Gerald L. Maatman, Jr. – Class Action Defense

June 5, 2026June 5, 2026 by Gerald L. Maatman, Jr.

President Trump’s New National Enforcement Program For The EEOC And What It Means For Employers

By Gerald L. Maatman, Jr., George J. Schaller, and Ryan T. Garippo

Duane Morris Takeaways: On June 4, 2026, the U.S. Equal Employment Opportunity Commission (the “EEOC”) announced its National Enforcement Plan (the “NEP”) for fiscal years 2025 – 2029. The NEP reflects the EEOC’s new priorities under President Donald Trump and formally rescinds the agency’s strategic objections during President Joseph Biden’s administration.

Employers should take note of this development as it is clear that the NEP signals a forthcoming crackdown on: (1) employers’ diversity, equity, and inclusion (“DEI”) programs; (2) instances of “anti-American” bias; (3) efforts to limit “single-sex spaces” for transgender individuals; and (4) failures to provide religious accommodations.

The EEOC’s National Enforcement Plan

As readers of this blog will know, the EEOC looks and acts differently under President Trump than it did under President Biden. President Biden’s strategic priorities, which we wrote about here, here, and here, largely focused on discrimination resulting from the use of artificial intelligence, preventing systemic harassment, enforcing equal pay obligations, and protecting historically marginalized groups. President Trump’s EEOC is a lot different.

On June 4, 2026, the EEOC’s Chair Andrea Lucas (R) and Commissioner Brittany Panuccio (R) rolled out the agency’s new NEP over the objection of Commissioner Kalpana Kotagal (D). The NEP describes the agency’s areas of strategic focus because “it is not feasible for the [EEOC] to devote the same amount of resources to each charge.” (NEP at 2.) Thus, “the agency must continue to be strategic about the matters it prioritizes to maximize the agency’s impact.” (Id.) To that end, the EEOC identified four major areas where it intends to be more proactive in its enforcement efforts, each of which is discussed more fully below.

First, the EEOC stated an explicit intention to attempt to “[r]emedy[] DEI-related race and sex discrimination.” (Id. at 6.) In particular, the EEOC cited the U.S. Supreme Court’s recent decisions in Ames v. Ohio Department of Youth Services, 605 U.S. 303 (2025), Muldrow v. City of St. Louis, Missouri, 601 U.S. 346 (2024), and Students for Fair Admissions, Inc. v. President & Fellows of Harvard College, 600 U.S. 181 (2023) as the basis for its decision. As a result, we expect to see continued efforts from President Trump’s administration to crackdown on DEI programs both in the workplace and in higher education.

Second, the EEOC states that it plans to prosecute claims with an intent to “protect[] American workers from anti-American national origin discrimination.” (NEP at 6.) This prosecutorial decision tracks with last year’s first-of-its-kind settlement against LeoPalace Resort, which we blogged about here, where a group of American workers alleged that they were subject to less favorable treatment than their Japanese colleagues. We can also expect these enforcement actions to continue throughout the second Trump administration.

Third, the EEOC intends to ensure access for women to “single-sex spaces at work” due to the “binary nature of sex.” (Id.) This objective continues to signal a rollback of President Biden’s efforts to enforce protections in favor of transgender workers, and tracks with the agency’s decision last year to dismiss all lawsuits seeking to enforce such protections. As readers will recall, we blogged about the decision to dismiss these lawsuits here because they were purportedly based on “gender ideology extremism.” This area is one where there is the potential for a significant uptick in EEOC enforcement actions and investigations.

Fourth, the EEOC stated its continued commitment to “religious liberty rights” including the right “to receive religious accommodations and be free from religious discrimination, harassment, and related retaliation.” (Id.) As we explained here, however, employers can expect certain types of religious bias to be policed more heavily than others. In accordance with President Trump’s policy platform, EEOC Chair Lucas has explicitly cited “antisemitism” as the basis for the current emphasis on religious discrimination. This enforcement priority tracks with recent appellate court decisions, such as EEOC v. Center One, LLC, No. 22-2943, 2024 WL 379956, at *4 (3d Cir. Feb. 1, 2024), where the Third Circuit held that forcing an employer to work on Yom Kippur and Rosh Hashanah could create “’intolerable’ conditions of discrimination.” Thus, the EEOC is signaling its intent to continue to build on precedent like Center One in the religious discrimination space.

Implications For Employers

Employers should take note of these enforcement priorities as it previews the types of cases that the EEOC intends to pursue both through investigations and litigation. Thus, if they have not already, corporate counsel should consider whether any revisions are necessary to their organization’s DEI programs as well as to any policies concerning differential treatment provided based on national origin, sex, or religion.

Further, if an organization receives notice of an EEOC charge or subpoena – particularly one targeting a pattern, practice, or policy based on the above-mentioned objectives – it should take such allegations extremely seriously and contact experienced counsel to help them navigate the process.

June 5, 2026June 5, 2026 by Gerald L. Maatman, Jr.

Colorado Federal Court Denies EEOC Application To Enforce Administrative Subpoenas Against Psychological Testing Firm In Discrimination Investigation

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

Duane Morris Takeaways: On June 3, 2026, in Equal Employment Opportunity Commission v. Psychological Dimensions, No. 1:26-MC-00072 (D. Colo. June 3, 2026), Senior Judge R. Brooke Jackson of the U.S. District Court for the District of Colorado denied the EEOC’s application for an order to show cause as to why two administrative subpoenas served on Psychological Dimensions should not be enforced. The EEOC sought information regarding a pre-offer psychological assessment administered to job applicants for the Arapahoe County Sheriff’s Office. The Court concluded that the subpoenas sought information that had nothing to do with the discrimination allegedly suffered by the charging party and declined to hold that the EEOC’s investigative authority is unlimited.

Courts typically give wide berth to the EEOC with its administrative, pre-lawsuit subpoenas, but this ruling illustrates that courts may impose meaningful limits on the EEOC’s subpoena power where the information sought bears no connection to the harm alleged by the individual claimant.

Case Background

On June 10, 2020, Jessica Roe applied for a position as a Public Information Liaison at the Arapahoe County Sheriff’s Office (“ACSO”). (ECF 20 at 1) The application process included both pre-offer and post-offer phases. During the pre-offer phase, Ms. Roe completed a 430-plus question psychological examination, sometimes referred to as a “Job Suitability Assessment,” administered by Psychological Dimensions, a contractor to the ACSO. (Id.) Ms. Roe also took a polygraph test, provided writing samples, and participated in interviews. (Id. at 2) Following these steps, Ms. Roe was informed she was one of three finalists, had additional interviews, and was offered the job contingent upon further medical, psychological, and background investigation. (Id.)

In the post-offer phase, Ms. Roe completed another extensive psychological examination and met with the Chief Psychologist of Psychological Dimensions. (Id.)During that meeting, she disclosed a mental health diagnosis, a mental health provider, and additional information regarding prescriptions she had been given. (Id.) She was also asked to release information for the diagnosing doctors. (Id.) However, when Psychological Dimensions attempted to verify the information, the diagnosing provider could not confirm Ms. Roe had been a patient or provide records to Psychological Dimensions due to its document retention policy, so the psychologist was unable to “pass” her. (Id.) On September 14, 2020, the ACSO rescinded the job offer because Ms. Roe did not pass the post-offer psychological exam. (Id.)

On June 4, 2021, Ms. Roe filed a Charge of Discrimination with the EEOC, alleging retaliation and discrimination based on sex in violation of Title VII and disability in violation of the ADA. (Id. at 3) Nearly three years later, on March 20, 2024, Ms. Roe filed an Amended Charge to expand the allegations to include discrimination based on race, color, sex, religion, national origin, retaliation, age, disability, genetic information, and pregnancy, invoking additional federal statutes. (Id.)

On August 28, 2025, as part of its investigation, the EEOC served two administrative subpoenas on Psychological Dimensions — one pursuant to the ADEA and one pursuant to the ADA and Title VII. (Id.) The subpoenas required Psychological Dimensions to produce the Job Suitability Assessments and related communications for all individuals who answered affirmatively that they had experienced workplace sexual harassment, filed formal complaints against an employer, been involved in lawsuits, or appeared in legal proceedings. (Id. at 4)

On September 10, 2025, Psychological Dimensions objected to the subpoenas, arguing that the information was not relevant, that compliance would be unduly burdensome (requiring at least 1,500 hours), that the request infringed on the privacy and HIPAA rights of non-parties, and that the request sought proprietary trade secrets. (Id.) The parties were unable to resolve the dispute, and the EEOC filed an application for an order to show cause. (Id. at 5)

The Court’s Order

The Court denied the EEOC’s application on procedural and substantive grounds.

As an initial matter, the EEOC argued that Psychological Dimensions’ objections were both procedurally defective and untimely. (Id.) The EEOC noted that the September 10, 2025, objection letter identified only the ADEA subpoena, and there is no administrative procedure for objecting to ADEA subpoenas. (Id.) The EEOC also pointed out that objections to subpoenas issued pursuant to the ADA or Title VII are due within five days after service, making Psychological Dimensions’ objections untimely. (Id. at 5-6) The Court acknowledged the untimeliness — the objections were filed thirteen days after service — but declined to treat this delay as dispositive. (Id.)

Turning to the substance of the subpoenas, the Court identified what it characterized as a “bigger problem.” (Id. at 6) The Court recognized that the four questions in the Job Suitability Assessment potentially punished applicants for exercising their rights under discrimination laws, and the subpoenas sought information to determine whether persons who answered “yes” to those questions were consistently denied employment at the ACSO. (Id. at 7) However, that information had “no application to the charging party, Ms. Roe.” (Id.) The Court’s rationale was that it was undisputed that Ms. Roe answered “no” to all four questions, was found suitable for the position, made the short list of three finalists, and was offered the job. (Id.) The reasons her offer was rescinded were found in the post-offer evaluation, not in the pre-offer Job Suitability Assessment.

Ultimately, the Court determined it was “unwilling to hold that the EEOC’s authority to investigate discrimination in the workplace is unlimited, or that an individual’s claim that she lost a job opportunity due to discrimination opens the door to compelling a third party to produce information that has nothing to do with the discrimination allegedly suffered by the claimant.” (Id. at 7-8) For this reason, the Court denied the EEOC’s application for an order to show cause on its two administrative subpoenas. (Id. at 8)

Implications For Employers

The Court’s decision in Psychological Dimensions is a significant ruling for employers and third-party contractors who face EEOC subpoenas during the investigation of discrimination charges. The decision signals that courts may impose meaningful limits on the scope of the EEOC’s investigative subpoena power where the information sought lacks a nexus to the actual harm alleged by the charging party.

This case demonstrates that, although the EEOC’s subpoena power is broad, it is not boundless. Where the EEOC seeks to expand an investigation beyond the facts that are relevant to the charging party’s claims, courts may be willing to deny enforcement of those subpoenas. Employers who receive subpoenas that they believe extend beyond the scope of the underlying charge should carefully consider whether the information sought bears a meaningful connection to the claimant’s allegations and should be prepared to articulate that disconnect to a court.

June 4, 2026June 4, 2026 by Gerald L. Maatman, Jr.

“Transfer, Not Dismissal” — Arizona Federal Court Confirms That 28 U.S.C. Section 1631 Applies To Personal Jurisdiction

By Gerald L. Maatman, Jr., Jennifer A. Riley, Jamar D. Davis, and Kenny Tran

Duane Morris Takeaways: On June 1, 2026, in Andrew Harrington et al. v. Cracker Barrel Country Store Inc., No. 21-CV-000940, 2026 WL 1532921 (D. Ariz. June 1, 2026), Judge Diane J. Humetewa of the U.S. District Court for the District of Arizona, reaffirmed the Ninth Circuit’s determination that 28 U.S.C. section 1631 does apply to personal jurisdiction issues.

The ruling serves as a blueprint for corporate counsel on jurisdictional defenses in nationwide wage & hour lawsuits

Case Background

Plaintiffs, former Cracker Barrel employees, brought an FLSA collective action seeking redress for alleged failure to pay proper wages. Id. at *1. Cracker Barrel filed a Motion to Dismiss due to the existence of a valid arbitration agreement. Id. A subset of the Plaintiffs who did not continue with arbitration refused to relent, filing a First Amended Complaint asserting that that their signed arbitration agreements were invalid because the Plaintiffs were minors when they signed the agreements. Id. Again, Cracker Barrel filed a Motion to Dismiss contending that the Court lacked personal jurisdiction as none of the named Plaintiffs were from Arizona or worked in Cracker Barrel Arizona stores. Id. The Court subsequently granted Cracker Barrel’s second Motion to Dismiss for lack of personal jurisdiction. Id. Remaining steadfast, the Plaintiffs filed a Second Amended Complaint adding an Arizona Cracker Barrel employee as a plaintiff. Id. In denying Cracker Barrel’s third Motion to Dismiss, the Court held that the addition of the Arizona Cracker Barrel employee cured the jurisdictional defect. Id.

Following the grant of conditional certification, Cracker Barrel filed a Motion to Certify an Interlocutory Appeal. Id. The Court certified for appeal two questions, including, “[w]hether Bristol-Myers Squibb Co. v. Superior Ct. of California, San Francisco Cnty., 582 U.S. 255, 265 (2017), prevents a District Court from sending notice under Section 216(b) of the FLSA to individuals over whom the Court lacks specific personal jurisdiction.” Id. The Ninth Circuit answered in the affirmative and held that “Bristol-Myers applies in collective actions under the FLSA and to that end, specific personal jurisdiction must be analyzed for every individual plaintiff proceeding under the collective action.” Id. In real word application, this meant that the Plaintiffs attempt to cure their Second Amended Complaint by adding an Arizona Cracker Barrel employee was ineffective as specific personal jurisdiction must be satisfied for all Plaintiffs in the collective action. Id. In other words, the Ninth Circuit determined that the District Court lacked personal jurisdiction over the non-Arizona Plaintiffs. Id. at *3.

In response, Plaintiffs filed a Motion to Sever and Transfer Non-Arizona Plaintiffs to the U.S. District Court for the District Court of Massachusetts. Id. at *1.

The Court’s Decision

Plaintiffs cited three statues, 28 U.S.C. Sections 1404, 1406, and 1631, to advance their motion. Id. at *2. The Court found that Section 1404 did not apply to Plaintiffs’ Motion. Id. The Court also clarified that Section 1406 did not apply to Plaintiffs’ Motion as the statute is appropriate when making an attempt to transfer a case if the initial court is not in the proper venue. Id. The Court noted that that venue “is not a jurisdiction component” and that Section 1406 is only proper if the defendant moved to dismiss (or transfer) for improper venue. Id.

The Court observed that Section 1631 did not apply to Plaintiffs’ Motion as it “is used specifically to cure deficiencies in jurisdiction.” Id. The statute, however, hinges on a “want of jurisdiction.” 28 U.S.C. § 1631. All circuits agree that “want of jurisdiction” applies to subject matter jurisdiction; however, there is a circuit split on whether the term applies to personal jurisdiction. Harrington, 2026 2026 WL 1532921, at *2. The Ninth Circuit typically finds that Section 1631 applies to personal jurisdiction. Id.

In the end, the Court made the decision to sever the non-Arizona plaintiffs and transfer their claims to the District Court of Massachusetts because there was a “want of jurisdiction” for the non-Arizona plaintiffs and because the legislative history, plain text, and the Ninth Circuit’s interpretation of Section 1631 (that the statute applies to personal jurisdiction) allowed for the transfer. Id. at 3.

Implications For Employers

Employers should remain diligent to confirm that personal jurisdiction applies for each plaintiff proceeding under a collective action. This is because attempts by the plaintiff’s bar to retain jurisdiction with the addition of a single plaintiff who is a resident of the location for the presiding court are futile. Further, this decision reaffirms the application of the Ninth Circuit’s reading of Section 1631 — namely, that “want of jurisdiction” applies to personal jurisdiction issues. Companies defending nationwide wage and hour actions should closely evaluate whether transfer motions can be used strategically when personal jurisdiction defects exist, especially in cases involving large groups of opt-in plaintiffs from multiple states.

June 4, 2026June 4, 2026 by Gerald L. Maatman, Jr.

Colorado Federal Court Allows Employer To Seek Attorneys’ Fees Against EEOC After Deeming Long COVID Claims Frivolous

By Gerald L. Maatman, Jr., Tiffany Alberty, and Bernadette Coyle

Duane Morris Takeaways: On June 1, 2026, in Equal Employment Opportunity Commission v. A&A Appliance, Inc., No. 1:23-CV-2456 (D. Colo. June 1, 2026), Chief Judge Daniel D. Domenico of the U.S. District Court for the District of Colorado granted Defendant A&A Appliances, Inc.’s (“A&A”) motion to deem the EEOC’s claims under the Americans with Disabilities Act (“ADA”) frivolous, unreasonable, and without foundation, entitling the employer to seek a full award of attorneys’ fees. This decision is an important read for corporate counsel facing employment discrimination cases, particularly EEOC-initiated litigation. The ruling demonstrates that the federal agency can face fee-shifting consequences when it pursues claims that lack evidentiary support from their inception.

Case Background

Defendant A&A Appliance, Inc. (“A&A”) employed Karima Javanzad from February 2019 to June 2020. During the early months of the COVID-19 pandemic, Ms. Javanzad sought a 12-week FMLA leave for varied reasons, including her own possible COVID-19 infection, her son’s illness, and a gastrointestinal condition. A&A approved the medical leave retroactively, covering mid-March through early June 2020. Over the following weeks, A&A and Ms. Javanzad exchanged emails, calls, and texts about when her leave would expire and whether an extension was possible. When Ms. Javanzad did not return to work after her leave ran out, A&A terminated her employment on June 10, 2020, explaining that it had offered to extend her leave only if the original FMLA-triggering condition warranted it, and that her gastrointestinal disorder (unrelated to COVID-19) did not qualify.

Ms. Javanzad subsequently filed a charge of discrimination with the EEOC in December 2020, asserting that A&A had discriminated against her based on her disability and retaliated against her for seeking a reasonable accommodation. Following its investigation, the EEOC concluded there was reasonable cause to believe A&A violated the ADA and attempted to resolve the matter through conciliation. After those efforts failed, the EEOC filed suit in September 2023 claiming: (1) failure to accommodate, (2) disparate treatment, and (3) retaliation under the ADA.

In September 2025, the Court granted summary judgment in favor of A&A on every claim, concluding that the EEOC had not demonstrated that A&A was ever on notice of a qualifying disability that required accommodation under the ADA. A&A then moved for an order deeming the EEOC’s claims frivolous, unreasonable, and without foundation so that it could recover its full attorney’s fees.

The Court’s Decision

Chief Judge Domenico granted A&A’s motion. The Court applied the standard from Christiansburg Garment Co. v. EEOC, 434 U.S. 412 (1978), which permits an award of attorney’s fees to a prevailing defendant in an ADA case where the court finds that the plaintiff’s claim was “frivolous, unreasonable, or groundless, or that the plaintiff continued to litigate after it clearly became so.” Id. at 422.

The Court applied three factors from the Eleventh Circuit’s decision in Walker v. NationsBank of Florida, N.A., 53 F.3d 1548 (11th Cir. 1995), which the Tenth Circuit has affirmed: (1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle; and (3) whether the trial court dismissed the case prior to trial or held a full-blown trial on the merits. All three factors weighed in A&A’s favor — the EEOC failed to establish a prima facie case, A&A offered to settle, and the case was dismissed on summary judgment before trial.

The Court rejected the EEOC’s argument that the Christiansburg Garment standard is met only when a party “utterly fails to produce any evidence in support of material issues necessary to withstand summary judgment.” The Court explained that while the EEOC presented some evidence that Ms. Javanzad had a disability and requested leave, it failed to present evidence for the critical element of A&A’s knowledge of the claimed disability. As the Court emphasized, “[a] ‘health condition’ does not equate to a qualifying disability under the ADA” and “knowledge of a health condition is not necessarily knowledge of a disability.”

Importantly, the Court found that the EEOC had multiple years before initiating the action in September 2023 to investigate the facts and apply established case law. The EEOC’s own initial complaint showed that it knew Ms. Javanzad was diagnosed with vocal cord paralysis and gastritis after her June 9 endoscopy, and thus presumably after her June 10 termination, and that she was diagnosed with COVID-19 after termination. These facts undermined the EEOC’s assertion that its evidence changed throughout discovery. Moreover, fact discovery closed in July 2024, seven months before the dispositive motion deadline, and A&A raised issues of factual and legal deficiencies throughout litigation prior to summary judgment.

Finally, the Court noted that the EEOC is not a “regular plaintiff” and that courts may consider distinctions between the Commission and private plaintiffs. Quoting the Fifth Circuit, the Court observed that the EEOC “owes duties to employers as well: a duty reasonably to investigate charges, a duty to conciliate in good faith, and a duty to cease enforcement attempts after learning that an action lacks merit.” EEOC v. Agro Distribution, LLC, 555 F.3d 462, 473 (5th Cir. 2009). The Court concluded: “Ms. Javanzad might have been excused from pressing these issues. The EEOC is not.” For these reasons, the Court entitled A&A to reasonable attorney’s fees.

Implications For Employers

For employers facing EEOC-initiated litigation, this decision underscores the importance of raising factual and legal deficiencies early, consistently and persistently throughout discovery, as the Court credited A&A’s efforts to put the EEOC on notice of the weaknesses in its case. This decision also reinforces that while there is a high threshold for establishing entitlement to attorney’s fees, prevailing defendants are not without recourse when the EEOC presses claims lacking foundational evidentiary support.

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

California Federal Court Clarifies Limits On AI Bias Testing And Applicant Data Disclosure In Mobley v. Workday

By Gerald L. Maatman, Jr., Adam D. Brown, and Elizabeth G. Underwood

Duane Morris Takeaways: In Mobley, et al. v. Workday, Inc., Case No. 23-CV-00770, 2026 WL 1510537 (N.D. Cal. May 29, 2026) (ECF No. 340), Magistrate Judge Laurel Beeler of the U.S. District Court for the Northern District of California issued an order resolving three discovery disputes in this closely watched employment discrimination class action involving novel artificial intelligence (AI) issues. The Court denied Plaintiffs’ motion to compel production of Workday’s bias-testing data, finding that the attorney-client privilege protects the data because Workday’s attorneys curated it and used the results in providing legal advice. The Court also denied Plaintiffs’ motion to compel Workday to produce its customers’ applicant data because Plaintiffs failed to show that Workday had control of that data within the meaning of Rule 34 of the Federal Rules of Civil Procedure. However, the Court ordered production of Workday’s EEO-1 and Office of Federal Contract Compliance Programs (OFCCP) documents, finding those documents to be relevant to Workday’s knowledge of potential demographic disparities when utilizing its AI tools.

The ruling is significant for corporate counsel. For employers navigating the intersection of privilege, discovery obligations, and AI hiring tools, this ruling provides important guidance on protecting bias-testing data while recognizing the broad scope of discoverable information in AI employment discrimination cases.

This development follows Workday’s unsuccessful Motion to Dismiss Plaintiff’s Amended Complaint, which we blogged about here, Workday’s first successful Motion to Dismiss, which we blogged on here, and the EEOC’s amicus brief filing, which we blogged about here.

Case Background

Plaintiffs are suing Workday for utilizing an AI screening system that allegedly is more likely to deny employment applications from individuals who are African American, suffer from disabilities, or are over forty years old. Id. at *1. Workday Recruiting is a software product that helps customers manage hiring, and customers who purchase Workday Recruiting have access to an algorithmic feature called Candidate Skills Match, which determines the extent to which an applicant’s skills match the role to which they applied. Id. In 2024, Workday acquired HiredScore, which allowed Workday to offer additional features to customers, including Spotlight, a candidate review tool, and Fetch, a sourcing tool that connects organizations with potential talent by suggesting individuals for open jobs. Id.

As to the present discovery disputes, first, Plaintiffs filed a motion to compel Workday to produce its bias-testing data and its customers’ applicant data. Id. at *3. The parties disagreed as to whether the bias-testing data was protected by attorney-client privilege and whether Workday had control of its customers’ applicant data. Id. Second, Plaintiffs sought to compel production of Workday’s EEO-1 and OFCCP documents, with the parties disputing relevance, burden, and waiver. Id. at *6. Third, Plaintiffs moved to compel Workday to provide deanonymized data of applicants’ names and other application information. Id. at *7.

The Court’s Decision

Attorney-Client Privilege Applied To Bias-Testing Data

First, the Court agreed with Workday that its bias-testing data was protected from disclosure by the attorney-client privilege. Id. at *4. Specifically, the Court reasoned that the bias-testing data was privileged because Workday had shown more than mere direction from its attorneys and “ha[d] represented that its attorneys curated the data it used in the bias testing, the overall purpose of the testing was to provide legal advice and not to be used in a business capacity, and it ha[d] not submitted the data to a regulatory body.” Id.

Moreover, the Court rejected Plaintiffs’ arguments that Workday had waived privilege by using the bias-testing data offensively through reliance on an “AI Fact Sheet” that stated Workday performs bias testing. Id. at *5. Instead, the Court held that “Workday’s invoking the mere existence of its bias testing outside of litigation [was] not enough to waive privilege.” Id.

No Control Over Customer Application Data

Second, the Court denied Plaintiffs’ motion to compel Workday to produce its customers’ applicant data. Id. at *6. The Court found that Plaintiffs had not met their burden of demonstrating that the provision of the Master Subscription Agreement allowing Workday to produce a customer’s data under a court order constituted “control” under Rule 34 because Workday did not have a legal right to obtain its customers’ data on demand. Id. at *6. However, the Court observed that some third parties that Plaintiffs had subpoenaed had taken the position that Plaintiffs should seek the data from Workday instead. Id. Thus, the Court encouraged the parties to work together to resolve the issue. Id.

Production Of EEO-1 and OFCCP Documents

Third, the Court ordered production of Workday’s EEO-1 and OFCCP documents, finding that Plaintiffs had met their initial burden on relevance. Id. In particular, the Court reasoned that Workday utilizes the same AI tools as its customers, and under either the agent or direct-employer theory, “Workday’s EEO-1 and OFCCP documents are relevant to its knowledge of potential demographic disparities when utilizing AI tools.” Id. at *6.

Deanonymized Applicant Data

Finally, the Court disposed of Plaintiffs’ request for deanonymized applicant data as moot because Plaintiffs had admitted in subpoenas seeking the same information from third parties that they did not need applicant names. Id. at *7.

Implications For Employers

This decision reinforces the concept that bias-testing data can be shielded from production under attorney-client privilege when an employer’s attorneys curate the underlying data and conduct bias-testing for the purpose of providing legal advice, as opposed to a business or regulatory compliance purpose. Of note, and as supported by this Court’s decision, companies that utilize AI in their hiring processes should structure their bias-testing under the direction of legal counsel to preserve attorney-client privilege.

Moreover, the Court’s ruling on EEO-1 and OFCCP documents suggests that employers and AI vendors should be aware that they may face broad discovery obligations regarding their own use of the same AI tools they market to customers, as in this case, the Court found Workday’s EEO-1 and OFCCP documents relevant because Workday uses the same AI tools as its customers.

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

Oregon Federal Court Denies Class Certification Due To The Impact Of Unique Defenses On The Named Plaintiffs

By Gerald L. Maatman, Jr., Jennifer A. Riley, Katherine L. Alphonso, and Jamar D. Davis

Duane Morris Takeaways: On May 28, 2026, in Ashley Schroeder et al. v. University of Oregon, Case No. 6:23-CV-01806, 2026 WL 1494043 (D. Or. May 28, 2026), Judge Michael J. McShane of the U.S. District Court for the District of Oregon – without deciding whether the University of Oregon adequately supports or invests in women athletics – reaffirmed that the typicality requirement for class certification cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied” with its own unique defenses. The ruling is a significant one for corporate counsel and provides a blueprint for defense of class action claims.

Case Background

In the 2000s, particularly at the collegiate level and among Division 1 institutions in warm-weather conferences, beach volleyball was a rapidly growing sport. Id. at *2. In 2009, the National Collegiate Athletic Association (“NCAA”), under its Emerging Sports for Women program, designated women’s beach volleyball an “emerging sport” for women. Id. Notably, the NCAA Emerging Sports for Women program was designed to encourage schools to create more opportunities for women’s athletic participation to meet the requirements of Title IX of the Education Amendment of 1972 (“Title IX”). Id.

As a state educational institution, the University of Oregon (the “University”) receives federal funds and is therefore subject to Title IX requirements. Id. at *1. In 2013, the University’s athletic department announced the addition of women’s volleyball to its roster of varsity teams. Id. at *2. Since its announcement, the University has worked to approve new beach volleyball facilities, provide locker rooms, make scholarships available for recruitment, and hire a new coach. Id. It currently sponsors eight men’s varsity teams (baseball, basketball, cross country, football, golf, tennis, indoor track and field, and outdoor track and field) and twelve women’s varsity teams (acrobatics and tumbling, basketball, beach volleyball, cross country, golf, lacrosse, soccer, softball, tennis, indoor track and field, outdoor track and field, and (indoor) volleyball). Id. at *1. The University also hosts forty-one club sports teams, including but not limited to rowing, which operate outside of the school’s athletic department and are generally student organized. Id. at *1-2.

Plaintiffs — consisting of female student athletes attending the University, five of which are current or former members of the women’s beach volley team (“Beach Volleyball Plaintiffs”) and four of which are current or former members of the women’s club rowing team (“Rowing Plaintiffs”) — filed a complaint alleging the University continues to violate Title IX by depriving its female student-athletes of equal treatment, equal access to athletic financial aid permissible under federal law, and equal opportunities to participate in varsity athletics. Id. at *1.

In pursuit of their claims, Plaintiffs asked the Court to certify the following classes: (1) Equal Treatment and Benefits Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University]”; (2) Damages Class for the Equal Treatment and Benefits claim; (3) Equal Financial Aid Class defined as “all current and future female students who participate or will participate in intercollegiate varsity athletics at [the University] and do not receive all athletic financial aid permissible under federal law”; (4) Damages Class for the Equal Financial Aid claim; and (5) Effective Accommodation Class defined as “all present and future female students at [the University] who are being deprived of the opportunity to participate on women’s varsity intercollegiate athletic teams.” Id. at *3-4.

The District Court’s Decision

Judge McShane denied class certification for four of the five requested classes, namely the Equal Treatment and Benefits Class, both Damages Classes, and the Effective Accommodation Class. Id. at *5-8. The Court stayed its class certification consideration as to the Equal Financial Aid Class pending final disposition of the underlying claim on its merits. Id. at *4-5.

With regards to the Equal Treatment and Benefits Class, the Court held Federal Rule of Civil Procedure 23(a)’s typicality requirement ultimately prevented certification of the class. Id. at *6. While factual variations between a named plaintiff and proposed class members do not per se defeat typicality, typicality cannot be met when “there is a danger that absent class members will suffer if their representative is preoccupied with defenses unique to it.” Id. at *6 (internal citation omitted).

Here, rather than discussing all purported class members, Plaintiffs focused almost exclusively on the unique experiences of the Beach Volleyball Plaintiffs. Id. For example, unlike most of the other women’s varsity teams, the beach volleyball team practiced and competed off campus; until September 2025, the beach volleyball team was the only varsity team without its own locker room; and the beach volleyball team was the only varsity team without a dedicated full-time head coach who was not also coaching another team. Id. Moreover, the Beach Volleyball Plaintiffs “would need to address whether their participation in an ‘emerging’ varsity sport influences the merits of their Title IX claim.” Id. The Court expressed concern that addressing the unique experiences of the Beach Volleyball Plaintiffs would steal the focus of the litigation, creating an impermissible danger to absent class members. Id.

With regards to the two Damages Classes, the Court held a class action is not a superior method to litigate Plaintiffs’ damages claims because there are “too many distinct individual determinations that frustrate [class action] manageability. Id. at *7; see Fed. Rule of Civ. Prod. 23(b)(3). Again, the atypical experiences of the Beach Volleyball Plaintiffs would require individualized inquiry into any alleged liabilities and/or applicable remedies. Id. In addition, individualized inquiries would be needed “to determine which student-athletes were eligible for various forms of financial aid and the amount of aid they hypothetically would have received.” Id. This is only further complicated by “the University’s policy of allocating financial aid on a team-by-team basis and allowing coaches to make discretionary awards to student-athletes,” resulting in a requisite analysis into which student-athletes may have been eligible for aid but were not necessarily awarded scholarships because of other individualized considerations. Id.

With regards to the Effective Accommodation Class, the Court held the Rowing Plaintiffs were not members of the proposed class because they failed to demonstrate “they have the abilities to participate in varsity athletics . . . ” as their rowing times were markedly lower than the worst performing Division 1 rowing teams. Id. at *8 (emphasis in original). As such, Rowing Plaintiffs cannot be deprived of the opportunity to participate in varsity athletics. Id. Moreover, the Rowing Plaintiffs’ “inability to compete on a varsity level subjects them to a unique defense that defeats typicality.” Id. As mentioned above, rowing was a club sport operating outside of the school’s athletic department.

An interesting focus in the Court’s ruling was its dicta regarding the “proverbial elephant in the Title IX room” — men’s college football. Id. at *2. The Court reasoned that college football has evolved into a highly commercialized enterprise requiring investments—“extensive game-day operations and security; expansive locker room and training facilities; specialized coaching staffs numbering in the dozens; strength and conditioning programs; sports medicine and physical therapy personnel; recruiting operations; charter travel; housing and meal programs; academic tutoring; scholarships; and year-round training infrastructure” — comparative to the scale of its revenue. Id. at *2-3. Specifically, Title IX compliance cannot be measured solely on a dollar-for-dollar basis and must be “viewed across the athletic program as a whole.” Id. at *3.

Implications For Universities And Other Title IX Institutions

The Court’s message to the defense bar here is clear: continue to distinguish the named plaintiffs from the proposed class members (through factual distinctions, discrete issues, shortcomings on judicial efficiency, and unique defenses) as much as possible to oppose class certification. The opinion also provides helpful insight into how the statutory and regulatory framework of Title IX permits disparate expenditures among varying collegiate sports (namely men’s football when compared to other sports), serving as a defense into the extraordinary institutional investments associated with men’s college football that does not run counter to the aims of Title IX.

June 1, 2026June 1, 2026 by Gerald L. Maatman, Jr.

Fourth Circuit Closes Door On Third Party ERISA And WARN Act Class-Wide Liability

By Gerald L. Maatman, Jr., Rebecca S. Bjork, and Olga A. Romadin

Duane Morris Takeaways: On May 26, 2026, a unanimous panel of the U.S. Court of Appeals for the Fourth Circuit issued an opinion affirming a federal district court’s dismissal of a putative class action alleging violations of the Worker Adjustment and Retraining Notification (“WARN”) Act and the Employee Retirement Income Security Act (“ERISA”) in Tony Messer v. Garrison Investment Group, LP, No. 25-1657, 2026 WL 1465139 (4th Cir. May 26, 2026). Citing a 1996 U.S. Supreme Court decision, the Fourth Circuit ruled that the plaintiffs could not pursue a private equity firm they had voluntarily dismissed from their earlier suit for a judgment against their former employer because the district court had no jurisdiction over the firm.

Case Background

On October 19, 2018, plaintiffs, a group of several hundred former employees, brought a class action against Bristol Compressors International, LLC (“BCI”) and Garrison Investment Group LP, as BCI’s alter ego and successor, alleging that the manufacturer had failed to provide sufficient notice of the plant’s closure in violation of the WARN Act, and that it had failed to comply with ERISA in terminating the employee severance plan. Id. at *1. Following certification of three sub-classes and completion of discovery, Garrison moved for summary judgment, arguing that it could not be held vicariously liable for the actions of BCI. Id. Both Garrison and BCI also argued that the employee severance plan had been properly terminated, that members of a subclass had released their claims by signing an agreement, and that other workers had received proper notice of the plant closure under the WARN Act. Id. Plaintiffs moved to voluntarily dismiss Garrison without prejudice, citing conservation of resources, which Garrison opposed, predicting that if plaintiffs were unable to collect a judgment against BCI they would seek to collect it from Garrison instead. Id. at *2. The district court granted the plaintiffs’ motion to dismiss without prejudice. Id. Additionally, the district court granted partial summary judgment to BCI on the severance plan, and found that those workers who had signed an agreement releasing all of their claims against BCI could not participate in the suit. Id. At the subsequent trial on the remaining WARN Act claims, the district court found BCI liable, and awarded a judgment totaling $1,392,915.40, which, following an appeal to the Fourth Circuit and reversal of summary judgment on the severance plan, was increased to $4,078,105.11 on remand. Id.

In August 2024, unable to collect the judgement against BCI following its insolvency and dissolution, the plaintiffs brought an action against Garrison, its agents, owners, and related entities, alleging that it was BCI’s alter ego and seeking to pierce the corporate veil. Id. at *3. Plaintiffs argued that federal jurisdiction was proper because Garrison controlled BCI when it had violated federal laws, but the district court granted Garrison’s motion to dismiss, citing lack of subject matter jurisdiction as the judgement had been awarded against BCI following voluntary dismissal of Garrison from the earlier case, and, alternatively, finding that the statute of limitations. Id. The plaintiffs appealed.

The Fourth Circuit’s Decision

The Fourth Circuit determined that there was no federal question jurisdiction under 28 U.S.C. § 1331, and agreed with the district court’s interpretation of Peacock v. Thomas, 516 U.S. 349 (1996), where the U.S. Supreme Court found that federal courts do not have ancillary jurisdiction to impose liability over a party that was “not otherwise liable.” Id. at *3.

In, Peacock, an ERISA class action, the Supreme Court declined to extend subject matter jurisdiction over an officer and shareholder of the plaintiff’s former employer following a judgment of liability against the employer and determination that the officer and shareholder was a non-fiduciary third party and not liable for the judgement. Id. at *4. Noting that the Messer plaintiffs brought the action against Garrison “solely” because BCI could not pay, that no new violations were being alleged, and that neither ERISA nor the WARN Act impose liability on third parties, the Fourth Circuit found “no independent basis for subject matter jurisdiction.” Id. at *5. Further, the Fourth Circuit wrote that U.S. Department of Labor regulations explicitly “foreclose the applicability of duplicative theories of recovery such as piercing the corporate veil,” and the practice is disfavored both within the Fourth Circuit and other circuits. Id. at *5-6.

The Fourth Circuit was unconvinced by plaintiffs’ argument that their claims against Garrison were independent of its suit against BCI, which it dismissed on a brief overview of the record and conclusion that this was a mere attempt to piece the corporate veil in order to extend liability to Garrison. Id. at *6.

Finally, the Fourth Circuit, emphasizing the limited jurisdiction of federal courts, declined to exercise ancillary jurisdiction over the claims against Garrison on the grounds that the plaintiffs had voluntarily dismissed its claims against Garrison in their earlier suit, and proceeded to litigate exclusively against BCI, which in effect made BCI the only entity liable for the judgement. Id. at *7.

Implications For Employers

The Fourth Circuit’s decision in Messer highlights both the importance of maintaining practices that conform with applicable law, and proactive engagement with workforces who may fall under ERISA and the WARN Act when enacting reductions in force or similar measures. Key to this case, for example, was how employees were offered compensation in exchange for liability waivers. Further, this decision underscores how companies with outside ownership should consider the strategic advantage of litigating separately from affiliates, especially when risking joint and several liability.

June 1, 2026June 1, 2026 by Gerald L. Maatman, Jr.

Doctor’s Orders: Michigan Data Breach Class Action Dismissed Due To The CAFA’s Home-State Exception

By Gerald L. Maatman, Jr., George J. Schaller, and Denis Yavorskiy

Duane Morris Takeaways: On May 26, 2026, in Berven v. Sturgis Hosp., Inc., 25-CV-1142 (W.D. Mich. May 26, 2026), Judge Robert J. Jonker of the U.S. District Court for the Western District of Michigan dismissed two related data breach class actions for lack of subject matter jurisdiction, finding that the Class Action Fairness Act’s (“CAFA”) home-state exception prevented the Court from exercising jurisdiction over the cases.

The Court found that the defendant, Sturgis Hospital, Inc., carried its burden of proving that the CAFA’s home-state exception applied by demonstrating that it is more likely than not that over two-thirds of the class members are Michigan citizens. Sturgis Hospital’s records suggested that roughly 90% of its employees and former patients, the two populations impacted by the alleged data breach, reside in Michigan. Companies facing data breach and other class actions should consider similar ways to challenge jurisdiction by invoking the home-state exception.

Case Background

Plaintiffs Lavonna Berven and Paul Minor filed two related class actions against Sturgis Hospital asserting multiple “state law claims — negligence, negligence per se, breach of implied contract, unjust enrichment, and violations of the Michigan Consumer’s Protection Act” arising from an alleged data breach. Id. at *3. Plaintiffs alleged that they had “subject-matter jurisdiction under 28 U.S.C. 1332(d)(2), the CAFA provisions of the diversity jurisdiction statute.” Id.

Sturgis Hospital is a nonprofit hospital with its principal place of business in Sturgis, Michigan, near the Indiana border, and primarily employs and serves Michigan residents. Id. at *2. Sturgis Hospital collects “a home address” from every employee and patient that uses its services. Id. at *2, n 1. According to its records, “[r]oughly 90% of Sturgis’ employees reside in Michigan” and “since 2010, at least 90% of all patient visits to Sturgis were from individuals with a Michigan home address.” Id. at *2.

In September 2025, after detecting unauthorized activity in its computer network, the hospital sent “approximately 21,379 notice letters” to former patients and employees with “known addresses that were affected by the data breach.” Id. Of those notice letters “19,412—or 90.80%—were sent to individuals with Michigan addresses.” Id. Plaintiffs alleged a breach resulting in “an unauthorized third party” acquiring “Personal Identifying Information (PII) and Private Health Information (PHI)” of approximately 77,771 employees and former patients and sought to represent a purported class of those impacted. Id. Sturgis Hospital moved to dismiss both cases under the CAFA’s home-state exception.

The Court’s Decision

Judge Jonker dismissed both complaints, determining that Sturgis Hospital demonstrated “by a preponderance of evidence that the home-state exception applies[.]” Generally, under the “CAFA, federal courts have jurisdiction over class actions where: (1) any member of the class of Plaintiffs is a citizen of a different state than any defendant; (2) the class includes more than 100 putative class members; and (3) the aggregate amount in controversy exceeds $5,000,000.” Id. at *3-4 (emphasis in original). However, under the CAFA’s home-state exception, federal courts must “decline jurisdiction if ‘two-thirds or more of the members of all proposed plaintiff classes in the aggregate,’ and the primary defendants, ‘are citizens of the State in which the action was originally filed.’” Id. at *4 (quoting 28 U.S.C. § 1332(d)(4)(B)).

Judge Jonker noted that Sturgis Hospital did not need to prove the “actual citizenship of the class members” and instead had to show domicile, which turns on proof of residence and an intent to remain. Id. at *4. Sturgis Hospital produced a declaration from its CFO and COO to demonstrate, along with “over ten thousand pages of hospital records” that suggested that “roughly 90% of its employees and former patients — the only two populations affected by the data breach—reside in Michigan.” Id. These records, along with testimony, showed that between 2010 to 2025, the percent of Sturgis employees and former patients that resided in Michigan ranged from 89.55% to 92.15%., and from 93.96% to 95.80%, respectively. Id. at *5-6.

Judge Jonker found that this evidence “strongly suggest[ed]” that the “two populations affected by the data breach — resided, and were therefore presumptively domiciled, in Michigan.” Id. at *6. Further, Sturgis Hospital’s notice letter process was “even more persuasive[]” support, as testimony showed that the hospital mailed “approximately 21,379 notice letters to potential class members[,]” 90.8% of which “were sent to individuals with Michigan home-addresses.” Id. Considering this evidence, it was “easy for the Court to find Sturgis has shown that it is more likely than not that over two-thirds of the proposed class members are residents, and therefore citizens, of Michigan.” Id. at *6-7.

Plaintiffs attempted to “poke holes” in the records, claiming they are “are unreliable indicators of residence and citizenship” and that “the addresses of former patients may be faulty.” Id. at *7. Plaintiffs also argued that “the patient-visit data . . . does not fairly represent the class because it includes ‘repeat patients’ that may have sought care . . . multiple times and other individuals that may have not been affected by the breach.” Id. Judge Jonker was unpersuaded by Plaintiffs’ “speculations[.]” Sturgis Hospital “required their employees to provide a home address” and “asked patients to provide a home address at every visit,” and for those patients with multiple visits, it used “the most recent address provided.” Id. at *8. Additionally, before sending notice letters, the hospital “used a third-party vendor to check for address changes for everyone that had been identified as involved in the data breach.” Id. (emphasis in original). Judge Jonker found that these procedures in verifying address residence data “ensure[d] that residence data [was] reasonably accurate.” Id.

Judge Jonker also found that potential “double counting had a negligible impact” since “the percentage of patient visits from individuals with a Michigan address” and “the percentage of notice letters that were sent to actual individuals” were both consistent at “roughly 90%.” Id. at *8-9. Further, Sturgis Hospital’s physical location nearing the Indiana border did not “rebut the presumption of domicile.” Id. at *9. Rather, the fact that Sturgis Hospital “is located ‘exclusively’ in Sturgis, Michigan, and markets itself as a ‘hometown’ medical service’” weighed in favor of applying the home-state exception. Id.

The Court concluded that “the consistency of the data suggests that Sturgis’ information easily meets the preponderance standard” and found “the home-state exception to [the] CAFA applies.” Id. at *10. Accordingly, the Court dismissed for lack of jurisdiction. Id.

Implications For Businesses

Berven illustrates that the CAFA is not an unbounded vehicle for litigating class actions in federal court, and when an exception applies, here the home-state exception, this defeats federal court jurisdiction and requires dismissal. Sturgis Hospital presented hospital records and notice letter statistics showing that the home-state exception applied because over two-thirds of the proposed class members are citizens of Michigan.

Jurisdictional challenges are strategic decisions that should be carefully considered when defending against class actions. Corporate counsel should weigh the pros and cons of proceeding in federal versus state court before asserting a jurisdictional exception to the CAFA. Corporate counsel should also consider the strength of the support and whether it proves by a preponderance of the evidence that an exception applies.

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

Third Circuit Affirms Dismissal Of Session Replay Code Class Action Because The Collection Of Anonymized Information Does Not Constitute A Concrete Injury Necessary To Confer Article III Standing

By Gerald L. Maatman, Jr., Justin Donoho, and Hayley Ryan

Duane Morris Takeaways: On May 26, 2026, in Smidga, et al. v. Spirit Airlines, Inc., No. 24-1757, 2026 WL 1470137 (3d Cir. May 26, 2026), the U.S. Court of Appeals for the Third Circuit affirmed a federal district court’s dismissal of a class action alleging that the defendant’s use of session replay code, a form of website analytics technology, violated federal and state privacy laws. Relying on its prior decision in Cook v. GameStop, Inc., 148 F.4th 153 (3d Cir. 2025), the Third Circuit held that the three named plaintiffs lacked standing because there were no allegations of embarrassment or humiliation, plaintiffs voluntarily provided the information on the defendant’s website, the information allegedly collected was anonymized, and, in any event, most people “understand that what we do on the Internet is not completely private.” Id. at *2. Accordingly, the Third Circuit concluded that plaintiffs failed to allege a concrete injury to their privacy interests sufficient to confer Article III standing. Id. at *1.

This ruling reinforces the growing trend among federal courts requiring plaintiffs to plausibly allege that the collected data was personally identifiable and obtained without authorization in order to establish a concrete privacy injury.

Background

Many companies embed session replay code and other similar software, such as Google Analytics and the Meta Pixel, into their websites to conduct website analytics and/or targeted advertising. All of these various technologies capture users’ browsing behaviors and cryptographically transmit this data to algorithms residing on the software providers’ servers. Upon entry into the algorithm, this data is typically anonymized, aggregated, and not alleged to have been viewed or accessible by any human. Plaintiffs across the country have filed multitudes of class actions challenging these various website analytics and advertising practices under federal and state privacy laws, targeting companies in virtually every industry, including healthcare, retail, education, and consumer products. Some cases have resulted in multimillion-dollar settlements, others have been dismissed, and the vast majority remain undecided. In these session replay and other data privacy class actions, the central question is often whether the specific data captured is sufficiently sensitive or personally identifying to establish a cognizable legal injury.

In Smidga, three named plaintiffs sued the defendant airline, alleging that session replay code embedded on its website recorded users’ interactions with the website in real time, including “text entries, mouse clicks, and geolocation.” Id. at *1. Plaintiffs asserted claims under the Pennsylvania and Maryland Wiretap Acts, the California Invasion of Privacy Act, California’s Unfair Competition Law, and several other state and common law causes of action. Id. at *1 n.2.

All three plaintiffs visited defendant’s website to browse flights. Only one plaintiff ultimately purchased tickets and entered the names, addresses, and ages of herself and her children while doing so. Id. at *1.

The defendant moved to dismiss for lack of Article III standing under Federal Rule of Civil Procedure 12(b)(1) or, alternatively, for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). In support of its Rule 12(b)(1) arguments, the defendant submitted a declaration from its Senior Vice President and Chief Information Officer disputing plaintiffs’ allegations that the session replay code collected personal information and explaining that any data collected was “not traceable to any specific [w]ebsite user.” Id. at *1.

The District Court granted the motion to dismiss for lack of standing, finding that the plaintiffs failed to establish an injury-in-fact sufficient to confer Article III standing, while also granting plaintiffs leave to seek jurisdictional discovery and amend the complaint again. Id. When plaintiffs took no further action, the District Court dismissed the complaint with prejudice, and plaintiffs appealed.

The Third Circuit’s Decision

The Third Circuit affirmed dismissal of the complaint but modified the District Court’s order so that the dismissal would be without prejudice. Id.

After observing that its recent decision in Cook v. GameStop, Inc., 148 F.4th 153 (3d Cir. 2025), “plainly resolve[d]” plaintiffs’ standing challenge, the Third Circuit “briefly explain[ed]” why plaintiffs failed to establish a concrete injury sufficient to confer Article III standing. Id. at *2.

First, the Third Circuit held that the alleged harm did not share a “close relationship” to the comparator torts of disclosure of private information or intrusion upon seclusion. Id. With respect to public disclosure of private information, the Third Circuit explained that the two non-purchasing plaintiffsdid not allege that the defendant collected any personal information. Although the purchasing plaintiff entered personal information while using the website, the Third Circuit noted that the tort of public disclosure of private facts requires allegations of resulting embarrassment or humiliation, which were absent from the complaint. Id.

The Third Circuit similarly concluded that plaintiffs failed to state an analogous intrusion upon seclusion injury. Such a claim requires allegations that the defendant intentionally intruded upon plaintiffs’ “private affairs or concerns.” Id. The Third Circuit determined that standard was not satisfied because plaintiffs voluntarily provided the information, the allegedly collected information was anonymized, and, in any event, most people “understand that what we do on the Internet is not completely private.” Id.

Second, the Third Circuit rejected plaintiffs’ argument that bare violations alone confer standing, concluding that the argument misconstrued Third Circuit precedent and the U.S. Supreme Court’s holding in TransUnion LLC v. Ramirez, 594 U.S. 413, 426–27 (2021). Id. at *2.

Third, the Third Circuit reasoned that it was “hard-pressed to find that a de facto invasion of privacy exists where a website makes no express promise to refrain from collecting site visitors’ information.” Id. at *3. As explained in Cook, “there is a material difference between an allegation that a website merely failed to ask for visitors’ consent to data collection and an allegation that a website expressly promised it would not collect information but secretly did so anyway.” Id. The complaint contained no allegations that the defendant made such a promise.

The Third Circuit also rejected plaintiffs’ challenge to the District Court’s consideration of the declaration submitted in support of the defendant’s Rule 12(b)(1) motion to dismiss. The Third Circuit emphasized that plaintiffs failed to request discovery to respond to the defendant’s factual challenge despite being given the opportunity to do so, and it agreed that plaintiffs’ “boilerplate averments” alone could not rebut the defendant’s external evidence. Id. at *3.

Accordingly, the Third Circuit affirmed the District Court’s dismissal order for lack of Article III standing but modified the dismissal to be without prejudice.

Implications For Companies

Smidga reinforces that plaintiffs challenging the use of common website analytics and advertising technology must, at a minimum, plausibly allege that the technology collected and disclosed personally identifying information, rather than anonymized, aggregated web-browsing data cryptographically transmitted to software providers’ servers and not viewable or accessible by any human. Moreover, alleging the collection and disclosure of PII via functionally internal session replay technology may or may not confer standing, depending on the jurisdiction one is in, as we blogged about earlier this month (here).

For companies facing session replay and other data privacy class actions in federal court, Article III standing remains a significant threshold defense that should be evaluated throughout the litigation, while balancing the possibility that claims may continue in state court.

May 28, 2026May 28, 2026 by Gerald L. Maatman, Jr.

U.S. Supreme Court Delivers Arbitration Exemption To Last-Mile Local Drivers

By Gerald L. Maatman, Jr., Jennifer A. Riley, Eden Anderson, Rebecca Bjork, Ryan T. Garippo, and Olga A. Romadin

Duane Morris Takeaways: On May 28, 2026, in Flowers Foods, Inc. v. Brock, 2026 WL 1485669 (U.S. May 28, 2026), and in a much-anticipated ruling following a grant of certiorari from the 10th Circuit’s decision in Brock v. Flowers Foods, Inc., 121 F. 4th 753 (10th Cir. 2024), Justice Neil Gorsuch authored a unanimous opinion for the U.S. Supreme Court that affirmed the applicability of the Federal Arbitration Act (the “FAA”) transportation worker exemption for “last-mile” delivery drivers. Today’s opinion builds on the Supreme Court’s prior decisions in Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street, LLC, 601 U.S. 246 (2024, to expand the FAA exemption for transportation workers seeking to bypass arbitration. The decision has significant implications for companies who employ delivery drivers and the logistics industry generally, and will play an important factor in re-shaping the arena of class and collective action litigation.

Case Background

Angelo Brock, a Denver-based delivery franchisee who had purchased distribution rights to baked goods produced by Flowers Foods, Inc. (known as a “last-mile” delivery driver), brought a putative class and collective action in a Colorado federal district court alleging that Flowers Foods had underpaid its franchisees in violation of the Fair Labor Standards Act (“FLSA”) and state laws. Id. at *2. “Brock picks up [Flowers Foods’] products from a warehouse in Colorado and delivers them to local stores, all without leaving the State.” Id. He also signed an arbitration agreement. Id. As a result, Flowers Foods filed a motion to compel arbitration under the terms of the agreement that it entered into with its franchisees, which the district court denied, citing 9 U.S.C. § 1., which exempts workers engaged in interstate commerce, and is commonly known as the FAA’s transportation worker exemption. Id.

In denying Flowers Foods’ motion, the district court concluded that Brock fell within the ‘‘transportation worker exemption” of § 1 of the FAA, which exempts transportation workers who engaged in interstate commerce from arbitration. Thus, even though Brock did not cross state lines, the district court reasoned that he had engaged in the transportation of the company’s products – which were created outside of the state – because he delivered those products in Colorado. Id. As a result, the district court declined to compel arbitration. Id.

Following an appeal of that decision by Flowers Foods, which argued that a worker who does not leave the state, like Brock, does not qualify for the exemption, the 10th Circuit affirmed the district court’s decision based on its determination that Brock’s “intrastate route formed a constituent part of the . . . interstate journey” of the cross-border delivery of Flowers Foods’s products. Id. Flowers Foods then sought review from the U.S. Supreme Court.

The U.S. Supreme Court granted Flowers Foods’ petition for writ of certiorari and sought to answer the question of whether a worker can fall under the “transportation worker exemption” for interstate workers under § 1 of the FAA if they neither cross state lines nor interact with vehicles that do. Id. at *3.

The Supreme Court Decision

In a unanimous decision, Justice Neil M. Gorsuch authored the 8-page opinion of the U.S. Supreme Court that affirmed the 10th Circuit’s ruling and held that “transportation workers” are exempt from the reach of the FAA, citing the statutory text, historical use, and U.S. Supreme Court precedent.

The Supreme Court cited its three recent decisions addressing § 1 of the FAA, including New Prime Inc. v. Oliveira, 586 U.S. 105 (2019), Southwest Airlines Company v. Saxon, 596 U.S. 450 (2022), and Bissonnette v. LePage Bakeries Park Street., LLC, 601 U.S. 246 (2024), to reject Flowers Food’s argument that in order to qualify for the exemption, a worker must cross state lines or engage with a vehicle that does. Id. Based on the statutory text, the Supreme Court found nothing in the language of the FAA requiring crossing state lines or interacting with a vehicle that does so. Under the definition for “interstate commerce” provided by Black’s Law Dictionary, the Supreme Court further noted, the transportation of goods between states includes intrastate activity. Id.

The Supreme Court also cited historic use of “interstate commerce” by referencing case law from the 19th and early 20th centuries, including discussing a case concerning steamship transportation of goods called The Daniel Ball, 10 Wall. 557 (1871), where the Supreme Court had found that a steamer that operated in one state without direct contact with other vessels transporting the goods into other states was found to engage in interstate transportation because the goods were destined for other states. Id. at *4.

Further, the Supreme Court rejected Flowers Foods’ argument that prior precedent was erroneously based on the U.S. Constitution’s Commerce Clause, and not the FAA. The Supreme Court noted that the similarity in the language between the Clause and § 1 were “probative” of the common conception of the meaning of the term used by both at the time that the FAA was enacted. Id.

Finally, the Supreme Court declined to find that the distribution agreement between Flowers Foods and Brock was relevant to the analysis. The Supreme Court did not find any significance to the fact that the agreement was signed by Brock’s independent company, and thus affirmed the judgment of the 10th Circuit by expanding the transportation worker exemption to individuals who do not travel to other states or come into contact with vehicles that do. Id. at *5.

Implications For Employers

As we predicted in a previous post in October 2025 (here – blog post), the Supreme Court’s decision is highly significant for logistics companies and deliver driver employees. This decision further expands the “transportation worker exemption” to make it much more difficult for employers to compel arbitration in class and collective actions brought by workers in transportation and transportation-adjacent positions. The U.S. Supreme Court’s decision, which was designed to prevent an analysis that hinges on “game of tag” with vehicles engaged interstate commerce, now has the potential to sweep in a wide variety of workers whose conduct is only tangentially related to movement of a company’s products across state lines.

Despite this blow to employers’ arbitration defenses, there are still some arguments for companies to assert in order to maintain their arbitration programs. By its own terms, the Supreme Court’s opinion is limited to whether § 1 requires a bright line rule that workers who “never cross[] state lines and never interact[] with vehicles that do” are outside of the FAA exemption and does not opine on whether a worker could be so attenuated from interstate commerce that they fall outside the scope of the exemption. Further, some arbitration agreements may be enforceable under state law and, therefore, the choice of law provisions in those these agreements will likely be the difference maker in whether a class action will survive a motion to compel arbitration or not. As a result, corporate counsel – particularly in the logistics industry – should follow the developments in this space closely, because their arbitration programs are under siege and a new wave of class actions is likely headed for their organizations.