Category: Class Action Weekly Wire

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Tyler Zmick with their discussion of an Illinois Supreme Court ruling that is welcome news for BIPA defendants and companies operating in the health care space.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

 Episode Transcript

Jerry Maatman: Thank you loyal blog readers and listeners, welcome to this week’s installment of the Class Action. Weekly Wire. Joining me today is my colleague, Tyler Zmick, here at Duane Morris.

Tyler Zmick: Thanks, Jerry. Great to be here.

Jerry: Today we’re discussing the most recent decision of the Illinois Supreme Court in Mosby v. Ingalls Memorial Hospital, a decision by the high court regarding exemptions under the BIPA statute – which is the source of so much class action litigation here in Illinois. Tyler, you’re one of the foremost thought leaders in this particular space – what’s your read on this particular decision?

Tyler: Sure, well I think it’s a significant and rare defendant-friendly ruling. And this exception at issue in the case could be potentially pretty broad and could be a basis for defendants to assert viable defenses in cases that are sort of less obviously involving or related to healthcare than this specific Mosby case.

But with respect to this case that went before the Illinois Supreme Court – the plaintiffs were nurses, and the hospitals they worked at required them to use a fingerprint-based medication dispensing system. So basically, the nurses had to scan their fingerprints to verify their identities, and the system would then give them access to controlled medicines which the nurses would then give to their patients. So, the plaintiffs sued the hospitals they worked for, in addition to the company that sold the medication dispensing device, and they alleged that all the defendants violated the BIPA by using the device to collect their biometric finger scan data without complying with the BIPA statute’s notice and consent requirements.

In the trial court, the defendants moved to dismiss, and they did so on the basis that the claims failed because plaintiff’s’ data was excluded from the scope of the BIPA. And specifically § 10 of the statute states that “biometric identifiers do not include information captured from a patient in the health care setting or information collected for healthcare treatment, payment, or operations under HIPAA.” And, as we all know, HIPAA is the federal health privacy statute that applies in many circumstances, and is often cross-referenced in state statutes. So defendants argued that the latter clause regarding HIPAA applied, and that plaintiffs’ fingerprints had been used so that the nurses could provide medicine to treatments, meaning the fingerprints were collected for healthcare treatment under HIPAA, but the trial court denied the motions to dismiss, which led to the appeal – first the Appellate Court, and then to the Illinois Supreme Court.

Jerry: I thought that the trial court’s disposition of the exemption, as well as the discussion by the Illinois Appellate Court regarding the either narrow or broadness of that particular exemption, was very interesting. I know, in handling these sorts of cases, plaintiffs always argue that exemptions to liability should be construed very narrowly. But it seems like in this particular case, the Illinois Supreme Court ruled in a very practical and straightforward way. With respect to the exemption, what did you find interesting between the trial court, Appellate Court, and Supreme Court’s treatment of the exemption?

Tyler: That’s a good question. I think primarily the Appellate Court’s reading of the healthcare exception in the BIPA statute was less based on the plain language of the statute, and as we know, the first rule of statutory interpretation is, go with the plain language of the statute, and read every word, so nothing is superfluous. And that is what the Illinois Supreme Court did here, and also interestingly, what one of the three appellate court justices did – specifically Appellate Court Justice Mikva thought that the exception should be applied more broadly in the way the Illinois Supreme Court did end up interpreting it.

Jerry: I went to law school with Justice Mikva, a good friend and very well respected in the bar. Did you think that the dissent in terms of its interpretation, somewhat carried the day and swayed the Illinois Supreme Court in terms of the result that we saw here from the high court?

Tyler: Yes, absolutely. I mean in pretty much every respect the Illinois Supreme Court agreed with Justice Mikva’s dissent. The high court unanimously held that as Justice Mikva opined that the BIPA’s exclusion for information collected for healthcare treatment, payment, or operations under HIPAA can apply to the biometric data of healthcare workers, and not only patients. And obviously here we have plaintiffs that were nurses and thus healthcare workers.

Going to the specific analysis that was adopted by the Supreme Court and Appellate Court’s justice, the high court determined that the relevant sentence of § 10 excludes from the definition of biometric identifier data that may be collected in 2 separate and distinct scenarios rather than overlapping scenarios. Specifically, biometric identifiers do not include (i) information captured from a patient in a healthcare setting or (ii) information collected, used, or stored for healthcare treatment, payment, or operations under HIPAA. And the Supreme Court again agreed with defendants that the two categories are different, because the information excluded under the first clause originates only from the patient, whereas information excluded under the second clause may originate really from any source. And regarding that second HIPAA clause, the Supreme Court observed that the Illinois Legislature borrowed the phrase ‘healthcare treatment, payment, and operations’ from the federal HIPAA regulations, and it’s important to note that the federal HIPAA regulations in turn provide relatively broad definitions for those terms. So it remains to be seen just how broad the BIPA’s healthcare exception will be when applied in other future BIPA cases.

Jerry: Well, it seems to me this is a gem of a ruling, and one that defendants – both in and outside of the healthcare industry – should put in their toolbox as an additional line of defense to oppose efforts to certify classes or for plaintiffs’ lawyers prosecuting BIPA cases. So thank you very much for your analysis, Tyler, and for being our guest on this week’s Class Action Weekly Wire.

Tyler: Absolutely. Thanks for having me, Jerry.

U.S. And U.K. Cybersecurity Agencies Announce International Agreement Addressing AI Safety

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Brandon Spurlock with their discussion of the latest developments on the regulatory front of artificial intelligence.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

Episode Transcript

Jerry Maatman: Hello, loyal blog readers! Welcome to the Class Action Weekly Wire. Today our guest is my colleague, Brandon Spurlock.

Brandon Spurlock: Hey Jerry, it’s great to be here. Thanks.

Jerry: Today, we’re talking about the most recent developments on a global basis for regulatory endeavors insofar as artificial intelligence is concerned. I know that, Brandon, you’re a thought leader in that space, so wanted to get your feedback on what corporations should know about the global move towards regulation of artificial intelligence.

Brandon: Absolutely, Jerry. Well, this agreement was unveiled to the public just this past weekend – November 26 to be exact. It’s titled “Guidelines for Secure AI System Development.” This initiative was led by the U.K.’s National Cyber Security Centre, and it was developed in conjunction with the U.S.’ Cybersecurity and Infrastructure Security Agency. These guidelines focus on how to keep artificial intelligence safe from rogue actors. The U.S., Britain, Germany, are among 18 countries that signed on to the new guidelines laid out in this 20-page document. Now, this is a non-binding agreement that lays out general recommendations, such as monitoring AI systems for abuse, elevating data protection and vetting software suppliers. One thing to note is that the framework does not address the challenging questions around data sources for AI models or appropriate use of AI tools.

Jerry: Well it certainly seems to be a milestone on the road to regulation of AI from a comparative standpoint. Where is the United States when it comes to regulation of artificial intelligence, as compared to other countries or major jurisdictions?

Brandon: Really  good question, Jerry. Many countries are putting their resources together, as well as independently positioning themselves to demonstrate leadership when it comes to embracing AI – while also cautioning its security, privacy, and market risk. So countries like France, Germany, Italy – they recently reached an agreement on how artificial intelligence regulations should be structured around “mandatory self-regulation through codes of conduct.” So what does this mean? It’s focused on how these AI systems are designed to produce a broad range of outputs. The European Commission, the European Parliament, and the EU Council are negotiating how the bloc should position itself on this particular topic.

Even last month, when we examined President Biden’s executive order on artificial intelligence, that publication from the White House further provides businesses with the in-depth roadmap of how the U.S. federal government’s regulatory goals regarding AI are developing.

Jerry: The evolution of artificial intelligence is certainly uppermost in the mind of most corporate counsel, and its impact on litigation – and in particular, the class action world – is real and palpable and with us. So thank you for your thoughts and analysis, Brandon, and we’ll see you next week on the Class Action Weekly Wire.

Brandon: Thanks, Jerry.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and special counsel Eden Anderson with their discussion of a PAGA case currently before the California Supreme Court weighing whether trial courts have inherent authority to ensure that PAGA claims will be manageable at trial, and to strike or narrow such claims if they cannot be managed appropriately.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

Episode Transcript

Jerry Maatman: Thank you for being here, loyal blog readers, in our next installment of the Class Action Weekly wire. I’m very excited to join my colleague, Eden Anderson, who is on the show today to talk about new California developments.

Eden Anderson: Thanks, Jerry. I’m very happy to be here.

Jerry: Great. A significant decision in the PAGA area was argued this past month in the California Supreme Court. And I know you’re following all things PAGA and all things arbitration on behalf of employers, and are very much in the forefront of thought leadership in this area. Could you tell our audience a bit about the case and what it means?

Eden: Yes, the Estrada, et al v. Royalty Carpet Mills case. There the plaintiff Jorge Estrada filed a putative class and PAGA action against his former employer asserting meal period violations under California law. The employer manufactured carpets and had employees working at a number of different locations and a number of different positions. The court initially certified two classes of workers from two different production facilities – 157 employees in total – and the claims were tried to the bench. The judge ultimately to decertified one of the two classes. The judge found there were too many individualized issues to support class treatment for that group, and as to the PAGA claim for that group, the judge deemed it not manageable, and dismissed it. Mr. Estrada appealed, and he argued that PAGA claims have no manageability requirement, and the Court of Appeal agreed with him; it reasoned that class action requirements don’t apply to PAGA actions, and therefore the manageability requirement that is rooted in class action procedure does not apply. And at the same time the Court of Appeal acknowledged that the difficulty that employers face, and trial courts as well with PAGA claims involving hundreds or thousands of employees, but it concluded that dismissal for lack of manageability just isn’t a tool that trial courts can utilize.

Jerry: I know there are a range of approaches that trial courts and appellate courts have undertaken when it comes to managing or adjudicating a PAGA action. Is there a split in authority that the California Supreme Court is going to be debating and looking at in terms of its ultimate ruling?

Eden: Yes, that’s correct. The holding in Estrada is contrary to the holding in Wesson v. Staples, where the trial court struck a PAGA claim as unmanageable, and the Court of Appeal affirmed. The claims at issue in Wesson involved the alleged misclassification of 345 store managers. The employer’s exemption affirmative defense turned on individualized issues as to each manager’s performance of exempt versus non-exempt tasks, which varied based on a number of factors including store size, sales volume, staffing levels, labor budgets, store hours, customer traffic, all of which varied across the stores.  The split in authority prompted the California Supreme Court to grant review in Estrada, but not Wesson. The Court of Appeal there determined that they had properly been dismissed for lack of manageability.

Jerry: I know the case was argued on November 8, and the stakes are quite high. It’s a vexing area for employers. It’s a challenging area for judges and lawyers. What were your takeaways from the oral argument, and what employers ought to know about the issues that were argued over that day before the California Supreme Court?

Eden: Overall, it was an uplifting oral argument for employers, which, as you know, can be a little bit unusual out here. On the downside, several justices, including justices Liu and Jenkins, express some skepticism about whether a trial court’s inherent powers allow it to outright strike or dismiss an entire PAGA action for lack of manageability. Justice Liu commented that permitting trial courts such wide-ranging power could shortchange the PAGA statute, unless there’s an overriding constitutional interest. On that point several justices acknowledged that an employer has a due process right to present evidence to support its affirmative defenses, and that in certain cases that evidence might require a series of mini trials over a period of years and wholly consume a trial court’s resources. Justice Kruger asked questions of Estrada’s counsel about the impracticability of requiring trial courts to consume years of time and resources in that manner. Justice Groban also expressed concern about a PAGA case, for example, where you have multiple labor code violations alleged, hundreds or even thousands of employees at issue, different work sites, different types of employees ranging from janitors to accountants, and he asked why, in such a case a trial court could not just limit the case to the accountants only, and other justices raised similar concerns. Chief Justice Guerrero asked Estrada’s counsel why the answer shouldn’t just be that trial courts have this broad discretion and that it’s just something that’s going to be subject to appellate review.

Jerry: It’s often said that California is the toughest venue in the United States to be an employer and litigate cases in courtrooms there. I suspect the answer is a little more nuanced, since every case is different. But given your expertise in this area and your thought leadership, do you have any prognostications for employers as to the outcome of the Estrada case and the California Supreme Court?

Eden: Yeah, given the constellation of comments from the justices, the court may hold that trial courts have an inherent authority to protect an employer’s due process rights, and that such power necessarily encompasses the right to gauge the manageability of PAGA claims, and to narrow them down as to whether that authority includes outright dismissal of an entire PAGA case. Employers are going to have to wait and see – a decision has to issue within 90 days, so we will soon know the answer.

Jerry: Well, in following the dockets of filings in all the states as we do, I think the number one case being filed these days by the plaintiffs’ bar are PAGA representative actions. So this particular decision certainly has the potential to be a game changer in the landscape of legal liability, especially in California. Well, thank you so much, Eden, and thank you to our loyal blog listeners for another edition and participation in our Class Action Weekly Wire.

Eden: Thank you for having me, Jerry, and thank you listeners.

Executive Order Targets Safety & Security, Consumer Privacy, And Algorithmic Discrimination

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Alex Karasik and associate George Schaller with their discussion of the landmark Executive Order published by the White House last week regarding artificial intelligence. The EO provides a good roadmap for employers of the federal government’s regulatory goals as artificial intelligence begins to take firm root throughout all sectors of the American economy.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

Episode Transcript

Jerry Maatman: Hello loyal blog readers, welcome to this week’s installment of our Class Action Weekly Wire series. I’m joined today by my colleagues Alex Karasik and George Schaller for an interesting discussion on artificial intelligence. Welcome Alex and George.

Alex Karasik: Thank you Jerry, always a pleasure.

George Schaller: Great to be here, Jerry.

Jerry: Today we’re talking about an important issue that has been in the news over the last week, and that is the White House initiative on artificial intelligence. Alex, can you give provide some overviews of what employers and corporations need to know about this particular event?

Alex: Absolutely, Jerry – like many federal, state, and local regulatory bodies, the White House is also paying attention to AI in terms of what its impact might be on a broad range on constituents. The Executive Order endeavors to cover eight key areas: consumer protection, workers’ protection, safety and security, privacy, innovation and competition, global leadership, and the government’s own use of AI. And in setting the tone on the regulatory front, this marks the White House’s commitment to these areas. The broad range means that essentially every sector of the American business economy could be potentially underneath the umbrella of AI and impacted by this new development.

Jerry: I found it fascinating that the White House and President Biden would focus on and get involved in potential regulation and policy statements in artificial intelligence. George, what does the Executive Order say and contemplate with respect to issues involving safety and security?

George: That’s a great question, Jerry. The EO directs the creation of new safety and security standards in requiring safety testing and reporting, standard safety tests, biological synthesis screening, determining best practices for detecting AI-generated content, establishing a cybersecurity program, and ordering the development of a national security memorandum. There are many AI-enabled problems like “deep fakes” and disinformation campaigns, and these are key targets in this area. Right now the processes and technologies for labeling the origins of text, audio, and visual content is further behind than the advancement of AI tools – a reliable way to identify machine-generated content does not yet exist.

On the privacy viewpoint, the EO includes evaluating how government agencies collect and use commercially available information, as well as enhancing privacy guidance for federal agencies.

Jerry: The phone calls I’ve gotten over the last ten days from general counsel of companies with whom we work focused on their responsibilities, obligations, and duties as employers. Alex, in pivoting to anti-discrimination issues and how artificial intelligence may impact workplace litigation issues – are there particular topics, areas, and issues that employers should focus on in the wake of the Executive Order?

Alex: Thank you, Jerry, that’s a great question. If we had to boil this down to three topics that are most impacted by the Executive Order in terms of anti-discrimination laws, it would be equity, workers’ protection, and civil rights. And what’s the common thread that ties all these topics together? Algorithmic fairness and algorithmic discrimination is a common theme. For example, the EO mentions making sure that federal contractor programs are being monitored for not having any type of discriminatory impact on those that are being hired. We’ve also seen something similar in New York City, where in July of 2023, there was an algorithmic fairness law that came out about the use of artificial intelligence in hiring processes. And we anticipate that the Executive Order is starting the conversation on the federal level. Whether or not and how the Executive Order will be enforced remains to be seen, but nonetheless I think this signifies that the federal government is aware what state and local governments are doing around the country and they’re now starting that conversation from a broader, bigger level.

George: Additionally, the EO highlights the importance of responsible and effective government use of AI by issuing guidance, acquiring products, and hiring professionals for government agencies. The EEOC has artificial intelligence in its strategic sights as well – both on the enforcement level and as an agency resource. It will be important to watch how different government agencies will be involved with carrying out the eight priorities set forth in the EO and considering the short timelines outlined, and further down the road, seeing what the extent of the enforcement strategy will be.

Alex: The Executive Order also aims to identify the benefits of AI and see how this technology could be used for good purposes. In addition, the Executive Order calls for monitoring of the labor markets to see what is the actual impact of this technology in terms of how it’s being used – is it having a good impact, are there potential harms that are arising from its use? Essentially, the Executive Order wants more data to make the most informed decisions.

Jerry: It struck me that this 100-page Executive Order is, in essence, the first ten feet in a race that is probably as long as a marathon, and this is that starting salvo in terms of the government getting involved in AI regulation. More importantly, the plaintiffs’ bar is nothing if not innovative, and certainly the use of artificial intelligence, applications of it, and challenges to its use are going to be things that I believe are going to find their way into privacy-related class action litigation and employment-related class action litigation, at least at the start.

George and Alex, thank you for your comments and thought leadership in this area, and loyal blog readers, we’ll see you next week on our future installment of the Class Action Weekly Wire.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jennifer Riley and associate Nathan Norimoto with their discussion of recent developments in a Massachusetts wage & hour suit brought by delivery drivers alleging independent contractor misclassification.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

Episode Transcript

Jennifer Riley: Hello, podcast listeners, welcome to this week’s installment of the Class Action Weekly Wire. I’m Jennifer Riley, partner at Duane Morris, and joining me today is Nathan Norimoto, associate in our San Francisco office. Welcome, Nathan.

Nathan Norimoto: Thanks, Jen. It’s great to be here.

Jen: So today we’re discussing one of the top areas of focus by the plaintiffs’ class action bar – wage & hour litigation – and in particular, we’re going to talk about a misclassification case out of Massachusetts involving the arbitration defense. Nathan, can you start by giving our listeners some background on the case?

Nathan: Absolutely. So, misclassification is a popular theory alleged in wage & hour lawsuits often alleging exempt versus non-exempt or independent contractor versus employee claims. This particular case involves independent contractor misclassification claims brought under the Massachusetts Wage Act and the Massachusetts Minimum Fair Wage Law. The case at issue is Canales, et al. v. Flowers Foods, Inc., et al., currently pending in the U.S. District Court for the District of Massachusetts.

Delivery drivers had filed suit in 2021, alleging that Flowers Foods and its subsidiaries, LePage Bakeries and CK Sales Co., misclassified them as independent contractors, and sought wages and overtime pay. After the district court denied the defendants’ attempts to make the workers arbitrate under the Federal Arbitration Act, or FAA, the companies appealed to the First Circuit, and the appeals court back to the district court’s judgment – finding that precedent from the First Circuit and the Supreme Court lays out the exemption from arbitration under the FAA. Just last month, after the First Circuit issued its decision, the defendants filed a motion to dismiss or compel arbitration under the Massachusetts Uniform Arbitration Act.

Jen: Thanks for that background, Nathan. What was the result of the Court’s latest ruling?

Nathan: So earlier this week, U.S. District Judge Allison D. Burroughs denied the defendants’ motion to dismiss or compel arbitration under the Massachusetts Uniform Arbitration Act. The judge had found that defendants delayed in filing a motion to compel arbitration, which was inconsistent with the purpose of arbitration, citing a Massachusetts district court decision called Oliveira v. New Prime, Inc.

However, in that same decision, Judge Burroughs did separately grant the companies’ request to stay the case while the United States Supreme Court weighs a decision in Bissonnette v. LePage Bakeries. In that Supreme Court case, the Second Circuit had argued that the delivery drivers were not exempt from arbitration under the FAA because they are employees in the bakery industry. Under Section 1 of the FAA, there’s an arbitration exemption for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”

Jen: Thanks so much, Nathan, for that rundown on this ongoing litigation and thank you listeners for joining us on the podcast today. We’ll be sure to keep you up-to-date on developments on the arbitration defense, the transportation worker exemption, and other issues. That wraps up another episode of the Class Action Weekly Wire.

Nathan: Thanks for having me, Jen, and have a great day everyone.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Greg Tsonis with their discussion of a California wage & hour settlement for $155 million in a class action brought by correctional officers regarding overtime wages for pre- and post-shift tasks.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, Apple Podcasts, Google Podcasts, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, YouTube or our RSS feed.

Episode Transcript

Jerry Maatman: Thank you for being here. Welcome to our Friday weekly podcast called the Class Action Weekly Wire. My name is Jerry Maatman I’m a partner at Duane Morris, and today we’re joined by my colleague Greg Tsonis who works in our employment group here in Chicago. Welcome, Greg.

Greg Tsonis: Thanks, Jerry. I’m very happy to be here.

Jerry: Today on our podcast we’re discussing wage and hour litigation. By my way of thinking – the number one risk that employers have throughout the United States. And there was a significant development this week with a rather substantial settlement involving correctional officers in California. Greg, can you give us a thumbnail description of what occurred ?

Greg: Absolutely, Jerry. So this case has actually been going on for 15 years. The classes in this case consisted of over 10,000 current and retired correctional sergeants and lieutenants that worked in the California correctional system. They filed suit against the state of California and its Department of Corrections and Rehabilitation alleging that they failed to pay overtime wages for preliminary and postliminary work activities – things like security searches, tool pickup, and pre-shift supervisory responsibilities – extending all the way back to 2005.

Jerry: Because of a more than 15-year litigation timeline – is that unusual in California or other parts of the country?

Greg: Very unusual, definitely not typical for a wage and hour class action alleging these types of claims to go on for 15 years.

Jerry: What were some of the terms of the settlement, and in your mind why is it significant for employers?

Greg: So in terms of the topline dollars, the party settled the claims for $155 million which included $46.5 million in attorney fees to three different law LA firms. Ultimately in the Court’s analysis of the settlement, it determined that the settlement was fair, reasonable, and adequate and found that it afforded members of the settlement classes meaningful relief under the circumstances, taking into consideration the risks and expenses of continued litigation. The Court also found that the fees requested were reasonable in part based on both the results obtained by class counsel as well as the issues and risk involved in the case, and the fact that the litigation had been going on for over 15 years. So a settlement this size – certainly employers should be aware of the potential risk for wage and hour class actions that have the potential for these sorts of nine figure settlements.

Jerry: In terms of a 15-year timeline, what were some of challenges confronted in the case involving uh class members who passed away, class members who went on to other jobs and were ex-employees, and then morale issues with the current employee population?

Greg: That’s exactly right Jerry. So thousands of the original class members have obviously retired at this point given the length of time, and one of the original named plaintiffs and even other unnamed class members have even passed away since the litigation commenced. In fact, indicated in their final settlement approval motion was that it would be a great benefit to the remaining class members to finalize the settlement at long last and you know get these individuals paid as soon as possible.

Jerry: $155 million is a monster huge settlement. I’ve studied this area for about 20 years and done comparative analyses of top 10 settlements in each calendar year, and I know that last year the top 10 wage and hour class action settlements topped out at about $545 million. Where does this year’s $155 million class action settlement rank this particular case?

Greg: Great question. So far this year this settlement ranks at number two in the wage and hour space of top settlements in 2023. It’s obviously a very significant settlement and could very well stay at the top of the range of recoveries for wage and hour cases this year.

Jerry: Well inevitably, like most often with taxes and rates go up, it sounds like 2023 is trending for a very, very big year and possibly higher settlement numbers than in years in the past.

Greg: I think that’s absolutely right Jerry.

Jerry: Well thank you for your thought leadership and joining us today, Greg< and providing your analysis of this particular noteworthy settlement .

Greg: Thanks for having me Jerry and thank you to all the listeners.

Jerry: That’s it for our Friday weekly podcast thanks for joining us here at the Duane Morris Class Action Blog.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partner Jerry Maatman and associate Brittany Wunderlich with their discussion of a Ninth Circuit’s ruling issued this week that reversed United Airlines’ win in a disability bias suit brought a baggage handler under FEHA in California.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, or our RSS feed.

 Episode Transcript

Jerry Maatman: Thank you, loyal blog readers welcome to our Friday weekly podcast entitled the Class Action Weekly Wire. Today I’m joined by my colleague Brittany Wunderlich, and we’re going to be talking about issues in California, where Brittany practices law. Welcome, Britney.

Brittany Wunderlich: Thanks, Jerry. I’m happy to be here

Jerry: Today we’re going to talk about a recent ruling from the Ninth Circuit involving Bezzina v. United Airlines. Brittany, what’s this case about? And why is it important to employers in terms of what the Ninth Circuit wrote in this particular case?

Brittany: So, in California to be successful on a disability discrimination claim under the Fair Employment and Housing Act, otherwise known as FEHA, a plaintiff must show 3 things. First, that they suffered from a disability; second, that they were otherwise qualified to do his or her job; and third, that they were subjected to an adverse employment action because of their disability.

Jerry: To me, what makes this case interesting is the disability in question. Could you share with our listeners a little bit about the background facts, and why those facts kind of dictated the result in the Ninth Circuit’s ruling?

Brittany: Absolutely. So, this case was filed by a baggage handler working for United, who alleged that the company would not accommodate his request to wear a face shield while he was working inside rather than a mask, and this was during the height of the COVID-19 pandemic. Specifically, the plaintiff stated that he was a military veteran who suffered from post-traumatic stress disorder, and so wearing a mask caused him anxiety. On the other hand, the defendant argued that the baggage handler’s position was too unpredictable to grant the accommodation, and that, denying the request was a reasonable business decision in response to the global pandemic. The defendant thereafter place the plaintiff on an unpaid leave of absence when he would not wear his face mask, which the plaintiff alleged was an adverse employment action against him because of his disability.

Jerry: This to me is a really interesting case because of the CDC guidelines, which in essence say face masks are the option of choice, and the safest device for presenting preventing the spread of COVID-19, and that only in alternatives should face shields be used. How did the plaintiff’s lawyer litigate that question that issue to get around that problem?

Brittany: Well, at the trial court the district court granted the defendant’s motion for summary judgment. The plaintiff then appealed the decision, and the Ninth Circuit reversed and remanded the case. The Ninth Circuit stated that the issue of whether the plaintiff’s request was reasonable should be for a jury to decide. The Ninth Circuit also reasoned that a jury could find that the plaintiff was able to perform the essential job duties while wearing a face shield and without endangering the health and safety of others. The Ninth Circuit then stated that the question of whether placing the plaintiff on an unpaid leave of absence was an accommodation, or instead an adverse employment action was an unresolved, disputed fact.

Jerry: Very interesting to me. One thinks that the COVID-19 pandemic is over, but the legal disputes are still in the courts still ripe and very interesting outcomes. I think it proves the old adage that every ADA case is different, and rises and falls on the individual circumstances of the plaintiff. Well, Britney, thanks so much for sharing your thought leadership and expertise looking at that. Thanks so much for being a guest on the Class Action Weekly Wire.

Brittany: Thanks, Jerry. It’s nice being here, and thanks to all your listeners.

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman and Shireen Wetmore with their discussion of the $36 million settlement approved last week resolving claims from multiple cases in both federal and California state court challenging an employer’s wage and hour practices.

Check out today’s episode and subscribe to our show from your preferred podcast platform: Spotify, Amazon Music, the Samsung Podcasts app, Podcast Index, Tune In, Listen Notes, iHeartRadio, Deezer, or our RSS feed.

Episode Transcript

Jerry Maatman: Thank you loyal blog readers and listeners, welcome to our Friday weekly podcast series entitled The Class Action Weekly Wire. I’m very excited to welcome our guest, my partner Shireen Wetmore from our San Francisco office. Welcome, Shireen!

Shireen Wetmore: Thanks, Jerry. Happy to be here.

Jerry: Today we’re going to focus on and talk about a rather hefty settlement just approved by a court in the wage and hour space for $36 million. The name of the case is Fodera v. Equinox Holdings. Could you tell us and explain to our listeners some of the background behind a class action that would spike at $36 million?

Shireen: Of course, Jerry. Yeah, this settlement represents the resolution of claims from multiple cases in both Federal and California State Court. The settlement covers a class of over 15,000 hourly non-exempt employees and former employees of Equinox from around April 2015 through December 2022, as well as a PAGA group of non-exempt employees that includes fitness trainers and instructors. And plaintiffs alleged that Equinox, the gym where they were teaching classes and providing personal training, failed to pay for pre- and post-shift work. Plaintiffs also challenged Equinox policies regarding meal and rest breaks wage statements and other wage and hour practices. Alameda Superior Court Judge Herbert approved a final settlement just last week on September 21, 2023.

Jerry: California is a super tough place to do business, and certainly so for wage and hour liability. Many, many employers doing business in the Golden State end up receiving these sorts of lawsuits. In your opinion, and based on your thought leadership in this space, what do you think were the main takeaways from the problems in that case that resulted in a settlement of $36 million?

Shireen: You know, Jerry, oftentimes in these cases we see this with our clients all the time – settlement doesn’t always mean that there’s a problem, settlement doesn’t always mean that something wasn’t done properly – there are lots and lots of reasons why clients may choose to settle a case. Certainly a case with the scale and scope of one like this, where there’s multiple pieces of litigation progressing at the same time. That often counsels settlement, just to avoid some of the really complicated procedural issues and costs associated with litigation, as you very well know California, like you said, tough place to do business. Some of the highlights that are coming out of this particular case is that these plaintiffs claimed that they were paid per session rate for the fitness classes that they were teaching and that they weren’t getting compensation for pre- and post-shift work outside of the class time. And so they alleged that they were required to engage in certain activities, like recruiting potential students or participants, and wanted compensation for that time. Also the residual impacts of that type of work impacting their meal and rest periods.

Jerry: In terms of the overall settlement, where does this rank in calendar year 2023 among the major wage and hour class action settlements?

Shireen: That’s a great question. So far this year this settlement will go right in the middle, actually a little surprising for such a large recovery, but in the top 10 it would be the fifth largest so far this year.

Jerry: That’s incredible. I’m a believer that success begets copycats, and when there are large settlements, employers experience an uptick of lawsuits brought. Certainly workers, plaintiffs’ lawyers notice these big numbers. And so that’s one of the reasons the Duane Morris Class Action review tracks and analyzes large settlements. Given that feature of our system where success begets success. Well, thank you so much, Shireen, for joining us and providing us with your thought leadership. Great to have you on the show.

Shireen: Thanks for having me, Jerry. Thank you, listeners!

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