Gerald L. Maatman, Jr. – Class Action Defense

August 6, 2026August 6, 2026 by Gerald L. Maatman, Jr.

Eighth Circuit Affirms Jury Verdict For Employer In Racial Harassment Case, Finding Insufficient Evidence Of Failure To Prevent Discrimination

By Gerald L. Maatman, Jr., Tiffany Alberty, and Brett Bohan

Duane Morris Takeaways: On August 4, 2026, in Equal Employment Opportunity Commission v. Sun Chemical Corporation, No. 25-1318 (8th Cir. Aug. 4, 2026), the U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s judgment in favor of an employer following a jury verdict rejecting a hostile work environment claim brought by the EEOC and an intervenor employee. The Eighth Circuit held that even assuming the jury instructions failed to adequately cover the EEOC’s theory that the employer could have prevented the harassment, the evidence in the record did not support such a theory. The opinion illustrates the importance of employers taking prompt corrective action in response to workplace harassment and reinforces the principle that an employer cannot be held liable for failing to prevent harassment when it lacked actual or constructive knowledge of ongoing discriminatory conduct.

Case Background

Bryan Banks and Ricardo Nevarez were both technicians at Sun Chemical Corporation, a manufacturer of inks, colorants, and coatings. Id. at 1. Their relationship deteriorated over time, culminating in a confrontation in which Nevarez punched a locker while standing near Banks and screamed that Banks was a “f***ing [N-word]” three times. Id. Banks reported the incident to a manager. Id. Sun Chemical suspended Nevarez for five days without pay and warned him that future incidents would lead to further discipline, up to and including termination. Id. at 1-2. Banks received a written warning for his profanity during the exchange. Id. at 2.

Banks subsequently filed a charge of race discrimination with the EEOC. Id. After conciliation efforts failed, the EEOC sued Sun Chemical in the U.S. District Court for the Western District of Missouri, alleging violations of Title VII of the Civil Rights Act of 1964. Id. Banks intervened. Id. Together, the EEOC and Banks argued that Sun Chemical’s response to Nevarez using the N-word was insufficient.

The Plaintiffs’ hostile work environment claim proceeded to a jury trial. Id. at 3. The jury returned a verdict in favor of Sun Chemical, concluding that the company did not discriminate against Banks. Id.

The Eighth Circuit’s Opinion

On appeal, the EEOC argued the jury received flawed jury instructions that did not cover its theory that Sun Chemical could have prevented the harassment. Id. The instructions indicated that plaintiff needed to prove that the company “knew or should have known of the harassing conduct” and “failed to take prompt and appropriate corrective action to end the harassment.” Id. The EEOC contended that the instructions addressed only whether Sun Chemical adequately responded to the harassment rather than whether the company had failed to prevent the harassment. Id. at 3-4.

The Eighth Circuit declined to decide whether the instructions adequately reflected the EEOC’s failure-to-prevent-harassment theory, holding instead that the evidence in the record did not support such a theory. Id. at 4. It explained that, even under the EEOC’s theory, Sun Chemical had to (1) have actual or constructive knowledge of “ongoing” harassment by Nevarez, and (2) decline to take “remedial action reasonably calculated to stop it.” Id.

As to the first element, the Eighth Circuit found that, at most, Sun Chemical may have known that Nevarez had used the N-word on one previous occasion toward a different Black employee. Id. Nothing about that incident would have placed the company on notice that Nevarez was a “known serial harasser.” Id. The Eighth Circuit distinguished cases where employers knew of continued harassment from a single isolated incident, noting that “a single harassing act might not be actionable standing alone.” Id. citing Engel v. Rapid City Sch. Dist., 506 F.3d 1118, 1124 (8th Cir. 2007).

Regarding the second element, shortly after the first incident, Sun Chemical sent a written disciplinary action to Nevarez directing him to “take a step back and begin to think about what you are about to say and the consequences that may follow.” Id. Although the Eighth Circuit acknowledged the response “could have been stronger,” it concluded that the discipline “reflected Nevarez’s more than three decades of service without a history of harassment,” and the law does not require an employer “to fire a harasser in the first instance to demonstrate an adequate remedial response.” Id. at 4-5.

The Eighth Circuit also rejected the EEOC’s unsupported argument that Nevarez used the N-word in occasional workplace conversations, finding that no one reported that conduct to Sun Chemical and there was not “enough information to raise a probability of harassment in the mind of a reasonable employer.” Id. at 5. It concluded that the occasional uses of the slur were not “so severe and pervasive that management reasonably should have known of them.” Id.

Implications For Employers

The Eighth Circuit’s decision in Sun Chemical provides several important takeaways for employers. First, the decision reinforces that an employer’s duty to prevent workplace harassment is triggered only when it has actual or constructive knowledge of discriminatory conduct. A single isolated incident, without more, does not place an employer on notice that an employee is a serial harasser requiring heightened preventive measures.

The opinion also confirms that courts will consider the totality of the circumstances, including the employee’s length of service and disciplinary history, when evaluating whether an employer responded appropriately. Employers should, however, document all known incidents and any progressive discipline, making clear that further incidents will result in escalating consequences, and in turn, underscoring the importance of reporting mechanisms. The Eighth Circuit found that the EEOC could not establish constructive knowledge of unreported incidents of alleged harassment. Employers who maintain clear reporting channels and anti-harassment policies may be better positioned to defend against claims that they should have known about discriminatory conduct that was never brought to management’s attention.

July 30, 2026July 30, 2026 by Gerald L. Maatman, Jr.

No Vine to Certify: Grape Packer’s Bid for Class Certification Falls Short of Rule 23’s Requirements

By Gerald L. Maatman, Jr., Jennifer A. Riley, Betty Luu, and Jamar Davis

Duane Morris Takeaway: On July 21, 2026, in Sara Reyes, et al v. Grow Smart Labor, Inc., et al, Case No. 1:24-CV-00028, Magistrate Judge Stanley Boone of the U.S. District Court for the Eastern District of California issued findings and recommendations denying an employee’s motion for class certification under the California Labor Code. This decision is a reminder that courts scrutinizing motions for class certification will conduct a rigorous, fact-intensive analysis of each Rule 23 requirement rather than accept generalized allegations of common policies or practices. Even where numerosity is easily met, courts will closely examine whether the proposed class is sufficiently uniform across workers, supervisors, pay methods, and timekeeping systems before finding that commonality, typicality, and predominance are satisfied.

Background:

On January 5, 2024, Plaintiff Sara Reyes (“Plaintiff”) filed a class action asserting claims for violations of the Migrant and Seasonal Agricultural Worker Protection Act and the California Labor Code on behalf of herself and those similarly situated in the State of California. Id. at 6.

Defendant Grow Smart Labor, Inc. (“Grow Smart”) employed Plaintiff as a grape picker and packer in August 2023 for a two-week period. Id. at 3-4. Plaintiff alleges she was paid less than the piece-rate basis, was not separately compensated for rest periods or other nonproductive time, and that Grow Smart supervisors instructed her and other employees not to take meal periods or rest breaks, instead directing them to continue working. Id. at 4-6.

On May 14, 2026, Plaintiff moved to certify a class of all non-exempt agricultural employees employed by any Grow Smart from January 5, 2021 to the present.

The Magistrate Judge’s Findings and Recommendations:

The Magistrate Judge recommended denying Plaintiff’s motion for class certification and addressed each Rule 23(a) prerequisite in turn. As to numerosity, the Magistrate Judge agreed with Plaintiff that her proposed subclasses (ranging from 160 to 1,067 members) comfortably exceeded the roughly 40-member threshold generally required in the Ninth Circuit. Id. at 22-23. On commonality, however, the Magistrate Judge found Plaintiff failed to meet her burden as to both her meal-break and piece-rate claims. Id. at 23. The Magistrate Judge reasoned that Grow Smart’s workforce was too heterogeneous to generate common answers, since employees worked for different third-party contractees, at different locations, under different supervisors, different pay methods, and different timekeeping systems. Id. at 31-32. The Court also rejected Plaintiff’s reliance on the rebuttable presumption of meal-period violations recognized in Donohue v. AMN Services, LLC, 11 Cal. 5th 58 (2021), explaining that Wage Order No. 14, unlike the wage order at issue in Donohue, exempts agricultural employers from recording meal periods when operations cease, so the absence of recorded breaks did not, on its own, establish noncompliance on a class-wide basis. Id. at 23-32.

On typicality, the Magistrate Judge found Plaintiff’s claims were not typical of the class she sought to represent. Id. at 33. Plaintiff worked only eight shifts, all for a single contractee, all on a piece-rate basis, and had no experience with the different contractees, supervisors, pay methods, or timekeeping systems used elsewhere in Grow Smart’s operations. Id. at 33-35. The Magistrate Judge also found Plaintiff could not represent employees who, beginning in March 2024, became subject to a mandatory arbitration agreement that Plaintiff herself never signed. Id. at 33-38. Because Plaintiff was not typical, the Magistrate Judge likewise found her inadequate to represent the class generally and, specifically, inadequate as to the arbitration-agreement subgroup. Id. at 38.

Turning to Rule 23(b), the Magistrate Judge found Plaintiff met neither subsection she invoked. Id. at 39. Under Rule 23(b)(2), the Magistrate Judge held that class treatment was inappropriate because Plaintiff sought individualized monetary damages (not solely injunctive or declaratory relief), which Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 360-361 (2011),forecloses under that subsection, and because the arbitration agreements and varying work conditions meant no single injunction could resolve the claims class-wide. Id. at 39-40. Under Rule 23(b)(3), the Magistrate Judge found predominance lacking for the same reasons commonality failed, and further found Plaintiff had not shown superiority, since resolving the claims would require individualized inquiries into each employee’s assignment, contractee, timekeeping format, and pay method. Id. at 41-43. Having found Plaintiff met only numerosity while failing commonality, typicality, and both invoked Rule 23(b) categories, the Magistrate Judge recommended that the motion for class certification be denied in full. Id. at 43.

It should be noted that the Magistrate Judge’s findings and recommendations remain subject to adoption by the District Judge. Under the Eastern District of California’s Local Rule 304 and 28 U.S.C. § 636(b)(1)(B) and (C), the parties have fourteen days from service to file objections, and the District Judge will then conduct the applicable review before deciding whether to adopt, modify, or reject the Magistrate Judge’s recommendation.

Implications for Companies

This decision offers useful guidance for agricultural employers and other companies using third-party staffing arrangements across varied worksites.

The decision demonstrates that a named plaintiff’s own work history can substantially narrow the class she is permitted to represent, giving employers grounds to contest an overbroad proposed class even when certain claims otherwise survive. Further, adopting an arbitration agreement even after litigation begins can carve out a meaningful subset of the workforce from any later-certified class, since a plaintiff who never signed such an agreement cannot represent employees who did.

July 29, 2026July 29, 2026 by Gerald L. Maatman, Jr.

“Calling” Out Fraud: Florida Federal Court Allows Counterclaim To Proceed Against TCPA Plaintiff

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On July 21, 2026, in Smith v. GetMeHealthCare, LLC, No. 25-CV-00568, 2026 WL 2089044 (M.D. Fla. July 21, 2026), Judge Sheri Polster Chappell, writing for the U.S. District Court for the Middle District of Florida denied a Telephone Consumer Protection Act (“TCPA”) plaintiff’s motion to dismiss a common law fraud claim brought by the defendant. Although TCPA claims can prove difficult to win on a motion to dismiss, this decision provides TCPA defendants with another powerful tool at the pleadings stage and helps create opportunities for companies to educate courts on a plaintiff’s fraudulent activity early in the proceedings.

Case Background

In 2025, Plaintiff Keneisha Smith (“Plaintiff” or “Smith”) filed a TCPA lawsuit against GetMeHealthCare, LLC (“GMHC”), alleging she received 31 unwanted telemarketing calls over a 10-day period. She claims these calls were made without her consent and even though she registered her telephone number on the national do-not-call registry.

Nonetheless, on June 12, 2025, Smith answered one of these alleged telemarketing calls. She provided her name, phone number, address, date of birth, and current insurance information. The agent then transferred Smith to a GMHC employee, who helped Smith complete the enrollment process, and signed her up for an insurance plan. Even though Smith willingly signed up for insurance, she sued GMHC claiming it violated Section 227(c)(5) of the TCPA, and its implementing regulations, for calling her telephone number despite its registration on the national do-not-call registry.

But GMHC decided to put these facts in front of the Court right away. Instead of simply moving to dismiss the claims, GMHC answered the complaint and filed counterclaims for fraudulent misrepresentation and fraudulent inducement. It argued that “Smith’s willingness to participate in the June 12, 2025, call is inconsistent with her wish not to be contacted.” Id. at *1. Smith also allegedly lied about her age, her actual willingness to obtain health insurance, and her desire to be contacted in the future. In support of its counterclaims, “GMHC sent a recording of the June 12, 2025 call and attached transcript of the call” to its pleadings. Id. at *1, n.1.

In response, Smith moved to dismiss the counterclaims.

The Court’s Decision

In a well-reasoned order, Judge Chappell denied Smith’s motion to dismiss in its entirety, finding “all of Smith’s arguments to be meritless.” Id. Although Smith asserted various arguments regarding the Court’s jurisdiction and GMHC’s requested relief, the majority of the opinion focused on the actual allegations of GMHC’s counterclaim, which were sufficiently pled to survive a motion to dismiss.

In federal court, fraud claims must be pled with a heightened degree of particularity. See Fed. R. Civ. P. 9(b). Under this standard, “claims of fraud must proffer ‘the who, what, when, where, and how of the fraud alleged.’” Smith, 2026 WL 2089044, at *2 (quoting Omnipol, a.S. v. Worrell, 421 F. Supp. 3d 1321, 1343 (M.D. Fla. 2019), aff’d sub nom., 32 F.4th 1298 (11th Cir. 2022))

Here, Judge Chappell found that GMHC pled all of these details and the misrepresentations could be actionable. Judge Chappell found that Smith’s alleged conduct before the call where she “consent[ed] to be contacted,” when coupled with her misrepresentations about her “age” and desire to complete “enrollment,” could plausibly constitute fraud. Smith, 2026 WL 2089044, at *3. Judge Chappell also accepted GMHC’s plausible allegations that Smith’s “motivation [was] to commit fraud” and the communication was orchestrated to form the basis of “a lawsuit against GMHC to get money.” Id. Judge Chappell also independently concluded that the recording and transcript of the call supported “most, if not all, of GMHC’s allegations.” Id.

Thus, Judge Chappel rejected “Smith’s Rule 9(b) argument” and declined to dismiss the claim. Id.

Implications For Companies

The litigation strategy in Smith is significant for companies facing TCPA lawsuits.

As many companies know, it is common for a consenting customer to invite telemarketing calls, and then “deceptively play[] along” upon receipt of those calls, only to turn around and sue the caller in a TCPA class action. Abramson v. Oasis Power LLC, No. 18-CV-00479, 2018 WL 4101857, at *5 (W.D. Pa. July 31, 2018). When companies try to explain these tactics to courts at the pleadings stage, the concerns are often brushed away as “unpersuasive.” Id. The reason that strategy is ineffective is because “[p]rior express consent is an affirmative defense to a claim under the TCPA” and typically must be resolved after discovery. Murphy v. DCI Biologicals Orlando, LLC, No. 12-CV-1459, 2013 WL 6865772., at *4 (M.D. Fla. Dec. 31, 2013) (quotations omitted).

With the benefit of discovery, companies can often demonstrate the “Plaintiff invited the initial call . . . [and] further calls by playing along on the first call” as a basis why a class should not be certified because it is a unique defense that “will distract from the claim to the Class’s detriment.” Sapan v. Fed. Sav. Bank, No. 23-CV-00075, 2025 WL 3050064, at *8 (C.D. Cal. Sept. 30, 2025) (denying class certification based on typicality); see also Sapan v. Veritas Funding, LLC, No. 23-CV-00468, 2023 WL 6370223, at (C.D. Cal. July 28, 2023) (same). But it requires a significant investment to litigate a claim through class certification, and many companies are looking for an exit opportunity prior to that stage in the proceedings.

Smith provides companies with a tool to get these facts in front of courts at the earliest stages of the litigation and shape the judge’s impression of the case. It also provides companies with additional recourse as common law fraud opens up the door to tort damages that are traditionally off the table in TCPA cases. For example, in Illinois, there is an argument that “actions at common law fraud provide for the award of attorney fees and costs, as well as punitive damages.” Father & Sons, Inc. v. Taylor, 703 N.E.2d 532, 547 (Ill. App. Ct. 1998).

Further, even if the counterclaim cannot result in the entire action being dismissed at the outset of a case, it can create leverage for the company to negotiate a favorable exit from the litigation early on. And, if the case proceeds to discovery regardless, the counterclaim can prove useful given that “a defense or counterclaim defeats typicality if it is likely to become the litigation’s focus.” Hirsch v. USHealth Advisors, LLC, 337 F.R.D. 118, 133 (N.D. Tex. 2020).

Thus, corporate counsel facing TCPA actions should be carefully considering the facts in their cases to determine whether they support the use of a similar counterclaim or other creative procedural defenses.

July 17, 2026July 17, 2026 by Gerald L. Maatman, Jr.

Seventh Circuit Holds That The TCPA’s Do-Not-Call Provision Does Not Cover Text Message

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Ryan T. Garippo

Duane Morris Takeaways: On July 14, 2026, in Steidinger, et al. v. Blackstone Medical Services, No. 25-2398, 2026 WL 2028517 (7th Cir. July 14, 2026), Judge Thomas Kirsch, writing for the U.S. Court of Appeals for the Seventh Circuit, affirmed the dismissal of a putative class action complaint and held that 47 U.S.C. § 227(c)(5) of the Telephone Consumer Protection Act (“TCPA”) does not create a private right of action for the receipt of unwanted text messages.

The decision is significant because it represents the first federal appellate decision squarely holding that text messages are not “telephone calls” within the meaning of Section 227(c)(5) and significantly reduces potential TCPA-related liability for companies operating in the Seventh Circuit.

Case Background

The plaintiffs in this case are a group of individuals (“Plaintiffs”) who received text messages and calls from Blackstone Medical Services (“Blackstone”) promoting the company’s home sleep tests. Plaintiffs alleged that they received these communications even though they were either registered on the national do-not-call registry or after they communicated to Blackstone that they did not want to be contacted. As a result, Plaintiffs filed a putative class action complaint against Blackstone, alleging violations of the TCPA and Florida’s mini-TCPA law, seeking statutory damages, an injunction, and declaratory relief. Specifically, Plaintiffs sued under Section 227(c)(5) of the TCPA which provides plaintiffs with a private right of action for certain “violation[s] of the regulations prescribed under this subsection.” 47 U.S.C. §227(c)(5)(a).

Blackstone moved to dismiss Plaintiffs’ TCPA claims. It argued that because the private right of action in Section 227(c)(5) is limited to any “person who has received more than one telephone call,” the provision only applies to “telephone calls” and not text messages. The U.S. District Court for the Central District of Illinois agreed with Blackstone. Jones v. Blackstone Med. Servs., LLC, 792 F. Supp. 3d 894, 902 (C.D. Ill. 2025).The district court concluded “based on a plain reading of the TCPA and its implementing regulations, Section 227(c)(5) does not apply to text messages.” Id. The district court also declined to exercise supplemental jurisdiction over Plaintiffs’ state law claim and dismissed the lawsuit. Plaintiffs appealed.

The Seventh Circuit’s Ruling

In a 13-page opinion, Judge Thomas Kirsch, writing for the Seventh Circuit, succinctly concluded “that § 227(c)(5) does not permit plaintiffs to sue for the receipt of unwanted texts.” Steidinger, 2026 WL 2028517, at *1.

The Seventh Circuit explained that Section 227(c)(5) creates a private right of action for any individual “who has received more than one telephone call within any 12-month period” in violation of the regulations implementing that subjection. Id. at *2(quoting 47 U.S.C. § 227(c)(5)). Thus, the dispute hinged on the meaning of the term “telephone call” when the statute was passed in 1991. Id.

As Judge Kirsch explained, in 1991, a “telephone” was defined as “[a]n instrument for reproducing sounds at a distance” and a “call” was defined as “to get or try to get into communication by telephone.” Id. Therefore, a “telephone call” would have “referred to communication via sound.” Id. But “[t]ext messages do not reproduce sounds” and would not have been thought of as calls (especially given that the first text message was not sent till 1992). Id.

After observing other structural elements of the TCPA which would suggest narrower reading of the term “telephone call,” the Seventh Circuit also rejected Plaintiffs’ argument that the Federal Communications Commission’s (“FCC”) interpretation of “call,” which included text messages, was entitled to deference. In McLaughlin Chiropractic Associates, Inc. v. McKesson Corporation, 606 U.S. 146, 168 (2025), the U.S. Supreme Court had already determined that courts are “not bound by the FCC’s interpretation of the TCPA.” Thus, the Seventh Circuit determined that it would not afford deference to the FCC’s interpretation.

Finally, the Seventh Circuit opined on the public policy concerns remedied by the TCPA. The Seventh Circuit explained that, when Congress passed the TCPA, it “specifically found that telemarketing calls create a public safety risk when they seize telephone lines needed for emergency or medical assistance.” Steidinger, 2026 WL 2028517, at *5. But “[s]pam text messages don’t pose this risk, making it unsurprising, or at the very least reasonable, that § 227(c)(5)’s private right of action would cover telephone calls but not messages.” Id.

In short, “[r]epeated, unwanted text messages are undoubtedly a nuisance. But they do not fall within the private right of action created by § 227(c)(5).” Id.

Implications For Companies

The Steidinger decision is likely the single most important decision in the post-McKesson era.

For TCPA cases filed in Illinois, Indiana, and Wisconsin, a company cannot be sued based on text messages that were allegedly made in violation of the TCPA’s implementing regulations. As a result, the typical claims that are often brought under Section 227(c)(5) will no longer be available to plaintiffs where the communications in question were text messages. These claims include situations where a company allegedly violated the national do-not-call registry’s requirements, their own internal do-not-call registry’s requirements, where texts were made without caller identification information, where texts were made during “quiet hours,” and other claims typically brought under Section 227(c)(5). Steidinger should take each of these claims off the table within these jurisdictions.

Steininger, however, is not the end of this fight. In Howard v. Republican National Committee, 164 F.4th 1119, 1123-24 (9th Cir. 2026), the Ninth Circuit determined (albeit while considering a Section 227(b)(3) claim) that text messages were covered by the broad definition of the phrase “any call” as applicable in that case. Although there may theoretically be some daylight between the phrase “any call” as interpreted in Howard, and the phrase “telephone call” as interpreted in Steidinger, this decision certainly signals a growing methodological division between these two circuits.

While Steininger is undoubtably beneficial for companies, corporate counsel should be mindful that this case does not mean their texts are unregulated for at least three reasons. First, even in the Seventh Circuit, private plaintiffs can still theoretically bring claims under Section 227(b)(3) if the texts are made using an “automatic telephone dialing system or an artificial or prerecorded voice.” 47 U.S.C. § 227(b)(1)(A). Second, there are also other federal, state, and local jurisdictions which prohibit the conduct previously protected by the TCPA in the Seventh Circuit. And third, Steininger only removes the risk of a federal class action lawsuit under Section 227(c)(5), it does not eliminate the risk of an FCC enforcement action related to a company’s text messaging programs.

We will be monitoring any developments in this space and corporate counsel should continue to check in regularly as the TCPA landscape continues to shift.

July 14, 2026July 14, 2026 by Gerald L. Maatman, Jr.

Seventh Circuit Undoes Novel Privacy Class Settlement Due To Lack Of Separate Representatives For Nationwide Class And State Sub-Classes

By Gerald L. Maatman, Jr., Hayley Ryan, and Tyler Zmick

Duane Morris Takeaways: On July 13, 2026, in the case captioned as In Re Clearview AI, Inc. Consumer Privacy Litigation, No. 25-1673, 2026 U.S. App. LEXIS 20406 (7th Cir. July 13, 2026), the U.S. Court of Appeals for the Seventh Circuit vacated a district court’s approval of a novel class action settlement between Clearview and individuals alleging that Clearview violated privacy laws by “scraping” their public photos from the internet to improve the company’s facial recognition technology. The Seventh Circuit held that the absence of separate class representatives for the nationwide class and the state-specific subclasses was a “key procedural problem” requiring vacatur of the settlement.

This decision is an important reminder that courts evaluating class settlements will closely scrutinize whether all classes and subclasses have adequate structural protections, including separate class representatives with separate counsel in cases where class members may have divergent interests.

Background

Clearview operates “a search engine for faces,” whereby the company scrapes photographs of individuals from public websites and analyzes them using artificial intelligence to generate “facial vectors” reflecting the geometry of a person’s facial features. Id. at *3. A search of Clearview’s database using a photograph of a person returns other photographs of that same person, together with links to the websites where the photographs were located.

The case arose from 11 putative class actions filed in federal district courts against Clearview and related defendants, which were ultimately transferred to the Northern District of Illinois for coordinated pretrial proceedings.

After the appointment of interim lead class counsel, Plaintiffs filed a consolidated complaint asserting claims for declaratory judgment and unjust enrichment on behalf of a Nationwide Class comprised of all individuals in the United States whose biometric data was or is contained in Clearview’s database. Plaintiffs also asserted claims under the Illinois Biometric Information Privacy Act (“BIPA”) on behalf of an Illinois Subclass; claims under various California laws on behalf of a California Subclass; claims under New York’s civil rights code on behalf of a New York Subclass; and claims under the Virginia Computer Crimes Act and for statutory commercial misappropriation of identity on behalf of a Virginia Sub-class.

The parties first engaged in settlement discussions in 2022, which failed because Clearview lacked the financial ability to make the substantial immediate payments sought by Plaintiffs. But after mediating the case in 2023, the parties agreed to a settlement structure under which class members would acquire equity stake in Clearview. Specifically, the settlement provided that upon an initial public offering or a merger, consolidation, or sale of Clearview, the Class would receive a payment equivalent to a 23% equity stake in Clearview as of September 6, 2023. Alternatively, in lieu of that payment, the court-appointed settlement master could either (i) sell the settlement stake to a third party for a “commercially reasonable price” or (ii) make a cash demand equal to 17% of Clearview’s revenue from the date of final approval of the settlement until the date of such demand. Id. at *7.

The settlement stake itself would be divided unevenly among Class members based on the specific forms of relief available under the relevant state laws: ten shares to each member of the Illinois Subclass; five shares to each member of the California, New York, and Virginia Subclasses; and just one share to each member of the Nationwide Class. Notably, none of the eight original class representatives agreed to the settlement, so lead class counsel replaced them with four new representatives, each of whom belonged to one of the “favored” state-specific sub-classes.

After the District Court granted final approval, Objectors Robert Weissman and Rick Claypool, both members of the Nationwide Class, appealed. They argued that the settlement was not “fair, reasonable, and adequate” because (i) it did not provide injunctive relief, (ii) the future equity-stake and cash-demand fallback made the settlement’s value too uncertain, and (iii) the Nationwide Class lacked separate representation during the settlement negotiations.

The Seventh Circuit’s Decision

The Seventh Circuit vacated the District Court’s approval of the settlement and remanded the case for further proceedings.

The Seventh Circuit rejected the Objectors’ two substantive challenges to the settlement, concluding that a fair settlement did not necessarily require injunctive relief and that the uncertainty associated with the equity-based structure was not disqualifying because “uncertainty is inherent” in such settlements. Id. at *11, 16.

The Seventh Circuit, however, agreed with the Objectors’ third argument regarding the settlement being deficient due to the absence of a separate Nationwide class representative with separate counsel. The Seventh Circuit explained that class action litigation relies on “structural assurance of fair and adequate representation for the diverse groups and individuals affected.” Id. at *23 (quoting Amchem Products, Inc. v. Windsor, 521 U.S. 591, 627 (1997)). One such “important structural feature” is the requirement that class representatives, who owe a fiduciary duty to absent class members, approve any proposed settlement. Id.

The Seventh Circuit emphasized that “[n]ot just any representative will do” and that the critical question is whether “the court can be confident that absent class members have been represented fairly.” Id. at *24-25. The Seventh Circuit concluded that the Nationwide Class lacked adequate representation because “none of the named class representatives was in a position to represent solely the interests of the Nationwide Class in allocating the settlement.” Id. at *29; see id. at *31 (“Appointment of separately counseled class representatives for identifiable, significantly different groups of claimants with fundamentally conflicting interests is Rule 23’s primary mechanism for such protection.”).

On this basis, the Seventh Circuit vacated the District Court’s approval of the settlement and remanded the case.

Implications For Companies

The Seventh Circuit’s decision in In Re Clearview AI, Inc. Consumer Privacy Litigation is a cautionary tale for companies structuring, or defending, class action settlements involving multiple classes or subclasses with potentially divergent interests. Where claimants fall into distinct groups with conflicting stakes in how settlement proceeds are allocated, courts will expect each group to have its own class representative with its own counsel at the negotiating table. A settlement that may be fair and reasonable on its face can be vacated if it lacks these structural safeguards, as without such protections a reviewing court cannot confirm that each class’s interests was independently considered during negotiations. Companies should keep this principle in mind at the outset of class settlement negotiations to avoid the possibility of a proposed class settlement failing on appeal due to the lack of necessary structural safeguards.

July 13, 2026July 13, 2026 by Gerald L. Maatman, Jr.

Ninth Circuit Revives Dishwasher Warranty Class Action Against Whirlpool, Reversing Dismissal Of Washington Consumer Protection Act Claim

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Elizabeth G. Underwood

Duane Morris Takeaways: On July 6, 2026, in Shellenberger v. AIG WarrantyGuard, Inc., et al., No. 25-1448 (9th Cir. July 6, 2026), Judges Christen, Hurwitz, and Bade of the U.S. Court of Appeals for the Ninth Circuit reversed a district court’s dismissal of a putative class action alleging that AIG WarrantyGuard, Inc. and Whirlpool Corporation violated the Washington Consumer Protection Act (“CPA”) in connection with a KitchenAid service plan. The Ninth Circuit held that the named Plaintiff plausibly alleged that the Defendants’ offer letter and service contract, taken together, had the capacity to deceive a reasonable consumer, and that the district court erred in resolving that fact-intensive question at the motion to dismiss stage.

This ruling serves as a cautionary tale for companies that market service plans, particularly where buyout provisions or qualifiers in the fine print may be read as cutting against the offerings set out in consumer offer letters.

Case Background

Plaintiff Hadassah Shellenberger (“Plaintiff”) filed a putative class action against AIG WarrantyGuard, Inc. and Whirlpool Corporation (collectively, “Defendants”), asserting a claim under the CPA, Wash. Rev. Code §§ 19.86.020, 19.86.093. Id. at 1. Plaintiff alleged that Defendants’ offer letter created the impression “that the KitchenAid Service Plan would provide repairs or replacements for covered malfunctions, with repairs performed by KitchenAid-certified technicians, at no out-of-pocket expense to her.” Id. at 3. Plaintiff further alleged that this impression was inconsistent with the terms of the service contract, which included a buyout option, exercisable at Defendants’ sole discretion, allowing Defendants to technically satisfy all obligations under the contract without ever providing a repair or replacement. Id.

The district court dismissed Plaintiff’s CPA claim, finding that she had failed to plausibly allege the first element of a CPA claim, namely, “whether the defendant has engaged in an unfair or deceptive act or practice.” Id. at 2. Plaintiff appealed the ruling to the Ninth Circuit. Id. at 1.

The Ninth Circuit’s Decision

The Ninth Circuit reversed and remanded, finding that the district court erred in dismissing Plaintiff’s CPA claim. Id. at 7. The Ninth Circuit determined that Plaintiff’s interpretation of the offer letter was “facially plausible” because the offer letter mentioned only repairs and replacements as modes of performance, while the buyout option in the service contract provided an alternative manner of performance that was “inconsistent with the advertised benefits.” Id. at 3.

The Ninth Circuit rejected Defendants’ arguments that caveats in the offer letter and a fine-print disclaimer made Plaintiff’s interpretation implausible, finding the disclaimer language “insufficiently clear to change the apparent meaning of the offer letter’s representations.” Id. at 4 (internal quotation marks omitted). In addition, the Ninth Circuit similarly rejected the argument that qualifiers, such as “covered” and “where applicable”, defeated Plaintiff’s reading, concluding that those terms plausibly limited only the specific representations immediately next to them. Id. at 5.

Finally, the Ninth Circuit highlighted that whether a representation is misleading to a reasonable consumer is “a fact-intensive question not typically susceptible to resolution at the motion to dismiss stage.” Id. at 7.

Implications For Companies

This decision underscores that companies cannot avoid liability at the motion to dismiss stage under the CPA and other similar consumer protection statutes by simply pointing to fine-print disclaimers or qualifying words like “covered” or “where applicable.” Instead, courts will look to whether that fine print is clear enough to actually change the overall impression created by a company’s offer letter.

Overall, companies should audit consumer-facing offer letters and relevant marketing materials against discretionary provisions in service contracts to ensure consistency and compliance, especially where materials promise specific modes of performance, such as repair or replacement by certified technicians as seen in this case, that could be undercut by a seller’s discretion to satisfy its obligations through a different mechanism.

July 7, 2026July 7, 2026 by Gerald L. Maatman, Jr.

FAA Exemptions Now Incorporated Into California Law

By Gerald L. Maatman, Jr., Jennifer A. Riley, Daniel D. Spencer, and Kenny T. Tran

Duane Morris Takeaways: On June 30, 2026, Governor Newsom signed Assembly Bill 2155 (AB 2155), which amends California Code of Civil Procedure section 1281 to provide that any arbitration agreement deemed unenforceable under the Federal Arbitration Act (FAA) is likewise unenforceable under the California Arbitration Act (CAA). The amendment is designed to align California law with federal law by ensuring that the same limitations, exceptions, and exemptions governing the enforceability of arbitration agreements under the FAA also apply under the CAA.

Overview

AB 2155 expressly incorporates two significant FAA exemptions into the CAA, including: (1) the “transportation worker” exemption, which applies to contracts of employment for seamen, railroad employees, and other classes of workers engaged in foreign or interstate commerce; and (2) the federal Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA), which renders predispute arbitration agreements unenforceable with respect to claims involving sexual assault or sexual harassment disputes.

AB 2155 becomes effective on January 1, 2027, and the legislation contains no indication that it applies retroactively. Prior to this amendment, employers frequently argued that even if the FAA did not govern an arbitration agreement, the agreement remained enforceable under the CAA because California law did not recognize the FAA’s transportation worker exemption. AB 2155 eliminates that argument. Beginning January 1, 2027, if an arbitration agreement is unenforceable under the FAA due to the transportation worker exemption, it will likewise be unenforceable under the CAA.

Implications for Employers

Employers, particularly those whose operations involve interstate commerce, should review their arbitration agreements and dispute resolution strategies in anticipation of AB 2155’s effective date. The amendment is likely to increase litigation challenging the enforceability of arbitration agreements, including class and representative actions brought by transportation workers and claims falling within the scope of the EFAA.

July 7, 2026July 7, 2026 by Gerald L. Maatman, Jr.

DMCAR Mid-Year Review – 2026/2027: FLSA Conditional Certification Rate Drops, And So Far In 2026 Courts Are Granting Less Class Certification Motions Overall Compared To 2025

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

Duane Morris Takeaway: In the first half of 2026, across all major types of class actions, courts issued rulings on more than 155 motions to grant or deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 97 rulings, with an overall success rate of 63%. In contrast, comparing apples to apples, in the first half of 2025, courts issued rulings on more than 211 motions to grant or deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 145 rulings, with an overall success rate of 69%.

Percentages for year over year rulings for 2022 to 2025 are below. Across all major areas of class action litigation in 2025, courts issued rulings on 435 motions for class certification. Courts granted 297 motions for class certification in whole or in part, a rate of approximately 68%. In 2024, courts issued rulings on 432 motions to grant or to deny class certification. Of these, plaintiffs succeeded in obtaining or maintaining certification in 272 rulings, for an overall success rate of 63%. In 2023, by comparison, courts issued rulings on 451 motions to grant or to deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 324 rulings, an overall success rate of nearly 72%. In 2022, courts issued rulings on 335 motions to grant or to deny class certification, and plaintiffs succeeded in obtaining or maintaining certification in 247 rulings, an overall success rate of nearly 74%.

2022 – 74%
2023 – 72%
2024 – 63%
2025 – 68%
2026 – 63% (Mid-Year)

In 2026, the number of motions that courts considered varied significantly by subject matter area, and the number of rulings varied across substantive area:

The following list summarizes the results in each of ten key areas of class action litigation.

FCRA – 100% granted / 0% denied (2 of 2 granted / 0 of 2 denied)
TCPA – 100% granted / 0% denied (2 of 2 granted / 0 of 2 denied)
RICO – 100% granted / 0% denied (1 of 1 granted / 0 of 1 denied)
WARN Act – 100% granted / 0% denied (1 of 1 granted / 0 of 1 denied)A
Security Fraud – 80% granted / 20% denied (8 of 10 granted / 2 of 10 denied)
Antitrust – 71% granted / 29% denied (5 of 7 granted / 2 of 7 denied)
Consumer Fraud – 71% granted / 29% denied (10 of 14 granted / 4 of 14 denied)
Civil Rights – 65% granted / 35% denied (13 of 20 granted / 7 of 20 denied)
ERISA – 64% granted / 36% denied (9 of 14 granted / 5 of 14 denied)
FLSA / Wage & Hour (Conditional Certification) – 58% granted / 42% denied (39 of 67 granted / 28 of 67 denied)
Discrimination – 50% granted / 50% denied (2 of 4 granted / 2 of 4 denied)
FLSA / Wage & Hour (Decertification) – 50% granted / 50% denied (1 of 2 granted / 1 of 2 denied)
Privacy – 44% granted / 56% denied (4 of 9 granted / 5 of 9 denied)
Products Liability / Mass Torts – 0% granted / 100% denied (0 of 1 granted / 1 of 1 denied)
Data Breach – 0% granted / 0% denied (no class certification rulings in 2026)

The plaintiffs’ class action bar obtained 100% success rates in four areas, FCRA, TCPA, RICO, and WARN. There have only been two FCRA and TCPA certification rulings in 2026, and one each for RICO and WARN, which were all granted by the court for a 100% success rate. In cases alleging securities fraud violations, plaintiffs succeeded in obtaining orders certifying classes in 8 of 10 rulings, for a success rate of 80%. In cases alleging antitrust violations, plaintiffs managed to obtain class certification rulings in 5 of 7 rulings issued during the first half of 2026, a success rate of 71%. And in wage & hour litigation, plaintiffs were not nearly as successful as in previous years. They succeeded in obtaining orders certifying classes and/or collective actions in 39 of 67 rulings issued during 2026, a success rate of only 58%.

Courts Issued More Rulings In FLSA Collective Actions and Wage & Hour Class Actions Than In Any Other Areas Of Law

For the first half of calendar year 2026, courts issued more certification rulings in FLSA collective actions and wage & hour class actions than in other types of cases. Plaintiffs historically have been able to obtain conditional certification of FLSA collective actions at a high rate, which surely has contributed to the number of filings in this area. Of the 67 rulings addressing first-stage motions for conditional certification, the court granted 39, for a success rate of a much lower than typical 58%

In contrast, from January 1 to July 1, 2025, issued 74 rulings. Of these, 71 addressed first-stage motions for conditional certification of collective actions under 29 U.S.C. § 216(b), and 3 addressed second-stage motions for decertification of collective actions. Of the 71 rulings that courts issued on motions for conditional certification, 58 rulings favored plaintiffs, for a success rate of 82%.

At the decertification stage, courts generally have conducted a closer examination of the evidence and, as a result, defendants historically have enjoyed an equal if not higher rate of success on these second-stage motions as compared to plaintiffs. The results so far in 2026 have not supported that typical success. There have only been 2 rulings thus far that courts issued on motions for decertification of collective actions, and only 1 ruling favored defendants, for a success rate of 50%.

An analysis of the rulings demonstrates that a disproportionate number emanated from traditionally pro-plaintiff jurisdictions, including the judicial districts within the Second Circuit (16 decisions) and Ninth Circuit (14 decisions), which include New York and California, respectively.

Takeaways From Certification Statistics Midway Through 2026

Notable thus far at the halfway point of the year, there have been a very small number of rulings emanating from the Fifth and Sixth Circuits (2 and 1 decisions, respectfully), which was true in 2025 as well. There have overall been less rulings issued by the courts, and at a lower success rate than previous years.

We will continue to track class certification trends in 2026 and will report on final numbers in the Duane Morris Class Action Review – 2027, which will be published in the first week of January. Stay tuned!

July 6, 2026July 6, 2026 by Gerald L. Maatman, Jr.

Key Insights Into The EEOC’s Draft Strategic Plan For FY 2026-2030

By Gerald L. Maatman, Jr., Jamar D. Davis, and Olga A. Romadin

Duane Morris Takeaways: On July 1, 2026, the U.S. Equal Employment Opportunity Commission released a preliminary draft of its 2026-2030 Strategic Plan. The draft sets forth the EEOC plans to prevent and address employment discrimination via improved procedures and key performance metrics, expand outreach and training activities, and improve internal processes via talent retention and use of technology that improves efficiency. The four-year plan was published on the regulations.gov webpage and is open for comment until July 19, 2026. Even if employers do not submit comments, they would be well-advised to review the draft and final Strategic Plan once it is announced because it provides a window into the EEOC Commissioners’ thinking for how the agency will use its resources to redress and deter workplace discrimination.

Introduction

Every four years, the EEOC prepares a Strategic Plan that guides its anti-discrimination enforcement priorities. The 2026-2030 Strategic Plan newly published on the regulations.gov webpage gives significant insight into specific goals and metrics that the agency will measure its performance by in the next several years. The three goals of the draft Strategic Plan and their significance are critical information for employers to understand in navigating interpretations and compliance with EEOC regulations and guidelines.

Operational Improvements And Performance Metrics Sought By The EEOC

The 2026-2030 Strategic Plan draft signals that the EEOC will focus its operations on three key areas. First, the EEOC aims to increase the number of favorable outcomes and to seek non-monetary relief where appropriate. For its matter outcomes, the EEOC aims to obtain at least one million dollars in monetary relief for select systematic investigations, to favorably resolve at least ninety percent of its enforcement lawsuits, and ensure its hearings, investigations, and appears meet or exceed unspecified metrics. (Draft Strategic Plan at 14-16.) On this point, the draft Strategic Plan explains that the EEOC will use its prosecutorial discretion to focus on prioritizing the investigation, litigation, and resolution of complex cases. (Id.) In addition to seeking monetary relief, the EEOC aims to also seek non-monetary relief. The draft Plan explains the EEOC’s view that this type of relief could encompass hands-on training for employers and workers, implementing discrimination deterrence practices, and monitoring. (Id.)

The EEOC additionally aims to “achieve[] targeted equitable relief and at least $1 million in monetary relief” at a rate of 80% of its systemic investigations where cause is found. (Id.) The draft Strategic Plan states that the emphasis here is on cases with broad overall impact and relief for employees impacted by systemic discriminatory patterns, practices, or policies. (Id.)

Further, “the EEOC will make significant progress toward enhanced monitoring of conciliation agreements,” with the goal of publishing developments of its achievements for each year. (Id.) The Strategic Plan explains that improved training, enhanced tracking, and streamlined reporting are crucial aspects of this point. (Id.)

With regards to employees of the federal government, the draft Strategic Plan outlines a baseline measurement for cabinet-level agency compliance with Equal Employment Opportunities. (Id. at 16.) This includes improvements in processing complaints, approving affirmative action plans, and establishing compliance with the Elijah E. Cummings Federal Employee Anti-Discrimination Act of 2020 through timeliness. (Id.) Reasoning that the federal government is the largest employer in the country, the draft Strategic Plan notes that “reducing unlawful employment discrimination in the federal sector is an integral part of combatting employment discrimination in the nation’s workplaces,” and thus will have a great impact on private sector employers. (Id.)

The EEOC aims to have “at least 90% of completed investigations and conciliations, hearings, and federal appeals meet or exceed criteria” implemented in the Quality Practices Plan (“QEP”) for each program. (Id.) Building on the EEOC’s prior Strategic Plan’s QEP, the Commission states that the quality targets for resolving cases without litigation paved a way to success when implemented rigorously. (Id. at 17.) Further, the EEOC will seek to assess the current status of its previous goals and update them as needed in FY 2027-2030. (Id.)

Next, the EEOC plans to broaden its outreach and training activities to ensure that employees know their rights, and that employers are equipped with the tools necessary to preclude discrimination. (Id. at 18-20.) The action items for this goal include use of social media engagement, the implementation of three innovative means to conduct outreach, updating training materials to be user-friendly, and tracking the effectiveness of each outreach effort. (Id. at 19, 22.)

The EEOC additionally seeks to improve its accessibility through updating its technological capabilities. (Id. at 17.) The priority outlined in its seventh measure highlights reducing processing time and looks to speed up the charge filing process following intake, with the ultimate goal of reducing pending cases in the long-term. (Id.)

Finally, the EEOC will strive to improve its overall operations via three distinct areas of focus, which include (1) personnel, (2) services, and (3) financial efficiency. The EEOC would like to improve its operations with regards to its employees by maintaining staffing levels at or greater to 95% of the FTE baseline, invest in in-person trainings, and allow for select employees to participate in leadership development programs. (Id. at 25-26.) For its services, the EEOC will issue feedback surveys to assess areas of growth for the intake process, outreach and training, and mediation services offered, then implement process improvements to targeted areas. (Id. at 27.) For budget concerns, each program area will strive to meet operating constraints and meet all submission deadlines. (Id.)

Implications For Employers

The EEOC’s FY 2026-2030 draft Strategic Plan is a document that provides insight into the direction the agency will take to improve how it functions, and where it will focus the majority of its resources. Knowing what to expect from the Commission over the next four years places employers at an advantage when it comes to contingency planning and updating workplace discrimination policies.

July 2, 2026July 2, 2026 by Gerald L. Maatman, Jr.

New Jersey Appellate Division Confirms Representative Wage Actions May Proceed Without Class Certification But Limits Look-Back Period For WHL And ESLL Claims

By Gerald L. Maatman, Jr., Olga A. Romadin, and Elizabeth G. Underwood

Duane Morris Takeaways: On June 29, 2026, in Martinez v. T. Slack Environmental Services, Inc., No. A-1008-24 (N.J. App. Div. June 29, 2026), the New Jersey Appellate Division addressed key issues in a wage and hour representative action brought pursuant to the New Jersey Wage and Hour Law (“WHL”) and the Prevailing Wage Act (“PWA”), including whether a representative action brought under the WHL and the PWA is distinct from a class action under N.J. Rule 4:32-1, and the appropriate statute of limitations for companion wage claims. Id. at 2. The Appellate Division affirmed in part and reversed in part a decision of the trial court holding that the WHL and PWA statutory language is independent of Rule 4:32-1 and therefore does not require class certification, and finding that a two-year—and not six—statute of limitations applies to WHL and Earned Sick Leave Law (“ESLL”) claims. Id. at 3.

This decision is significant for employers in because it confirms that representative wage actions under New Jersey’s wage statutes may proceed outside Rule 4:32-1 class certification procedures while also clarifying that WHL and ESLL claims carry a two-year limitations period, and PWA claims carry a six-year limitations period as breach of contract claims.

Case Background

Juan Martinez (“Martinez”) alleged that he worked as an hourly laborer for T. Slack Environmental Services, Inc. (“T. Slack”), a small, non-union New Jersey contractor that employed between six and ten hourly laborers subject to the same pay practices from 2006 to 2019. Id. at 3-4.

In February 2020, Martinez filed a lawsuit in which he alleged that T. Slack failed to pay required prevailing wages for public work, including for tasks classified as “B” and “C” laborer functions under the PWA. Id. at 4. He also claimed that defendants miscalculated overtime by paying him at lower rates rather than using a blended or weighted rate when he worked on both public and private projects or in different job titles during the same week. Id. at 5. Martinez further alleged uncompensated “off-the-clock” work, including transporting equipment to and from worksites and defendants’ Kenilworth facility, and asserted that earned sick leave was improperly calculated using the lower private wage rate. Id. at 5-6.

Following discovery conducted under the supervision of a special adjudicator, Martinez moved to certify a statutory representative action under the WHL and PWA in September 2024. Id. at 6-7. Defendants opposed on several grounds, arguing that Martinez had not satisfied the class action requirements of Rule 4:32-1, that a representative action was not permissible outside of Rule 4:32-1, that the putative class lacked numerosity, that Martinez was not an adequate representative, and that individualized questions precluded both representative and class treatment. Id. at 7.

The motion court granted Martinez’s motion, certified the matter as a representative action, designated Martinez as the representative of defendants’ current and former employees, and imposed a six-year look-back period for overtime claims from February 28, 2014, to February 28, 2020. Id. at 7. Defendants appealed. Id. at 8.

The Appellate Division’s Decision

The Appellate Division held, consistent with its recent decision in Cano v. County Concrete Corp., 483 N.J. Super. 459 (App. Div. 2026), that “the statutory language of both the WHL and PWA is independent of Rule 4:32-1 and therefore does not require class certification.” Id. at 3. The Appellate Division explained that the remedial nature of the PWA permits any worker “to maintain such action for and on behalf of [themselves] or other work[ers] similarly situated,” N.J.S.A. 34:11-56.40, and that this statute addresses the similar concerns of the WHL and ESLL. Id. at 15.

In addition, the Appellate Division rejected T. Slack’s argument that Martinez was required to present evidence of other similarly situated employees to qualify as a representative action. Id. Instead, it determined that, as in Cano, Martinez’s complaint put defendants on notice regarding the existence of similarly situated employees, and that the plain language of the PWA and WHL does not require a named plaintiff to identify the similarly situated employees to defendants. Id. at 15-16. Defendants, moreover, were already aware of approximately fifteen employees whose names and contact information had previously been provided to Martinez. Id. at 16.

Lastly, the Appellate Division reversed the six-year look-back period for WHL claims, and, by incorporation, ESLL claims. Id. at 18. Relying on Maia v. IEW Constr. Grp., 257 N.J. 330 (2024), the Appellate Division held that the 2019 amendment extending the WHL limitations period from two years to six years applies prospectively only, so the two-year limitations period governed those claims. Id.

On the other hand, the Appellate Division affirmed the six-year look-back period for PWA claims. Id. at 18-19. Because PWA claims for unpaid prevailing wages are treated as breach of contract claims, and the PWA does not provide its own limitations period, the general six-year contract limitations period under N.J.S.A. 2A:14-1 applied. Id. at 19.

Implications For Employers

This decision confirms that representative wage actions under New Jersey’s WHL, PWA, and ESLL may proceed independently of Rule 4:32-1 class certification requirements. While this may expand procedural avenues for plaintiffs pursuing wage claims on behalf of similarly situated employees, employers should note that the decision also limits potential exposure for WHL and ESLL claims by applying a two-year statute of limitations to pre-2019 conduct.