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

Seyfarth Synopsis: Following the EEOC’s down 2020 fiscal year, in which the Commission made significant changes to many of its programs in the midst of the global COVID-19 pandemic and leadership changes, in FY 2021 the EEOC’s litigation enforcement activity showed signs of recovering from the lingering pandemic. The number of cases filed by the EEOC increased in a respectable climb back to pre-pandemic levels, forecasting a busy year ahead for the Commission and employers in FY 2022.

For the most of the last 25 years, the EEOC’s Fiscal Year ended with a surge in last-minute lawsuits. August and September filings often eclipsed the entire rest of the year combined.  Following a “down year” in FY 2020 where only 33 lawsuits were filed in September, the finish in FY 2021 represented a return to form, with 59 lawsuits filed during September (similar to the 52 filed in September of FY 2019, and 84 in FY 2018). At the time of publication of this blog posting, the EEOC filed 114 total cases in FY 2021, which includes 111 merits lawsuits and 3 subpoena enforcement actions. This total number of filings is more than last year’s total of 101 lawsuits (see here), but still less than the last two years prior (see here and here).

Cases Filed By EEOC District Offices

In addition to tracking the total number of filings, we closely monitor which of the EEOC’s 15 district offices are most actively filing new cases. Some districts tend to be more aggressive than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by EEOC district office.

The most noticeable trend of FY 2021 is the filing dip in some key regions compared to past years. The New York district office fell from 12 filings in FY 2020 to 6 filings in FY 2021. The California district offices in San Francisco and Los Angeles, which combined for 16 new filings last year, declined in FY 2021, coming at a combined total of 13 new filings, including San Francisco’s fall from 10 to 6. The Indianapolis district office, which had a huge year in FY 2020 with a nation-leading 13 filings, returned to the middle of the pack with only 4 filings this year.

On the other hand, leading the pack in new filings was the Philadelphia district office with 14 filings. Chicago’s filings shot up from 3 filings last year to 9 filings this year, and the Dallas district office made a similarly large jump from 5 filings from FY 2020 to 11 filings in FY 2021. The Birmingham district office also made a noticeable move from 5 filings in FY 2020 to 9 filings in FY 2021. Overall, following a substantial decline in litigation enforcement activity in FY 2020, the increase filings in FY 2021 suggests the EEOC is back on track at most of its regional offices across the country.

Analysis Of The Types Of Lawsuits Filed In FY 2021

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. Those numbers at least – when considered on a percentage basis – are in line with the numbers we have seen the last few years. The graphs below show the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

When considered on a percentage basis, the distribution of cases filed by statute remained roughly consistent compared to FY 2020 and 2019. Title VII cases once again made up the majority of cases filed, making up 62% of all filings (on par with the 60% in FY 2020 and 60% in FY 2010). ADA cases also made up a significant percentage of the EEOC’s filings, totaling 36% this year, a moderate uptick from 30% in FY 2020. There was only one age discrimination case filed in FY 2021, down seven from FY 2020.

February 2021 Release Of Enforcement Statistics

On February 26, 2021, the EEOC released its comprehensive enforcement and litigation statistics for FY 2020 (available here). The dip in the number of charges that employers saw in 2018 and 2019 continued through 2020, with the number of charges reaching its lowest point since 1997. The prominence of gender discrimination charges seen in 2018 due to the #MeToo movement has all but disappeared, with sex discrimination charges remaining in the fourth-place position and dropping to their lowest number in over 20 years. When the FY 2021 figures are released in the coming months, we do not expect there to be much departure from this trend.

However, monetary benefits recovered by the Commission in FY 2020 surged. The EEOC recovered a record amount of $535.4 million on behalf of alleged discrimination victims. By comparison, the EEOC recovered approximately $486 million in FY 2019; approximately $505 million in FY 2018; and approximately $484 million in FY 2017.  When the final figures are released for FY 2021, we anticipate there will be a similar eye-popping dollar amount of recoveries.

January 2021 Release Of Annual Performance Report

On January 19, 2021, the EEOC released its second-ever Annual Performance Report (“APR”) for FY 2020 (see here). In essence, it is a report card on the Commission’s activities, including its record relative to enforcement litigation. That said, the APR is an analysis of the EEOC’s litigation goals and performance results, and contains important data points regarding the EEOC’s changing strategic objectives and potential future targets of heightened enforcement activity.

In what can be considered a potential explanation for the decline in lawsuits, during FY 2020, the Commission conducted 6,272 mediations, resulting in $156.6 million in relief to charging parties. Further, 766 federal sector mediations were conducted, reducing the inventory of federal sector disputes. Overall, approximately $333.2 million in relief was recovered through mediation, conciliation, and settlements.

When this data is later released for FY2021, given the shutdowns in the courts coupled with the surge of virtual mediations, we anticipate the number of mediations and recoveries will remain significant.

Implications For Employers

FY 2020 was a year of whirlwind change at the EEOC as a result of the pandemic and leadership changes, and the FY 2021 aftermath resulted in strikingly similar results. Now that the new leadership regime and their structural changes are finally settling in to a world that remains hampered by a lingering global pandemic, employers find themselves once again looking out over an uncertain future of the employment landscape. It remains to be seen how new priorities and strategies will impact their businesses in FY 2022, especially when many businesses are shifting to remote work structures that may limit some of the common catalysts of workplace discrimination.

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 2021 to carry employers through the new year.

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

 

Surgery, Hospital, Medical Professionals, DoctorBy Gerald L. Maatman, Jr., Jennifer Riley, and Michael L. DeMarino

Seyfarth Synopsis: As the COVID-19 era continues to unfold, many employers have adopted back-to-work polices that include mandatory vaccinations for their employees.  In Beckerich, et al. v. St. Elizabeth Medical Center, et al., Case No. 21-105-DLB-EBA (E.D. Ky. Sept. 24, 2021), the Defendants, a hospital group, did just that.  In response, Plaintiffs, a group of healthcare workers, filed a lawsuit seeking a preliminary injunction prohibiting Defendants from enforcing the policy. The U.S. District Court for the Eastern District of Kentucky denied Plaintiffs’ bid for a preliminary injunction because Plaintiffs could not demonstrate that any of the factors that courts consider in favor of injunctive relief.  Notably, Plaintiffs could not demonstrate a likelihood of success on their underlying constitutional, ADA, and Title VII claims. 

This case is a must read for employers that have adopted, or are considering adopting, a mandatory COVID-19 vaccination policy.  This case highlights the theories of relief Plaintiffs are likely to seek and demonstrates the importance of maintaining a process for requesting and granting reasonable accommodations to avoid claims of discrimination.

The Decision

In this case, the employer maintained a vaccination policy that required its healthcare employees to either receive a COVID-19 vaccine or submit a request for a medical exemption or an exemption for a sincerely held religious belief. Employees who did not comply with this policy would be subject to termination. Id. at 2.

Plaintiffs sought a preliminary injunction on the ground that the employer’s vaccination policy infringed on their constitutional rights and failed to provide religious and medical accommodations required under the American With Disabilities Act (“ADA”) and Title VII of the Civil Rights Act (“Title VII”).  Id. After considering the traditional preliminary injunction factors – the likelihood of success on the merits,  irreparable harm, substantial harm to others, and the public interest – the Court held that Plaintiffs were not entitled to injunctive relief.  Id.

The Court concluded that Plaintiffs could not demonstrate a strong likelihood of success on any of their claims, the first factor for consideration when determining whether to grant a preliminary injunction. With respect the constitutional claim, the Court concluded that the defendant employer was not a “state actor” and thus its actions were not subject to Fourteenth Amendment scrutiny.  As such, the likelihood of success for Plaintiffs’ constitutional claims was  “virtually nonexistent.” Id. at 6.

The Court reached a similar conclusion concerning Plaintiffs’ ADA claim. The Court noted that the ADA generally requires employers to provide a process by which a disabled employee can seek a medical exemption to a COVID-19 vaccination requirement. Id. at 7.  Plaintiffs’ strongest claim, according to the Court, was that the employer “corrupted this process.” Id. Nonetheless, the Court concluded that Plaintiffs had not shown that the employer failed to provide the necessary medical accommodations to the vaccination requirement, noting that the employer granted exemptions or deferments to 75 percent of the applicants. Id.

Plaintiffs’ Title VII claim was unavailing for similar reasons. Indeed, the Court noted that none of the Plaintiffs in the case had been denied a religious exemption, and in fact, 11 of the 40 Plaintiffs had been granted one. Id.  As such, the Court concluded that Plaintiffs were unable to establish the third element of their Title VII claim, which requires discharge or discipline from their employer.  And, similar to Plaintiffs’ ADA claim, the Court relied on the fact that the employer granted 57 percent of the requested religious exemptions. Id. at 11-12.

The Court also determined that the next preliminary injunction factor – irreparable harm – weighed against granting a preliminary injunction. The Court reasoned that there was no irreparable harm because no Plaintiff was forcibly vaccinated and, to the extent there is a violation of the ADA or Title VII,  loss of employment, or emotional distress, Plaintiffs would be entitled to monetary relief.

Finally, regarding the last two factors – substantial harm to others and public interest – the Court grappled with the competing views of the parties regarding the efficacy and safety of the vaccinations, as well as the tension between “private equities and public equities, which have both been prominently raised in this case.”  Id. at 17.  Relying on Jacobson v. Massachusetts, 197 U.S. 11, 26 (1905), a Supreme Court decision that upheld a state-imposed vaccination and the penalty of imprisonment, the Court reasoned that “being substantially less restrictive than the Jacobson mandate, and being enacted by a private actor, Defendants’ policy is well within the confines of the law, and it appropriately balances the public interests with individual liberties.”  Id.

On the whole, the Court held that Plaintiffs failed to state a viable legal theory in support of injunctive relief because each of the required factors, individually and collectively, weighed against the denial of injunctive relief.

Implications For Employers

Although the Court did not reach a decision on the merits of Plaintiffs’ underlying claims, this case distills the legal and factual issues involved in challenging and defending an employer’s mandatory COVID-19 vaccination policy.  While constitutional claims are likely a non-starter against private employers, ADA and Title VII claims may have merit depending on how employers carry out their policies.

Employers should take steps to insulate themselves from such claims by ensuring that they adopt a consistent process by which employees can seek religious and medical exemptions.  Also, carefully documenting accommodation requests can go a long way – as it did in this case – in demonstrating that the employer has provided reasonable accommodations to avoid claims of discrimination.

By Gerald L. Maatman, Jr., Thomas Ahlering, Alex Karasik, and Sarah Bauman

Seyfarth Synopsis: On September 20, 2021, the Seventh Circuit ruled in Fernandez v. Kerry, Inc., No. 21-1067 (7th Cir. Sept. 20, 2021), that a cause of action filed under the Illinois Biometric Information Privacy Act (“BIPA”) by employees of Kerry, Inc., was preempted by Section 301 of the Labor Management and Relations Act because the claims were premised on an alleged failure by the employer to obtain consent before requiring their employees to scan their fingerprints, and the issue of consent was covered by a collective bargaining agreement. As a result, the Seventh Circuit held that the class action claims could not be pursued by the employees against Kerry, Inc. in federal court.

The Fernandez ruling exemplifies that certain employee disputes implicating the BIPA will be dismissed if the parties intended such disputes to be resolved by the employer and the employees’ collective bargaining representative.

Case Background

Five former employees of Kerry, Inc. (“Plaintiffs”) filed a class action under the BIPA, alleging that Kerry, Inc. failed to obtain their consent before requiring Plaintiffs to scan their fingerprints for timekeeping purposes.  Id. at 1-2.  Defendant moved to dismiss on the grounds that the suit was preempted by Section 301 of the Labor Management Relations Act, 29 U.S.C. §185 (“LMRA”), because the resolution of the claims depended on interpretation of collective bargaining agreements between Defendant and the union that represented Plaintiffs while employed with Kerry.  Id. at 2.  Pursuant to preemption principles, federal law prevents states from interfering in relations between private employers and unions.  Id.  The district court agreed with Defendant and dismissed the lawsuit. Plaintiffs thereafter filed an appeal with the Seventh Circuit.

The Seventh Circuit’s Decision

In reviewing the district court’s ruling, the Seventh Circuit relied primarily on its decision in Miller v. Southwest Airlines Co., 926 F.3d 898, 903-05 (7th Cir. 2019).  There, it held that provisions in the Railway Labor Act that parallel Section 301 prohibit employees from “bypassing their employers about how to clock in and out.”  Id. at 2.  The Miller decision further “doubted that Illinois has attempted to give unionized workers a privilege to bargain directly with employers — after all, the [BIPA] permits an employee’s ‘legally authorized representative’ to consent to the collection and use of biometric information.”  Id. (citing 740 ILCS 14/15(b)).  Relying on Miller, the Seventh Circuit held that where an employer asserts that a union has consented, any dispute regarding the accuracy of such consent must be resolved between the employer and the union.  Id. at 2.  And if any employer “plausibly contends that the union[] has consented,” that “is enough to prevent suits by individual workers.”  Id. at 3.

The Seventh Circuit rejected Plaintiffs’ argument that the Railway Labor Act is “more preemptive” than the LMRA, recognizing that the U.S. Supreme Court “has equated the two” in Hawaiian Airlines, Inc. v. Norris, 512 U.S. 246, 260 (1994).  Id. at 3.  The Seventh Circuit similarly rejected Plaintiffs’ suggestion that a permissive topic (i.e., with respect to the LMRA, clocking in and out) of bargaining need not be subject to the union’s representation.  Id.  Rather, it held that “a certified union is each worker’s exclusive representation on collective issues,” and thus covers disputes regarding timekeeping.  Id.

In conclusion, the Seventh Circuit held that as in Miller, Defendant “invoke[d] a management rights clause,” and whether “‘unions did consent to the collection and use of biometric data, or perhaps grant authority through a management-rights clause, is a question for [decision under the agreement].  Similarly, the retention and destruction schedules for biometric data, and whether [employers] may use third parties to implement timekeeping . . . are topics bargaining between unions and management.’”  Id. at 4 (quoting Miller, 926 F.3d at 903).  Accordingly, the Seventh Circuit explained it would be impossible to litigate a dispute about how an employer uses biometric information without asking whether the union has consented on the employees’ behalf — as such, states “cannot by-pass the mechanisms” of federal law and allow direct negotiation or litigation between workers and their employers.  Id. 

Finally, the Seventh Circuit rejected Plaintiffs’ request to send the dispute to arbitration to the extent that the collective bargaining agreements at issue did not allow workers to demand arbitration if the union forgoes the procedure, and the union had not requested arbitration.  Id.  For these reasons, the Seventh Circuit upheld the district court’s decision and dismissed the case.  Id.

Takeaways For Employers

The ruling in Fernandez v. Kerry doubles down on the Seventh Circuit’s refusal to litigate employee-initiated BIPA class actions where the issue of consent is covered by a collective bargaining agreement.  Accordingly, if sued under the BIPA, employers should consider this ruling to assess whether their employees’ claims are premised on a dispute that is covered by an applicable collective bargaining agreement.  Doing so could significantly limit an employer’s liability for damages, and provide another mechanism for seeking dismissal on the pleadings.

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

Seyfarth Synopsis: On September 17, 2021, the Illinois Appellate Court issued its highly-anticipated decision in Tims v. Black Horse Carriers, Inc., 2021 IL App (1st) 200563 (1st Dist. Sept. 17, 2021), on whether a one-year or five-year statute of limitations period applies to claims under the Biometric Information Privacy Act, 740 ILCS 14/15 (“the BIPA”) The Illinois Appellate Court’s holding was two-fold — a one-year limitations period governs actions brought under sections 15(c) and (d) of the BIPA, while claims under sections 15(a), (b), and (e) are subject to the catch-all five-year limitations period.

The ruling in Tims is sure to be appealed to the Illinois Supreme Court. That being said, it has the potential to be a game-changer for BIPA class action litigation, and likely the plaintiffs’ bar will aggressively push for the five-year statute of limitations when pursing class-wide relief.

Case Background

In March 2019, Plaintiff (“Plaintiff”) filed a class action complaint claiming that Black Horse Carriers, Inc.’s (“Defendant”) timekeeping practices, which involved the scanning and storing of employees’ fingerprints, violated the BIPA.  Id. at ¶ 5.  The first count of the complaint asserted that Defendant violated section 15(a) of the BIPA in failing to institute, maintain, and adhere to a retention schedule for biometric data.  Id. at ¶ 7.  The second and third counts alleged that Defendant violated sections 15(b) and (d), respectively, by obtaining their employees’ biometric data and disclosing it to third-parties without first obtaining their written, informed consent.  Id.  Although Plaintiff did not allege claims under sections 15(c) or (e), those provisions prohibit the sale of a person’s biometric data for a profit (740 ILCS 14/15(c)), and impose a duty of reasonable care in storing and protecting biometric data from disclosure (id. at 14/15(e)).

In June 2019, Defendant filed a motion to dismiss on the ground that Plaintiff filed the complaint outside of the applicable statute of limitations period.  Id. at ¶ 8.  Defendant argued that the one-year limitations period prescribed by 735 ILCS 5/13-201 applied to Plaintiff’s claims because the BIPA’s main concern is privacy protection.  Plaintiff countered that the five-year catch-all limitations period prescribed by 735 ILCS 5/13-205 covered Plaintiff’s claims, in that a “publication element” was required for a claim to be covered by section 13-205 — an element which, according to Plaintiff, the BIPA clearly lacked.  Id. ¶ 9.

In September 2019, the trial court denied the motion to dismiss.  Id. at ¶ 11.  It held that section 13-201 did not apply because Plaintiff alleged a violation of the Act itself, rather than a general violation of privacy.  Id.  As such, the trial court opined that a five-year limitations period applied to Plaintiff’s claims.  Id.  The trial court did not address the issue of when Plaintiff’s claims accrued — upon Plaintiff’s first finger scan vs. Plaintiff’s last finger scan — because the complaint was timely filed under either scenario.  Id. at ¶ 10.

Defendant then sought an appeal to the Illinois Appellate Court for the First District.

The Appellate Court’s Decision

At issue in the appeal was the question of whether a one or five-year statute of limitations period applies to the BIPA.  First, the Appellate Court noted the “sole concern” in determining which limitations period applies was the intent of the legislature.  Id. at ¶ 19.  Given the BIPA’s silence on the issue, the Appellate Court turned to the language of section 13-201, which establishes a one-year limitation period for “[a]ctions for slander, libel, or for publication of matter violating the right of privacy.”  Id. at ¶  20.  Relying on its decision in Benitez v. KFC National Management Co., 305 Ill. App. 3d 1027, 1033 (1999), the Appellate Court explained that Illinois trial courts have recognized two types of privacy interests in the right to privacy — secrecy and seclusion — and held that section 13-201 applies only to those claims premised on the right to secrecy, such as false-light publicity and the appropriation of the name or likeness of another.  Id. at ¶  21.  The Appellate Court also noted the language of section 13-205, which “provides for a five-year limitation period for, in relevant part, ‘all civil actions not otherwise provided for.’”  Id. at ¶ 22.

In addition, the Appellate Court highlighted the various “duties” enforced by the BIPA, citing the Illinois Supreme Court’s landmark decision in Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186, ¶ 1 (2019), which held in pertinent part that a violation of the BIPA causes an individual’s  “biometric privacy [to] vanish[] into thin air.”  Id. at ¶ 25 (citations and quotations omitted).  The Appellate Court reasoned that at this point, “[t]he precise harm the Illinois legislature sought to prevent is then realized.”  Id.

Applying these principles to the question at issue, the Appellate Court concluded that the section 13-201 one-year limitations period covers only privacy actions in which publication is an element or an “inherent part of the action.”  Id. at ¶ 29.  The Appellate Court did not address the legislative history of the BIPA, because it could answer the certified question “based on the relevant statutory language, which is ambiguous.”  Id. at ¶ 35.  Indeed, the Appellate Court reasoned that the legislature did not intend for section 13-201 to include all privacy actions, in that it “would have written something like ‘actions for slander, libel or privacy,’” or used “broad language rather than the narrower ‘for publication.’”  Id.

Accordingly, the Appellate Court found that the section 13-201 one-year statute of limitations governs only those actions brought under sections 15(c) and (d) of the BIPA.  Id. at ¶¶  30, 32.  It explained that the BIPA imposes various duties that are separate and distinct from one another.  Id. at ¶ 30.  While each of the duties set forth under sections (a)-(e) “concern privacy,” the Appellate Court reasoned that a private entity could violate sections (a), (b), or (e) “without having to allege or prove that the defendant . . . published or disclosed any biometric data.”  Id. at ¶  31.  Thus, any such action would not be one “‘for publication of matter violating the right of privacy.’”  Id. (quoting 735 ILCS 5/13-201).

Conversely, the Appellate Court held that the “publication or disclosure of biometric data is clearly an element of an action under” sections 15(c) and (d).  Id. at ¶ 32.  It opined that, to the extent (c) and (d) prohibit the disclosure or sale of biometric data, these sections “entail[] publication, conveyance, or dissemination of such data.”  Id. at ¶ 32.

In sum, the Appellate Court held that a one-year limitations period pursuant to 13-201 governs actions under sections 15(c) and (d) of the BIPA, while a five-year statute of limitations pursuant to section 13-205 applies to sections 15(a), (b), and (e).  Id. at ¶ 35.

Takeaways For Employers

While the ruling in Tims v. Black Horse Carrier has the potential to significantly limit Illinois employers’ liability under the BIPA in some respects, the plaintiffs’ bar will likely use this decision to continue to push for a five-year damages period relative to sections 15(a), (b), and (e).    At the same time, given the stakes at issue, a further appeal to the Illinois Supreme Court is virtually certain. Nonetheless, employers should be extra cautious in their compliance with those requirements that do concern “publicity” — i.e., sections 15(a), (b), and (e).  They should consider establishing policies that enable employees to  give their express, written consent before scanning their fingerprints or otherwise furnishing their biometric data to their employers.  Further, employers should ensure that such biometric data is destroyed upon an employee’s termination or resignation with the company; have a widely-accessible policy regarding the destruction and retention of biometric information; and exercise heightened caution when storing any biometric data within their possession.

 

 

 

By Gerald L. Maatman, Jr. and Sarah K. Bauman

Seyfarth Synopsis: On August 30, 2021, in Massone, et al. v. Washington, No. 20-CV-7906, 2021 WL 3863081(S.D.N.Y. Aug. 30, 2021), the U.S. District Court for the Southern District of New York dismissed a lawsuit brought by the U.S. Security Officers Union (the “Union”) on behalf of its members (“CSOs”) against the U.S. Marshals Service and contractor Centerra Group LLC (“Defendants”), alleging that Defendants failed to implement adequate COVID-19 precautions.  The Court held that the President of the Union lacked standing to sue because the complaint sought merely monetary damages — rather than equitable relief — on behalf of individual CSOs allegedly harmed by the protocol. The ruling exemplifies that monetary recovery for workplace COVID-19-related injuries is better suited for an individualized lawsuit, unless the relief is sought on behalf of the association itself and is equitable in nature.

Case Background

On September 25, 2020, on behalf of approximately 2,200 members, the President of the Union (“Plaintiff”) filed a lawsuit against Defendants, claiming that the COVID-19 precautions in place failed to protect Union members (“CSOs”) from infection. Id. at *1-2. Plaintiff alleged that Defendants failed to properly sterilize the working and common areas in federal courthouses and failed to provide adequate personal protective equipment, resulting in COVID-related deaths, sickness, and quarantines of certain CSOs. Id. at *1. Plaintiff also alleged that Defendants retaliated against various CSOs who complained, by making threats of disciplinary action, such as suspension and permanent termination. Id. The complaint sought monetary damages on behalf of the CSOs who suffered COVID-19-related injuries or were retaliated against by the Defendants. Id. at *4.  Defendants moved to dismiss for lack of standing and for failure to state a claim.  Id. at *1.

The Court’s Decision

The Court granted the Defendants’ motion to dismiss.  Id.  at *3.  The Court did not reach the merits of the case because it found that Plaintiff lacked both organizational and representative standing to sue.  Id.  The Court honed in on Plaintiff’s alleged injuries for alleged monetary damages suffered only by (1) those CSOs who were allegedly exposed to or contracted COVID-19, and (2) those CSOs who allegedly were retaliated against by Defendants.  Id. at *4.  According to the Court, “[n]either of these is an injury to the Union itself, and thus neither can support a finding that the Union” had standing.  Id.

In making this determination, the Court recognized that Plaintiff brought suit in his capacity as President of the Union.  Id. at *3.  Accordingly, the Court held that Plaintiff was required to demonstrate that the Union had either organizational (also referred to as associational) standing to sue in its own right or representative standing to sue on behalf of its members.  Id.  Recognizing that an association must meet the same standing test that applies to individuals, the Court concluded that Plaintiff failed to demonstrate associational standing.  Id. at *3-4.  The Court agreed with the Defendants’ argument that the injuries alleged were sustained by individual CSOs, not the union itself.  Id. at *3.  The Court reasoned that, contrary to the Plaintiff’s contention, it was “not enough that the defendant allegedly [] engage[] in a wrong that affects each union member individually and equally.”  Id. at *4.  Rather, Plaintiff was required to an allege an injury sustained by the Union as a whole, and it failed to do so.  Id. 

The Court also analyzed whether Plaintiff sufficiently asserted representative standing on behalf of the Union.  Id.  The Defendants argued that Plaintiff could not satisfy the test for organizational standing because the Complaint exclusively sought monetary damages for injuries allegedly suffered by “unidentified, individual CSOs.”  Id.  The Court agreed with Defendants’ position.  Id.  at *5.  Relying on U.S. Supreme Court authority and a number of decisions from within the Second Circuit, the Court recognized the widely-accepted jurisprudential routine of “declin[ing] to find representative standing when a plaintiff brings a claim on behalf of its members for monetary damages.”  Id.  Since Plaintiff merely sought damages for particular CSOs, rather than “a declaration, injunction, or some form of prospective relief,” the Court found the Plaintiff also lacked representative standing and granted the Defendants’ motion to dismiss.  Id. at *4-5.  The Court reasoned that any injures the CSOs suffered were “peculiar to the individual member concerned, and both the fact and extent of injury would require individualized proof.”  Id. at *5.

Finally, the Court also denied Plaintiff’s request to amend the lawsuit to address the standing issues, but held that Plaintiff could refile the request so long as it attached an amended complaint that cured the deficiencies of the original.  Id. 

Takeaways For Employers

The ruling in Massone v. Washington, demonstrates that unions (and other organizations) will have a difficult time suing employers in federal court for monetary damages allegedly suffered by their individual members/employees.  As the COVID-19 pandemic continues, it is important for employers to be aware of the standing limitations address in Massone, when faced with similar lawsuits.  This holds true not only for New York employers, but also all employers located within the United States, as emphasized by the Court’s reliance on several U.S. Supreme Court decisions in dismissing the case for lack of standing.

Seyfarth Synopsis: Jerry Maatman, Seyfarth’s chair of the firm’s class action defense group, discusses an EEOC-initiated pregnancy discrimination lawsuit in which a federal district court in granted in part and denied in part the employer’s motion for summary judgment, finding there were several genuine issues of material fact surrounding an employee’s return to work from pregnancy leave, but holding that her constructive discharge claim lacked merit. Jerry analyzes the ruling and what it means for employers involved in EEOC litigation.

Thanks for tuning in!

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

Seyfarth Synopsis:  Following a jury trial in a federal court in Mississippi in an EEOC-initiated lawsuit alleging that Black adult club dancers were subjected to race discrimination, where their employer was found liable of wrongdoing, the Court granted the EEOC’s motion for injunctive relief, ordering the employer to comply with all seven of the non-monetary terms sought by the EEOC. See EEOC v. Danny’s Restaurant, LLC, No. 3:16-CV-00769, 2021 U.S. Dist. LEXIS 153633 (S.D. Miss. Aug. 16, 2021).

This ruling exemplifies that once a court reaches a finding of liability in an EEOC-initiated lawsuit, the Commission will be emboldened to seek and secure wide-ranging injunctive relief. Likewise, it shows the scope of injunctive relief that courts are apt to enter following a determination of liability.

Case Background

On September 20, 2016, on behalf of current and former adult club dancers (“Claimants”), the EEOC filed a lawsuit against Danny’s Downtown Cabaret location in Jackson, Mississippi, alleging it discriminated against them on the basis of their race. Id at *2. On October 1, 2018, the Court found Defendant subjected various Claimants to disparate terms and conditions of employment in violation of Title VII of the Civil Rights Act of 1964, as amended. The remaining issue of damages proceeded to a jury trial, which took place from May 6-13, 2019. At trial, the EEOC sought relief for the Claimants’ emotional pain, mental anguish, and lost wages. In addition, the EEOC sought punitive damages for Defendant’s alleged reckless or callous indifference to Claimants’ federally protected rights. The jury returned a verdict as to damages and awarded back pay, compensatory damages, and punitive damages. Thereafter, the EEOC moved for injunctive relief.

The Court’s Decision

The Court granted the EEOC’s motion for injunctive relief.  As a preliminary matter, after noting that the EEOC acts in the public interest and seeks remedies to vindicate the underlying policies of Title VII, the Court explained that the issuance of an injunction rests primarily in the informed discretion of a judge. Id. at *3 (citations and quotations omitted).  Defendant argued that injunctive relief was not warranted because the EEOC had offered no proof of the “likelihood of future violations” and that the “totality of the circumstances should be considered when evaluating the likelihood of future violations.” Id. at *4 (citations omitted).

After considering the trial evidence, the Court held that Defendant failed to meet its burden that recurring violations were unlikely. The Court noted that after one Claimant filed an EEOC charge, Defendant continued to discriminate against its Black dancers by implementing a Black dancer quota. Id. Managers were informed that when checking in dancers, they needed to include the race of the dancer. Finally, Defendant would limit the number of Black dancers who could work on a shift and inform managers that there were, “too many [B]lack girls,” which would result in Black dancers being sent home. Id. Accordingly, the Court held that the EEOC was entitled to injunctive relief.

The Court granted all seven of the components of injunctive relief sought by the EEOC. First, the Court held that the five-year term of the injunctive relief proposed by the EEOC was appropriate. Id. at *8. Second, the Court held that because Defendant did not object to the appointment of an Injunctive Relief Manager, and had over a year to identify and retain an HR consultant, a time period of 60 days to appoint or retain an Injunctive Relief Manager was reasonable.  Third, the Court ordered the Injunctive Relief Manager to review, revise, and post anti-discrimination policies on bulletin boards and locker rooms. Id. at *10-11. Fourth, the Court held that Defendant must provide EEO training for all employees, which is to be completed by the Injunctive Relief Manager or a third-party entity experienced in conducting EEO anti-discrimination trainings. Fifth, the Court held that the injunctive relief is binding on any purchaser of Defendant’s business. Sixth, the Court ordered Defendant to maintain a confidential, toll-free, employee hotline number for reporting concerns about discrimination, harassment or retaliation. Seventh, the Court required: (i) the Injunctive Relief Manager to submit reports to the EEOC relating to Defendant’s compliance with the Court’s Judgment of Injunctive Relief; and (ii) permission for the EEOC to review and/or request information related to compliance.  Accordingly, the Court granted the EEOC’s motion to implement all seven facets of injunctive relief.

Takeaways For Employers

The ruling in EEOC v. Danny’s Restaurant, LLC, demonstrates that the Commission will aggressively pursue expansive injunctive relief in the event it obtains a finding of liability from a court or jury.  Employers facing motions for injunctive relief brought by the EEOC can expect the Commission to use this ruling and others like it to persuade courts to exercise their authorized discretion in this area.  Accordingly, when appropriate, employers would be prudent to negotiate injunctive relief terms as early as possible, so as to avoid potentially onerous court-ordered non-monetary relief.

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

Seyfarth Synopsis:  In an EEOC-initiated pregnancy discrimination lawsuit, a federal district court in Florida granted in part and denied in part the employer’s motion for summary judgment, finding there were several genuine issues of material fact surrounding an employee’s return to work from pregnancy leave, but holding that her constructive discharge claim lacked merit.  EEOC v. NICE Systems, Inc., No. 20-CV-81021, 2021 U.S. Dist. LEXIS 146834 (S.D. Fla. Aug. 5, 2021).

The ruling is instructive for employers in terms of both reintegrating pregnant employees into the workforce, and potential litigation strategies for subsequent EEOC pregnancy discrimination litigation.

Case Background

The Intervenor Plaintiff worked for Defendant from August 2015 to March 2018 as a Sales Executive.  In April 2017, she informed her direct supervisor that she was pregnant.  Thereafter, the Intervenor Plaintiff complained of the discriminatory treatment to her employer’s Director of Human Resources, Vice President of Solution Sales, and Regional Vice President.  She also requested transfer to a different department, but the company was not able to accommodate that request.  On March 2, 2018, the Intervenor Plaintiff resigned.  Id. at *4.

The EEOC brought a lawsuit on behalf of the Intervenor Plaintiff alleging claims of pregnancy discrimination, retaliation, and constructive discharge in violation of Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act of 1978.  It alleged that the Intervenor Plaintiff’s employer discriminated against her on the basis of her pregnancy by undertaking four actions, including: (1) transferring her existing sales accounts to a newly hired employee on a different team; (2) refusing to assign a new sales lead in her territory; (3) invoking the “windfall” provision of her employment contract to cap the amount of commission she could receive on an audit/settlement that she contributed to before she went on maternity leave; and (4) upon her return from maternity leave, reassigning her Canada territory to a male colleague, and assigning to her a different territory.  Id. at *2-3.  Following discovery, Defendant moved for summary judgment as to all three claims.

The Court’s Decision

The Court granted Defendant’s motion for summary judgment as to the constructive discharge claim, but denied summary judgment as to the pregnancy discrimination and retaliation claims. First, the Court explained that to establish a Title VII disparate treatment discrimination claim, the EEOC must prove that the discrimination the claimant suffered constituted an adverse employment action, and that Defendant acted with discriminatory intent.  Id. at *7 (citations omitted).  Further, proof of discriminatory intent may be shown by either direct or circumstantial evidence.  Id. at *8.

Applied here, the Court noted that despite requesting a sales lead for approximately a month and a half prior to her maternity leave, the Intervenor Plaintiff’s supervisor did not assign one to her territory until almost two months after she returned from leave.  As such, the Court held that a reasonable jury could find that the loss of this income-producing opportunity constituted an adverse employment action.  Further, the Court found there was direct evidence of intentional discrimination when the supervisor announced on a conference call that he would not be assigning the Intervenor Plaintiff’s new sales leads because of her “condition,” in reference to her pregnancy.  Id. at *11.  Accordingly, the Court held that Defendant was not entitled to summary judgment on the EEOC’s discrimination claim.

Turning to the second claim asserting retaliation, the Court opined that the EEOC must prove that: (1) the claimant participated in an activity protected by Title VII; (2) she suffered from an action that might well have dissuaded a reasonable worker from making or supporting a charge of discrimination; and (3) there is a causal connection between the participation in the protected activity and the action. Id. at *12 (citations omitted).  Here, the EEOC alleged, in part, that Defendant retaliated against the Intervenor Plaintiff by paying her less commission on a deal than she should have received as a result of her maternity leave.  Defendant argued that the Intervenor Plaintiff did not originate the deal and participated minimally, and therefore she was not entitled to the sales commission.  The Court concluded that summary judgment on the retaliation claim would be improper, since there was a question of fact as to whether she was entitled to the commission bonus.

Finally, the Court granted Defendant’s motion for summary judgment regarding the constructive discharge claim.  The Court explained that to establish a claim for constructive discharge, the EEOC must demonstrate that the employer deliberately imposed conditions that were, “so intolerable that a reasonable person in [the employee’s position] would have been compelled to resign.” Id. at *18 (internal quotation marks and citation omitted).  Defendant argued that, based on the evidentiary record, no reasonable jury could find that the Intervenor Plaintiff’s work environment deteriorated to the point of becoming “intolerable.”  Id. at *19.  Viewing the totality of the evidence in Plaintiffs’ favor, the Court opined that the EEOC’s best theory for establishing the constructive discharge claim was that from the time that the Intervenor Plaintiff disclosed to her supervisor that she was pregnant, he took steps to siphon off income-producing opportunities from her sales pipeline, until her commission prospects were so diminished that she would have no choice but to resign.  However, the Court held that even this scenario was not enough to meet the, “intolerable  work environment,” standard.  Id. at *20-21. Therefore, the Court granted Defendant’s motion for summary judgment on the constructive discharge claim.

Implications For Employers

From a factual perspective, this ruling illustrates potential pitfalls for employers who elect to modify the working conditions of pregnant employees upon their return to work, as well as issues relative to non-streamlined compensation structures such as commissions and bonuses.

From a legal perspective, this ruling demonstrates that pregnancy discrimination lawsuits often contain complex factual considerations, resulting in courts’ hesitancy to grant summary judgment where, as here, a jury could find both parties’ positions to be meritorious.

Accordingly, prudent employers should establish thorough pregnancy leave policies that account for pre-leave and post-leave circumstances that may impact working conditions in their sectors.

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

By Gerald L. Maatman, Jr., Pamela Q. Devata, and John Drury

Seyfarth Synopsis:  On June 25, 2021, the U.S. Supreme Court reversed the Court of Appeals for the Ninth Circuit in TransUnion LLC v. Ramirez, No. 20-297 (U.S. June 25, 2021).  The Supreme Court held that the vast majority of class members did not suffer any “concrete harm” from TransUnion’s alleged violations of the federal Fair Credit Reporting Act (“FCRA”), and therefore did not have Article III standing.  While the decision is helpful to employers in that it restricts “no-harm” class actions in federal court, the practical impact may be an increase in similar claims filed in state courts with less demanding standing requirements.

Case Background

Defendant TransUnion prepared a credit report on Plaintiff.  An alert on the report inaccurately indicated that Plaintiff was on the terrorist watch list.  Plaintiff then requested a copy of his credit file from TransUnion, which responded in two separate mailings.  The first mailing included his credit file and summary of rights under the FCRA, but it did not mention the alert on his report.  The second mailing included the alert, but did not include a separate summary of rights.

Ramirez asserted multiple claims in a class action he filed against TransUnion under the FCRA.  First, he alleged that TransUnion violated the FCRA by failing to follow “reasonable procedures” to assure maximum possible accuracy of the class members’ credit files.  Second, he alleged that TransUnion violated the “full file” disclosure requirements of the FCRA by not providing class members with copies of their complete credit files and not providing the required summary of rights.

The district court certified a class of 8,185 and awarded over $60 million in damages.  Only 1,853 class members actually had their reports sent to a third party.  The Ninth Circuit subsequently affirmed in relevant part, holding that all class members had standing, but reducing the total award to about $40 million.

The Supreme Court’s Decision

The U.S. Supreme Court reversed the Ninth Circuit.  In a 5-4 decision, it held that only plaintiffs concretely harmed by a defendant’s statutory violation have Article III standing to seek damages against a private defendant in federal court.  In short, the majority opinion stated  “[n]o concrete harm, no standing.” Id. at 1.

The Supreme Court reinforced prior precedent that Article III standing requires a “concrete harm” even when there is a statutory violation and that “an injury in law is not an injury in fact.” Id. at 11. Applying the “concrete harm” requirement to the facts on appeal, the Supreme Court held that every class member must have Article III standing in order to recover individual damages, and that every class member bears the burden of establishing Article III standing with respect to each claim asserted.

The Supreme Court also addressed standing with respect to the “reasonable procedures” claim.  The Supreme Court indicated that it had “no trouble” concluding that the 1,853 class members whose credit reports actually were disseminated to third parties showed a concrete harm and had Article III standing.  Id. at 17. However, it was a “different story” for the remaining 6,332 class members, whose credit files were never sent to a third party. Id. at 18. The Supreme Court held that the “mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm” and fails to confer Article III standing. Id. at 19.  The Supreme Court also rejected the argument that the “risk of future harm” was enough to satisfy Article III’s concrete harm requirement for the remaining 6,332 class members.  Id. at 20-23.

Finally, the Supreme Court addressed standing with respect to the “full file” claims. Id. at 24-27. Applying the “concrete harm” standard, the Supreme Court held that no one in the class (except Ramirez) had standing to recover for what it concluded was a “formatting” violation. Id. In so holding, the Supreme Court also rejected the argument that an actionable “informational injury” existed because the “plaintiffs did not allege that they failed to receive any required information,” but instead “argued only that they received it in the wrong format.” Id. at 26.

Implications for Employers

This Ramirez decision has the potential to significantly limit “no-harm” class actions in federal court.  In the last several years, employers have faced a significant increase in class actions under the FCRA, with many claims directed at technical statutory violations that arguably cause no harm to anyone, much less a “concrete harm.”  Beyond the FCRA or the specific claims at issue in Ramirez, many other consumer protection statutes involve, at most, allegations of intangible “informational” or “privacy” injuries that may now fail to confer Article III standing.

That being said, the Supreme Court’s opinion is not a panacea against “no-harm” class actions based on statutory violations.  Ramirez only addressed federal court standing under Article III.  Many state courts have more lenient standing requirements – in particular, California, Illinois, and New York.  There already had been a steady increase in class actions filed in state courts with concurrent jurisdiction over federal statutes such as the FCRA.  As a result, employers should expect Ramirez to result in more class actions being filed in state court.

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

Seyfarth Synopsis: In a recent case out of the U.S. District Court for the Southern District of Texas, the Court dismissed wrongful termination and violation of public policy claims brought by employees refusing an employer’s mandate to receive the COVID-19 vaccine. The case is Bridges v. Houston Methodist Hosp., No. 21- CIV-211774, 2021 WL 2399994, at *1 (S.D. Tex. June 12, 2021). It is the first court ruling of its kind, and is a must-read for all employers navigating the return-to-work and COVID-19 vaccine landscapes.

Case Background

Beginning in April 2021, Defendant Houston Methodist Hospital announced a policy requiring its employees to be vaccinated against the COVID-19 pandemic at its own expense. Following the announcement of the vaccine requirement, 117 employees, comprising a small minority of Houston Methodist’s workforce, filed suit to block the vaccine requirement, alleging that the Hospital was unlawfully requiring its employees to receive vaccines, that any terminations as a result of such mandate would be wrongful, and that the Hospital was violating federal law. The Hospital moved to dismiss the case.

The Court’s Opinion

The Court granted the Hospital’s motion and dismissed the plaintiffs’ claims in their entirety.

As to plaintiffs’ claims of wrongful termination under Texas law, the Court opined that Texas only protects employees from termination if they refuse to commit a criminal act. The Court reasoned that receiving the COVID-19 vaccine is not an illegal act and emphasized that the Equal Employment Opportunity Commission (“EEOC”) has declared that employers can require employees to be vaccinated against COVID-19 as long as they allow for reasonable accommodations for employees with disabilities or sincerely held religious beliefs. Based on these considerations, the Court summarily dismissed the plaintiffs’ wrongful termination claims.

The Court then addressed the plaintiffs’ request for the Court to declare the vaccine mandate invalid because it violated federal law. The plaintiffs argued that individuals cannot be required to receive “unapproved” medicine and that no available COVID-19 vaccines have been fully approved by the Food and Drug Administration. The plaintiffs further argued that the vaccine requirement forced the Hospital’s employees to become “human subjects” in a trial of the vaccine and likened the vaccine policy to the forced medical experimentation during the Holocaust.

Calling the plaintiffs’ comparison “reprehensible,” the Court rejected the plaintiffs’ arguments, holding that they misapplied the federal laws relative to human trials for medications, misconstrued facts in the case, and were in no way forced or coerced to receive the vaccine. Ultimately, the Court concluded that, if the employees did not want to receive the vaccine, they “simply need to work somewhere else.” Id. at *2. For these reasons, the Court dismissed the remainder of the plaintiffs’ claims.

Implications

The Court’s decision in Bridges is notable as the first to uphold an employer’s policy of requiring its employees to receive the COVID-19 vaccine.  Although the EEOC has opined that employers may require the vaccine, Bridges provides some additional clarification on the issue.

Nonetheless, there are still several considerations surrounding this issue, and private employers should identify the extent to which they might require COVID-19 vaccines and how they will approach difficult issues where individuals are hesitant or unwilling to participate.