Olga Romadin – Class Action Defense

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.

June 22, 2026June 22, 2026 by Gerald L. Maatman, Jr.

No Retake Allowed: New York Federal Court Denies EEOC’s Motion For Reconsideration In Equal Pay Act Case Against School District

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

Duane Morris Takeaways: On June 18, 2026, Judge Anthony J. Brindisi of the U.S. District Court for the Northern District of New York denied the EEOC’s motion for reconsideration of the Court’s earlier order denying cross-motions for summary judgment in EEOC v. Hunter-Tannersville Central School District, No. 1:21-CV-00352, 2026 WL 1759441 (N.D.N.Y. June 18, 2026). The district court found that the EEOC failed to satisfy the standard for reconsideration, reasoning that the EEOC had not identified an intervening change in controlling law, new evidence, or a clear error warranting relief.

This ruling is significant for employers defending Equal Pay Act claims and reinforces the high burden parties must satisfy to obtain reconsideration, namely, that a motion for reconsideration cannot be used to relitigate old issues or present evidence that was previously available.

Case Background

On March 26, 2021, the EEOC filed this action against the Hunter-Tannersville Central School District (“District”) alleging that the District violated § 206(d)(1) of the Equal Pay Act of 1963 by paying a former District superintendent, Dr. Susan T. Vickers (“Vickers”), less than her male colleagues for substantially equal work. Id. at *1. In response, the District denied the allegations and raised a statutory affirmative defense, asserting that any alleged pay disparity resulted from factors other than sex under 29 U.S.C. § 206(d)(1)(iv). Id.

After several years of discovery, the parties filed cross-motions for summary judgment. Id. The Court denied both motions, finding that genuine disputes of material fact precluded summary judgment in favor of either party. Id. The EEOC then timely moved for reconsideration, which the District opposed. Id.

The Court’s Decision

The Court ultimately denied the EEOC’s motion for reconsideration of the Court’s order denying cross-motions for summary judgment. Id.

First, the EEOC argued that the Court had erroneously accepted certain facts as undisputed after overlooking contrary evidence, specifically a deposition exhibit that the EEOC admittedly did not submit with its prior motion papers. Id. However, the Court rejected this argument for two reasons. Id. The omitted deposition exhibit did not qualify as “new evidence” because it was readily available at the time of the earlier briefing. Id. Moreover, the EEOC did not show that the omitted evidence was inconsistent with any of the challenged findings. Id. at *2.

Next, the EEOC contended that the Court misapplied Second Circuit precedent on the question of substantial equivalence. Id. The Court disagreed, explaining that the Second Circuit has made clear that “[w]hether two positions are ‘substantially equivalent’ for Equal Pay Act purposes is a question for the jury.” Id. (quoting Lavin-McEleney v. Marist Coll., 239 F.3d 476, 480 (2d Cir. 2001)). In particular, the Court determined that the EEOC did not show a clear error in the Court’s application of the law because the “expansive record” included “sufficient evidence from which a reasonable factfinder could conclude that Vickers’ comparators had different or additional job responsibilities and performance requirements.” Id.

The EEOC also argued that the Court failed to require the District to “prove” that the pay disparities between Vickers and her comparators stemmed from gender-neutral factors. Id. at *3. The Court, however, determined that the EEOC’s argument misunderstood the relative burdens on a motion for summary judgment. Id. While the District would have needed to “prove” its affirmative defense as a matter of law to succeed on its own motion, to survive the EEOC’s motion and get to trial, “the District was only required to identify sufficient evidence from which a reasonable factfinder could conclude that ‘the pay disparity in question result[ed] from a differential based on any factor except for sex.’” Id. (quoting Eisenhauer v. Culinary Inst. of Am., 84 F.4th 507, 522–23 (2d Cir. 2023)). The Court found the District met that standard. Id.

Finally, the Court rejected the EEOC’s argument that the Court failed to apply the law requiring the District to prove that longevity and negotiation were gender-neutral factors. Id. In rejecting the EEOC’s argument, the Court noted that the EEOC cited no controlling authority for the proposition that longevity and negotiations cannot constitute factors other than sex, identifying several courts within the Second Circuit that have found such factors to be legitimate factors other than sex. Id.

Because the Court declined to reconsider its earlier ruling, the Court indicated that the EEOC’s contingent requests regarding the issues of willfulness, good faith, and damages were rendered moot. Id. at *4.

Implications For Employers

The Court’s decision underscores that motions for reconsideration are subject to a demanding standard and cannot be used as a second opportunity to relitigate issues or present evidence that was available during an earlier round of briefing.

This decision also reinforces that the question of whether two job positions are “substantially equivalent” under the Equal Pay Act is a fact-intensive inquiry properly reserved for a jury, and that shared job descriptions alone do not establish substantial equivalence as a matter of law. Id. at *2.

Lastly, the Court’s analysis confirms that longevity and salary negotiations remain viable “factors other than sex” under the Equal Pay Act in the Second Circuit. Id. at *3. Employers should therefore document the legitimate, gender-neutral factors underlying compensation decisions to support a potential affirmative defense in the event of an Equal Pay Act challenge.

June 22, 2026 by Gerald L. Maatman, Jr.

The Third Circuit’s FLSA Overtime Gap Time Decision Opens Up Circuit Split

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

Duane Morris Takeaways: On June 3, 2026, addressing an issue of first impression on overtime gap time, the U.S. Court of Appeals for the Third Circuit in U.S. Department of Labor v. Comprehensive Healthcare Mgmt. Servs. LLC, No. 24-2842, 2026 WL 1582064 (3d Cir. June 3, 2026), partially reversed an order of a district court that had awarded damages to the U.S. Department of Labor(“DOL”), which had brought a lawsuit on behalf of 6,000 healthcare employees, alleging various overtime violations under the Fair Labor Standards Act (“FLSA”) by Comprehensive Healthcare Management Services LLC (“Comprehensive”). On appeal, Comprehensive argued that the district court had erred in finding that the FLSA affords a remedy for overtime gap time claims, which address non-overtime hours in a non-exempt employee’s workweek, as well as misapplied a lower burden of proof to some of the claims against it, had erred in its finding that certain employees were nonexempt, and in some of its factual findings. The Third Circuit agreed with the employer in part, and vacated and remanded the matter to the district court.

Case Background

In 2018, the DOL brought a lawsuit in the U.S. District Court for the Western District of Pennsylvania against fifteen nursing and assisted living entities owned and operated by Comprehensive Healthcare Management Services LLC and its chief executive officer, alleging that the defendants had failed to pay hourly employees for all hours worked and the appropriate rate of pay, as well as failing to keep accurate pay records in violation of the FLSA. Id. at *1. One of the claims involved overtime gap time, which occurs when an employee who exceeds the overtime threshold does not receive pay for all non-overtime hours worked. Id.

In January 2024, the district court held a bench trial, following which it ruled in favor of the DOL, finding that there were “system errors” in the calculation of pay. Id. at *2. The district court explained that the defendants’ timekeeping system had not kept an accurate record of employees’ working hours, and Comprehensive paid employees for scheduled hours instead of hours they actually worked, as well as that the system automatically deducted meal breaks, even if employees had worked through them, and that the defendants had failed to accurately pay overtime wages. Id. The district court found that employees were not paid the required one-and-one-half regular rate required under the FLSA, and that the regular rate did not include pay that was required to be calculated in it, including shift differentials, bonuses, and other types of pay. Id. The district court also concluded that some employees had been improperly classified as exempt from the FLSA’s overtime requirement. Id. The district court, noting that the Third Circuit had not yet ruled upon the “viability of overtime gap time claims,” nonetheless awarded $35,804,438.20 in damages against Comprehensive for these violations. Id. at *3. Comprehensive appealed.

The Third Circuit’s Decision

On appeal, Comprehensive argued that the district court had erred in finding that claims for overtime gap time were cognizable under the FLSA. Id. at *3. The Third Circuit noted a disagreement among the circuits, with the Second Circuit having opined that overtime gap time claims were not cognizable under the FLSA in Lundy v. Cath. Health Sys. Of Long Island, Inc., 711 F.3d 106, 115-17 (2d Cir. 2013), while the Fourth Circuit found that they were in Conner v. Cleveland County, 22 F.4th 412, 426 (4th Cir. 2022). Id. Writing for the majority in a split panel decision, Third Circuit Chief Judge Michael A. Chagares explained that “[w]hen the statutory language is clear, the text is the beginning and the end of our inquiry.” Id. at *4. On review of the text of the FLSA, the appellate court found no mention of overtime gap time and concluded that the statute does not provide a remedy to overtime gap claims. Id. In finding that there was no support in the text of the statute for an overtime gap claims, the court of appeals rejected the Labor Secretary’s argument that under § 207 of the FLSA, the term “regular rate” contemplates an overtime requirement, and so requires that a regular rate must be paid for all hours worked. Id. Further, the Third Circuit was unconvinced by the Secretary’s reference to the DOL’s guidance, which stated that overtime under the FLSA requires the payment of all straight time worked during non-overtime hours, finding that this ran counter to the unambiguous text of the Act. Id. at *4-5. Finally, agreeing with the Court of Appeals for the Second Circuit, the Third Circuit determined that individuals seeking to bring such claims could do so under state laws. Id. at *5. Thus, agreeing with Comprehensive, the Third Circuit reversed the district court’s ruling finding that Comprehensive had violated the FLSA by failing to compensate certain employees for overtime gap time. Id.

In reviewing the remaining arguments brought by Comprehensive, the Third Circuit court found that the district court did not err in applying a lower evidentiary burden to the claims against Comprehensive under the Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946) burden-shifting framework, where an employee alleging an employer failed to keep adequate records may do so by producing sufficient evidence prior to the burden being shifted to the employer to counter the claims. Id. at *5-6. Noting that the district court based its findings on the time and pay records produced by Comprehensive, the appellate court concluded that “Mt. Clemens did not affect the analysis for these claims.” Id. at *6. The Third Circuit also found no clear error in the district court’s factual findings or finding of an ongoing pattern or practice of regular rate miscalculation, writing that the single witness that Comprehensive had produced in support of its contention that employees were paid for all hours worked instead of based on their scheduled hours was found to be unreliable by the district court, and that the Secretary of Labor had produced more concrete proof in the form of an investigation, and documentary proof corroborated by hundreds of employees. Id. Next, the Third Circuit affirmed the lower court’s finding that employees at different facilities were regularly not paid for work performed through meal breaks based on a representative sample of employee testimony and the testimony of the company’s regional consultant. Id. at *7.

Finally, the Third Circuit agreed with Comprehensive that the district court’s determination that certain employees were not exempt from the FLSA’s overtime requirements was an error because it had applied the “plain and unmistakable” burden of proof to its analysis, but under the U.S. Supreme Court’s decision in Encino Motorcars, LLC v. Navarro, 584 U.S. 79 (2018), an employer seeking to prove an employee’s exempt status does so by a preponderance of the evidence, and vacated the part of the lower court’s decision and remanded it for further proceedings. Id. at *8-9.

In a partial dissent, U.S. Circuit Court Judge Jane R. Roth wrote that the text of the FLSA “is far from clear,” and the case law defining a regular rate offered additional confusion that could be addressed by making the actual rate, contracted rate, and regular rate of pay to be the same, aligning with the Fourth Circuit decision in Conner and the U.S. Department of Labor guidance that the majority declined to endorse. Id. at *10-11.

Implications For Employers

Employers with a workforce falling under the FLSA should take heed in ensuring that exempt employees, such as those working in an executive, administrative, or professional capacity, meet the statutory minimums such as salary requirements to qualify as bona fide exempt from overtime requirements. Maintaining accurate pay and time records for exempt and non-exempt workers and conducting regular audits may serve well in defending against miscalculation allegations, as the appellate court here confirmed the lower court’s conclusion based on records provided by the company.

This federal appellate court decision further signals a circuit split on the issue of whether overtime gap time claims are cognizable under the FLSA, with the Third Circuit here joining the Second Circuit in deciding that under the plain meaning of the text they are not, while the Fourth Circuit maintains that the FLSA does offer relief for plaintiffs seeking to bring such claims.

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.

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.

May 27, 2026May 27, 2026 by Gerald L. Maatman, Jr.

Pennsylvania Federal Court Delivers Misjoinder Blow To FedEx Drivers’ Wage And Hour Mass Actions

By Gerald L. Maatman, Jr., Elisabeth Bassani, and Olga A. Romadin

Duane Morris Takeaways: On May 18, 2026, Judge Robert J. Colville of the U.S. District Court for the Western District of Pennsylvania issued an order severing claims of over 14,000 plaintiffs who had alleged violations of the Fair Labor Standards Act (“FLSA”) and state laws in Brannon, et al. v. Federal Express Corp., No. CV 2:24-1128, 2026 WL 1382330 (W.D. Pa. May 18, 2026), Abner, et al. v. Federal Express Corp., No. 2:25-1129, 2026 WL 1382330 (W.D. Pa. May 18, 2026), and Smith, et al. v. Federal Express Corp., No. 2:25-1507, 2026 WL 1382330 (W.D. Pa. May 18, 2026). Following an order to show cause, plaintiffs in each of the three matters filed motions to sever and to transfer venue, which the Court granted, tolling the statute of limitations to permit individual plaintiffs to file individual claims.

Case Background

Three mass actions were filed following voluntary decertification and dismissal by plaintiffs in Claiborne, et al. v. FedEx Ground Package Systems, Inc., No. 2:18-CV-1698 (W.D. Pa.), a conditionally certified class and collective action consisting of over 30,000 opt-ins alleging FLSA overtime violations which had been pending in the Western District of Pennsylvania for almost seven years. Id. at *1. The Court subsequently granted a Motion on Misjoinder, Change of Venue, and Separate Trials, and severed the claims of all plaintiffs in Claiborne, and a related matter entitled Atwood, et al. v. FedEx Ground Package Systems, Inc., No. 2:24-CV-1127 (W.D. Pa.). Id. The Court also issued a Memorandum Order in which it opined that Brannon and Abner were also likely mis-joined, and ordered the plaintiffs in those matters to show cause. Id. In response, the plaintiffs motioned to sever and transfer their claims to appropriate forums, as the court had granted in Claiborne and Atwood, which FedEx opposed. Id.

The Court’s Decision

The Court, including the Smith matter in its opinion due to all three matters being represented by the same law firm, granted the plaintiffs’ motion to sever, and tolled the statute of limitations at 60 days, though it declined to transfer the claims of the thousands of individual plaintiffs to appropriate forums as requested because it determined that doing so would be overly burdensome for the Court and the Clerk’s Office. Id. at *3.

Noting the wide disparity in the numbers of putative plaintiffs in Claiborne and Atwood, which had twelve and two, respectively,and the hundreds and thousands of named plaintiffs in the three matters at issue here, the Court warned that the mass actions had the appearance of “a tactical maneuver around the standard or collective action procedures,” which the plaintiffs were unable to maintain, and the Court found to be improper. Id. at *2.

The Court found, as it had in its prior orders, that the plaintiffs here were mis-joined under Federal Rule of Civil Procedure 20. Id. at *3. Noting that the U.S. District Court for the District of Massachusetts echoed its conclusions on mis-joinder in related cases before it, the Court wrote that its prior conclusions regarding impracticality of litigating the claims in Claiborne and Atwood were equally applicable here in that holding a trial for 14,296 individual plaintiffs with individual issues predominating was “patently untenable.” Id. Further, the Court found that the claims did not arise out of the same transaction, occurrence, or series of transactions or occurrences, as required for joinder under Rule 20, and thus elected to sever the claims. Id.

Finally, the Court determined that the plaintiffs’ severed claims would be continuations of their current cases, and therefore permitted an extension of the tolling period to allow them 60 days to file individual actions in appropriate forums, but cautioned that any further efforts to bring additional mass claims would be “at their own peril.” Id. at *4.

Implications For Employers

For employers with a workforce that may fall under the FLSA, this decision offers practical insight into maintaining a compliant overtime program.

The Court’s decision additionally highlights the proliferation of creative procedural tactics, such as mass actions, undertaken by plaintiffs’ attorneys as a strategic loophole when class and collective actions are otherwise unsuccessful.

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

Overtime Case Loses Pulse: New York Federal Court Finds Medical School Researchers Are Learned Professionals Exempt From FLSA And Denies Bid For Collective Action Certification

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

Duane Morris Takeaways: On March 26, 2026, Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York issued an order denying certification of a Fair Labor Standards Act (“FLSA”) collective action brought by a study coordinator alleging that his employer, a medical school, misclassified him and a group of similarly-situated individuals in Castillo, et al. v. Albert Einstein College of Medicine, Inc. et al., No. 24 Civ. 00984, 2026 WL 834712 (S.D.N.Y. Mar. 26, 2026). Following discovery, the Court found that a higher standard for the first step of the conditional certification process was warranted, and on review of evidence submitted by the defendants as well as the plaintiff, it declined to certify the collective action, concluding that the differences in coordinators’ duties precluded a collective action.

Case Background

Plaintiff, a researcher in the Cognitive Neurophysiology Laboratory of the Albert Einstein College of Medicine, a medical school based in New York, brought a collective action against the College and three related entities, including a teaching college and the schools’ parent corporations, alleging that they had misclassified study and research coordinators as “learned professionals” exempt from overtime under the FLSA. Id. at *3.

The College filed a motion to dismiss Castillo’s amended complaint in July 2024, arguing that it was not an “employer” under the FLSA and NYLL, but the Court found this unavailing and denied the motion, and the parties proceeded to discovery. Id. at *1. Castillo then moved for conditional certification under the FLSA, seeking to encompass a collective of current and former employees working as research and study coordinators for the College of Medicine and its related entities who he alleged were not compensated for overtime work. Id. Castillo also sought to toll the FLSA statute of limitations period and asked the Court to authorize notice to individuals employed by the defendants as far back as three years. Id.

The District Court’s Decision

The Court found that, in light of the substantial discovery between the parties, the plaintiff faced a higher threshold requirement of making a “modest plus” factual showing in step one of the Second Circuit’s two-step process to certify a collective action under the FLSA, which it ruled Castillo had failed to meet because evidence submitted by both parties was not convincing that a collective of similarly-situated individuals existed. Id. at *5.

In its analysis, the Court noted that classifying a category of employees as learned professionals exempt under the FLSA is not, on its own, enough for a finding of a “common policy, plan, or practice” to find them to be “similarly situated.” Id. at 6. Plaintiffs have to show a uniform misclassification by identifying individuals with similar duties and responsibilities, and Castillo had failed to do so here because his reliance on two declarations and six job descriptions lacked the weight and detail necessary to account for the work of hundreds of individuals in dozens of departments and programs across the institutions. Id. at *7-8.

The Court was further swayed by the defendants’ evidence of substantial job descriptions showing a variety of duties and responsibilities both demonstrating variation and fitting into the learned professional exemption. Id. at *8-9. Defendants produced 49 job descriptions demonstrating that coordinators’ duties ran the gamut—while some were primarily tasked with data collection, others were responsible for developing clinical studies, making medical recommendations, or engaging with patients—and had “differing levels of intellectual rigor” and educational requirements. Id.

Finally, the Court found that Castillo’s reliance on the deposition testimony of the College’s vice president of human resources actually bolstered the defendants’ position that the duties and responsibilities of coordinators vary widely from one position to the next, undermining his argument that they are similarly situated and thus eligible for conditional certification. Id. at *10-11.

Implications For Employers

This decision offers several practical takeaways for employers in fields where workers may fall under an FLSA exemption. Employers are well-served by maintaining and cataloging detailed job descriptions that accurately reflect the duties and educational requirements of each position.

The Court’s decision also highlights the strategic value of the “modest plus” standard for defendants facing FLSA conditional certification motions. Where pre-certification discovery has already taken place, defendants in many circuits may involve this heightened standard and submit their own evidence to demonstrate that putative class members are not similarly situated with respect to their job duties and requirements.