruled that it was “not prepared to appoint them at this time.”  Id. at 3.  The Court explained that it was concerned about “a lack of diversity in the proposed lead counsel.”  It noted, for example, that “all four of the proposed lead counsel are men, which is also true for the proposed seven lawyers for the ‘executive committee’ and liaison counsel.”  Id.

The Court also noted that, in addition, the proposed counsel “appear to be lawyers and law firms that have enjoyed a number of leadership appointments in other cases.”  Although the Court opined that such experience was “likely to benefit the putative class,” it found that the proposal “highlights the ‘repeat player’ problem in class counsel appointments that has burdened class action litigation and MDL proceedings.”  Id.

Thus, while counsel with “significant prior appointments” are “by no means disqualified from consideration,” the Court held that “leadership roles should be made available to newer and less experienced lawyers, and the attorneys running this litigation should reflect the diversity of the proposal national class.”  Id.  The following day, the two firms went back to Judge Donato with a revised roster that identified a female partner as a co-leader and included six women on the executive leadership committee.

A Growing Trend?

Other federal judges have exercised similar discretion.  More than a decade ago in 2007, Judge Harold Baer noted in In Re JP Morgan Chase Cash Balance Litigation, 242 F.R.D. 265, 277 (S.D.N.Y. 2007), that a proposed class included “thousands of Plan participants, both male and female, arguably from diverse racial and ethnic backgrounds” and that, therefore, “it is important to all concerned that there is evidence of diversity, in terms of race and gender, of any class counsel I appoint.”

Three years later, the same judge ruled in In Re Gildan Activewear Inc. Securities Litigation, No. 1:08 Civ. 05048 (S.D.N.Y. Sept. 20, 2010), that, because a proposed class included “thousands of participants, both male and female, arguably from diverse backgrounds,” it was therefore “important to all concerned that there is evidence of diversity, in terms of race and gender, in the class counsel I appoint.”  Judge Baer directed the firms to “make every effort” to assign at least one minority lawyer and one woman lawyer with requisite experience” to the matter.

The Rules seemingly allow courts to exercise such discretion.  Rule 23(g), for instance, requires that, in appointing class counsel, a court must consider factors such as “counsel’s experience in handling class actions” and “knowledge of applicable law,” and may consider “any other matter pertinent to counsel’s ability to fairly and adequately represent the interests of the class.”  Fed. R. Civ. P. 23(g)(1).  If more than one adequate applicant seeks appointment, “the court must appoint the applicant best able to represent the interests of the class.”  Fed. R. Civ. P. 23(g)(2).

Implications

As diversity is a key goal in all aspects of the business world, the ruling in In Re Robinhood Outage Litigation is a positive step in the right direction. The factors that a court deems pertinent to a lawyer’s ability to fairly and adequately represent the interests of the class are subject to discretion.  Whereas the rulings are currently few, we expect that more courts will begin to consider the makeup of proposed legal teams at increasing rates.  This opens the door for defense counsel to point out the same shortcomings, including where for example proposed class counsel are repeat players, lack diverse membership, or fail to reflect the putative class, as potential grounds to challenge the adequacy of class counsel to effectively represent the interests of class members.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: The Workplace Class Action Blog has provided analysis on important class action decisions and legal updates for over 10 years. We are happy to announce to our loyal blog readers that the U.S. Library of Congress recently selected our blog for inclusion in its new Web Archives! This inclusion means that the blog will be part of the historical record of important digital materials. We are grateful to the Library of Congress for recognizing our blog as part of the historical materials necessary to preserve for the future!

According to the Library of Congress website, this preservation is for important cultural artifacts and will allow access to these artifacts in the years to come to foster education and scholarship. The Library of Congress web archives contribute to the historical record and capture information and knowledge that could be lost.

Readers can learn more about the Library’s Web Archiving program goals here. We are thrilled and honored to be part of the archives. Thank you to all our loyal readers for your support of the WCAB over the years! Stay tuned for more content soon…

 

By: Matthew Gagnon, Steve Shardonofsky, Jim Swartz, and Coby Turner

The COVID-19 pandemic has spawned a wave of employment litigation directly and indirectly based on COVID-19-related health risks and employers’ response to the crisis.  Seyfarth has been tracking lawsuits filed in state and federal courts across the country, and will be reporting on the emerging trends within this wave of COVID-19 employment litigation and offering practical strategies for avoiding and responding to these lawsuits.  This legal update provides our initial impressions from our data collection and analysis.

1.    Types of Lawsuits

In both state and federal courts, employees have advanced a wide variety of claims in response to COVID-19’s effect on their workplaces. Given the unprecedented nature and breadth of the pandemic and corresponding economic repercussions, the claims cover a rather broad range of topics, but those advanced so far tend to fall into one or more of several categories:

  • Failure to provide a safe working environment. These claims have been asserted as negligence claims, violations of state or federal workplace safety laws and COVID-19 safety protocols, and even wrongful death claims.  Common allegations include failure to provide workers with adequate personal protective equipment and failure to implement customer or visitor policies (such as required temperature checks or masks) to protect employees.
  • Discrimination claims. Age and disability discrimination claims dominate COVID-19-related filings to date.  For instance, a 70-year-old plaintiff in New Jersey state court alleged that he was denied a work-from-home accommodation that he requested due to his medical condition and age, which he asserted presented additional risk of complications from COVID-19. Similar allegations—that a plaintiff was forced out of a job because of his age due to the employer’s concern about exposing an older worker to COVID-19—appear in this early wave of litigation and are arguably supported by the EEOC’s recent FAQ publication.
  • Leave claims. Numerous lawsuits have been filed alleging that employees have been unlawfully denied sick leave or family and medical leave for reasons related to COVID-19 under the Family Medical Leave Act, the Families First Coronavirus Response Act, state and local paid leave laws, and employer sick-leave policies.
  • Retaliation and whistleblower claims. Typically asserted in reference to an employee’s termination, retaliation claims commonly appear in these early COVID-19-related cases. Frequently, these lawsuits assert that an employee was terminated for complaining about workplace safety or working conditions (including complaints about the failure to provide appropriate personal protective equipment or the failure to comply with applicable COVID-19 safety protocols) or for exercising leave rights related to COVID-19. Some of these cases have also been couched in terms of state-law claims for wrongful termination against public policy.
  • Wage-and-hour claims. While the usual litany of wage-and-hour class and collective actions continues seemingly without regard to the pandemic, a number of new filings have involved circumstances directly caused by COVID-19 business impacts. For example, cases disputing compensation practices related to sanitation and hygiene protocols, expanded schedules, and on-call time have been filed in significant numbers across the country. In addition, a number of cases asserting an employer’s failure to pay contractually-agreed commissions or fees have been filed. Other categories of claims are reasonably foreseeable, as well. For example, wage-and-hour claims motivated by changes in working schedules or venues (e.g., work-from-home situations) and state-law-dictated expense reimbursement claims have not yet reached critical numbers, but may become a more fertile area for employee-litigants in the coming months.

2.    Affected Industries

Although no industry has been completely immune to this early wave of litigation, certain business sectors have seen heightened litigation activity as a consequence of the pandemic.  Three stand out due to either the risk of COVID-19 exposure or the typical conditions under which these businesses operate.

First and foremost, the health care sector has been targeted by employees and their unions, patients, and residents.  In the words of the Centers for Disease Control, “[g]iven their congregate nature and resident population served (e.g., older adults often with underlying chronic medical conditions), nursing home populations are at high risk of being affected by respiratory pathogens like COVID-19 . . . .”  Pharmacies and other healthcare businesses also experience the confluence of being an essential business and frequent exposure to potential COVID-19 patients.  Perhaps predictably, nursing homes, other residential or in-patient medical facilities, and other healthcare businesses are starting to see a wave of claims alleging failure to provide a reasonably safe workplace for healthcare provider staff and other employees.

Similarly, manufacturers have seen a significant share of newly filed COVID-19-related employment cases.   Manufacturing environments often involve close-contact, indoor operations.  Unlike healthcare facilities, manufacturing operations may not have the level of familiarity with personal protective equipment designed to inhibit the transmission of respiratory diseases. Accordingly, employees in these environments have tended to bring more claims related to workplace safety issues and attempts to exercise leave rights.

Finally, retail businesses have seen a variety of COVID-19-related claims.  Many retail businesses were permitted to remain open under state and local shelter-in-place orders and the rest are slowly reopening. Employees of these retailers have brought a panoply of claims related to accommodations needed for existing disabilities, working conditions, and retaliation.

3.    Proactive Steps to Avoid COVID-19 Litigation

While each lawsuit involves a close examination of the applicable law and relevant facts, there are some initial measures employers can take to minimize the risk of being sued and mitigate the potential exposure once a COVID-19-related lawsuit has been filed.

First, businesses should have a return-to-work plan that addresses some of the safety concerns that occupy a central place in this recent spate of lawsuits.  Seyfarth has published a checklist to assist employers with the process of bringing employees back into the workplace in a safe and transparent manner.  This resource covers a number of business re-opening topics, including many of the concerns alleged in recent COVID-19 litigation.  The checklist is available here.  Seyfarth safety, wage-hour, and employment counseling attorneys have also presented numerous webinars discussing a broad range of COVID-19-related compliance issues for the workplace. Those webinars can be viewed here.

Second, employers should prioritize addressing systemic issues that could affect large groups of employees. Employers should make time to create solid policies (and demonstrate its efforts to comply with them) that address and minimize risks and concerns  that could impact different employee populations on a collective basis. Seyfarth has discussed COVID-19-related class action avoidance here.

Third, employers should review existing policies and consider their application in the context of COVID-19.  Accommodation policies, typically used to provide reasonable accommodations for qualified employees with disabilities, may have broader application in light of the pandemic, and employers should consider whether it is feasible and desirable to extend the accommodation process to individuals whose medical conditions place them at higher risk of serious illness if they contract COVID-19.  Similarly, employers should carefully consider whether any of its efforts to promote a safe workplace—even those intended to protect older workers or workers with a medical condition that heightens risk—could have a discriminatory effect on the basis of protected characteristics.  Wage-and-hour policies could also be implicated as workers are asking to and being asked to work in different venues or with different hygiene protocols.  Existing policies likely do not address those situations from a pay perspective, so employers should either issue specific guidance to employees on these issues or contextualize existing policies.  Consulting with subject matter expert attorneys to develop the appropriate approach may help avoid the types of lawsuits now being filed in substantial numbers.

COVID-19 will continue to impact employers around the world in new and unpredictable ways. We will continue to monitor case filings and significant decisions and look forward to sharing our insights and analysis, guidance on best practices, and industry-focused information about COVID-19-related litigation activity.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Seyfarth Synopsis:  While many businesses hoped that the U.S. Supreme Court would blow up the ban on autodialed calls in the Telephone Consumer Protection Act (“TCPA”), on July 6, 2020, the nation’s highest court issued its long-anticipated decision in Barr v. American Association of Political Consultants, Inc., No. 19-631 (July 6, 2020), and accomplished the opposite.  Although the Supreme Court agreed that an exception allowing government debt-related robocalls was unconstitutional because it favored debt-collection speech, the Supreme Court merely struck down the carve out, effectively broadening the TCPA and reaffirming the law’s importance.

The ruling clears the way for a flood of TCPA-related lawsuits, as members of the plaintiffs’ bar move forward with TCPA-related lawsuits against those who use autodialers to collect debts, such as student loans or mortgages guaranteed by the federal government, and move forward with claims they previously put “on hold” pending the Supreme Court’s decision.  As a result, businesses that communicate with employees and customers via telephone and text message must continue to be cautious of the TCPA’s prohibitions.

Background

In response to consumer complaints, Congress passed the Telephone Consumer Protection Act in 1991 to prohibit, among other things, robocalls to cellular and residential telephone lines.  In 2015, Congress amended the robocall restriction and carved out calls made solely to collect a debt owed to or guaranteed by the United States.

The American Association of Political Consultants, Inc. and other political and non-profit organizations (“Plaintiffs”) filed a declaratory judgment action against the U.S. Attorney General and the FCC (the “Government”), arguing that the government-debt exception to the TCPA violated the First Amendment because it favored debt-collection speech over political and other speech.  Plaintiffs sought to invalidate the entire TCPA (rather than simply invalidate the government-debt exception).

Even though the district court identified the government-debt exception as a content-based restriction on speech, the district court held that the exception survived strict scrutiny because of the Government’s compelling interest in collecting debt.  Id.  On appeal, the U.S. Court of Appeals for the Fourth Circuit vacated the district court’s order.  Id. (citing Am. Ass’n of Political Consultants, Inc. v. FCC, 923 F.3d 159, 167 (4th Cir. 2019)).  The Fourth Circuit agreed that the government-debt exception was a content-based restriction on speech, but it held that the exception failed a strict scrutiny review and severed the exception.  Id. at 5-6.  The Supreme Court subsequently granted certiorari.

The Supreme Court’s Ruling

The Supreme Court affirmed the Fourth Circuit’s ruling.  As an initial matter, the Supreme Court found the TCPA’s robocall restriction, with the government-debt exception, a content-based restriction because it favors speech made for the purpose of collecting government debt over political and other speech.  As the Supreme Court explained, “A robocall that says, ‘Please pay your government debt’ is legal.  A robocall that says, ‘Please donate to our political campaign’ is illegal. That is about as content-based as it gets.”  Id. at 7.  As such, the Supreme Court found it subject to a strict scrutiny review.

The Supreme Court rejected the Government’s arguments to the contrary.  First, it noted that the TCPA does not draw any distinction based on the speaker, rather than the content, and, even if it did, that would not automatically render the distinction content neutral.  Id. at 8.  Second, it noted that the TCPA focuses on whether the caller is speaking about a particular topic and not, as the Government contended, on whether the caller is engaged in a particular economic activity.  Id.

Next, the Supreme Court held that the robocall restriction with the government-debt exception could not satisfy strict scrutiny.  It noted that the Government failed sufficiently to justify the differentiation between government-debt collection speech and other important categories of robocall speech, such as political speech, issue advocacy, commercial advertising, and the like.  Id. at 9.

Having so concluded, the Supreme Court then turned to the question of whether it should invalidate the entire TCPA or whether it could cure the problem by severing the government-debt exception from the remainder of the TCPA.  Because the TCPA was an amendment to the Communications Act, which contains an express severability clause, the Supreme Court concluded that it was required to sever the offending provision.  Id. at 18.

The Supreme Court noted that its “precedents reflect a decisive preference for surgical severance rather than wholesale destruction, even in the absence of a severability clause.”  Id. at 15.  Applying that preference, the Supreme Court explained it would sever the exception from the remainder of the TCPA because the remainder of the law “is capable of functioning independently” and in fact “function[ed] independently . . . 20-plus years before the government-debt exception was added in 2015.”  Id. at 18.

Implications Of The Supreme Court’s Ruling

Although many businesses hoped that the Supreme Court would invalidate the TCPA, the ruling in Barr gives it a boost.

Writing for the majority, Justice Kavanaugh noted that, while “Americans passionately disagree about many things,” they “are largely united in their disdain for robocalls” and he quoted legislative history that described robocalls as the “scourge of modern civilization.”  Id. at 1, 3.

As such, businesses should brace for a renewed flurry of TCPA-related class action lawsuits, as the plaintiffs’ bar moves forward with TCPA-related lawsuits against debt collectors and other businesses previously put “on hold” pending the Supreme Court’s decision, aided by Plaintiff-friendly “gems” from the opinion in Barr.

That said, the Supreme Court’s opinion opens the door to new defenses, including challenges to other portions of the TCPA.  The Supreme Court ruled that Plaintiffs “still may not make political robocalls to cell phones, but their speech is now treated equally with debt-collection speech.”  The TCPA and FCC regulations, however, provide for other exceptions that may be equally problematic and subject to challenge in that they similarly fail to treat speech equally.  Thus, as TCPA litigation gets a boost, the Supreme Court’s decision may provide a roadmap for new angles of attack.

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

Seyfarth Synopsis:  On July 7, 2020, the EEOC announced in a press release two new six-month pilot programs aimed at increasing voluntary resolutions of discrimination charges. One of the new programs seeks to increase the effectiveness of the conciliation process at the Commission, and the other will create more opportunities to resolve matters through the EEOC’s popular mediation process. The details of the EEOC’s latest programs are a critical “must read” read for all employers dealing with EEOC charges.   

Conciliation Pilot Program

The conciliation process is an informal process at the EEOC that seeks to resolve findings of discrimination by the Commission before litigation. The EEOC’s conciliation pilot program, which reportedly began on May 29, 2020, and was first reported by us here, updates the conciliation process to “drive accountability” and “emphasize the importance of conciliation as a tool for remedying complaints of discrimination.” The Commission’s announcement of the program provides that the pilot reestablishes the commitment for full communication between the EEOC and the parties to a charge of discrimination and, notably, adds a requirement that conciliation offers be approved by the “appropriate level of management” before they are shared with respondents.

This new pilot, which has been underway for several weeks, appears focused on enhancing oversight over the conciliation decisions made by EEOC personnel in the field and materially changes how the agency conciliates discrimination and harassment allegations. However, the pilot has garnered criticism from Senator Patty Murray, Ranking Member of the Senate HELP Committee, and Representative Bobby Scott, Chair of the House Committee on Education and Labor, who wrote to EEOC Chair Janet Dhillon on June 22, 2020, to question the rollout of the program and the moderation of EEOC field personnel discretion in conciliation efforts. (In that letter, the legislators cited our recent blog post on the impact of these changes on employers.)

Mediation “ACT” Pilot Program

The EEOC first implemented an agency-wide mediation program in 1999 and, since its implementation, it has been a popular option for employers to resolve charges of discrimination. However, the mediation program has historically only been available for certain categories of charges at the beginning of the charge process. The EEOC’s new “ACT” Mediation pilot, which stands for “Access, Categories, Time,” now expands the kinds of charges eligible for the mediation process and allows for mediation throughout the entire charge investigation. This program purports to allow parties more opportunities to resolve charges, though the Commission’s announcement does not contain any additional detail on the types of charges that may now be eligible for mediation. For example, large-scale, systemic cases were historically not subject to mediation, but it is unclear if that is still the case.

The EEOC also announced that the pilot will expand the use of technology to hold virtual mediations, presumably to continue this program despite challenges posed by the COVID-19 pandemic.

Implications For Employers

While additional details about these programs have yet to be disclosed, the changes described by the EEOC in its press release are potentially positive developments for employers. The conciliation program requirements that personnel in the field must obtain approval from a higher level of management before making conciliation demands could provide more clarity and assurance on conciliation demands offered to employers, and the mediation program changes may allow for more opportunities for employers to resolve charges throughout the investigation process.

These new measures are the latest in a variety of changes made by EEOC Chair Dhillon and are consistent with the EEOC’s previously-announced strategic priorities to emphasize pre-suit conciliation and mediation. The ongoing changes at the Commission are a must-watch for employers, as they considerably expand the opportunities for pre-litigation resolution of discrimination claims.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Seyfarth Synopsis:  As employers embark on reopening their businesses and implementing return to work plans, they face a potential wave of workplace class action litigation.  Such lawsuits have begun to roll in and courts have started to weave a patch-work quilt of responses.  Early results show trends beginning to emerge and lessons for employers embroiled in these actions.  In this blog post, we outline items that businesses need to have in their defense arsenals as they start responding to and defending post-COVID-19 class actions. A sound class action survival guide is a business imperative

  1. A Good Sense Of Common Sense:

The COVID-19 pandemic has provided some welcome direction from courts and clarity to litigants to focus on things that matter.  Over the past few months, numerous courts have suggested that litigants should act with a greater sense of awareness and many judges have exhibited a lower tolerance for frivolity and thoughtlessness.  This sense of the bigger picture has come through in not-so-subtle terms in the tenor and substance of many recent rulings.

In one illustrative example, a district judge in Chicago famously rejected a motion for reconsideration of a ruling continuing a TRO hearing noting that, even if the plaintiff were successful in securing an order that directed a slew of third-parties to spring into action to prevent the proliferation of “infringing unicorn” and “knock off elf” images, the order either would be ignored or would distract people who may have “bigger problems” on their hands.  Art Ask Agency v. Individuals, Corporations, Limited Liability Cos., No. 1:20-CV-01666 (N.D. Ill. March 18, 2020).  Similar examples abound from courts throughout the country.

Even as schedules and deadlines ease back into rigidity, employers in class actions are well-served by picking their battles and, when it comes to presenting issues to the court, refining their approach to account for the bigger picture, so as to avoid an inflated sense of urgency, and to jettison needless bickering.

  1. A Solid Understanding Of Class Certification Standards

As the tide of lawsuits alleging personal injury and wrongful death have started to roll in, some employers remain paralyzed by fear that an exposure on their premises could prove crippling to their survival.  Further frustrating any sense of security, courts have begun issuing inconsistent rulings on whether exposure claims are appropriate for class treatment.

In one of the first rulings, on April 10, 2020, a court in the Northern District of Illinois declined to certify a class of state inmates concerned about their risk of COVID-19 infection because it found that each putative class member came with a unique situation and the imperative of individualized determinations rendered the case inappropriate for class treatment.  Money v. Pritzker, No. 1:20-CV-02093 (N.D. Ill. April 10, 2020).

On June 6, 2020, a court in the Southern District of Florida reached a different result.  Focusing on the threat of a heightened risk of severe illness, despite the need for individualized assessment of each detainee’s vulnerabilities to COVID-19, it found the commonality required by Rule 23 because plaintiffs alleged common conduct, including failure to implement adequate precautionary measures and protocols, lack of access to hygiene products, and lack of social distancing.  Gayle v. Meade, No. 20-Civ-21553 (S.D. Fla. June 6, 2020).

Employers defending class cases should come prepared with a solid understanding of certification standards to navigate this growing patchwork of rulings.

  1. An Understanding Of The Various Laws That Shield Employers From Liability

Although Congress has not yet passed any COVID-19 liability shield on the federal level, a growing number of states have taken steps to immunize businesses from lawsuits by employees or customers who contract COVID-19.

A slew of bills await review that would shield businesses in certain states from coronavirus-related lawsuits, including one that would shield Louisiana restaurants from civil liability related to COVID-19, and others that would broadly block employees from bringing complaints in court and limit remedies for on-the-job infections to those available through the workers’ compensation system.

Whereas states such as North Carolina, Oklahoma, Utah, and Wyoming have enacted broad liability protections for businesses related to COVID-19, additional states such as Arizona and Michigan have adopted more limited protections specific to health-care providers.  These laws create a patchwork of protection, with varying scope and conditions, that companies facing broad scale class actions should understand and come prepared to invoke.

  1. A Sense Of Creativity Relative To Applicable Legal Standards

One example of creative thinking on the part of the plaintiffs’ bar lies in the workplace safety arena.  The Occupational Safety & Health Act (“OSHA”) requires that employers provide a workplace “free from recognized hazards that are causing or are likely to cause death or serious physical harm.”  In the context of COVID-19, OSHA has advised employers to follow guidelines from the CDC, such as sanitizing surfaces and ensuring social distancing.

Whereas federal administrative guidance does not generally give rise to a private cause of action, members of the plaintiffs’ bar have attempted to shoehorn failures to comply into claims for public nuisance as well as claims for breach of duty to protect the health and safety of employees.  Lawsuits have started to roll in from employees who allege that they were “encouraged” to continue attending work and prevented from adequately washing hands or sanitizing workstations.  Employees allege that masks created a “facade of compliance” that fell short of the measures that actually would have provided protection.

Courts have started to weave a patchwork quilt of rulings as to whether those alleging “failure to protect” can state a viable claim, particularly if they did not contract the disease.  In connection with Hurricane Harvey, for example, the U.S. Court of Appeals for the Eleventh Circuit ruled that a plaintiff could not state a claim by citing a laundry list of every possible injury imaginable without any factual allegations that he suffered any harm.  Motions to dismiss COVID-19 claims on similar grounds remain pending.  See, e.g., Chao v. Princess Cruise Lines, Ltd., No. 2:20-CV-03314 (C.D. Cal. June 2, 2020).

Court have disagreed over whether they should weigh in on such claims.  A federal court in Missouri, for instance, granted a motion to dismiss claims that an employer failed to protect employees at a meat processing plant, declining to hear the case pursuant to the primary jurisdiction doctrine to allow the OSHA to consider the issues.  Rural Community Workers Alliance v. Smithfield Foods, Inc., No. 5:20-CV-06063 (W.D. Mo. May 5, 2020).  An Illinois state court, however, recently refused to toss accusations by a proposed class of Chicago employees that their employer failed to do enough to protect them during the ongoing pandemic.  Massey v. McDonald’s Corp., 2020-CH-04247 (Cir. Ct. Cook County June 3, 2020).

To effectively defend these new theories, businesses should be prepared to think outside the box and mount a multi-faceted attack, including challenges on the pleadings, challenges to class certification, as well as a series of defenses on the merits.

  1. Thoughtful Policies And Documented Efforts To Comply

As legislators grapple with whether and on what terms to extend COVID-19 liability protections to employers, and plaintiffs grapple with turning non-compliance into legal theories, employers should be prepared to address the guidelines, their safety efforts, and their workplace policies.  Employers can create a positive defense posture by being prepared to demonstrate that they adopted and enforced reasonable and appropriate workplace policies and reporting mechanisms.  In addition to considering the risks and developing a plan, employers should be prepared with documentation that will enable them to rebut allegations of any widespread shortfall.

In sum, as members of the plaintiffs’ bar continue to pivot their theories to meet the next phase of the COVID-19 pandemic, and courts continue to issue rulings on their various claims, employers should be prepared to meet these new challenges with advance preparation and multi-faceted defense strategies.

By Gerald L. Maatman, Jr., Matthew J. Gagnon, and Alex W. Karasik

Seyfarth Synopsis:  In a landmark decision for gay and transgender employees, the U.S. Supreme Court held in Bostock v. Clayton County, Georgia, No. 17-1618, 2020 U.S. LEXIS 3252 (June 15, 2020), that Title VII prohibits discrimination against gay or transgender employees as a form of sex discrimination. Although Title VII does not explicitly prohibit discrimination based on sexuality or gender identity, the 6-3 decision authored by Justice Gorsuch represents a victory for the EEOC as it has been championing this theory in the federal courts for years. Employers should expect the EEOC will be increasingly vigilant in terms of enforcing this new federal workplace protection for the foreseeable future.

Case Backgrounds

The Supreme Court’s ruling decided three cases that raise similar issues – Altitude Express v. Zarda, No. 17-1623; Bostock v. Clayton County, Georgia, No. 17-1618; and R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission et al., No. 18-107.

As we previously discussed here, in Zarda, the plaintiff, was a sky-diving instructor who told a client that he was gay so she would feel more comfortable being strapped to him for a tandem jump. Following the plaintiff’s termination after the client’s boyfriend complained, the plaintiff filed a lawsuit alleging his employment was terminated because of his sexual orientation, which constituted sex stereotyping in violation of Title VII. The district court granted summary judgment dismissing his Title VII claim, and the Second Circuit affirmed, relying on precedent that a sex stereotyping claim cannot be predicated on sexual orientation. The plaintiff successfully petitioned for rehearing en banc. A divided Second Circuit overturned the panel decision and its own circuit precedent, holding that Title VII’s prohibition against discrimination on the basis of sex necessarily prohibits discrimination based on sexual orientation.

The Eleventh Circuit decided a similar case in Bostock, where the plaintiff alleged that he was fired because he is gay, despite having a long history of positive performance. The Eleventh Circuit ultimately reaffirmed that circuit’s precedent holding sexual orientation is not protected by Title VII’s prohibition against discrimination on the basis of sex.

The third case before the Supreme Court was R.G. & G.R. Funeral Homes v. EEOC, which we previously blogged about here. This lawsuit was one of the first cases brought by the EEOC alleging this theory of sex discrimination. After the plaintiff disclosed to her employer in 2013 that she would transition to dressing as a woman and planned to have sex-reassignment surgery, her employer offered her a severance agreement and terminated her. The district court granted summary judgment in favor of the employer, but the Sixth Circuit reversed, holding that gender identity discrimination fell squarely within Title VII’s prohibition against discrimination on the basis of sex and sexual stereotyping.

The Supreme Court’s Decision

The U.S. Supreme Court determined that Title VII of the Civil Rights Act of 1964 prohibits employment discrimination against LGBT individuals in the workplace. The Supreme Court held that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” Id. at *2. Further, it noted that although, “[t]hose who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result . . . the limits of the drafters’ imagination supply no reason to ignore the law’s demands.” Id.

After noting that “[f]ew facts are needed to appreciate the legal question we face,” the Supreme Court explained that, “[e]ach of the three cases before us started the same way: An employer fired a long-time employee shortly after the employee revealed that he or she is homosexual or transgender — and allegedly for no reason other than the employee’s homosexuality or transgender status.” Id. at 2. The Supreme Court reasoned that because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII.

In two lengthy dissenting opinions, Justices Alito, Thomas, and Kavanaugh opined that the majority’s decision was “preposterous,” because, “even as understood today, the concept of discrimination because of ‘sex’ is different from discrimination because of ‘sexual orientation’ or ‘gender identity.’” Dissent at 3. In criticism of the majority’s approach, Justice Alito’s dissent held that its “opinion is like a pirate ship. It sails under a textualist flag, but what it actually represents is a theory of statutory interpretation that [the late] Justice Scalia excoriated –– the theory that courts should ‘update’ old statutes so that they better reflect the current values of society.” Id.

Implications For Employers

This decision is a significant win for the EEOC and a game-changer for employers. The EEOC championed this legal theory for almost ten years, relying on its own quasi-judicial and rule-making powers to set precedent and its considerable enforcement powers to push this theory in the federal courts. The EEOC won many of those cases — but not all of them. Today’s ruling is a final vindication for the EEOC and a powerful testament to the law-shaping powers of a determined federal agency.

This decision will likely garner considerable media attention, and it would not be surprising if this leads to a significant uptick in EEOC charges brought by LGBTQ employees. We would also expect the EEOC will continue actively processing claims by LGBTQ employees as “sex” discrimination claims, with a new SCOTUS ruling in Bostock that supports the agency’s interpretation of Title VII once a claim hits the federal courts. We also foresee more attention in the workplace to LGBTQ employee issues. Now may be a good time for employers to review policies and practices to ensure they are legally sound following the Bostock decision.

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

Seyfarth Synopsis:  On June 11, 2020, the EEOC updated its Technical Assistance Q&A webpage to address several new questions submitted by employers and their counsel regarding the application of the Americans With Disabilities Act (“ADA”), the Rehabilitation Act, and other EEO-related laws to employees returning to work after the lifting of the COVID-19 shelter-in-place orders. The Commission’s latest guidance addresses issues such as reasonable accommodations for employees returning to work, accommodating employees more “at-risk” of the coronavirus, discrimination issues related to providing flexible schedules or telework options, and dealing with pandemic-related harassment. The EEOC’s latest guidance is a critical read for all employers returning employees to the workplace and providing alternative work arrangements.  

Latest EEOC COVID-19 Guidance On Reasonable Accommodations

One of the primary focuses of the Commission’s new guidance is the accommodation of employees with various COVID-19 concerns after they have returned to work. One new question addressed by the EEOC is whether an employee is entitled to a reasonable accommodation to avoid exposing one of their family members who is more at risk of the coronavirus. The new guidance informs employers that they do not need to provide accommodations to employees relative to their family member’s at-risk status under the ADA.

The Commission also advises employers that they may issue general advisories to their employees informing them of who to contact in the organization to request accommodations or other flexibilities in working arrangements. Further, the new guidance cautions employers that employees who need alternate screening measures due to a medical condition could be protected by the ADA, and employers should engage in the interactive process to identify a suitable accommodation for such employees.

Accommodations For Employees More At Risk Of COVID-19

The Commission’s newest guidance also addresses questions regarding accommodating employees who are more at risk of the virus, including employees over 65 or pregnant employees. The EEOC advises employers that they cannot exclude at-risk employees from the workplace or other work-related activities involuntarily, as such exclusion could run afoul of the Age Discrimination in Employment Act (“ADEA”), the ADA, or the Pregnancy Discrimination Act (“PDA”). Further, accommodations requested by more at-risk employees should be handled in accordance with the ADA or analyzed pursuant to the PDA to ensure that employees protected by such laws are not being treated disparately compared to other employees in the workplace.

Pandemic-Related Harassment And Discrimination

The EEOC’s guidance further addresses issues related to harassment in the workplace or via email for teleworking employees. The Commission cautions employers to be alert for pandemic-related harassment, particularly harassment of Asian employees. The EEOC recommends that employers train their managers and executive staff to recognize and address such harassment, even harassment from third parties coming into the workplace. Further, employers should consider issuing a statement reminding employees that harassment is not tolerated in the workplace. Additionally, the EEOC’s guidance advises employers that harassment conducted over email or video by employees who are teleworking should be addressed in the same way as harassment occurring in the workplace.

Finally, the Commission’s latest warns employers to keep an eye on any disparate treatment of employees in granting flexible work schedules or telework arrangements, advising that employers should not grant such benefits on the basis of any protected status, including gender.

Implications For Employers

The EEOC’s new guidance is the latest installment in the EEOC’s ongoing effort to provide clarity for employers on the application of the ADA, the Rehabilitation Act, and other EEO laws to COVID-19-related issues. The Commission’s additions to its Q&A page address a multitude of questions submitted to the EEOC by employers and employment counsel, including several questions submitted by Seyfarth Shaw. Employers dealing with these issues should carefully read the newest guidance as well as details on the EEOC’s other recent changes, all of which have been tracked here.