By Christopher M. Cascino and Gerald L. Maatman, Jr.

Seyfarth Synopsis: In Ellis v. Google, Inc., No. CGC-17-561299 (Cal Sup. Ct. Dec. 4, 2017), Judge Mary Wiss of the Superior Court of California granted a motion to dismiss a class action lawsuit brought by Google employees who claimed that all female Google employees are paid less than their counterparts.  Specifically, Judge Wiss found that the plaintiffs failed to plead sufficient facts to conclude that Google paid all female employees less than their male counterparts, even though the complaint alleged that a statistical analysis “found systematic compensation disparities against women pretty much across the entire workforce.”  Id.  at 4. This case represents a win for employers, who too often are forced to defend large class actions based on conclusory allegations.

Case Background

Three former female Google employees filed a putative class action in the Superior Court of California, alleging that Google “maintained throughout California a ‘centrally determined and uniformly applied policy and/or practice of paying its female employees less than male employees for substantially similar work.’”  Id. at 2.  To support this allegation, the plaintiffs also alleged that the U.S. Department of Labor found that, with respect to Google’s Mountain View office in 2015, “‘systematic compensation disparities against women pretty much across the entire workforce.’”  Id.  The plaintiffs asserted four causes of action against Google based on the alleged disparity, including a California Equal Pay Act claim, a California Labor Code claim, a Business and Professions Code claim, and a claim for declaratory judgment.  The plaintiffs purported to bring these claims on behalf of all female Google employees in California.


The Court observed that a class action complaint should be dismissed where, “assuming the truth of the factual allegations in the complaint, there is no reasonable possibility that the requirements for class certification will be satisfied.”  Id. at 3.  The Court then discussed the requirements for class certification under California law, including: “(a) an ascertainable and sufficiently numerous class; (b) a well-defined community of interest; and (c) substantial benefits from certification that render proceeding as a class superior to the alternatives.”  Id. at 4.  With respect to the second factor, the Court observed that it has three factors, including(a) predominant common questions of law or fact; (b) class representatives with claims or defenses typical of the class; and (c) class representatives who can adequately represent the class.”  Id.

The Court found that the plaintiffs did not allege sufficient facts to conclude that there was an ascertainable class.  Even though the plaintiffs defined the class as “all women employed by Google in California,” which on its face was ascertainable, the Court found the definition overbroad because the plaintiffs offered “no means  by which only those class members who have claims can be identified from those who should not be included in the class.”  Id.  Significantly, the Court found that the plaintiffs’ allegation that the U.S. Department of Labor “‘found systemic compensation disparities against women pretty much across the entire workforce’” at a Google office in 2015 was insufficient to support the conclusion that “Google implemented a uniform policy of paying all female employees less than male employees for substantially equal or similar work.”  Id.  The Court observed that the complaint did not “specify, for example, the specific job classifications it pertains to, or whether the comparison was made against men who perform substantially similar work under similar working conditions.”  Id.

The Court also concluded that the plaintiffs failed to allege that there were common questions of law and fact that predominated over individual issues because the plaintiffs’ class was “overbroad,” so liability could not be decided for all putative class members in one proceeding.  Id. at 5. The Court further opined that the plaintiffs’ conclusory allegation that they “performed ‘equal work’ as their male counterparts” was insufficient to allege that they, in fact, performed equal work, and dismissed their individual claims.  Id. at 6.

Implications For Employers

The Ellis case has been closely watched as it is a significant workplace class action in a worker-friendly jurisdiction. The ruling of December 4 is a win for employers insofar as companies, especially in California, can use the decision to try to stop class actions at the pleadings stage.  When moving to dismiss such complaints, employers should lay out what conclusions can be drawn from assuming specific factual allegations are true, as they may have far less significance than may appear at first glance.  Employers should also continue reminding courts that class actions are only appropriate when they can create common answers to common questions, which is often not the case in large, overbroad class actions, and that conclusory allegations are insufficient to state claims.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: Each year the American Tort Reform Association (“ATRA”) publishes its “Judicial Hellholes Report” that focuses on litigation problems in state court systems and challenges for corporate defendants in the fair and unbiased administration of justice. The ATRA’s 2017 Report was recently published; a copy is here, as well as an executive summary here.

Insofar as the Report defines a judicial hellhole as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, the Judicial Hellholes Report is an important read for corporate counsel facing class action exposures. In sum, if one has to litigate class actions and make decisions with respect to venue strategy, the Report is a “must read.”

The 2017 Hellholes

The ATRA identified 8 jurisdictions on its 2017 hellholes list – including, in order, (1) Florida (particularly in the Florida Supreme Court and trial courts in southern Florida), (2) California, (3) St. Louis, Missouri, (4) New York (especially in its treatment of asbestos litigation in New York City), (5) Philadelphia (especially in the Philadelphia Court of Common Pleas), (6) New Jersey, (7) Illinois (especially Cook and Madison counties), and (8) Louisiana. As corporate counsel are undoubtedly aware, these are “magnet” venues for Plaintiffs’ class action lawyers and less than optimal venues for corporate defendants to be sued.

The 2017 “Watch List”

The ATRA also included 7 jurisdictions on its “watch list,” including Baltimore, Maryland, Georgia (principally in the Georgia Supreme Court), Newport News, Virginia (especially in asbestos litigation), Oregon (particularly in the Oregon Supreme Court), Pennsylvania (in the Pennsylvania Supreme Court), the U.S. Court of Appeals for the Ninth Circuit, and West Virginia. Just a notch below the 8 hellholes, the “watch list” jurisdictions also present significant challenges for corporate defendants.

Implications For Employers

The Judicial Hellholes Report dovetails with the experience of employers in high-stakes workplace class actions, as Florida, California, Missouri, New York, Pennsylvania, New Jersey, Illinois, and Louisiana are among the leading states where Plaintiffs’ lawyers file employment discrimination and wage & hour class actions in state courts. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and by generous damages recoveries possibilities under state laws.


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

Seyfarth Synopsis:  In an ADEA action brought by the EEOC alleging that the New Mexico Department of Corrections failed to promote correctional officers over the age of 40, a federal district court in New Mexico denied the employer’s motion to dismiss but ordered the EEOC to file a supplemental pleading identifying previously unnamed aggrieved parties.

For employers facing EEOC age discrimination claims, this ruling provides insight into how to attack allegations relative to unidentified aggrieved individuals and to flush out the true size and scope of an EEOC systemic lawsuit.


In EEOC v. State of New Mexico, Dep’t of Corrections, No. 15-CV-879, 2017 U.S. Dist. LEXIS 198770 (D.N.Mex. Dec. 4, 2017), the EEOC alleged that from January 2009 to at least December 2014, the New Mexico Department of Corrections (“NMDC”) denied employment opportunities to three specific workers and a group of unidentified aggrieved individuals aged 40 and over on the basis of their age.  The NMDC moved to dismiss with respect to the unidentified aggrieved individuals, arguing those claims were insufficiently plead, and further, that the EEOC failed to provide sufficient notice about any additional aggrieved individuals during the pre-filing conciliation period. 

The EEOC moved to convert the motion to dismiss to a motion for summary judgment after the NMDC attached to its motion exhibits relating to the EEOC’s investigation and conciliation.  Judge Kenneth J. Gonzales of the U.S. District Court for the District of New Mexico denied both motions, but  ordered the EEOC to file a supplemental pleading listing the names of each aggrieved party.

Employers can use this decision in ADEA litigation to argue that the EEOC should identify any unnamed aggrieved individuals at the outset of litigation. In this respect, it is a key ruling for employers.

Case Background

The EEOC alleged that the NMDC failed to promote three correctional officers to various positions at the Central New Mexico Correctional Facility because they were over the age of 40.  The former warden allegedly told the officers that “while [two Claimants] were qualified for the [position], he selected a 31-year-old candidate because he was looking for someone with ‘longevity.’”  Id. at *2.  The EEOC also alleged that the warden: (1) made many of the decisions to deny employment opportunities to older workers; (2) used ageist comments about longevity, preferring younger workers, and not promoting employees near retirement; and (3) instilled a culture of age discrimination that continued to be applied by the NMDC.  As such, the EEOC sought an injunction requiring policy changes and money damages for any individual adversely impacted by the discrimination.

Arguing that the EEOC failed to provide sufficient notice about any additional aggrieved individuals during the pre-filing conciliation period, the NMDC moved to dismiss the amended complaint.  In support of its motion, NMDC sought to offer several exhibits, including: (1) requests for information propounded on the NMDC by the EEOC; (2) the EEOC’s letter to the NMDC’s employees soliciting information or claims; and (3) letters and e-mails between the parties relating to EEOC’s efforts at conference, conciliation, and investigation.  Id. at *5.  The EEOC argued that if the Court was willing to entertain evidence regarding pre-filing communications, then the motion to dismiss should be converted to a motion for summary judgment.  Id. at *3.

The Court’s Decision

The Court denied the NMDC’s motion to dismiss, denied the EEOC’s motion to convert the convert the motion to dismiss to a motion for summary judgment, and ordered the EEOC to file a supplemental pleading listing the names of each aggrieved party involved in this lawsuit.  First, the Court addressed the NMDC’s argument that the exhibits were “implicitly referenced” in the EEOC’s allegations regarding its pre-filing investigation.  Id. at *5.  The Court rejected this argument, opining that “implicit, subtle, or passing references to extraneous evidence” did not justify their inclusion.  Id.  As such, the Court excluded the NMDC’s exhibits, and therefore denied the EEOC’s motion to convert.

Second, the Court addressed the NMDC’s argument that the Court should consider the lack of actual pre-litigation notice as part of the notice pleading inquiry, including its knowledge about the potential number of claimants, facilities, and wrongdoers.  Id. at *6.  According to the NMDC, any potential recovery should be limited to the claimants the EEOC actually knew about when conciliation concluded in September of 2013.  The Court held that it would allow the parties to amend their pending summary judgment motions to supplement any evidence and arguments regarding actual pre-litigation notice and timeliness, but that “a motion to dismiss typically is not the correct vehicle for determining whether a claim is barred based on when it arises.”  Id. at *7.

Third, the Court addressed the NMDC’s argument that the EEOC failed to meet the pleading standards defined in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), and Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).  The Court opined that there is no binding case law addressing how much information the EEOC’s complaint must provide about unidentified parties.  Id. at *9.  Further, it instructed that courts are more permissive about the class-type allegations where the complaint is very specific about the charging parties.  Id. at *10 (citations omitted).  Applying these principles, the Court held that the complaint stated a plausible claim for relief on behalf of the unidentified aggrieved individuals since it described the types of discrimination at issue (age); the group of workers (NMDC workers over the age of 40); and the duration of the discriminatory conduct (since 2009 and ongoing).  Id.  Accordingly, the Court denied the NMDC’s motion to dismiss.

Finally, at oral argument, the EEOC offered to file an amended complaint to satisfy the party plaintiff rule, if the Court found it applied.  Id. at *12.  Instructing that the ADEA incorporated the requirements of 29 U.S.C. § 216(c), the Court ordered the EEOC to identify each aggrieved individual in the record by filing a supplemental pleading.  Id. at *11-12.  The Court also permitted the NMDC the option to file a response, but advised that the Court would prefer to address additional substantive arguments through the summary judgment proceedings.  Accordingly, the Court denied the NMDC’s motion to dismiss, denied the EEOC’s motion to convert the convert the motion to dismiss to a motion for summary judgment, and ordered the EEOC to file a supplemental pleading listing the names of each allegedly aggrieved worker on whose behalf the EEOC sought recovery.

Implications For Employers

In its Strategic Enforcement Plan for Fiscal Years 2017-2021, the EEOC identified eliminating barriers in recruitment and hiring as one of its six priorities (as we blogged about here).  One of the prime areas where the EEOC has been targeting employers involves age discrimination.  This litigation should put employers on notice that promotional and hiring decisions will be closely scrutinized by the EEOC.

Further, although the Court did not reach the issue of whether the EEOC fulfilled its conciliation obligations with respect to the unnamed group of allegedly aggrieved individuals, this employer’s attack of the EEOC’s failure to fulfill its pre-suit obligations under Title VII resulted in the Court ordering the Commission to file a supplemental pleading identifying such individuals.  Although the employer’s motion to dismiss was denied, employers can cite to this ruling in ADEA litigation when arguing that the EEOC should “put its cards on the table” and disclose who exactly is part of the lawsuit.

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


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

Seyfarth Synopsis:  In an ADA action alleging that a maker of train components discriminated against a group of applicants by regarding them as disabled, a federal district court in Illinois granted the EEOC’s partial motion for summary judgment, holding that the company’s decision to deny them work was based on improper tests concerning prospective injuries.

Employers should keep this ruling on their radar when considering medical testing in the job application process.


In EEOC v. Amsted Rail Co., No. 3:14-CV-1292, 2017 U.S. Dist. LEXIS 189713 (S.D. Ill. Nov. 16, 2017), Amsted made conditional job offers to thirty-nine applicants (the “Claimants”) for chipper positions, but placed them on medical hold because of abnormal results from a nerve conduction test (“NCT”).  Id. at *2-6.  The EEOC argued that Amsted violated the ADA by not hiring the Claimants on the basis of disability in regards to job application procedures and hiring.  Id. at *7-8.  Amsted justified its refusal to hire the Claimants by asserting there was a higher risk of developing carpal tunnel syndrome (“CTS”) for those with abnormal NCT results.  After both parties cross-moved for summary judgment, Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois granted in part the EEOC’s motion for partial summary judgment, holding that the NCT did not indicate the Claimants’ contemporaneous inability to perform the chipper job, but only a prospective, future threat to their health if they were to perform the job. 

This ruling illustrates that employers must be careful not to make hiring decisions based on the potential of future medical injuries.

Case Background

Amsted employs “chippers” to finish the surfaces of the steel side frames for railcar components.  Id. at *3.  Chippers use pneumatically powered tools, such as 12-pound sledgehammers, to perform their jobs.  The work requires intensive use of the hands and arms, and includes exposure to vibrations.  In 2010 and 2011, during a hiring surge, Amsted offered employment to applicants who had the necessary skills and experience, but the offers were contingent on their passing a medical examination and other tests.  Id.  The medical examination aimed, in part, to determine applicants who were at higher risk of developing CTS, one of the risks of jobs that require intensive use of the hands and exposure to vibrations.  Amsted contracted with an outside medical company to conduct on-site medical exams, which included a medical history questionnaire, measuring vital signs, vision and hearing assessments, a physical examination, and an NCT.

Applicants whose NCT was “abnormal” were put on “medical hold pending further data” regardless of any other information obtained in the examination.  Id. at *4.  This was done because the medical testing company believed abnormal NCT tests indicated that an applicant was “right on the verge of” developing CTS and losing the use of his hand.  Id.  Amsted was aware that applicants were being placed on hold because of an abnormal NCT result and authorized this use of the NCT results.  Applicants who did not return with normal NCT results were not hired.  Amsted did not hire any applicants who did not test normal on an NCT.

The EEOC alleged that Amsted violated the ADA when it denied the Claimants employment on the basis of their disability rather than an individualized assessment.  Id. at *7.  The EEOC argued that an abnormal NCT result was an inappropriate basis for making employment decisions.  It further alleged that Amsted was not concerned with worker safety, but rather with reducing workers’ compensation costs.  Amsted challenged the EEOC’s ability to prove all elements of its ADA case, including that the Claimants were qualified because they did not pose a direct threat.  Id. at *9.  As such, both parties cross-moved for summary judgment. 

The Court’s Decision

The Court granted in part the EEOC’s motion for partial summary judgment.  With the exception of one Claimant, Amsted did not challenge whether the EEOC had sufficient evidence to prove the Claimants were disabled.  Id. at *10.  The Court rejected Amsted’s challenge relative to the lone Claimant, noting that because Amsted conceded it refused to hire the Claimant because it feared he posed a safety risk in light of his prior CTS diagnosis and corrective surgery, no reasonable jury could fail to find that it regarded him as disabled  Id. at *11.  Regarding the element that the Claimants be qualified, the Court opined that the relevant case law established that the qualification question focuses on the individual’s condition at the time of the defendant’s employment decision, regardless of what may happen to the individual in the future.  Id. at *15.

In addition, the Court addressed the adverse employment action element.  Id. at *18.  Amsted argued that the Claimants were not subject to an adverse employment action because they were not rejected for employment but were simply put on medical hold pending receipt of further medical information.  The EEOC argued that Amsted’s placement of Claimants on medical hold was an adverse employment action because it effectively foreclosed future employment as a chipper.  Agreeing with the EEOC, the Court held that “[t]he evidence show[ed] that the Claimants’ placement on medical hold due to an abnormal NCT result was an adverse employment action because it effectively precluded them from being hired.”  Id. at *19. 

Finally, the Court explained that the EEOC must show but-for causation in order to prevail.  Id. at *20.  Amsted argued that the EEOC could not establish a discriminatory intent because the company relied in good faith on medical judgments that the Claimants were unable to safely perform the essential functions of the chipper job or had certain medical restrictions.  The Court rejected this argument, holding that Amsted took the Claimants out of the applicant pool because of its perception that they were disabled.  Accordingly, the Court granted in part the EEOC’s motion for partial summary judgment.

Implications For Employers

In its Strategic Enforcement Plan for Fiscal Years 2017-2021, the EEOC identified eliminating barriers in recruitment and hiring as one of its six enforcement priorities (as we blogged about here).  For employers in industries where an applicant’s medical background may be important, it is crucial for those employers to keep the EEOC’s strategic priorities in mind.  When employers make hiring decisions based on the potential for future injuries, such as the employer here, they significantly increase their likelihood of facing EEOC-initiated ADA litigation.  As such, employers should be exercise caution when implementing medical testing procedures for applicants, and ensure such procedures are lawfully conducted.

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


Happy Holiday season to our loyal readers of the Workplace Class Action Blog!

Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report.

We anticipate going to press in early January, and launching the 2018 Report to our readers from our Blog.

This will be our Fourteenth Annual Report, and the biggest yet with analysis of over 1,350 class certification rulings from federal and state courts in 2017.  The Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”  You can read more about the review here.  Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2018 Report will analyze rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2017 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2018 Report will be available on our blog in early January. Happy Holidays!

Seyfarth Synopsis: A somewhat bizarre event – even by this year’s standard of unusual current events – hit the news stream earlier this week, as two “Acting Directors” showed up to work on Monday morning at the U.S. Government’s Consumer Financial Protection Bureau, also known as the CFPB. In today’s vlog, Partner Jerry Maatman of Seyfarth Shaw, LLP gives our readers an explanation of the situation at the CFPB, discusses the agency’s significance for employers, and forecasts potential class action implications based on these developments.


The Consumer Financial Protection Bureau (“CFPB”) has been a controversial government agency since its authorization under the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2011. Formed out of a post-2008 recession by then-Harvard Law Professor and current U.S. Senator Elizabeth Warren, the CFPB is designed – per its legislative history – to “protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law.” As of January 2017, this consumer-friendly agency had secured nearly $12 billion to 29 million consumers.

On Monday, November 27th, both Leandra English and Mick Mulvaney sent out emails to CFPB staff members claiming to be the Acting Director of the agency. This conflict stemmed from Richard Cordray, longtime Director of the CFPB, relinquishing his duties effective November 24 at midnight. Upon his departure, Cordray named English as the Deputy Director, on the assumption that she would assume leadership as Acting Director (and Cordray would block the White House from interfering). However, at the same time, President Trump used his federal appointment power under the Federal Vacancies Reform Act (FVRA) to name Mick Mulvaney as Acting Director. English subsequently filed a lawsuit seeking an injunction against President Trump and Acting Director Mulvaney in the U.S. District Court for the District of Columbia, but Judge Timothy Kelly ruled in favor of Trump and Mulvaney.

This week’s leadership debacle was not the only time the CFPB has been in the news recently. Last month, the U.S. Senate voted to repeal the CFPB’s Arbitration Rule by a narrow 51-50 vote. The existence of this broad rule effectively barred financial institutions from including a class action ban in their arbitration agreements with consumers. Similar to the agency itself, the Arbitration Rule was a strictly partisan issue. The Republican Party claimed that the rule allowed trial lawyers to “line their pockets” off unnecessary customer class actions and hurt American business. On the other side, Democrats argued that the repeal of this rule and ensuing limitations to the CFPB placed too much power in the hands of big business and hurt consumers.

As the vlog outlines, potential class action implications of this controversial agency are yet to be seen. Assuming that Acting Director Mulvaney remains in control at the CFPB, it is safe to say the agency he once called a joke “in a sick, sad way” is headed for a limitation in institutional reach and power. More importantly, though, the upcoming U.S. Supreme Court decisions regarding class action waivers in NLRB v. Murphy Oil USA, Inc. (No. 16-307), Epic Systems Corp. v. Lewis (No. 16-285), and Ernst & Young LLP v. Morris (No. 16-300) will have a profound impact on future class action litigation. One takeaway from this situation that cannot be debated, though, is Jerry’s final thought of the vlog. “We are living in interesting times these days.”

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

Seyfarth Synopsis:  As biometric technology has become more advanced and affordable, more companies and employers have begun implementing procedures and systems that rely on biometric data.  Given the serious repercussions of compromised biometric data, a number of states have proposed or passed laws regulating the collection and storage of biometric data, including Illinois through the passage of the Illinois Biometric Privacy Act (“BIPA”) – the only biometric statute which provides a private cause of action.

Plaintiffs’ class action attorneys have taken notice, as the number of class action lawsuits alleging violations of the BIPA in Illinois has surged in recent months.  As more and more employers are utilizing biometric technology for various purposes, including timekeeping, employers are at a significant risk of becoming a target of class action litigation under the BIPA if it fails to comply with the requirements of the statute.  Cases brought pursuant to the BIPA are akin to other “gotcha” statutory class actions – highly popular with the plaintiffs’ bar due to the inclusion of statutory damages and a provision for attorneys’ fees.

The theories underlying BIPA class actions, and the defenses thereto, remain largely untested.  However, the Second Circuit became the first U.S. Court of Appeals to wade into the rising tide of litigation under the BIPA in Santana v. Take Two Interactive Software, 2017 U.S. App. LEXIS 23446 (2d Cir. Nov. 21, 2017), by affirming the district court’s dismissal of the case based upon a lack of Article III standing under the principles announced by the Supreme Court in Spokeo v. Robins, 136 S. Ct. 1540 (2016), but vacating the district court’s finding that plaintiffs were not “aggrieved by” a violation the BIPA (e.g., failed to state a cause of action under the statute due to a failure to plead actual damages).

The decision sheds light on the viability of certain potential employer defenses in BIPA class actions, particularly at the motion to dismiss stage.


Requirements Of The BIPA

Notice And Consent

 The BIPA prohibits companies from collecting employees’ biometric information until the company notifies the employee in writing that the information is being collected. Specifically, the written notice must inform the individual of the “specific purpose and length of term for which a biometric identifier or biometric information is being collected, stored and used.” 740 ILCS § 14/15(b).  Likewise, a company must obtain a written release from the individual enabling it to collect and store the information.  In the employment context, “written release” is defined as a “a release executed by an employee as a condition of employment.”  740 ILCS § 14/10.

Written Policy

The BIPA also requires companies to develop a written policy establishing a retention schedule and guidelines for permanently destroying biometric information when the initial purpose for collecting them has been satisfied or within three years of the employee’s last interaction with the employer, whichever occurs first.  740 ILCS § 14/15(a).  The policy must be made available to the public.  Id.

Disclosure To Third-Parties

In addition, a company may not disclose biometric information to a third party unless: it obtains consent for disclosure from the individual; the disclosure completes a financial transaction requested by the individual; the disclosure is required by law; or the disclosure is required by a valid warrant or subpoena.  740 ILCS § 14/15(d).

Standard Of Care

Also, the BIPA requires that a company use “the reasonable standard of care” within its industry for storing, transmitting and protecting biometric information and act “in a manner that is the same as or more protective than the manner in which the [company] stores, transmits and protects other confidential and sensitive information.”  Id. § 14/15(e).

Case Background

In Santana, Plaintiffs alleged that Defendant violated the BIPA based on the use of a feature in the NBA 2K15 and NBA 2K16 video games, which contain a feature called “MyPlayer” which allows gamers to create a personalized basketball player that has a realistic 3-D rendition of the gamer’s face.  The 3-D mapping process used cameras to capture a scan of the gamer’s facial geometry to disseminate a realistic rendition of the gamer’s face which requires gamers to hold their faces within 6 to 12 inches of the camera and slowly turn their heads during the scanning process.  Id. *2-3.  To use the feature, gamers must also first agree to terms and conditions acknowledging that the face scan will be visible and may be recorded during gameplay and requires gamers to “agree and consent to such uses.”  Id.

Plaintiffs alleged that Defendant: (1) collected their biometric data without their informed consent; (2) disseminated their biometric data to others during game play without their informed consent; (3) failed to inform them in writing of the specific purpose and length of term for which their biometric data would be stored; (4) failed to make publicly available a retention schedule and guidelines for permanently destroying plaintiffs’ biometric data; and (5) failed to store, transmit, or protect from disclosure plaintiffs’ biometric data by using a reasonable standard of care or in a manner that is at least as protective as the manner in which it stores, transmits, and protects other confidential and sensitive information.  Id. *4.

Defendant moved to dismiss Plaintiffs’ claims for lack of Article III standing and for failure to state a cause of action under the statute (i.e., lack of “statutory standing”).  The district court granted the motion on both grounds and dismissed the action with prejudice, and Plaintiffs appealed.

The Second Circuit’s Decision

In its ruling of November 21, 2017, the Second Circuit entered a summary order affirming the district court’s decision insofar as it held that plaintiffs lacked Article III standing, but vacating the decision in part insofar as it held that plaintiffs lacked a statutory cause of action as “aggrieved” parties.

In regards to Article III standing, the Second Circuit held that “none of the alleged procedural violations [] raise[d] a material risk of harm” to Plaintiffs arising out of the use, collection, or disclosure of an individual’s biometric data.  Id. *7.  In reaching this conclusion the Second Circuit noted that no reasonable person would believe that the feature of the game at issue was anything other than a facial scan and Plaintiffs did “not plausibly assert (beyond a mere conclusory allegation) that they would have withheld their consent had Take-Two included additional language in its consent disclaimer.  Id. *8.  Plaintiffs’ alleged violations of the BIPA’s notice provisions similarly failed to raise a material risk of harm because Plaintiffs did not allege that Defendant had not or will not destroy their biometric data within the period specified by the statute nor did Plaintiffs allege that Defendant lacked such protocols or that its policies were inadequate and “there is accordingly no material risk that [Defendant’s procedural violations have resulted in plaintiffs’ biometric data being used or disclosed without their consent.  Id. *9.  Finally, the Court was not persuaded by Plaintiffs attempts to “manufacture an injury” by alleging that they would be deterred from using biometric technology in the future because “Plaintiffs’ fear, without more, is insufficient to confer Article III injury-in-fact.  Id. *11.

Despite this ruling, the Second Circuit remanded to the district court with the instruction that the district court shall enter dismissal without prejudice finding that the district court did not have subject matter jurisdiction to ultimately find that plaintiff did not have “statutory standing,” e.g., that Plaintiffs had not alleged a cause of action under the statute – specifically, that Plaintiffs were not “aggrieved by” a violation of the statute because they did not allege “actual damages.”  The Second Circuit held:

Since the statutory standing arguments here are based on differing constructions of the term ‘aggrieved party’ as used in BIPA, the district court’s resolution of the issue was a judgment on the merits that could not be properly addressed absent subject matter jurisdiction.  The district court was therefore without power to dismiss the complaint with prejudice for failure to state a cause of action under the statute.

Id. at *13.

Implications For Employers

The Second Circuit’s ruling represents a victory for employers to the extent that it will make it more difficult for plaintiffs to plead and maintain Article III standing to survive a motion to dismiss in federal courts.  On the other hand, the Second Circuit opinion did not bring any clarity as to who a “person aggrieved” is for purposes of the statute and whether plaintiffs must plead actual damages in order to state a cause of action under the BIPA.

The practical import of this ruling is that the battleground for defenses based on subject-matter jurisdiction and standing grounds and a lack of statutory standing (e.g. failure to plead a cause of action because plaintiffs were not “aggrieved by” a violation of the statute) will likely shift back to the Illinois state courts, which (despite being similar in many respects) have different and independent standing principles from federal courts.

Courts remain split as whether plaintiffs alleging violations under the BIPA must allege actual damages in order to state a cause of action, with state courts generally finding that actual damages are not necessary to plead a cause of action under the statute.   Compare McCollough v. Smarte Carte, Inc., 2016 WL 4077108, at *4 (N.D. Ill. Aug. 1, 2016) (dismissing BIPA action for lack of actual damages) and Rottner v. Palm Beach Tan, Inc., 2015-CH-16695 (BIPA requires showing of actual damages) with Monroy v. Shutterfly, Inc., 2017 WL 4099846, at *9 (N.D. Ill. Sept. 15, 2017) (“[w]hile the matter is not free from doubt, the court declines to hold that a showing of actual damages is necessary in order to state a claim under the BIPA); Rosenbach v. Six Flags Entertainment Corporation et al., 16 CH 13 (Cir. Court, Lake County, IL, June 17, 2016) (finding sufficient statutory standing for the plaintiff to survive a motion to dismiss where the plaintiff had provided fingerprints to Six Flags as part of an annual pass program to the amusement park); Sekura v. Krishna Schaumberg Tan, Inc., 2017 WL 1181420 (Cir. Ct., Cook County, IL, Feb. 9, 2017) (denying motion to dismiss BIPA claim and noting that ”the term ‘aggrieved’ has been used consistently in numerous statutes to provide claims for the infringement of granted legal rights without the need to plead specific or actual damages” and “it is not this court’s role to determine whether BIPA was well intentioned or even well drafted, only to determine, in this case, whether it requires that plaintiffs plead actual damages to state claims thereunder.”)

In sum, while the Second Circuit’s opinion provides employers with strong support for arguments based on a lack of subject-matter jurisdiction and standing (particularly in federal courts), arguments by employers at the motion to dismiss stage that a plaintiff lacks statutory standing (e.g., whether the statute requires a plaintiff to plead actual damages to state a cause of action) will likely have to be resolved by Illinois state courts and any such arguments in federal court may result in remand to state court, or a dismissal without prejudice allowing plaintiffs to re-file in state court.

By Gerald L. Maatman, Jr. and Michael L. DeMarino

Seyfarth Synopsis:  In E.E.O.C. v. Scott Medical Health Center, P.C. No. CV 16-225, 2017 WL 5493975, at *2 (W.D. Pa. Nov. 16, 2017), a default judgement of liability was entered against the defendant company for sex-based harassment, and the Court awarded the EEOC back pay, prejudgment interest, and compensatory and punitive damages. Although the Court found that an award of compensatory damages above $50,000 would be consistent with cases with comparable emotional distress, the Court determined that it was not authorized by statute to award more than this statutory cap.

This is case is  important as a continuation of one of the first decisions to conclude that discrimination based on sexual orientation is prohibited by Title VII. We blogged about it here.

Although the EEOC’s recovery was not what it might have been due to the statutory cap, this decision is nonetheless an important reminder for employers that compensatory and punitive damages could easily add up, even in cases involving sex-based discrimination and murky areas of Title VII.

Case Background

In E.E.O.C. v. Scott Medical Health Center, P.C. No. CV 16-225, 2017 WL 5493975, at *1 (W.D. Pa. Nov. 16, 2017), a default judgment on liability was entered against the defendant Scott Medical for sex-based harassment. The Court found that Dale Massaro, an employee of Scott Medical, was subjected to sex-based harassment in the form of anti-gay slurs and comments  directed at him by his supervisor, Robert McClendon. Id. Massaro reported the harassment to Gary Hieronimus, Scott Medical’s owner and CEO. Id. Rather than take action to stop the harassment, however, Hieronimus simply said that McClendon “was just doing his job.” Id.  After complaining to Hieronimus, the harassment continued, and Massaro quit his job. Id. at *2. Massaro then became depressed and suffered emotional distress for which he was treated by his family physician. Id.

The Decision

Scott Medical accepted a default judgment against it on liability but tried the issue of damages. After a trial on damages, the Court concluded that the EEOC proved by a preponderance of evidence that Massaro was entitled to a back pay award and prejudgment interest in the amount of $5,500.43. Id at *3. “Prejudgment interest on back pay awards,” the Court explained, “is appropriate to ensure that victims of discrimination are made whole.” Id.

The Court then calculated compensatory and punitive damages. Because Scott Medical had fewer than 101 employees, the applicable statutory limit on compensatory and/or punitive damages was $50,000. Id. at *5. Thus, although the Court concluded that the EEOC had proved that Massaro was entitled to at least $125,000 in compensatory and punitive damages, the EEOC’s recovery for Massaro was capped at $50,000. Id. at *5-6.

Critical to the Court’s damages award was that Scott Medical neither plead a “good faith efforts” affirmative defense to punitive damages nor presented any evidence to support such a defense. Id. at *5. The Court held that the evidence showed that Scott Medical made no efforts to comply with Title VII. Id. The Court concluded that Scott Medical’s CEO not only failed to take corrective action in response to Massaro’s complaint of harassment, but also actually ratified the harasser’s conduct by allowing the harassment to continue. Id. A good faith defense, the Court explained, is “unavailable for discriminatory acts committed by company officials who are of sufficient authority within the organization that they are deemed alter egos or proxies of the organization . . . .” Id.

Implication For Employers

Whether Title VII protects sex-based discrimination is an unsettled question and is likely hurtling towards the U.S. Supreme Court. Nonetheless, this case demonstrates that employers could face punitive damages for such violations. In other words, a “good faith efforts” affirmative defense might be unavailable even though the law to which the employer must make a good faith effort to comply with is unsettled.

While this areas remains hazy, employers should review their anti-harassment policies, and consider adding sexual orientation and gender identity as protected classes. In addition, employers will need to respond appropriately in the event of a complaint alleging harassment based on sexual orientation.



By: Gerald L. Maatman, Jr.Christopher J. DeGroff, Matthew J. Gagnon, and Kyla Miller

Seyfarth Synopsis: On November 15, 2017, the EEOC released its annual Performance and Accountability Report for Fiscal Year 2017 – its internal “report card” for its fiscal year 2017. The report touts the EEOC’s progress in reducing charge inventory, as well as the increased number of merits lawsuits that were filed by the EEOC over last fiscal year. The report notes that those filings more than doubled over FY 2016.

On November 15, 2017, the EEOC released its annual Performance and Accountability Report (“PAR”). (The PAR is available on the EEOC’s website — here.) The PAR reports on the agency’s progress during FY 2017 – from October 1, 2016 through September 30, 2017 – in meeting the goals and enforcing the strategic priorities outlined in its Strategic Enforcement Plan. The major takeaways from this year’s PAR are the substantial reduction in the EEOC’s charge inventory, as well as the considerable increase in the number of lawsuits that the Commission filed against private employers. The PAR also reports notable increases in systemic investigations and monetary recovery from resolutions of systemic investigations.

Huge Increases In Merits And Systemic Lawsuits

The EEOC filed 184 merits lawsuits in FY 2017. This is more than double the 86 merits lawsuits that were filed in FY 2016. The PAR reports that 124 of those lawsuits were on behalf of individuals, 30 were non-systemic suits with multiple victims, and another 30 were systemic claims. The EEOC labels a case “systemic” if it “has a broad impact on an industry, company or geographic area.” The EEOC also filed 18 subpoena enforcement actions in FY 2017.

The 30 systemic lawsuits represent a sizeable jump over prior years (30 in FY 2017, compared to just 18 in FY 2016 and 16 in FY 2015). Although this may seem like an alarming increase, compared to the total number of filings, systemic lawsuits actually account for a smaller percentage of filings compared to last year (16% of all merits lawsuits in FY 2017 vs. 20% in FY 2016).

The PAR notes that the EEOC’s field offices resolved 329 systemic investigations and collected $38.4 million in remedies (compared to 273 and $20.5 million in FY 2016). This is a near record for monetary relief for systemic cases. The EEOC also issued cause determinations finding discrimination in 167 systemic investigations (compared to 113 in FY 2016). Consequently, not only did the EEOC resolve markedly more systemic investigations compared to FY 2016, but also it also made considerably more cause determinations that it converted to beefed-up recoveries for claimants compared to last year.

Whether the Commission continues on this pace in 2018 is an open question. Change is coming, as two new Commissioners appointed by President Trump are waiting in the wings for Senate confirmation. Presumably, the EEOC also will get a new general counsel by 2018, and the impact these changes may have on the pace of litigation and the types of cases brought by the EEOC are open questions.

Bulldozing The Backlog Of Pending Charges

The EEOC also pats itself on the back for reducing the large charge backload that has bogged down the agency for years. The current EEOC Acting Chair, Victoria Lipnic, stated: “[t]he pending inventory of private sector charges (the backlog) has been a longstanding issue for the EEOC and the public it serves. Early in the calendar year, we made addressing the backlog a priority.” The PAR shows that the EEOC did so.

In FY 2017, the EEOC resolved 99,109 charges, a marked increase over the past two years. In fiscal years 2016 and 2015, the EEOC resolved 97,443 and 91,503 charges respectively. As a result, the EEOC decreased its charge inventory by 16.2%, to 61,621. This is the lowest level of inventory in 10 years and represents a significant reduction compared to FY 2016, where the EEOC only reduced its outstanding charges by 3.8%. The PAR credits the EEOC’s renewed emphasis on inventory reduction strategies and priority charge handling procedures, technological enhancement, and front-line staff hired in FY 2016. The EEOC also noted that it responded to over 540,000 calls to its toll-free number and 155,000 inquiries to field offices – on par with last year’s numbers of 585,000 and 160,000 respectively.

Settlements: Keeping It Consistent

The EEOC secured approximately $484 million in total relief in FY 2017. This tracks close last year’s total relief of $482.1 million. It also includes $355.6 million obtained through mediation, conciliation, and settlement for victims of discrimination in private, state and local government, and federal workplaces. That number is marginally up from last year, which saw $347.9 million in recoveries.

Litigation recoveries, on the other hand, have been steadily declining in the past few years, hitting only $42.4 million in 2017. This is markedly lower than FY 2016 and FY 2015, which saw the EEOC obtain $52.2 million and $65.3 million in litigation recovery respectively.

Implications For Employers

In her opening remarks in this year’s PAR, Acting Chair Victoria Lipnic called FY 2017 “a year of transition” due to the change in administration. The PAR gives few other clues as to what that transition looks like from inside the agency, or how the EEOC is adapting to its new political environment. About the only thing U.S. employers can be sure of is that the EEOC is not laying down its enforcement weapons. It may be no coincidence that litigation activity is increasing at the same time that litigation recoveries are going down. The EEOC may be trying to boost its recovery numbers for FY 2018, and it may be mining its backlog of charges to help it do so. Clearly the EEOC is trying to make its mark by doubling the number of lawsuits it filed over last year. Whether those lawsuits will be successful or not remains to be seen.

Seyfarth Synopsis: Blog readers will recall our Vlog in early October recapping the EEOC’s 2017 Fiscal Year.  Today, Jerry Maatman of Seyfarth Shaw, LLP discusses recent developments from the EEOC that ought to be “required reading” for employers.  Specifically, Jerry analyzes the agency’s new technological initiatives, end-of-year litigation statistics, and the line of high-ranking officials awaiting appointment.  Lastly, he gives his predictions for the EEOC’s priorities during FY 2018.


As we detailed in our September 30 blog post, the EEOC filed 184 merit lawsuits in FY 2017, more than doubling last year’s total.  According to the Commission’s press release on November 9, 2017, an increase in filings was not the only highlight of this Fiscal Year.  The EEOC also recovered $484 million for workers in FY 2017, as well as decreased its number of pending cases to the agency’s lowest backlog in 10 years (see here).

Since the end of the Fiscal Year, the EEOC also rolled out an online portal allowing individuals to take the first steps in filing a charge of workplace discrimination.  In the words of Acting Chair Vicki Lipnic, “It’s a giant leap forward for the EEOC in providing online services.”  Other important news coming out of the Commission regards newly appointed high-level employees, as well as the upcoming Senate vote on Trump’s two appointees to lead the EEOC.

For those interested in a complete analysis of 2017 EEOC Fiscal Year, stay tuned for the publication of Seyfarth Shaw’s annual EEOC-Initiated Litigation Report coming out at the end of December.  In terms of the future, as Jerry states in the video, “put on your seat belts…I think it will be a very interesting next 12 months for the EEOC.”