By Gerald L. Maatman, Jr. and Christina M. Janice

Seyfarth Synopsis: In the latest development in the ultra-high stakes nationwide Prescription Opiate Litigation, the U.S. Court of Appeals for the Sixth Circuit recently granted the petition of six Ohio cities to appeal the  class certification order of U.S. District Court Judge Daniel A. Polster creating a new and innovative type of class action — the “negotiation class.” In In Re National Prescription Opiate Litigation, No. 19-0306, 2019 U.S. App. LEXIS 33629 (6th Cir. Nov. 8, 2019), the Sixth Circuit determined that Judge Polster’s “negotiation class” is so novel and relevant to class litigation in general that a prompt, interlocutory appeal of the legality of the certification order is warranted. Corporate counsel should keep this on their radar, as it signals how and to what extent class certification procedures might be construed in “tough cases” and in novel circumstances.


As previously reported here, on September 11, 2019 Judge Daniel A. Polster, presiding over the nationwide prescription opiate multidistrict litigation, certified for the first time ever an innovative “negotiation class” mechanism to structure a formal process for 34,448 cities, counties and municipalities in over 2,000 lawsuits to negotiate lump sum settlements with prescription opiate manufacturers and distributors. In Re National Prescription Opiate Litigation, No. 1:17-MD-2804, 2019 U.S. Dist. LEXIS 155118 (N.D. Ohio Sept. 11, 2019).

The hallmark of the district court’s order is the expansion of Federal Rule 23, which allows for class actions for trial and settlement purposes. The order creates a new type of class action before trial or settlement, comprised of a multi-step process: (i) allocating a lump sum settlement and a plan for class members to vote on its reasonableness; (ii) moving for class certification under Rule 23, including judicial approval of the proposed allocation and voting plan; (iii) issuing court-authorized notice to the class and opt-out period; (iv) engaging in lump sum settlement negotiations once the class size is set; and (v) and pursuing the approval process including preliminary judicial approval of the settlement, objections, voting on the settlement, and final judicial approval of the plan. Id. at 5-7; 33-40.

The district court certified the innovative “negotiation class” in the run up to the first scheduled bellwether trial for two Ohio county Plaintiffs, Cuyahoga County and Summit County.  The move to certify a “negotiation class” drew objections from most state attorneys general, numerous municipalities, and several drug manufacturers and distributors that the order would not allow for global settlement or would require parties to opt-out before fully knowing the terms of settlement.

Six cities in Northern Ohio – North Royalton, East Cleveland, Mayfield Heights, Lyndhurst, Huron and Wickliffe – objected to class certification without success. On September 25, 2019, these municipalities filed their petition for interlocutory appeal with the Sixth Circuit, arguing that the “negotiation class” was novel; that the district court was unlikely to reconsider the legality of its order until after the negotiation process plays out and settlements are reached; and that an appeal should be allowed to determine the legality and constitutionality of the order.

The Sixth Circuit’s Ruling

Observing that under Rule 23(f) there is no “hard-and-fast” rule for when it can permit an appeal from the grant or denial of a motion for class certification, the Sixth Circuit considered four factors in determining whether to allow an appeal that is interlocutory ─ before the entry of a final judgment or order: (i) whether the case raises novel or unsettled question; (ii) the likelihood of the petitioner’s success on the merits; (iii) the costs of continuing litigation; and (iv) the posture of the case before the district court. Id. at 2.

Here, the Sixth Circuit determined that whether the negotiation class is permitted under Rule 23 “is both novel and relevant to class litigation in general.” Id. The Sixth Circuit also viewed the order as sufficiently final to warrant review, stating that “the district court entered a final order to certify the class, with no indication that it will review its decision in the future.” Id.

The appeal will be briefed in the upcoming months. The implications of the appeal on proceedings in the district court, where the first bellwether trial scheduled for October 21, 2019 was settled just prior to the start of trial, is not yet clear.

Implication For Employers:

The Sixth Circuit’s decision to pump the brakes on the district court’s expansion of Rule 23 to create a new kind of class certification device will be watched by courts and litigants across the country. As class actions grow in breadth and complexity it is likely that the Prescription Opiate Litigation is the first of several trial balloons for innovation in case handling in the complex litigation arena. We will keep our readers apprised of developments in the emerging area.

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

Seyfarth Synopsis: In an EEOC disability discrimination lawsuit alleging that an employer failed to accommodate and then wrongfully terminated a laundry technician with anxiety, the U.S. District Court for the Middle District of Tennessee granted the employer’s motion for summary judgment, holding the EEOC did not establish that the employee was disabled for purposes of the Americans With Disabilities Act, 42 U.S.C. §§ 12101, et seq. (“ADA”).

This ruling provides insight for employers relative to defending ADA lawsuits where the alleged disability may be questionable.

Case Background

In EEOC v. West Meade Place LLP d/b/a The Health Care Center at West Meade Place (“WMP”), No. 3:18-CV-101, 2019 U.S. Dist. LEXIS 182600 (M.D. Tenn. Oct. 22, 2019), the EEOC alleged that WMP violated the ADA by failing to provide a reasonable accommodation to a former employee, and by wrongfully discharging her because of her disability. The employee, who worked as a laundry technician at WMP from February 2015 to November 2015, was terminated after requesting an accommodation for her anxiety disorder.  WMP argued that the employee was not disabled under the ADA, and therefore the EEOC’s failure to accommodate and unlawful termination claims failed.  After discovery, WMP moved for summary judgment.

The Court’s Decision

The Court granted WMP’s motion for summary judgment.  First, the Court explained that under the ADA, a “disability” is defined in three ways, including: (a) a physical or mental impairment that substantially limits one or more of the major life activities of an individual; (b) a record of such an impairment; or (c) being regarded as having such an impairment.  Id. at *4 (citing 42 U.S.C. § 12102(1)).  For purposes of this definition, “major life activities” include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working.  Id. (citing 42 U.S.C. § 12102(2)).

In support of its allegation that the employee was disabled, the EEOC relied on the testimony of a doctor who opined that the employee “could not work during flare-ups of her anxiety and therefore could potentially be unable to work for one to three days per month.”  Id. at *4.  The Court noted that although the doctor’s deposition testimony confirmed her diagnosis of the employee as having “anxiety,” she did not explain how she reached that diagnosis by use of her medical expertise.  Id. at *6.  The physician’s testimony suggested that she relied on a diagnosis made by a previous physician, which was suggested to her by the employee.  Id.

Further, the Court explained that the EEOC must also show that the impairment substantially limited one or more of the employee’s major life activities when her anxiety was active.  The Court held that nothing in the deposition testimony supported such a finding, inasmuch as the doctor’s notation on the medical form – that the employee could not work during flare-ups and could potentially need to take off one-to-three days per month – did not appear to have been based on a medical assessment, but instead based on a request made to the physician by the employee.

The EEOC also argued in the alternative that the employee had a “record of impairment” that was provided to WMP at the start of her employment.  An individual has “a record of a disability if the individual has a history of, or has been misclassified as having, a mental or physical impairment that substantially limits one or more major life activities.”  Id. at *9 (citing 29 C.F.R. § 1630.2(k)(1)).  After examining the various onboarding forms cited in support of the EEOC’s argument, the Court held that nothing in those forms indicated that the employee had ever been treated for a mental condition, nor had she consulted or been treated by clinics, physicians, healers, or other practitioners with the past 5 years for other than minor illnesses, and thus did not establish a “record of impairment” under the ADA. Id. at *10-11.

Finally, the EEOC argued that the employee was “regarded as having an impairment” by WMP. Id. at *12.  The Court explained that “[a]n individual meets the requirement of ‘being regarded as having such an impairment’ if the individual establishes that he or she has been subjected to an action prohibited under this chapter because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”  42 U.S.C. § 12102(3)(A).  The Court rejected the EEOC’s argument, holding that nothing in the deposition testimony cited by the EEOC indicated that WMP did not take any action based on a perceived impairment.

Accordingly, because none of the evidence offered by the EEOC showed that the employee had a disability as defined by the ADA, the Court granted WMP’s motion for summary judgment.

Implications For Employers

While some disabilities and medical conditions are readily apparent, others may appear less obvious.  Although employers should take a cautious approach when confronted with requests for accommodations, in instances where such requests may not be medically supported, the ruling in EEOC v. WMP provides insight into how employers can defend against corresponding ADA claims by maintaining detailed onboarding records and aggressively deposing medical experts relied upon by the EEOC.

By: Gerald L. Maatman, Jr.Christopher J. DeGroff, Matthew J. Gagnon, and Ala Salameh

Seyfarth Synopsis: The Trump Administration has succeeded in replacing several open  positions within the upper echelons of the EEOC. Employers are anxiously looking for any sign as to how this slate of leadership will put its stamp on the agency’s mission and, more importantly, which employers and business practices the agency will most heavily target. But even though the names and faces are now known, what changes they will bring in terms of enforcement priorities and tactics remain elusive.

The Trump Administration is now well into its third year. And although it has recently filled most of the open positions at the headquarters of the EEOC, including a new Chair and a new General Counsel, the impact that will have on the EEOC’s mission remains largely uncertain. Employers may have hoped for greater clarity in terms of this Administration’s priorities for the agency. The agency’s new leadership has not been vocal about its intentions, and the new lawsuits the EEOC filed in FY 2019 offer few clues.

The term of former Commissioner, Chai Feldblum, expired at the end of the last calendar year, leaving the Commission without a quorum to make major decisions. That, along with heightened political division in Washington (including a 35-day government shutdown), caused the EEOC’s litigation activity to come to an unanticipated standstill. Despite this prolonged interruption, the Commission’s litigation program boasted three-digit filing numbers toward the end of the fiscal year.

As we have come to expect, the EEOC ended its fiscal year with increased activity, filing 52 lawsuits during September alone compared to the total of 12 filings during the entire first quarter of 2019. But in the end, the agency’s end-of-year rush and total number of filings did not come anywhere near the numbers posted last year. At the time of publication of this blog posting, the EEOC had filed 149 total cases in FY 2019, which includes 141 merits lawsuits and 8 subpoena enforcement actions. This total number of filings is significantly less than the last two years (see here and here), and is more in line with the drop off in filings that we saw in FY 2016 (see here).

Cases Filed By EEOC District Offices

In addition to tracking the total number of filings, we also keep a close watch on which of the EEOC’s 15 district offices are most actively filing new cases. Some districts tend to be more active than others, and some focus on different EEOC priorities. So the where of EEOC filings not only shows which areas of the country are most heavily targeted, but also offers a clue as to which priorities the EEOC is focusing on for the coming year. The following chart shows the number of filings by EEOC district office.

The most noticeable trend of FY 2019 is the marked decrease in coast-to-coast filings that we have seen compared to past years. Leading the pack in new filings are the Charlotte and Philadelphia district offices, with 15 and 14 filings respectively. The Chicago district office is usually at the head of the pack, but has been bumped to the shared number three spot along with New York and Houston at 12 filings each. The numbers for the other district offices are also fairly close to on par with what we have come to expect. This year, the Indianapolis, St. Louis, and Phoenix district offices posted comparatively mid-range numbers. This middle of the pack performance is fairly typical of those district offices. The Dallas and Los Angeles district offices were outliers on the lower end of the spectrum. Los Angeles filed just 8 new lawsuits this year compared with 17 last year, and Dallas filed just 3 compared to 10 last year.

Analysis Of The Types Of Lawsuits Filed In FY 2019

Each fiscal year we also analyze the types of lawsuits the EEOC files, in terms of the statutes and theories of discrimination alleged, in order to determine how the EEOC is shifting its strategic priorities. But here again, the numbers – when considered on a percentage basis – are largely in line with prior years, confounding attempts to ascertain where the new leadership will focus the agency’s attention in FY 2020 and beyond. The graphs set out below show the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act, etc.) and, for Title VII cases, the theory of discrimination alleged.

Although the total number of filings is down across the board, when considered on a percentage basis, the distribution of cases filed by statute remained broadly consistent compared to FY 2018. Title VII cases once again made up the majority of cases filed, making up 60% of all filings (as compared with 55% in FY 2018). ADA cases also made up a significant percentage of the EEOC’s filings, totaling 37% this year, as compared to 42% in FY 2018. This too is fairly typical. There were only 7 age discrimination cases filed in FY 2019, which is a relatively small number. But again, when compared on a percentage basis, this does not represent a large shift in focus for the EEOC (5% in FY 2019 on par with the 5% in FY 2018).

Change At The Top

By any measure, FY 2019 was a “transition” year for the EEOC. The Commission’s leadership team include five members: the Chair, Vice Chair, and three Commissioners, collectively appointed by the President and approved by the Senate. Of the five Commissioners, no more than three may be members of the same political party, a requirement promising bipartisanship outliving administration changes. Janet Dhillon, the current EEOC Chair, was originally selected for that role by President Trump in June 2017, but was not approved by the Senate until FY 2019, taking office on May 15, 2019. She joined two Obama-appointed Commissioners, Victoria Lipnic and Charlotte Burrows, a Republican and a Democrat respectively. Two Commissioner positions remain vacant.

President Trump had originally re-nominated former Commissioner Chai Feldblum for a third term. As a bipartisan federal agency, it is customary for the President to nominate Commissioners who are members of both parties. However, Feldblum was the first openly gay member of the Commission, and a champion of LGBT rights. Although President Trump re-nominated Feldblum, she was not confirmed by the Senate due to her perceived views on those issues, leading to her term’s expiration on January 2, 2019. The EEOC was therefore left with only two Commissioners until Dhillon took her seat in May.

Three acting Commissioners are required for the EEOC to exercise its powers. Between the expiration of Feldblum’s term in January and Dhillon’s appointment nearly four months later, the Commission lacked a quorum, thereby hindering its ability to act. This may, in part, explain the drop in merits suits and subpoena enforcement actions in FY 2019. The government shutdown, which lasted from December 22, 2018 to January 25, 2019, may also have played a part. Upon Dhillon’s appointment, and despite two remaining vacancies, the three-member Commission satisfies quorum and has since resumed full operations at the EEOC.

Appointment of the new Chair came on the heels of thirty business organizations, including the U.S. Chamber of Commerce and American Trucking Associations, imploring Congress and the President to confirm then nominee Dhillon with expediency. Absent a quorum, the EEOC was unable to respond to newly issued court decisions and regulations impacting employers in costly ways. Among them was the March 4, 2019 decision issued by Judge Tanya Chutkan of the U.S. District Court for the District of Columbia, which revitalized the Obama-era requirement that employers report W-2 wage information and total hours worked for all employees by race, ethnicity, and sex within 12 proposed pay bands (EEO-1 Component 2 pay data).

Now that the EEOC has a quorum again, we may be starting to glimpse how things may start to change at the agency. On September 11, 2019, the EEOC announced that it is not renewing its request for authorization to collect Component 2 pay data because of the burden that collection imposes on employers. Although this change in policy came too late to prevent employers from having to submit such data this year (by today), this may be one of the first indications employers have seen as to how the new leadership may shake things up in years to come.

Implications For Employers

Commissioner Lipnic’s term expires on July 1, 2020 which could result in a loss of quorum again if she is not re-nominated and confirmed for her position, or otherwise replaced by a Trump nominee. This leaves open the possibility of three Commissioner appointments by President Trump during the upcoming election year. We fully expect that the EEOC’s future composition and the broader political climate will have major implications for the Commission’s enforcement priorities.

We will continue to monitor these changes closely and keep readers apprised of developments. Our annual comprehensive analysis of trends in EEOC litigation will be published at the end of the calendar year. As always, we will keep abreast of EEOC data amid the ever-changing political milieu, and share lessons learned from FY 2019 to carry employers through the new year.

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

By Gerald L. Maatman, Jr. and Christina M. Janice

Seyfarth Synopsis: In complex class actions, courts have looked to Rule 23 to authorize class actions either for trial, or for approval of a previously negotiated settlement. Now as thousands of public entities nationwide pursue financial relief from opiate manufacturers, distributors, and pharmacies, U.S. District Court Judge Daniel A. Polster has ordered into effect a third and “innovative” type of class action. In the litigation entitled In Re National Prescription Opiate Litigation, No. 1:17-MD-2804 (N.D. Ohio Sept. 11, 2019) the Court, over the objections of most of the state attorneys general in the U.S., has granted a “negotiation class certification” order allowing a nationwide class of public entities to negotiate potential settlement of the 2,000 pending lawsuits in this sweeping multidistrict litigation. For obvious reasons, the ruling of Judge Polster is well worth a read for any company involved in class action litigation.


In 2017, federal lawsuits brought by public entities against the opiate industry for reimbursement of public funds used to address the opiate crisis were consolidated for pretrial purposes in a multidistrict litigation in the U.S. District Court for the Northern District of Ohio. In an opinion entered by Judge Daniel A. Polster this week in In Re National Prescription Opiate Litigation, No. 1:17-MD-2804 (N.D. Ohio Sept. 11, 2019), the Court observed that since “ the outset of this MDL, the Court has encouraged the parties to settle the case,” id. at ¶ 2, adding “[h]ere, a settlement is especially important as it would expedite relief to communities so they can better address this devastating national health crisis.” Id.

The stakes for crafting a path toward successful resolution could not be higher in In Re National Prescription Opiate Litigation, where bellwether trials are now scheduled for a sample of over 2,000 lawsuits involving 34,458 counties, cities, and other public entities nationwide on such claims against the opiate industry as violations of the Racketeer Influenced Corrupt Organizations Act and the Controlled Substances Act. Some defendants resisted potential settlements that did not assure them of a “global settlement” of all claims, and the Court and its Special Master, Professor Francis McGovern, recognized that “this situation required creative thinking.” Id.

The Special Master, the parties, and the experts “developed an innovative solution: a new form of class action entitled ‘negotiation class certification.’” Id. On June 14, 2019, some 51 cities and counties filed a motion for certification of a Rule 23(b)(3) negotiation class, drawing objections from State Attorneys General pursuing their own state court claims, and an order from the Court allowing Plaintiffs to re-brief their motion in light of the objections. Id. at 4.

On July 9, 2019, Plaintiffs filed an amended motion seeking certification of a Rule 23 “negotiation” class on behalf of a single nationwide class of all public entities listed on the Opioids Negotiation Class website, Id. at 1, 16. Over the objection of 37 State Attorneys General and the Attorneys General for the District of Columbia and Guam, the motion was granted in part and the Court certified what it called “a negotiation class.” Id. at 1.

The Decision

Recognizing that since 1966 courts have certified two types of class actions under Rule 23 (class actions for trial on liability or damages and settlement class actions), the Court observed that “the text of Rule 23 does not dictate, nor therefore limit, the use to which the class action mechanism can be applied.” Id. at 8. The Court noted that the development of Rule 23 settlement class actions – where the settlement is reached in advance of certification – itself was not without its own detractors. Id. at 8-9.

Following this line of reasoning, the Court determined that neither Rule 23 nor the Due Process Clause of the U.S. Constitution prohibit a “negotiation class” certification, in which class members decide whether to opt out before knowing the size of the settlement. Id. at 9. This is so because the framework for the class approved by the Court has a multi-step process affording Rule 23 protections to class members and absent class members, including satisfying the requirements of class numerosity, commonality, typicality, adequacy of representation, and a showing of either a risk of multiple, inconsistent adjudications in the absence of a class, the appropriateness of injunctive or declaratory relief, or common questions of law of fact predominate over individual inquiries.

The multi-step process approved by the Court in the new “negotiation class” certification includes: (i) the allocation of a lump sum settlement and a plan for class members to vote on its reasonableness; (ii) a motion for class certification to consider the required showings for all class actions under Rule 23, as well as the proposed allocation and voting plan; (iii)  a Court-authorized notice to the class and opt-out period; (iv) the lump sum settlement negotiations once the class size is set; and (v) preliminary judicial approval of the settlement, the filing of objections, the vote on the settlement, and final judicial approval of the plan, notice and settlement as equitable and sufficient. Id. at 5-7; 33-40.

Ostensibly “putting to rest” the concerns and objections of the State Attorneys General, the Court excluded from the negotiation class any negotiations on behalf of city and counties against their state governments. Id. at 40.

Implication For Employers:

This decision boldly goes where no court has ever gone before. If endorsed by other district court judges and appellate courts, the ruling may usher in a new framework for negotiating settlements in complex, multi-defendant class actions. Employers facing regional or nationwide wage and hour litigations in particular, in which joint employer and other multi-defendant claims are made, may add the novel approach of negotiation class certification to their toolkit of dispute resolution strategies. We will keep our readers apprised of developments in the emerging area.

By: Gina R. Merrill, David B. Ross, and Gerald L. Maatman, Jr.

Seyfarth Synopsis: In a decision with farreaching implications for workplace class actions, the D.C. Circuit recently affirmed the denial of class certification of a Rule 23(b)(3) class on the grounds that the proposed class contained uninjured class members in the case of In Re Rail Freight Fuel Surcharge Antitrust Litigation, Dakota Granite Co, et. al. v. BNSF Railway Co., et. al. (decided August 16, 2019) (“Rail Freight”). In so doing, the D.C. Circuit joined the First Circuit in a decision issued last year, which denied certification on the same grounds. See In Re Asacol Antitrust Litig., 907 F. 3d 42, 51-58 (2018). The issue of whether a certified class may contain uninjured class members was left open in the Supreme Court’s decision in Tyson Foods Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), and now has been answered in the negative by two federal  Courts of Appeal. It should be required reading for any corporate counsel involved in workplace class action litigation.

Background Of The Case

The Rail Freight case was brought before an MDL panel on behalf of a class of over 16,000 shippers, claiming price fixing by the nation’s largest freight railways in violation of the Sherman and Clayton Acts. Plaintiffs’ key evidence to establish common causation, injury, and damages consisted of a regression analysis from their economist, Dr. Rausser, which estimated “negative damages” for 12.7% of the putative class members or more than 2,000 shippers – in other words, the model estimated that a significant portion of the putative class suffered no damages whatsoever. Id. at 8. Lacking any other proof that they were injured by the alleged price-fixing violations – and lacking any “winnowing mechanism” to segregate these uninjured class members –  the D.C. Circuit ruled that plaintiffs’ statistical evidence, though admissible under Daubert, failed to show class-wide injury and therefore did not make the necessary showing of commonality and predominance under Rule 23. Id. at 11.

The D.C. Circuit’s Reasoning

The D.C. Circuits also reiterated a prior holding in the case that common evidence must “show all class members suffered some injury.” Id. at 9. Even accepting for the sake of argument that predominance might exist despite a de minimis number of uninjured class members, the D.C. Circuit suggested that it was the “raw number” here and not the percentage that was troubling because presenting individualized evidence for 2,037 class members was incompatible with the requirements of Rule 23. Id. at 10-12. Finally, the D.C. Circuit noted that questions of overly broad classes cannot be deferred to a post-certification stage, but must be confronted up front as “part-and-parcel of the ‘hard look’ required” by the Supreme Court for statistical models that purport to show predominance. Id. at 4, citing Comcast Corp. v. Behrend, 569 U.S. 27 (2013).

Implications For Employers

The type of statistical evidence which was critical to plaintiffs’ case in Rail Freight is also essential in workplace class actions asserting claims of adverse impact, and raises the same problem of uninjured class members. The standard regression models supporting class certification in adverse impact cases address the question of whether an alleged discriminatory policy or practice adversely affects a protected class, on average, at a statistically significant level, after accounting for all major non-discriminatory variables. By way of example, plaintiffs might challenge an employer’s crediting of certain levels of education in deciding whether to promote candidates to a supervisory position, arguing that this factor is not sufficiently job-related and favors men. Plaintiffs might then offer a statistical model that purports to isolate the effect of education on promotions of men and women (controlling for other major factors), with the goal of establishing that this factor has a statistically significant adverse impact on women candidates. 

If plaintiffs are able to produce such a model, is that sufficient for class certification? The Rail Freight decision suggests that the answer may be no.

By its nature, a standard regression model only reflects average disparities (that is, the mean value of a normal distribution of observations). Class members may be more or less affected, and it is likely that some were not affected at all. To use our example, there will be some women who had credited levels of education and therefore received the benefit of its consideration (even if they were not ultimately promoted) and others who even with the credential would never have been promoted because their other qualifications were lacking in some other way. Neither of these categories of women have suffered any damages under plaintiffs’ case theory. 

In adverse impact class-based litigation, courts have nevertheless allowed cases like this to proceed as class actions. Courts have reasoned that even if individualized damages are typically not amenable to class treatment, damages can be determined at a later phase where individuals pursue their own claims with a favorable presumption based on class liability, subject to the employer’s right to produce exonerating evidence. Rail Freight, however, instructs that the overinclusion of uninjured persons must be confronted at class certification and not deferred to a later stage. This standard applied to adverse impact litigation would make class certification more difficult, because the very statistical evidence used to support class certification, when given a “hard look,” may also defeat the showing of commonality or predominance in the first instance.

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

Seyfarth Synopsis: Complex class actions often present a scenario in which some or most of the putative class members are subject to arbitration agreements, but the named plaintiff is not. In Gembarski v. PartsSource, Inc., No. 2018-0125, 2019 Ohio LEXIS 1639 (Ohio Aug. 14, 2019), the Supreme Court of Ohio concluded that because the defendant could not have raised an arbitration defense against the named plaintiff prior to class certification, such a defense did not have to be raised in the Answer. For this reason the defendant was not precluded from raising arbitration as a defense to class certification for putative class members.


In Gembarski v. PartsSource, Inc., No. 2018-0125, 2019 Ohio LEXIS 1639 at 2 (Ohio Aug. 14, 2019), Plaintiff filed a class action complaint against his employer, PartsSource, alleging that the company improperly withheld commissions that he and other putative class members earned while working as account managers. PartsSource filed an answer to the complaint, denying any wrong-doing and denying that the suit could be maintained as a class action. Id. at 4.

Eventually, Plaintiff filed a motion to certify the case as a class action and PartsSource opposed the motion. Specifically, PartsSource argued that Plaintiff could not meet the typicality or adequacy requirements for class certification because, unlike members of the putative class, Plaintiff did not sign an arbitration agreement agreeing to arbitrate claims on an individual basis. PartsSource argued that Plaintiff’s interests were divergent from those putative members who were subject to an arbitration defense.  Id. at 5-6.

Plaintiff, however, argued that PartsSource had waived its arbitration defense because PartsSource had not asserted an “arbitration defense” in its answer prior to raising it at the class certification stage. Id. at *7. PartsSource countered that it never had a right to demand arbitration from Plaintiff and contended that it would have been premature to raise any argument related to arbitration prior to the class certification phase of the litigation. Id.

The Decision

The Ohio Supreme Court ultimately agreed with PartsSource, holding that, when a case originates with a single named plaintiff and that plaintiff is not subject to an arbitration agreement that was agreed to by unnamed putative class members, the defendant need not raise a specific argument relating to arbitration in the defendant’s answer.

The Supreme Court explained that “[a]rbitration as a defense to an action is a concept that is separate from arbitration as an attack on a plaintiff’s” satisfaction of the requirement to certify a class.  Id. at 12. Because PartsSource had no duty to raise with specificity a class certification argument in its Answer, such an argument was not waived by failing to raise it at that time. The appropriate time to raise such an argument was precisely when PartsSource did so: at the certification stage. Id. at 21.

Implication For Employers

The decision in Gembarski gives employers more time to investigate and contemplate unique defenses to class certification. However, the best practice for employers battling class actions is to raise arbitration as a defense in an answer, as that will altogether preclude plaintiffs from asserting a waiver argument. Outside of the potential for waiver, employers must be sure to investigate every potential avenue for defeating the class as early as possible in the case. Arbitration defenses and other similar defenses that can defeat class certification should be developed and flagged early in every class action.

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

Seyfarth Synopsis: In the latest battle of the multi-year showdown between the State of Texas and the EEOC – whereby Texas asserted that the EEOC’s 2012 “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (“Guidance”) interfered with its authority to limit the hiring of felons – the U.S. Court of Appeals for the Fifth Circuit affirmed most  parts of an injunction that the U.S. District Court for the Northern District of Texas entered in favor of Texas, which blocked the EEOC and the U.S. Department of Justice (“Defendants”) from enforcing the Guidance.  State of Texas v. EEOC et al., No. 18-10638, 2019 U.S. App. LEXIS 23498 (5th Cir. Aug. 6, 2019).

This ruling serves as a major roadblock for the EEOC in circumstances where the Commission attempts to infringe upon states’ rights by issuing an administrative guidance, and can further be considered a game-changer in the criminal background check litigation landscape.

* * *

Case Background

As we have blogged about extensively in the past (here, here, here, and here), in April 2012 the EEOC issued the Guidance citing data which suggested that blanket bans on hiring individuals with criminal records disproportionately impacted minorities.  Id. at *2.  Texas brought two causes of action against the EEOC after an individual who had been rejected for a State job filed a complaint with EEOC, challenging Texas’s no-felon hiring policy as having a disparate impact in violation of Title VII.  In the first cause of action, brought under the Declaratory Judgment Act (“DJA”), Texas asked for “a declaration of its right to maintain and enforce its laws and policies that absolutely bar convicted felons (or particular categories of convicted felons)” from specified jobs.  Id. at *7.  Texas also asked for an injunction that EEOC and the Attorney General “cannot enforce the interpretation of Title VII that appears in its Felon-Hiring Rule, nor . . . issue right-to-sue letters pursuant to that rule.”  Id.  In the second cause of action, brought under the Administrative Procedures Act (“APA”), Texas sought to set aside the Guidance, arguing that it exceeded the EEOC’s power under Title VII; was promulgated without notice and comment in violation of the APA; and was substantively unreasonable.

After the District Court dismissed the case for want of subject matter jurisdiction, a divided Fifth Circuit panel reversed, holding that Texas had Article III standing to challenge the Guidance, and that the Guidance was a final agency action eligible for judicial review under the APA.  Id. at *7-8.  However, the Fifth Circuit later withdrew its opinion, vacated the judgment, and remanded, noting that the District Court did not have a chance to apply the U.S. Supreme Court’s decision in United States Army Corps of Engineers v. Hawkes Co., 136 S. Ct. 1807 (2016), which held that the issuance of judicial determinations produced “legal consequences.”  Id. at *12.

On remand, the District Court denied the EEOC’s renewed motion to dismiss for lack of jurisdiction, and following cross-motions for summary judgment, the District Court dismissed Texas’s DJA claim, “declin[ing] to declare that Texas has a right to maintain and enforce its laws and policies that absolutely bar convicted felons (or certain categories of convicted felons) from serving in any job the State and its Legislature deems appropriate.”  Id. at *8-9.  The District Court also declined to enjoin the EEOC from issuing right-to-sue letters.  Regarding the APA claim, the District Court granted Texas’s motion for summary judgment in part and denied the EEOC’s motion, holding “that the Guidance . . . is a substantive rule issued without notice and the opportunity for comment.”  Id.  As such, the District Court enjoined both the EEOC and the Attorney General from enforcing the EEOC’s interpretation of the Guidance against the State of Texas until the EEOC complied with the notice and comment requirements under the APA for promulgating an enforceable substantive rule.  The District Court did not reach the questions of whether the EEOC has the power to promulgate a substantive rule interpreting Title VII, or whether the Guidance was substantively unreasonable.  The EEOC appealed, and Texas cross-appealed.

The Fifth Circuit’s Decision

In its recent ruling, the Fifth Circuit affirmed the District Court’s injunction, and vacated and dismissed Texas’s DJA claim.  Id. at *32.  First, the Fifth Circuit noted that it must decide two jurisdictional issues, including: (1) whether the Guidance was a final agency action subject to review; and (2) and whether Texas had standing to challenge the Guidance.  Id. at *9.  Regarding whether the Guidance was a final agency action, the Fifth Circuit noted that whether an action binds the agency is evident “if it either appears on its face to be binding[] or is applied by the agency in a way that indicates it is binding,” and further, that courts have looked for mandatory language to determine whether an agency’s action binds it and accordingly gives rise to legal consequences. Id. at *11 (citation omitted).

After conceding that the Guidance binds the EEOC staff to an analytical method in conducting Title VII investigations and directs their decisions about which employers to refer for enforcement actions, Defendants argued that legal consequences did not flow from the Guidance for three reasons.  First, Defendants argued that because EEOC had no power to bring a Title VII enforcement action against Texas, its Guidance has no legal consequences for the State.  Citing Hawkes, the Fifth Circuit rejected this argument, noting that legal consequences may flow from an “agency action even if “no administrative or criminal proceeding can be brought for failure to conform” to the action.  Id. at *16 (citation omitted).  Second, the EEOC argued that any legal consequences flow from Title VII, not the Guidance, because the Guidance’s interpretation of Title VII disparate impact liability has force of law only if a court presiding over an enforcement action agrees with the Guidance. The Fifth Circuit rejected this argument, holding whether the agency action binds the agency indicates whether legal consequences flow from that action.  d. at *18. Third, Defendants argued that the Guidance does not, and could not, create a safe harbor guaranteeing that the Attorney General will not sue an employee.  The Fifth Circuit also rejected this contention, explaining that whether the Guidance is final agency action does not hinge on whether a private or public employer challenges it, and that such an approach “would flout the Supreme Court’s repeated instruction to approach finality flexibly and pragmatically.”  Id. at *19. The Fifth Circuit thus held that the Guidance was a final agency action that it had jurisdiction to review.

Next, the Fifth Circuit addressed whether Texas had standing to sue the EEOC and the Attorney General to challenge the legality of the Guidance.  As the party invoking federal jurisdiction, the Fifth Circuit opined that Texas must establish Article III standing by showing that it has suffered an injury that is “concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.”  Id. at *20.   The Fifth Circuit held that because it was the object of the Guidance and had suffered multiple injuries as a result, Texas had constitutional standing.  In reaching this conclusion, the Fifth Circuit held that the Guidance deemed unlawful the hiring practices of multiple Texas agencies by rejecting across-the-board felon hiring screens, and it faced the possibility of investigation by EEOC and referral to the Attorney General for enforcement proceedings if it failed to align its laws and policies with the Guidance.  Id. at *21-22.

After finding that it had jurisdiction, the Fifth Circuit further addressed Defendants’ challenges to the scope and phrasing of the injunction.  Texas contended that the EEOC lacked power to promulgate the Guidance at all, and that instead of barring enforcement until the Guidance goes through notice and comment rulemaking, the District Court should have enjoined Defendants from treating the Guidance as binding.  Id. at *28-29.  The Fifth Circuit agreed that the Guidance was a substantive rule subject to the APA’s notice-and-comment requirement and that EEOC thus overstepped its statutory authority in issuing the Guidance, a conclusion that “follow[ed] naturally from its holding that the Guidance is a final agency action.”  Id. at *29-30.  However, the Fifth Circuit noted that the notice-and-comment aspect implied that the Guidance would stand if it went through that rulemaking process, which is used to promulgate substantive rules.  Accordingly, because the Guidance was a substantive rule, and the text of Title VII and precedent confirm that EEOC lacks authority to promulgate substantive rules implementing Title VII, the Fifth Circuit modified the injunction by striking the clause “until the EEOC has complied with the notice and comment requirements under the APA for promulgating an enforceable substantive rule.”  Id. at *30.

Finally, the Fifth Circuit clarified that because an injunction must be framed so that those enjoined will know what conduct the court has prohibited, “to avoid any confusion,” it modified, “the injunction to clarify that EEOC and the Attorney General may not treat the Guidance as binding in any respect.”  Id. at *31.  In addition, the Fifth Circuit declined to consider the merits of Texas’s DJA claim since it affirmed the injunction.

Implications For Employers

This victory is a feather in the cap for state employers relative to the EEOC’s attempt to use an administrative guidance as a means to challenge state law.  Although many of the legal battles in this showdown between the State of Texas and the EEOC have involved heavy doses of procedure, this ruling provides an excellent blueprint for how to attack the EEOC when it promulgates substantive rules implementing Title VII, and those rules condemn state law.

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


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

Seyfarth Synopsis:  After a federal magistrate judge in California ordered the EEOC to provide written discovery responses relative to the substance its pre-suit investigation of a sex discrimination charge in EEOC v. Chipotle Mexican Grill, Inc., No. 17-CV-5382, 2019 U.S. Dist. LEXIS 129046 (N.D. Cal. Aug. 1, 2019), the EEOC objected to the order and sought review; thereafter, the district judge granted EEOC’s motion for relief from the magistrate judge’s order. The Court found that the requested evidence was protected by the deliberative process privilege, and therefore, that the EEOC did not have to respond to the discovery request.

For employers who are defending against EEOC-initiated litigation, this ruling serves as yet another roadblock in terms of seeking discovery regarding the Commission’s pre-suit investigation.

* * *

Case Background

A former employee filed a charge against Chipotle alleging he was subjected to sexual harassment, retaliation, and discharge.  Id. at *1-2. Before filing suit, the EEOC issued to Chipotle a determination finding reasonable cause to believe that it violated Title VII.  In the course of discovery, the parties agreed to provide written responses to each other’s 30(b)(6) deposition notices instead of producing witnesses.  The EEOC did not substantively respond to five of these topics (Topics 10-14), invoking in part the governmental deliberative process privilege in response to each.  The EEOC argued that Chipotle was not entitled to the requested information because “[t]he substance of the EEOC pre-suit investigation is not judicially reviewable” and therefore not relevant, and that the information was protected by the deliberative process privilege. Id. at *2-3.

Magistrate Judge van Keulen sided with Chipotle and ordered the EEOC to respond to Topics 10–14. Specifically, the Magistrate Judge found that Chipotle sought only “the determinative facts and evidence that support the specific findings of the EEOC,” and that they did “not seek any privileged information.” Id. at *3. The Magistrate Judge surmised that in making its Determination, the EEOC likely “(1) conducted an investigation; (2) identified relevant facts; (3) evaluated those facts; and (4) reached its conclusions.” Id. The Magistrate Judge held that Topics 10–14 were targeted only at the “identified relevant facts” step and not at the EEOC investigation of or evaluation of those facts. Id. The Magistrate Judge concluded that “[t]he EEOC has not identified a privilege that protects the facts that support findings because there is none.” Id. The Magistrate Judge thus ordered the EEOC to respond to these topics. Thereafter, the EEOC filed its motion for relief from a non-dispositive pretrial order of the Magistrate Judge.

The Court’s Decision

The Court granted the EEOC’s motion for relief from a non-dispositive magistrate judge order, and held that the EEOC was not required to respond to Topics 10-14. First, the Court addressed the EEOC’s argument that the Magistrate Judge’s order was contrary to law because Chipotle requested topics seeking information that was protected by the deliberative process privilege.  The Court explained that the deliberative process privilege shields from disclosure intra-governmental communications relating to matters of law or policy, and that its purpose is to protect the quality of governmental decision-making by “maintaining the confidentiality of advisory opinions, recommendations, and deliberations comprising part of a process by which governmental decisions and policies are formulated.” Id. at *4 (citations and quotations omitted). The Court thus held that the Magistrate Judge failed to apply this law by apparently failing to consider whether the sought “factual material was so interwoven with the deliberative material that it was not severable.” Id. at *5.

Turning to the Magistrate Judge’s holding that no privilege “protects the facts that support findings,” the Court held this was an incorrect statement of law. Id. Citing the relevant case law, the Court noted that the deliberative process privilege protects facts if they are “so interwoven with the deliberative material” that “the unveiling of factual materials would be tantamount to the publication of the evaluation and analysis of the multitudinous facts conducted by the agency.” Id. Because the Magistrate Judge did not consider whether revelation of the “identified relevant facts” would be tantamount to revelation of the deliberative process, the Court held that her holding was contrary to law.

Next, the Court addressed Chipotle’s request that the EEOC explicitly disclose only those facts that underpin the determinations, and implicitly to exclude those facts that were not pertinent to the decision. The Court rejected this approach, holding that by disclosing the facts on which it based its conclusions, EEOC would be required to provide Chipotle unwarranted insight into how those facts played into the EEOC’s decision-making process, and that the deliberative process privilege protects such a disclosure. 

Having found the deliberative process privilege may apply, the Court then analyzed whether Chipotle nevertheless demonstrated that disclosure of the materials was warranted.  Noting that the deliberative process privilege was a qualified privilege, the Court applied the Ninth Circuit’s four non-exclusive factors that courts may consider in determining whether the litigant has met this requirement: “(1) the relevance of the evidence; (2) the availability of other evidence; (3) the government’s role in the litigation; and (4) the extent to which disclosure would hinder frank and independent discussion regarding contemplated policies and decisions.”  Id. (citation omitted).  The Court held that disclosure was not appropriate under this multi-factor balancing test because, perhaps most importantly, the evidence sought was not relevant to this case.  Further, the Court opined that relevant evidence was available to Chipotle through other avenues, including through produced documents from and investigative file, interview notes for four witnesses, and deposition testimony of the interviewees.

Accordingly, the Court held that although “this litigation is serious and the Government is a litigant in the case, these factors do not tip the balance in favor of disclosure given that the requested evidence is irrelevant with respect to the claims and that forcing EEOC to disclose its deliberative process in cases such as this might chill administrative officers from conducting a fulsome investigation in such circumstances.” Id. at *7.The Court thus granted the EEOC’s motion for relief from a non-dispositive magistrate judge order, and held that the EEOC was not required to respond to Topics 10-14.

Implications For Employers

For employer who are embroiled in EEOC-initiated litigation, the discovery process can be challenging in regards to unearthing evidence from the EEOC’s pre-suit investigation. This ruling will not make that task any easier, and the Commission will almost certainly use it in future discovery-related briefing.

Nonetheless, the Court did provide employers with some alternative avenues to discover facts about the EEOC’s pre-suit investigation, for instance, by requesting interview notes and subsequently deposing the interviewees. Employers should thus be creative when crafting discovery strategies in EEOC-initiated litigation.

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


By Gerald L. Maatman, Jr., Thomas E. Ahlering and Andrew R. Cockroft

Seyfarth Synopsis: While most employers are likely familiar with the Illinois Biometric Information Privacy Act (“BIPA”), they should know that Illinois is not the only state with a biometric privacy law and many other states are not far behind from joining that group.  In addition to states with existing biometric privacy laws (Illinois, Texas, and Washington), various state legislatures are considering similar (often-times identical) statutes. As a result, employers should take account of this patchwork quilt of laws in their compliance activities.

Since 2018, employers operating in Illinois have become well accustomed to recent flurry of class actions involving the Illinois Biometric Information Privacy Act (“BIPA”).  Following the Illinois Supreme Court’s decision in Rosenbach v. Six Flags Entertainment Corp., 2019 Ill. Lexis 7 (Ill. Jan. 25, 2019), there has been a sharp rise in cookie-cutter claims alleging violations of the BIPA with often no concrete injury even alleged.  Though there are current legislative efforts that could potentially curtail the prevalence of lawsuits under the BIPA, Illinois employers should be aware that non-compliance could expose employers to potential damages of $1,000 or $5,000 for each employee relating to improper collection of biometric information or biometric identifiers.


However, employers in other states also should be aware that the BIPA-craze is not isolated to Illinois.  Indeed, at least two other states have biometric privacy statutes on their books right now (Washington and Texas) and nearly a dozen more have considered implementing statutes like the BIPA.  Though all of these statutes in some way prohibit the collection of biometric information and/or biometric identifiers, only some are like the BIPA in that they contain a private right of action and apply to the collection of biometric information or identifiers in an employment context.

In particular, employers in Alaska, Michigan, and New York (as well as employers based solely in New York City) should be aware that these respective legislative bodies are considering statutes nearly identical to the BIPA.  Similarly, employers should monitor the current efforts to expand the private right of action in the California’s Consumer Privacy Act (“CCPA”).  Should the California legislature allow private individuals to sue for the violations of every one of the CCPA’s various requirements, California could become the “new Illinois hotbed” in biometric privacy litigation.

Set forth below we have grouped each state’s respective biometric privacy law based on whether it is: (1) current law; (2) signed, but not yet effective; (3) pending in the legislature; or (4) introduced in the legislature, but has since died.

Current Biometric Privacy Laws In Other States

Texas – The Texas Biometric Privacy Act prohibits the “capture” of biometric identifiers for a “commercial purpose” without notice and consent.  The Act defines “biometric identifiers” as specifically “a retina or iris scan, fingerprint, voiceprint, or record of hand or face geometry.” “Commercial purpose” is left undefined in the statute.  The law does not define whether notice and consent must be done in writing.  Only the attorney general can bring suit for violations of the Act.  Each violation is subject to a civil penalty of up to $25,000.

Washington – Washington prohibits the collection and use of biometric identifiers for commercial purposes without notice and consent.  Unlike Texas’s law, Washington restricts the “enrollment” of biometric identifiers, which is defined as “capturing” a biometric identifier or “convert[ing] it into a reference template.” The law does not define whether notice and consent must be done in writing.  However, notice and consent provisions do not apply to data collected for “security purposes” (i.e. stored for “the purpose of preventing shoplifting, fraud, or any other misappropriation or theft of a thing of value”).  The law does not have a private right of action to allow for suits by individual plaintiffs.  Instead, only the Washington Attorney General can enforce the requirements.

Signed, But Not Yet Effective, Biometric Privacy Laws in Other States

Arkansas – On April 15, 2019, Governor Asa Hutchinson signed HB1943 and the bill goes into effect on July 23, 2019.  The bill amends Arkansas’ Personal Information Protection Act (“PIPA”) by adding “biometric data” into the definition of “personal information” protected by the PIPA. “Biometric data” is defined as “fingerprints, faceprint, a retinal or iris scan, hand geometry, voiceprint analysis, DNA, or any other unique biological characteristics of an individual if the characteristics are used by the owner or licensee to uniquely authenticate the individual’s identity when the individual accesses a system or account.”

If a breach affects 1,000 or more individuals and the data owner is required to report the breach to individuals under the PIPA, then the data owner must disclose the security breach to the Arkansas Attorney General.  Additionally, businesses that suffer a security breach must retain a copy of the written determination of the breach, as well as any supporting documentation, for five years from the date of determination of the breach.  However, the determination and documentation are to remain confidential and are not subject to public disclosure.  Crucially, the bill does not contain a private right of action.

California – On June 28, 2018, California passed the California Consumer Privacy Act (“CCPA”) which will become effective January 1, 2020.  “Biometric information” is included under the definition of “personal information” protected by the statute.  Under the CCPA, biometric information is “an individual’s physiological, biological or behavioral characteristics, including . . . iris, retina, fingerprint, face, hand, palm, vein patterns, and voice recordings, from which an identifier template, such as a faceprint, a minutiae template, or a voiceprint, can be extracted, and keystroke patterns or rhythms, gait patterns or rhythms, and sleep, health, or exercise data that contain identifying information.”

The CCPA requires companies make certain disclosures to consumers via their privacy policies, or otherwise at the time the personal data is collected. As currently drafted, the CCPA has a limited private right of action which allows individuals to sue for statutory damages of $100 to $750 per violation if one’s personal information is “subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’ violation of the duty to implement and maintain reasonable security procedures and practices appropriate to the nature of the information to protect the personal information.” For all other violations, the CCPA provides that only the Attorney General may sue to recover civil penalties, with the recovery of those penalties to be earmarked for a new consumer privacy fund designed to offset the Attorney General’s and courts’ additional costs in enforcing the CCPA.

However, the state of the finalized CCPA is still in flux — particularly in two respects of utmost importance: (1) the expansiveness of the CCPA’s private right of action; and (2) the CCPA’s application to employers.  Recently, an amendment providing for a sweeping private right of action failed to get out of committee.  Additionally, another bill is pending that is seeking to exclude information relating to employees from the scope of the CCPA and seeks to narrow the definition of “consumer” to exclude employees.

We recommend keeping an eye on these two developments relating to the CCPA moving forward as they are crucial to employers’ compliance efforts.

Pending Biometric Privacy Laws in Other States

Alaska – Alaska’s biometric privacy bill, H.B. 72 mirrors the BIPA in providing a private right of action and statutory damages of between $1,000 and $5,000 depending on the type of violation.  H.B. 72 also requires employers to provide individuals notice of the collecting entity’s biometric privacy practices and obtain written consent.  Unlike the BIPA, however, H.B. 72 does not explicitly allow employers to make consent to the collection of biometric information a condition of employment.  The bill has been pending since 2017, however, and it still remains in committee.

Arizona  – On January 22, 2019, HB 2478 was introduced in Arizona’s legislature.  HB 2478 does not include a private right of action, however, the bill would prohibit businesses from capturing, converting, or storing an individual’s biometric identifier in a database for a “commercial purpose” unless (1) it provides “a mechanism to prevent the subsequent use of a biometric identifier for a commercial purpose; or (2) advance notice [is] provided and consent [is] obtained from the individual.”

Massachusetts – Massachusetts’ proposed legislation, Bill SD.341, “an Act relative to consumer data privacy,” is still in committee.  However, employers should be aware that this bill as currently written does not apply to “business[es] collecting or disclosing personal information of the business’s employees so long as the business is collecting or disclosing such information within the scope of its role as an employer.”

Michigan – Michigan’s biometric privacy law, House Bill No. 5019, is still in committee after being introduced in September 2017.  The text of the bill is nearly identical to the BIPA, and includes a private right of action.

New Hampshire – Though a BIPA-like law has not been introduced since 2017, there have been more recent attempts at prohibiting the collection of biometric information.  This year, HB 536 was introduced seeking to add two new provisions to New Hampshire’s Consumer Protection Act making it unlawful to “Obtain[], us[e], disclos[e], or retain[] biometric information about an individual with whom the person is engaged in trade or commerce for any purpose other than that which the individual reasonably expects.” If the amendment is successful, such a provision can only be enforced by New Hampshire’s Consumer Protection and Antitrust Bureau.

New York – New York has two different biometric privacy bills pending in their legislature.  On January 11, 2019, NY SB 1203 was introduced for the third time in just as many years.  Like the bill pending in Michigan, the text of the New York bill is nearly identical to the BIPA, and includes a private right of action.

Another bill, S5642, is similar to California’s Consumer Privacy Act, though it’s private right of action allows individuals to bring suit for unlawful disclosure of biometric information as well as the unlawful collection of biometric information.  Unlike California’s law, however, S5642 does not apply to the collection of personal information in the employment context.  “Consumer” as defined in the bill “does not include an employee or contractor of a business acting in their role as an employee or contractor.”

New York City – On October 17, 2018, Bill Int. No. 1170 was introduced seeking to amend Section 1, Chapter 5 of Title 20 of the Administrative Code of the City of New York.  While the bill contains some similar provisions to the BIPA, including a private right of action, and avoids the statutory standing issues by providing that “any person who[se] biometric identifier information was collected, retained, converted, stored or shared in violation of [the law] may commence an action,” the bill as written only applies to the collection of biometric identifier information of “customers” defined as “a purchaser or lessee, or a prospective purchaser or lessee, of goods or services from a commercial establishment.” The bill has yet to be presented before a committee.

Introduced Biometric Privacy Laws In Other States Which Did Not Pass

DelawareDelaware’s biometric privacy bill, DE HB350, was introduced in March 2018 and remains pending.  Though individuals must be provided notice and give consent prior to the collection of their biometric information, unlike the BIPA, the law does not mandate consent be in writing.  The bill as written may only be enforced by the Delaware Consumer Protection Unit. As of this writing, the bill is dead.

Florida – On March 5, 2019, the “Florida Biometric Information Privacy Act” (SB 1270)  was introduced in the Florida legislature.  The statute generally follows the text of the BIPA regarding notice and consent requirements, a private right of action and the availability of statutory damages.  As of the date of publication, the bill has died in committee.

Montana – Montana has actually had two failed attempts at passing BIPA-like legislation.  On February 17, 2017, the “Montana Biometric Information Privacy Act” (HB 518) was introduced in the Montana legislature.  Like the BIPA, HB 518 requires written notice and consent before biometric data or information may be collected and also provides for a private right of action. However, the bill has died in committee.  On March 1, 2018, an act of the same name was introduced as HB 645 with the private right of action removed and leaving enforcement to the state’s attorney general.  This too died in committee.

New Hampshire – New Hampshire last considered a BIPA-like law in 2017 following the introduction of HB 523.  The bill is similar to the BIPA in its notice and consent requirements. However, the bill made it unlawful to refuse to employ someone who declined to consent to the collection of their biometric information.  Nevertheless, the bill, died in committee.

Best Practices For Compliance

Though many of these statutes have not made it passed committee, much less passed, it is still important to get ahead while it is costs far less than the potential class action lawsuit.  Accordingly, it is critical for employers in these jurisdictions to:

  • Have a written policy relating to the collection, storage, and retention of biometric information stating the business’s retention schedule for the data and the rules governing its destruction;
  • Obtain written consent from employees who are using technologies that collect or capture biometric information;
  • Take steps ensure that neither the company nor any vendor storing biometric data on the company’s behalf sells or discloses the data;
  • Implement security protocols for the protection of biometric data; and
  • Have appropriate provisions in vendor contracts ensuring they comply with existing laws and that the company may retain the right to request information and have the right to be notified in the event of a suspected breach.

Compliance is key, and there no better time to think about your company’s biometric privacy compliance than right now.  Businesses with compliance questions should contact a member of Seyfarth Shaw’s Biometric Privacy Compliance & Litigation Practice Group.

By: Gerald L. Maatman, Jr., Thomas E. Ahlering, and Alex W. Karasik

Seyfarth Synopsis: Over the last few years, Illinois companies have quickly become aware of the risks associated with the state’s unique biometric privacy law. Originally passed in 2008, the Illinois Biometric Information Privacy Act (“BIPA”) made Illinois the first state to enact a policy governing the collection and storage of biometric data resulting in a surge of class action lawsuits filed by employees and consumers alleging that their biometric data was improperly collected for timekeeping, security, and consumer transactions. While filing activity under the statute remained silent for nearly a decade following its enactment, the recent explosion of class actions in Illinois under the BIPA has since made biometric privacy compliance a top priority for many employers. In today’s blog, we examine this novel class action trend and provide a comprehensive analysis of the class action filing history of claims under the BIPA including the volume of class action filings, a breakdown of jurisdictions in which class actions are filed, who is filing, and the primary industries facing class actions.

Background Of The BIPA

As biometric technology has become more practical and affordable, businesses have gradually begun to utilize these innovative tools for various beneficial purposes, such as implementing biometric time clocks to prevent “buddy punching,” facilitate consumer transactions, and for restricting access to secure areas. Accordingly, the BIPA was enacted by the Illinois state legislature as a reaction to the increased use of biometric technology due to the sensitive nature of biometric identifiers and associated data.

The BIPA regulates the collection, capture, and storage of “biometric identifiers,” such as fingerprints, voiceprints, retina/iris scans, and scans of hand or face geometry. Specifically, the statute prohibits an entity from collecting biometric information unless it first: (1) informs individuals in writing that his or her biometric data is being captured; (2) outlines the purpose and period of time for which the data will be utilized; and (3) receives a written release from individuals consenting to the collection. Outside of these guidelines, the BIPA also includes regulations requiring a compliant, publically-available written policy, prohibits disclosure of biometric data to third-parties absent consent, and mandates a “standard of care” that businesses must adhere to in protecting biometric data.

While other states have also implemented biometric privacy statutes, the BIPA is unique because it provides a private right of action, and therefore allows plaintiffs to recover liquidated damages and attorneys’ fees for violation of the statute. Under the BIPA, “[a]ny person aggrieved by a violation” can recover “liquidated damages of $1,000 or actual damages, whichever is greater” for negligent violations, and “liquidated damages of $5,000 or actual damages, whichever is greater” for intentional or reckless violations.

Since the BIPA was the first biometric privacy statute of its kind, there were still a few important questions to be answered regarding the interpretation of the law. Namely, the most pressing threshold issue was whether individuals need to sustain actual damages in order to qualify as a “person aggrieved” in order to asserts claims under the BIPA. As we blogged HERE, this question was answered in the negative by the Illinois Supreme Court in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186 (Ill. Jan. 25, 2019). In Rosenbach, the Illinois Supreme Court held that a person does not need to allege any actual injury or adverse effect, beyond technical violations of the statute in order to state a claim.

Analysis Of Class Action Filing Trends Under The BIPA

Despite the BIPA being enacted in 2008, the first class action under this law was not filed until 2015. Though this filing drew some attention to Illinois’ unique statute governing biometric data, filing activity under the statute remained minimal until approximately 2017. As indicated in the graphic below, there were only a total of 15 class actions filed in Illinois under the BIPA from 2008 through 2016. However, filings have since increased at an exponential and rapid pace. Most notably, the approximately 161 class actions filed already in 2019 (as of the date this blog was published) more than doubles the total number from 2017, and filings have increased approximately 27 times from the total filings a mere four years ago.Perhaps the most striking trend of all is the substantial increase in class action filings under the BIPA since the Illinois Supreme Court’s decision in Rosenbach. Since this decision was issued on January 25, 2019, there have been a total of 151 class actions under the BIPA filed in Illinois – approximately a rate of an additional case filed every day. In fact, in just 148 days following the Rosenbach decision, the Illinois plaintiff’s bar filed nearly as many class action lawsuits under the BIPA as it did during a 10-year span prior to the decision. The pie graph below offers a visual account of this prompt spike in litigation activity. It has become clear to all Illinois businesses utilizing biometric technology that the plaintiff’s bar views the Rosenbach decision as a “door-opener” for class action filings under the BIPA.


In terms of jurisdiction, the large majority of class actions are filed in the Circuit Court of Cook County – a traditionally plaintiff friendly jurisdiction. In fact, approximately 82% of filings have been initiated in Cook County. The next most popular jurisdiction is the U.S. District Court for the Northern District of Illinois. However, this federal court represents a distant second to the Circuit Court of Cook County, accounting for just 4% of all class action filings under the statute. While the plaintiff’s bar has filed biometric privacy class actions in a total of nine different courts, the BIPA is, by all accounts, being primarily litigated in the Circuit Court of Cook County.

With the rising number of filings in Illinois, the plaintiff’s class action bar have been staying busy and some plaintiff’s class action firms have carved out a niche in this arena. As indicated below, three firms alone account for more than half of all class actions file under the BIPA in Illinois.

Finally, it is important for employers to know which types of businesses are commonly targeted in these types of biometric privacy cases. As the bar graph below demonstrates, there is no clear target of class actions in terms of industry. One of the most targeted industry of class actions under the BIPA is the business services industry, which includes all companies designed to service other businesses, such as those performing staffing, logistics, or janitorial services. The healthcare industry is also a popular BIPA class action target, and the manufacturing and retail industries are not far behind. Furthermore, though the filing numbers are not as large, the software and technology industry is also notable because it includes many businesses who produce, maintain, or sell the types of timekeeping software at issue.

Best Practices For Compliance

Given the rising class action litigation activity, businesses must proactively implement biometric privacy compliance measures. First and foremost, companies utilizing biometric technology must obtain written consent from individuals prior to storing or collecting their biometric data. This action alone resolves some of the core privacy issues at issue in many biometric privacy class actions. Additionally, companies must maintain a publically-available written policy stating the company’s retention and destruction schedule for all biometric data. Companies should also take steps to ensure that biometric data is not sold or disclosed to third parties by implementing security guidelines for the protection of individuals’ biometric data and ensuring that company vendors provide the same level of data protection, if not higher, than that of the business.

Compliance is key, and there no better time to think about your company’s biometric privacy compliance than right now. Businesses with compliance questions should contact a member of Seyfarth Shaw’s Biometric Privacy Compliance & Litigation Practice Group.