Seyfarth Exclusive! Live Webinar

You are invited to join Paige Smith of Bloomberg Law and Seyfarth Partner Gerald (“Jerry”) L. Maatman, Jr. for a virtual panel discussion marking the release and book launch of Seyfarth’s 18th Annual Workplace Class Action Litigation Report. Please register here to join this event!

As we move into a shifting landscape of policy and litigation developments in 2022, employers are seeking insights to prepare for the challenges of the future of complex workplace litigation. At this important event, the presenters will provide their analyses of significant trends in workplace class action litigation and government enforcement actions, and a look ahead to likely developments in 2022. Jerry will also discuss the top class action rulings in 2021 and hot topics for 2022, including key trends in class certification, government enforcement litigation, and COVID-19 litigation.

Webinar:

Tuesday, February 1st

Noon – 1 p.m. Eastern
11 a.m. – Noon Central
10 a.m. – 11 a.m. Mountain
9 a.m. – 10 a.m. Pacific

Speakers:

 

 

 

 

 

Paige Smith is a Reporter with Bloomberg Law, covering labor and employment policy on Capitol Hill. She previously covered the Equal Employment Opportunity Commission and the Labor Department’s Office of Federal Contract Compliance Programs, as well as reporting on various employment law-related news.

 

 

 

 

 

Gerald L. Maatman, Jr. is one of Seyfarth’s preeminent class action litigators, co-chair of our Class Action Litigation Practice Group, and the Editor of the Workplace Class Action Litigation Report, which is recognized as the nation’s most complete guide to workplace-related complex litigation.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: Seyfarth’s 18th Annual Workplace Class Action Litigation Report analyzes 1,607 rulings and is our most comprehensive Report ever at over 840 pages.

Click here to access the microsite featuring all the Report highlights. You can read about the five major trends of the past year, order your copy of the eBook, and download Chapters 1 and 2 on the 2022 Executive Summary and key class action settlements.

The Report has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We are humbled and honored by the recent review of our 2021 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation.” Further, the article noted that “No practitioner who deals with employment claims, whether as an underwriter, broker, risk manager, consultant, or attorney should be without it.”

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

The 2022 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2021 for employment discrimination, wage & hour, ERISA class actions, and statutory workplace laws, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

We hope our loyal blog readers will enjoy it!

Executive Summary

Over the past decade, workplace class action litigation has exploded relative to its prevalence and complexity. The class action mechanism provides skilled plaintiffs’ lawyers a tool to attempt to inflate the size and risk of litigation exponentially. The plaintiffs’ class action bar has seized on and expanded its use of this tool to grow its practice and has adopted an array of tactics to command and build increasing pressure and leverage.

Today, workplace class actions remain at the top of the list of challenges that business leaders face. An adverse judgment in a class action has the potential to bankrupt a company. Adverse publicity from a threatened or ongoing class action has the potential to eviscerate good will and market share. At the same time, negotiated resolutions have the potential to spawn copy-cat class actions and follow-on claims from multiple groups of plaintiffs’ lawyers who challenge corporate policies and practices in numerous jurisdictions at the same time or in succession. Compounding these risks, federal and state legislatures and administrative agencies continually add to a patchwork quilt of compliance challenges that shift and change with each administration, thereby bringing increased unpredictability.

Ever-attuned to the challenges facing business leaders, the plaintiffs’ class action bar has leveraged these risks into increasingly large pay-outs. Skilled plaintiffs’ class action lawyers and governmental enforcement litigators have continued to develop new theories and approaches to the successful prosecution of complex workplace litigation and enforcement lawsuits and have continued to convert the size and uncertainty of such litigation into settlements at increasing rates. This phenomenon was manifest in 2021 as the aggregate value of workplace class action settlements ballooned to an all-time high.

As a result, managing and combating workplace class action threats commands an evolving and strategic approach. The events of the past year demonstrate that the array of problems facing businesses are continuing to change and to become more complex. During 2021, the COVID-19 pandemic continued to inspire new laws and regulations, which led to new types of workplace issues and new class theories that are likely to influence the fabric of complex workplace litigation for years to come. The COVID-19 “return to work” effort, remote and hybrid work arrangements, and vaccination mandates spawned new challenges and new class action risks.

The impact of the pro-worker policies of the Biden Administration also took hold over the past year as the agencies under its charge effectively reversed many of the pro-business rules adopted by the Trump Administration. The Biden Administration rolled out policy changes that are continuing to take shape through executive orders, legislative efforts, agency rulemaking, and enforcement litigation. Contrary to the pro-business approach of the Trump Administration, many of these efforts expanded the rights, remedies, and procedural avenues available to workers and government enforcement agencies, and created an array of litigation and compliance challenges for businesses.

As we move into 2022 and beyond, employers should expect that the changing workplace, coupled with these stark reversals in policy, will expand enforcement efforts and have a cascading impact on private class action litigation. The combination of these factors presents increasing challenges for businesses to integrate their risk mitigation and litigation strategies to navigate these exposures.

While predictions about the future of workplace class action litigation may cover a wide array of potential outcomes, one sure bet is that the plaintiffs’ class action bar will continue to evolve and adapt to changes in legislation, agency rulemaking, and case law precedents. As a result, class action litigation will remain fluid and dynamic, and corporate America will continue to face new litigation challenges in the year to come.

An overview of workplace class action litigation developments in 2021 reveals five key trends.

Blockbuster Settlement Numbers

First, the aggregate monetary value of workplace class action settlements exploded in 2021 to an all-time high, as plaintiffs’ lawyers and government enforcement agencies monetarized their claims at the highest values we have ever tracked. Many employers and commentators alike expected the pandemic to depress the size and pace of settlements. Instead, the numbers show that the plaintiffs’ bar was successful in converting case filings into significant settlement numbers at higher levels during the pandemic than in any of the preceding years. After settlement numbers reached a high point in 2017, they plummeted to their lowest level ever in 2018 before experiencing a mild recovery in 2019. In 2020, settlement numbers continued their upward trend in several areas, signaling a return to prominence of these bet-the-company cases. This momentum continued in 2021, as class action settlement recoveries reached a new threshold. The top 10 settlements in various employment-related class action categories exceeded $3.62 billion in 2021, compared to $1.58 billion in 2020, $1.34 billion in 2019, and $1.32 billion in 2018. For wage & hour class actions, the monetary value of the top 10 private plaintiff settlements entered into or paid in 2021 reached $641.3 million. This amount represents a monumental increase from the 2020 total of $294.6 million, as well as the 2019 total of $449.05 million. For ERISA class actions, the monetary value of the top 10 private plaintiff settlements entered into or paid in 2021 totaled a whopping $837.3 million, more than double the 2020 total of $380.10 million and the 2019 total of $376.35 million. The only areas of decline were private-plaintiff employment discrimination and government enforcement action settlements. The top 10 employment discrimination settlements garnered $323.45 million in 2021, as compared to settlement figures of $422.68 in 2020 and $137.35 million in 2019, and the top 10 government enforcement action settlements garnered $146.38 million, a sharp decline from the 2020 total of $241 million, but a significant jump from the 2019 total of $57.52 million.

Deluge Of Wage & Hour Litigation

Second, wage & hour litigation remained a sweet spot for the plaintiffs’ class action bar as it achieved high rates of success at both the certification and decertification stages. Based on sheer volume and statistical numbers, workers certified more class and collective actions in the wage & hour space in 2021 as compared to any other area of workplace law. While evolving case law precedents and new defense approaches resulted in many good outcomes for employers opposing class and collective action certification requests in 2021, the plaintiffs’ bar sustained its high rate of success on first-stage conditional certification motions in 2021 and markedly improved its rate of success on second-stage decertification motions. Perhaps due to the backlog resulting from pandemic-related court closures, the overall number of rulings increased in 2021, and plaintiffs prevailed on those first-stage motions at a rate exceeded only by the rate at which they prevailed in 2020. Of the 298 FLSA wage & hour certification decisions in 2021, plaintiffs won 226 of 279 conditional certification rulings (approximately 81%). As to second-stage decertification motions, plaintiffs prevailed at a similar rate in 2021 than in other years of the past decade. Plaintiffs lost 10 of 19 decertification motions (approximately 53%). By comparison, employers saw 286 wage & hour certification decisions in 2020, and plaintiffs won 231 of 274 conditional certification motions (approximately 84%) and lost six out of 12 decertification rulings (approximately 50%). By further comparison, of the 267 wage & hour certification decisions in 2019, plaintiffs won 198 of 243 conditional certification rulings (approximately 81%), and lost 14 of 24 decertification rulings (approximately 42%). By further comparison, there were 273 wage & hour certification decisions in 2018, where plaintiffs won 196 of 248 conditional certification rulings (approximately 79%) and lost 13 of 25 decertification rulings (approximately 48%). In sum, the plaintiffs’ bar successfully secured certification of wage & hour actions at an astounding rate in 2021, while their odds of clearing the decertification hurdle decreased slightly to 47%. We expect these numbers to rise ever further in 2022 with a more employee-friendly U.S. Department of Labor actively working to eliminate pro-business rules and shifting its regulatory focus toward a plaintiff-friendly agenda.

More Aggressive Government Enforcement Litigation

Third, the change of leadership in the White House translated directly to reversals in administrative agendas, as the Biden Administration’s enforcement authorities took steps to eliminate pro-business rules of the Trump Administration, thereby fueling skepticism regarding the continued weight of agency determinations. Voters elected to turn the White House from red to blue in November 2020 and, as a result, changes in numerous areas rolled out over 2021 that reversed Trump-era pro-business policies and sought to expand worker rights. The Department of Labor (“DOL”), in particular, withdrew or rescinded Trump-era rules, including the tip credit, joint employer, and independent contractor rules promulgated by the DOL during the Trump Administration. For example, after amending the DOL’s Field Operations Handbook in February 2019, the Trump DOL undertook formal rulemaking and, in late 2020, issued a final rule that would have allowed employers to take the tip credit for duties performed “for a reasonable time immediately before or after” a tipped duty. Before that final rule took effect, the Biden Administration delayed its effective date and then rescinded and replaced it with a more complicated, worker-friendly final rule that limited use of the tip credit effective December 28, 2021. Similarly, effective on March 16, 2020, the Trump DOL established a rule that set forth a four-factor balancing test for determining when a business would be considered the “employer” of a worker who simultaneously performs work for another business. The Biden DOL rescinded the Trump DOL rule, effective September 28, 2021, in favor of the more expansive and less predictable “economic reality” test applied by some courts. While the DOL acted swiftly to reverse course on many fronts with the change of administrations, other agencies continue to operate under Trump-appointed majorities and, as a result, have been slower to pivot. Likewise, the chair of the EEOC shifted with President Biden’s inauguration, and major rule shifts came through other avenues. On June 30, 2021, for example, President Biden signed a joint resolution narrowly passed by Congress to repeal a Trump-era rule that would have increased the EEOC’s information-sharing requirements during the statutorily mandated conciliation process. The agency’s filings over the past year reflect this state of affairs. For instance, after more than doubling its inventory of systemic filings between FY 2016 and FY 2018 (with 18 in FY 2016, 30 in FY 2017, and 37 in FY 2018), the EEOC’s systemic filings dropped to 17 in FY 2019, 13 in FY 2020, and 13 in FY 2021. Total filings followed a similar trajectory, with 136 in FY 2016, 202 in FY 2017, 217 in FY 2018, but only 149 in FY 2019, 101 in FY 2020, and 114 in FY in 2021. When the EEOC’s current leadership shifts away from a majority of Trump-appointed Commissioners in mid-2022, employers should anticipate a stark shift in the EEOC’s litigation enforcement program.

Continuing Impact Of COVID-19 On Class Actions

Fourth, COVID-19 class action litigation became more pervasive in reaching across new industries and spawning new challenges on the workplace class action front. The COVID-19 pandemic had a significant, continuing impact on all aspects of life in 2021. Its impact extended to the legal system in general and workplace class actions in particular. As we reported last year, in 2020, as state and local governments responded to the COVID-19 threat, many employers moved their employees to tele-work or work-from-home arrangements, many companies laid off or furloughed workers, and many businesses shut down or postponed critical operations. In 2021, as vaccines became widely available and state and local governments continued to manage the COVID-19 threat, many employers attempted to move their employees to “return to work” or “hybrid” work arrangements. Such developments prompted federal regulators to enact vaccine-or-test mandates and fueled employers to adopt or expand health screenings, temperature check protocols, and mandatory vaccination policies. These steps, in turn, led to waves of controversy as workplace class actions brought by states, employee advocates, unions, and employer groups erupted over regulatory actions and employer policies. Litigants challenged agency rule-making contending that it exceeded executive authority to regulate conditions of employment. These challenges have met mixed results, as courts have granted approximately 41% of requests for temporary restraining orders or preliminary injunctions to date. Other litigants have challenged employer policies on various grounds, including on the bases that they allegedly discriminated against employees by failing to provide disability or religious accommodations, or retaliated against workers who expressed COVID-related concerns or sought such accommodations. Such challenges have met a lower rate of success, as courts have granted approximately 82% of motions to dismiss such class claims in whole or part. In sum, the pandemic has continued to spike class actions (of all varieties) and litigation over all types of workplace issues. Employers are apt to see these workplace class actions continue to expand and morph in 2022 as the pandemic endures.

Assault On Arbitration Defenses

Fifth, workplace arbitration programs continued to influence the nature of class action litigation and shift the types of claims filed in 2021 as the plaintiffs’ bar continued to find ways to work around such obstacles. As employers clawed for cover from the increasing weight of workplace class action litigation in recent years, workplace arbitration continued to gain steam, aided by the U.S. Supreme Court’s transformative ruling in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). Epic Systems reaffirmed that the Federal Arbitration Act requires courts to enforce agreements to arbitrate according to their terms, including mandatory agreements that provide for individual proceedings and include class action waivers. Bolstered by such precedents, more than half of non-union, private-sector employers and more than two-thirds of large employers have adopted mandatory arbitration agreements. Such programs have continued to shift class action litigation dynamics in critical ways as they have led to more front-end attacks on proposed class and collective actions and, as the result of such attacks, to the defense bar dismantling more workplace class and collective actions by fracturing those proceedings and diverting them into individual arbitrations. Over the past year, plaintiffs’ class action lawyers continued to attempt to find ways to attempt to end-run such agreements. These efforts took shape on multiple fronts. In 2021, the plaintiffs’ bar continued to shift its efforts toward claims more apt to be immune from such programs or toward populations less likely to have entered into agreements with defendants. This trend is illustrated by the spike in filings based on state laws that are not currently subject to arbitration, like the California Private Attorneys’ General Act (“PAGA”), which filings have quadrupled over the past decade and continued their upward trajectory during 2021. On a different front, advocates for workers and labor redoubled their efforts to shift this landscape by backing new legislation that would amend federal laws to ban mandatory arbitration agreements, depending on the bill, for employment, consumer, antitrust, civil rights, or sexual harassment disputes. In light of current administrative priorities, the future remains anything but clear as to whether arbitration programs will remain viable tools to counter proposed workplace class actions in the face of these continued attacks on Epic Systems.

Implications For Employers

In the ever-changing economy and patchwork quilt of laws and regulations, corporations face new, unique, and challenging litigation risks and legal compliance problems.

Adding to this challenge, the one constant in workplace class action litigation is change. Continuing a trend from 2020, 2021 was a year of great change, inside and outside of the workplace. As these issues play out in 2022, additional chapters in the class action playbook will be written.

The private plaintiffs’ bar are apt to be equally, if not more, aggressive in 2022 in bringing class action and collective action litigation against employers. They are likely to be aided by new worker-friendly rulemaking emanating from agencies within the executive branch.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2022.

By Jennifer A. Riley and Alex W. Karasik

Seyfarth SynopsisThis week the U.S. Court of Appeals for the Seventh Circuit issued its long-awaited decision in Cothron v. White Castle Sys., No. 20-3202, 2021 U.S. App. LEXIS 37593 (7th Cir. Dec. 20, 2021), on whether claims asserted under Sections 15(b) and 15(d) of the Illinois Biometric Information Protection Act (“BIPA”) accrue only once upon the initial collection or disclosure of biometric information, or each time a private entity collects or discloses biometric information.  In lieu of answering the question, upon Plaintiff’s request, the Seventh Circuit certified the issue to the Illinois Supreme Court.

This ruling is a major development in the BIPA class action landscape, as the Illinois Supreme Court’s forthcoming ruling will likely have a major impact on statute of limitations defenses and damages calculations.

Case Background

Plaintiff alleged that shortly after she began working for White Castle in 2004, White Castle introduced a system that required employees to scan their fingerprints to access pay stubs and work computers.  Based on White Castle’s use of that system, Plaintiff alleged that White Castle violated Sections 15(b) and 15(d) of the BIPA.  Section 15(b) provides that a private entity may not “collect, capture, purchase, receive through trade, or otherwise obtain” a person’s biometric data without first providing notice to and receiving consent from the person.  Section 15(d) provides that a private entity may not “disclose, redisclose, or otherwise disseminate” biometric data without consent. Plaintiff brought a class action asserting these claims.

White Castle moved for judgment on the pleadings, arguing that the suit was untimely since the claim accrued in 2008 when the plaintiff’s first fingerprint scan occurred after the BIPA went into effect  Id. at 2.  Plaintiff countered that every unauthorized finger-print scan amounted to a separate violation of the statute, so a new claim accrued with each scan.  As such, Plaintiff argued that the lawsuit was timely for the scans within the limitations period.

The District Court rejected White Castle’s “one time only” theory of claim accrual and denied the motion.  Id.  However, the District Court found the question close enough to warrant an interlocutory appeal under 28 U.S.C. § 1292(b).  During the appeal, Plaintiff thereafter asked the Seventh Circuit to certify the question to the Illinois Supreme Court.

The Seventh Circuit’s Ruling

The Seventh Circuit agreed to Plaintiff’s request to certify the question to the Illinois Supreme Court, and directed it to answer the following question:  “Do section 15(b) and 15(d) claims accrue each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, or only upon the first scan and first transmission?”  Id. at *18-19.

White Castle argued that the District Court erred in denying its motion for judgment on the pleadings for two reasons.  First, White Castle invoked a special accrual principle applicable in cases involving defamation and other privacy torts known as the single-publication rule.  Second, White Castle argued that the Illinois Supreme Court’s reasoning in Rosenbach v. Six Flags 129 N.E.3d 1197, 1200 (Ill. 2019), actually pointed to the opposite conclusion, i.e., that Plaintiff was “aggrieved” only by the initial violations of sections 15(b) and 15(d).  Id. at 10.  The Seventh Circuit held that while White Castle offered “a plausible reading of the statute,” the relevant statutory language “does not clearly say that a claim accrues only once.”  Id. at 14.

Further, the Seventh Circuit opined that White Castle’s “one-and-done theory makes sense if we accept that subsequent collections or disclosures of biometric data do not work a harm that the Act seeks to prevent. And more importantly, focusing on what it means to be ‘aggrieved’ by a violation of the statute gives this theory a plausible hook in the statutory text.”  Id. at 14-15. However, the Seventh Circuit also observed that White Castle’s “theory also has some notable weak spots. The premise — two violations aren’t worse than one — may simply be wrong.”  Id.

Accordingly, the Seventh Circuit held that “the practical implications of either side’s interpretation, to the extent that Illinois courts would weigh them, do not decisively tilt one way or the other.”  Id. at 16.  The Seventh Circuit thus certified this issue to the Illinois Supreme Court.

Implications For Employers

Given that the BIPA statute does not have an explicit statute of limitations, the issue of claim-accrual may be dispositive for many pending and future BIPA class actions.  Further, the viability of recovering for each individual scan (as opposed to only the first scan) could have major implications for damages calculations.  Accordingly, employers should closely monitor this Illinois Supreme Court’s review of this case.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: Happy Holidays to all of our loyal readers of the Workplace Class Action Blog! Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report. We anticipate going to press in early January, and launching the 2022 Report to our readers from our Blog.

This will be our 18th Annual Report, and the biggest yet with analysis of over 1,560 class certification rulings from federal and state courts in 2021. The Report will be available for download as an E-Book too.

We are humbled and honored by the recent review of our 2021 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation.” Further, the article noted that “No practitioner who deals with employment claims, whether as an underwriter, broker, risk manager, consultant, or attorney should be without it.”

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

The 2022 Report will analyze rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2020 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

With the country continuing to battle COVID-19 this year, workplace class action litigation took some interesting and unexpected turns.

Information on downloading your copy of the 2022 Report will be available on our blog in early January. Happy Holidays to everyone!

Explosion, Fire, Forest, NatureBy Gerald L. Maatman, Jr.

 Seyfarth Synopsis: On an annual basis the American Tort Reform Association (“ATRA”) publishes its “Judicial Hellholes Report.” The Report focuses on litigation issues in state court systems and challenges for corporate defendants in the fair and unbiased administration of justice. The ATRA recently published its 2021-2022 Report and California is identified as the most disadvantageous jurisdiction in the country for corporate defendants – a copy is here and the executive summary is here.

The Judicial Hellholes Report is an important read for corporate counsel facing class action litigation because it identifies jurisdictions that are generally unfavorable to defendants. The Report defines a “judicial hellhole” as a jurisdiction where judges in civil cases systematically apply laws and procedures in an unfair and unbalanced manner, generally to the disadvantage of defendants. The Report is a “must read” for anyone litigating class actions and making decisions about venue strategy.

The 2021 Hellholes

In its recently released annual report, the ATRA identified 8 jurisdictions on its 2021 hellholes list – which, in order, include: (1) California (with the plaintiffs’ bar taking advantage of unique California laws like the Private Attorney General Act); (2) New York City (particularly regarding Americans With Disabilities Act accessibility claims and an activist attorney general battling climate change with energy companies), (3) Georgia; (4) Philadelphia, which fell from the number 1 spot last year (especially in the Philadelphia Court of Common Pleas and the Supreme Court of Pennsylvania), (5) Illinois (especially Cook, St. Clair, and Madison counties and regarding asbestos litigation and Illinois Biometric Information Privacy Act class actions), (6) Louisiana (including deceptive lawsuit advertising practices and coastal litigation), (7) St. Louis, Missouri, and (8) South Carolina (particularly in asbestos litigation).

According to the ATRA’s analysis, these venues are less than optimal for corporate defendants and often attract plaintiffs’ attorneys, particularly for the filing of class action lawsuits. Therefore, corporate counsel should take particular care if they encounter a class action lawsuit filed in one of these venues.

The 2022 “Watch List”

The ATRA also included 5 jurisdictions on its “watch list,” including Florida (the ATRA noted that Florida has been making strides to improve its liability climate, however, the trial bar is still able to capitalize on liberal judges and rulings in this jurisdiction), Colorado, Texas (a newcomer to the list, added because of its prohibition on introducing evidence about different products and dissimilar accidents), Maryland (due to unstable medical malpractice climate and backlog of asbestos lawsuits), and Minnesota (dropping from the Hellholes list for the first time in three years, mostly due to COVID-19 inactivity rather than any reforms).

In addition, the ATRA recognized that several Courts made significant positive improvements this year, and 20 states created laws protecting against meritless claims brought in connection with the COVID-19 pandemic.

Implications For Employers

The Judicial Hellholes Report dovetails with the experience of employers in high-stakes workplace class actions, as California, New York, Georgia, Pennsylvania, Illinois, Louisiana, Missouri, and South Carolina are among the leading states where Plaintiffs’ lawyers file employment discrimination and wage & hour class actions. Many of these jurisdictions are also becoming a hotbed for privacy and accessibility-related lawsuits. These jurisdictions are linked by class certification standards that are more plaintiff-friendly and by generous damages recovery possibilities under state laws.

We are pleased to present our latest vlog featuring Jennifer Riley and Alex Karasik, members of Seyfarth’s Biometric Privacy Class Action Team, with their thoughts, analysis, and practical guidance on workplace privacy laws and regulations affecting employers in Illinois, New York City, California, and elsewhere in the United States. Join our panel of experts for a discussion on BIPA and similar privacy legislation, as well details on the recent spike in BIPA-related class action litigation, the biggest settlements seen so far, and information for employers on biometric compliance. Be on the lookout for our forthcoming Class Action Privacy Primer and webinar for in-depth coverage of biometric privacy laws and issues, including trends, filing numbers, proposed legislation, and upcoming decisions to watch, due out early next year.

By Matthew J. Gagnon and Sarah K. Bauman

Seyfarth Synopsis: On November 17, 2021, the EEOC updated its COVID-19 technical assistance resources to add guidance on pandemic-based employer retaliation and interference.  The updated guidelines clarify the rights of employees who engage in EEO protected activity.  Key for employers are the numerous examples of what the EEOC deems retaliation in this specific context.  Notably, this update is also consistent with the Commission’s recent stated objective (previously discussed here) of broadening its outreach and improving its technology for purposes of promoting effective communication and understanding of the U.S. workforce. Employers would be well served to review the new guidance.

COVID-19 Technical Assistance Generally

The EEOC’s COVID-19 technical assistance has explained and synthesized on a rolling basis the applicability of the federal anti-discrimination laws to the COVID-19 pandemic.  The technical assistance seeks to inform employees of their rights with respect to such laws while addressing employer concerns stemming from the pandemic.  Presently consisting of 13 sections (available here), this assistance program addresses issues such as confidentiality of medical information (Section B), hiring and onboarding (Section C), return to work (Section G), and vaccinations (Section L).  For example, the Commission clarifies that employers may not direct at-risk applicants, such as those who are 65 or older or pregnant, to postpone their start date or revoke an offer of acceptance.  Employers may, however, choose to allow telework or discuss the option of a postponed start date.  In sum, the technical assistance provides valuable guidance to employers on how to balance necessary COVID-19 precautions with employees’ rights to be free from workplace discrimination.

Recent Update On Retaliation

The EEO laws, such as Title VII, the Equal Pay Act, the Age Discrimination in Employment Act, and the Americans With Disabilities Act (“ADA”), prohibit employers from retaliating against employees for engaging in “protective activity” — i.e., asserting their rights under such laws.  Protected activity generally takes many forms, the most typical being an employee’s complaint to a supervisor about workplace harassment, being a witness to such harassment and reporting it on the victim’s behalf, or filing a charge or lawsuit against the employer.  Retaliation includes any employer action in response to EEO activity that could deter a reasonable person from engaging in protected EEO activity, such as termination, denial of a promotion or benefits, or involuntary transfers.  To be actionable, the employer’s response must be a result of the protected activity.

Additionally, the ADA specifically prohibits not only retaliation, but also “interference” with an individual’s exercise of ADA rights.  For example, employers may not coerce, intimidate, or threaten an employee who seeks to exercise his or her rights under the ADA.

In addition, available here), the EEOC sets forth several scenarios, specific to the COVID-19 context, which constitute retaliation in violation of federal anti-discrimination laws.  For example, a supervisor may not give a false negative job reference to punish a former employee for making an EEOC complaint or refuse to hire an applicant because of the applicant’s EEOC complaint against a prior employer.  The EEO laws also prohibit retaliation against employees for reporting harassing workplace comments about their religious reasons for not being vaccinated.  Further, employers may not, for example, transfer an employee to a less-desirable role for requesting continued telework as a disability accommodation after a workplace reopens.

The Commission also explains that requests for accommodation are protected activity even if the individual is not legally entitled to an accommodation.  In other words, employers may not retaliate against an employee if that employee requests an accommodation but the employee’s medical condition, for instance, is not ultimately deemed a disability.  Such protected activities could come in the form of requesting to modify one’s protective gear (like a mask) so that it can be worn with religious garb, or requesting to be exempt from an employer’s vaccination requirement for religious reasons.

Implications For Employers

The Commission has stated that retaliation is the most frequently alleged form of discrimination in EEOC charges and has been for many years.  That said, employers should be aware of the specific circumstances that could give rise to such claims during these unprecedented times.  Increased efforts should be geared not only towards minimizing the health-risks of COVID-19, but also towards protecting their employees from discrimination derived from pandemic-related issues.  Doing so could significantly reduce an employer’s potential for liability under the EEO laws.

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

Seyfarth Synopsis:  On November 16, 2021, the EEOC released its Agency Financial Report (“AFR”) for Fiscal Year 2021. The AFR is a data compilation regarding the EEOC’s financial health, initiatives, and guiding principles. This year’s edition marks the third version of the publication, following the release of the inaugural AFR in FY 2019.

The AFR is a “must read” for employers. It is an important guide to how the EEOC spent its budget in FY 2021, thereby providing a useful roadmap for the Commission’s strategic direction and litigation enforcement priorities in FY 2022. 

A Decline In Monetary Recoveries

As we previously reported here, FY 2021 represented a return to form for the EEOC following a year of transition, stemming from leadership changes and the COVID-19 pandemic.  While lawsuit filings surged, especially at the end of the fiscal year in September, the EEOC’s monetary recoveries dropped by $51 million, from a record setting $534.4 million in FY 2020 to approximately $484 million in FY 2021.  This more closely resembled the $486 million recovered in FY 2019.

However, the amount recovered through mediations, conciliations, and settlements increased from $333.2 million in FY 2020 to approximately $350.7 million in FY 2021, nearly mirroring the $354 million total recovered in FY 2019.  The $350.7 million total was recovered on behalf of 11,067 victims of employment discrimination in the private sector and state and local governments.  The EEOC also announced that more than $100 million was recovered on behalf of 2,169 federal employees and applicants.  The AFR also noted that the EEOC recovered $34 million for 1,920 individuals as a direct result of litigation resolutions, a sharp decline from the $106 million total in FY 2020 and $39.1 million in FY 2019.

Prioritizing Alternative Dispute Resolution

With the pandemic lingering into FY 2021, the EEOC continued its steadfast commitment to Alternative Dispute Resolution (“ADR”) programs, including virtual mediation and conciliation proceedings.  In FY 2021, the EEOC successfully resolved 41.1% of its conciliations, and 51.7% of those that were resolved included claims relative to involved one or more Strategic Enforcement Plan priority areas.  The EEOC conducted 6,644 private sector mediations, resulting in $176.6 million in benefits to charging parties.  This represented a significant increase from the $156.6 million that was recovered in mediations during FY 2020.  In addition, 639 federal sector mediation resulted in $8.4 million in recoveries for federal employees and applicants.

Other Key Developments And Initiatives

After the EEOC’s backlog of pending charges was reduced in FY 2019 and FY 2020, the backlog endured a slight 2.0% increase in FY 2021, going from 41,951 charges to 42,811 charges. Nonetheless, the Commission frequently communicated with the workforce in FY 2021, handling more than 383,500 calls from the public and more than 52,000 e-mails, a 40% increase in volume over FY 2020.  The EEOC reduced federal sector hearings inventory for the fourth consecutive year, as well as reducing the number of federal sector appeals that were more than 500 days old.

In line with the workforce’s rapid technological evolution, the EEOC made substantial technological improvements in FY 2021.  The Commission upgraded its data collection and analytics tools, which the EEOC indicated will facilitate data-driven decision making.  Two new web-enabled tools were launched, including “EEOC Explore” and “Annual Report Dashboard,” which are designed to provide user transparency into EEOC enforcement data and statistics.

Finally, despite pandemic-related restrictions for live events, the EEOC was highly active in the employment community.  The Commission conducted more than 2,325 outreach events for more than 254,830 individuals nationwide.  Those included 313 outreach events related to COVID-19, which reached 38,827 individuals.  In addition, the EEOC hosted 186 outreach event related to LGBTQ+ matters, which had 19,208 attendees.  Partnering with organizations that work with vulnerable workers, the EEOC conducted 649 outreach events that reached 105,943 attendees.  The EEOC also held its first-evert, all virtual public hearing to explore workplace civil rights implications of the COVID-19 pandemic, which was attended by 2,000 people.

Implications For Employers

As the workforce has adapted to the pandemic, the EEOC reciprocated this transition by continuing to enhance its virtual ADR program and use of data-driven analytics to guide its processes.  The AFR’s data illustrates that while overall monetary recoveries declined in FY 2021, the EEOC is getting back on track, and gearing up for an active 2022 and beyond.

We will continue to monitor trends and developments in the EEOC’s mission, including the types of cases that are filed and how the agency chooses to fight those lawsuits in court. As we do every year, we look forward to providing you an in-depth look at those trends and developments in the months to come.

By Andrew L. Scroggins and Alex W. Karasik

Seyfarth Synopsis:  While businesses have shifted their operations to digital platforms over the last few decades, the COVID-19 pandemic has greatly accelerated the transformation of the workplace. One area where employers have looked to increase the efficiency of their hiring processes is through the use of artificial intelligence. The EEOC has been paying attention to this trend as well, and on October 28, 2021, the Commission announced an initiative to ensure that artificial intelligence (AI) and other emerging tools used in hiring and employment decisions comply with the federal civil rights laws that the agency enforces. It behooves employers to understand and heed the Commission’s new initiative.

Artificial Intelligence In The Employment Setting

Businesses are routinely looking for new and improved ways to source, screen, and on-board talented employees. The era of written applications dropped off in person by candidates has given way to electronic tools that can include online job postings, web-based applications and questionnaires, computer-aided screening tools, and video conference interviews and presentations. Innovative employers may use keyword searches and predictive algorithms – sometimes created in-house and other times licensed through vendors – to help target and rank candidates best suited to their needs. Employers facing the challenges of the tight labor market may see artificial intelligence as a way to bring unique efficiencies to the hiring process.

Of course, while the tools for hiring may be evolving, the guardrails set by employment laws remain in place. And that means oversight by the EEOC can be expected.

The EEOC’s Announcement

At an external event on October 28, 2021, EEOC Chair Charlotte A. Burrows announced the EEOC’s intent to more closely scrutinize this potential area for discrimination. Burrows acknowledged both the potential benefits and challenges at hand: “Artificial intelligence and algorithmic decision-making tools have great potential to improve our lives, including in the area of employment. At the same time, the EEOC is keenly aware that these tools may mask and perpetuate bias or create new discriminatory barriers to jobs. We must work to ensure that these new technologies do not become a high-tech pathway to discrimination.” Burrows’ comments follow recent comments by fellow EEOC Commissioner Keith Sonderling. On October 20, 2021, Sonderling gave a speech in New York (and tweeted more broadly later) that “highlighted the potential #cybersecurity and #privacy concerns employers must be aware of when using #AI to make employment decisions.” As a thought-leader in this space, Sonderling also has written articles and given statements to other publications on the topic. Those public remarks from EEOC Commissioners appointed by different administrations confirm the Commission’s intent to focus on this area.

The EEOC’s announcement explains that the, “initiative will examine more closely how technology is fundamentally changing the way employment decisions are made. It aims to guide applicants, employees, employers, and technology vendors.” Burrows added that, “While the technology may be evolving, anti-discrimination laws still apply,” and perhaps most importantly for employers, “Bias in employment arising from the use of algorithms and AI falls squarely within the Commission’s priority to address systemic discrimination.”  Id.

The EEOC laid out five prongs to its initiative: (1) establish an internal working group to coordinate the agency’s work on the initiative; (2) launch a series of listening sessions with key stakeholders about algorithmic tools and their employment ramifications; (3) gather information about the adoption, design, and impact of hiring and other employment-related technologies; (4) identify promising practices; and (5) issue technical assistance to provide guidance on algorithmic fairness and the use of AI in employment decisions.  Id.  The EEOC indicates these plans build off work it has been doing in this area since 2016.  Id.

Implications For Employers

When the Commission declares an area to be a systemic discrimination priority, employers should take heed. Employers who utilize artificial intelligence, algorithmic decision-making tools, and other automated processes should evaluate their use to ensure no resulting bias. Likewise, when considering third party vendors, employers should ask what steps have been taken to ensure that the tools are compliant with employment. And during EEOC investigations, employers should be on the alert for requests that suggest the EEOC is interested in taking a closer look at the use of these tools. In sum, as business practices evolve with the technology, so too does the EEOC in its enforcement priorities.

By: Matthew J. Gagnon and Tyler Z. Zmick

Seyfarth Synopsis: Following the March 8, 2021 Executive Order establishing the White House Gender Policy Council, on October 22, 2021 the White House released the first-ever U.S. Government National Strategy on Gender Equity and Equality. The EEOC contributed to the Strategy and supports its full implementation, suggesting that gender-related issues – including the gender wage gap – may be among the Commission’s top priorities in its FY 2022 enforcement agenda.

As part of President Biden’s March 8, 2021 Executive Order 14020 establishing the White House Gender Policy Council (see here), on October 22, 2021 the White House released the first-ever U.S. Government National Strategy on Gender Equity and Equality (available here).

The Strategy has three main sections. Section One establishes guiding principles undergirding the strategy to advance gender equity and equality. Section Two outlines the following ten interconnected priorities: (1) economic security; (2) gender-based violence; (3) health; (4) education; (5) justice and immigration; (6) human rights and equality under the law; (7) security and humanitarian relief; (8) climate change; (9) science and technology; and (10) democracy, participation, and leadership. Section Three elaborates on the whole-of-government effort that is required for implementation, ensuring that a focus on gender is mainstreamed across the work of the federal government.

Strategy On Improving Economic Security And Accelerating Economic Growth

The Strategy Paper’s “economic security” priority includes subsections on “Promoting Economic Competitiveness by Advancing Women’s Employment in Well-Paying Jobs” and “Addressing Persistent Gender Discrimination and Systemic Barriers to Full Workforce Participation.” Under the Strategy Paper, the White House will “ensure that women have the support they need to enter, stay, and advance in the labor force, and encourage their access to well-paying, good quality jobs,” “ensure that women have a free and fair choice to join a union and that domestic workers receive the legal benefits and protections they deserve,” and “seek increased pay for jobs that are disproportionately held by women by pursuing an increase in the minimum wage and the elimination of the tipped minimum wage and the subminimum wage for all workers, including those with disabilities.”

Furthermore, to close the gender wage gap in the U.S., the White House will “work to strengthen laws prohibiting wage discrimination on the basis of gender, race, and other characteristics, and . . . increase resources for enforcement,” “promote pay transparency, taking steps to increase analysis of pay gaps on the basis of gender, race, and other factors, and outline plans to eliminate these disparities,” “pursue policies to eliminate reliance on prior salary history in compensation decisions, which can perpetuate and compound the effects of prior discrimination,” and “support policies to prohibit discrimination against pregnant and parenting workers.” To eliminate harassment and other forms of workplace discrimination, the White House will support “increasing transparency and accountability by ending forced arbitration and mandatory nondisclosure agreements that prevent workers from pursuing their day in court and by strengthening prevention efforts to create a work environment where all workers can thrive.”

Section III (“Implementation”) requires each federal agency to establish at least three goals to advance the Strategy’s objectives, and detail the plans and resources needed to achieve their goals. Specifically, “agencies should identify, under the auspices of their three priority goals: (i) the gender gaps they aim to close; (ii) outcome measures; and (iii) budgetary, staff, and other needs to achieve targeted objectives.” To ensure effective implementation of the Strategy Paper, the White House will also “embark on a government-wide effort to strengthen data collection and analysis and close gender data gaps.”

EEOC “Supports Full Implementation” Of White House Strategy

The EEOC issued a press release (see here) the same day the Strategy Paper was released, noting the Commission’s contribution to the White House’s Strategy Paper and supporting its full implementation. EEOC Chair Charlotte A. Burrows stated:

The COVID-19 pandemic’s disparate impact on women generally and women of color in particular makes it more urgent than ever to ensure that gender is not a barrier to economic security and opportunities in the workplace. This strategy’s goals to promote pay equity, eliminate harassment and other forms of employment discrimination, and support the nation’s caregivers are all important EEOC priorities.

As previously noted (here), the EEOC’s litigation enforcement activity showed signs of recovering in fiscal year 2021 following the Commission’s down year in FY 2020 – forecasting a busy year in FY 2021 for the EEOC and employers. The EEOC’s public support for full implementation of the White House’s National Strategy on Gender Equity and Equality indicates that issues relating to gender equity may be priorities for the Commission in FY 2022.