Class Action Defense

April 6, 2023 by Gerald L. Maatman, Jr.

District Court Declines To Award Additional Attorneys’ Fees In $508 Million Sex Discrimination Class Action Settlement

By Gerald L. Maatman, Jr. and Rebecca S. Bjork

Duane Morris Takeaway: Even when class actions span decades prior to settling, the case seems unwinnable, the settlement contains a vast record, and the outcome was largely favorable to plaintiffs, courts nonetheless might be reluctant to add a “superior attorney performance” lodestar multiplier for an award of attorneys’ fees when the evidence provided by plaintiffs’ counsel is insufficient to do so. This issue was present in the U.S. District Court for the District of Columbia’s recent ruling in the extraordinary 45-year long case of Hartman, et al. v. Blinken, Case No. 77-CV-2019 (D.D.C. Mar. 31, 2023).

The ruling is a must read for any corporate counsel involved in class action litigation.

Case Background

Hartman was originally filed on Nov. 25, 1977 by over 1,000 female plaintiffs alleging that they were discriminated against by the United States Information Agency on the basis of their sex in violation of Title VII of the Civil Rights Act when they were allegedly passed over for hiring or promotions at the agency. The resulting litigation continued for decades, until the last several years, which involved negotiations between the plaintiffs’ counsel and the United States Department of State, the resulting defendant following the dissolution of the U.S. Information Agency. In 2000, the parties entered into a consent decree that provided for a $508 million settlement fund for the class and for “reasonable attorneys’ fees, expenses, and costs.” Id. at 2. The parties also settled more than 20 interim attorneys’ fee requests. Id.

The class action settlement constitutes the largest employment discrimination class action settlement ever.

In 2018, after all settlement funds were issued, plaintiffs filed a motion for a final determination of attorneys’ fees, seeking an additional award of $34 million as an enhancement to the lodestar amount.

Following an extensive evaluation and analysis of the previously awarded attorneys’ fees, the court denied plaintiffs’ request. It ruled that although the lodestar fee that had been awarded up to that point was “likely not an adequate measure of class counsel’s true market value,” plaintiffs had failed to properly identify information necessary for the court to approve a modification to the award. Id. at 3. Specifically, the court noted that plaintiffs had not submitted information regarding the “Laffey Matrix rates” used to calculate interim fees over the past several years, and failed to provide interest rate differences between the 1-year Treasury bill rate and the prime rate. Id. at 3-4.

The parties thereafter stipulated that defendants: (i) would pay plaintiffs $9,033,600 to resolve any issues concerning the use of the below-market Laffey Matrix rates and the Treasury bill interest rate; (ii) that the value of the base lodestar for the enhancement was $19 million; and (iii) that all other claims based on delay of fees, true market lodestar value, or interest paid on the interim fee awards were fully resolved. Id. at 4. The only remaining issue, identified by the parties as a potential dispute, was the possibility of a lodestar enhancement for “superior attorney performance” or “exceptional results.” Id.

Plaintiffs thereafter filed a motion for a lodestar enhancement based on “superior attorney performance.” The court denied the motion.

The Court’s Ruling

The court reviewed plaintiffs’ request under the D.C. Circuit’s “three-part analysis to assess appropriate fee awards under fee-shifting statutes in cases involving complex federal litigation.” Id. at 5. Under that framework, the third part of the analysis, or whether the use multiplies as warranted, was applicable here. Id.

Plaintiffs asserted that exceptional results and superior lawyering justified enhancement of the lodestar because it did not account for: (i) the results obtained; (ii) “the preclusion of other employment by committing both human and capital resources to the case;” (iii) “the duration of the case;” (4) “the ‘undesirability’ of the case;” and (iv) “awards in similar cases.” Id. at 10.

The court essentially found that none of the factors warranted a lodestar enhancement, as all factors were already accounted for in other areas of the lodestar determination. The court explained that any special results obtained should be already reflected in the reasonableness or the hourly rates. The court also noted that the complexity and voluminous nature of the record materials would be reflected in the overall number of hours billed. The court also stated that plaintiffs failed to show how any special commitment of human or capital resources was not already reflected in the lodestar.

As to plaintiffs’ argument that the case was “undesirable” and thus an enhancement was warranted, the court ruled that plaintiffs failed to identify specific evidence demonstrating that the case was undesirable, which was required under pertinent case law. Further, any societal implications from plaintiffs’ victory could not be measured in an objective way by the court in order to provide a lodestar enhancement.

The court concluded by emphasizing that the decision not to multiply the lodestar should not be taken to diminish the “resounding success plaintiffs’ counsel achieved.” Id. at 13-14. However, the court ruled that this case was not the “rare” or “exceptional” case in which “specific evidence” supports an “objective and reviewable basis” for enhancement of the lodestar. Id. at 14. The court thereby denied plaintiffs’ request for an enhancement of the lodestar amount.

Implications For Employers

Fee awards are discretionary, but the ruling in Hartman demonstrates the high standard of evidence required for an enhancement award. This decision is an excellent reference for defense efforts to fight attorneys’ fees awards in large-scale class actions.

April 3, 2023 by Gerald L. Maatman, Jr.

ESG And The Growing Interplay With Class Action Lawsuits

By Gerald L. Maatman, Jr. and Brad A. Molotsky

Duane Morris Takeaways: The plaintiffs’ class action bar is exceedingly innovative and in constant pursuit of “the next big then” insofar as potential liability is concerned for acts and omissions of Corporate America. Environmental, Social, and Governance – known as “ESG” – each of the verticals within ESG are surely are topics on the mind of leading plaintiffs’ class action litigators. As ESG-related issues evolve and become increasingly more important to corporate stakeholders, class action litigation against companies is inevitable and has already begun to take shape. This blog post reviews the current landscape of litigation risks, and underscores how good corporate compliance programs and corporate citizenship are prerequisites to minimizing risk.

The Class Action Context

In 2022, the plaintiffs’ class action bar filed, litigated, and settled class actions at a breathtaking pace. The aggregate totals of the top ten class action settlements – in areas as diverse as mass torts, consumer fraud, antitrust, civil rights, securities fraud, privacy, and employment-related claims – reached the highest historical totals in the history of American jurisprudence. Class actions and government enforcement litigation spiked to over $63 billion in settlement totals. As analyzed in our Duane Morris Class Action Review, the totals included $50.32 billion for products liability and mass tort, $8.5 billion for consumer fraud, $3.7 billion for antitrust, $3.25 billion for securities fraud, and $1.3 billion for civil rights.

As “success begets success’ in this litigation space, the plaintiffs’ bar is loaded for bear in 2023, and focused on areas of opportunity for litigation targets. ESG-related areas are a prime area of risk.

The ESG Context

Corporate ESG programs is in a state of constant evolution. Early iterations were heavily focused on corporate social responsibility (or “CSR”), with companies sponsoring initiatives that were intended to benefit their communities. They entailed things like employee volunteering, youth training, and charitable contributions as well as internal programs like recycling and employee affinity groups. These efforts were not particularly controversial.

In recent years, ESG programs have become more extensive and more deeply integrated with companies’ core business strategies, including strategies for avoiding risks, such as those presented by employment discrimination claims, the impacts of climate change, supply chain accountability, and cybersecurity and privacy. Companies and studies have increasingly framed ESG programs as contributing to shareholder value.

As ESG programs become larger and more integrated into a company’s business, so do the risks of attracting attention from regulators and private litigants.

And The Lawsuits Begin From All Quarters

While class action litigation can emanate from many sources, four areas in particular are of importance in the ESG space.

Shareholders: Lawsuits by shareholders regarding ESG matters are accelerating. Examples include claims that their stock holdings have lost value as a result of false disclosures about issues like sexual harassment allegations involving key executives, cybersecurity incidents, or environmental disasters. Even absent a stock drop, some shareholders have brought successful derivative suits focused on ESG issues. Of recent note, employees of corporations incorporated in Delaware who serve in officer roles may be sued for breach of the duty of oversight in the particular area over which they have responsibility, including oversight over workplace harassment policies. In its ruling in In Re McDonald’s Corp. Stockholder Derivative Litigation, No. 2021-CV-324 (Del. Ch. Jan. 25, 2023), the Delaware Court of Chancery determined that like directors, officers are subject to oversight claims. The ruling expands the scope of the rule established in the case of In Re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996), which recognized the duty of oversight for directors. The decision will likely result in a flurry of litigation activity by the plaintiffs’ bar, as new cases will be filed alleging that officers in corporations who were responsible for overseeing human resource functions can be held liable for failing to properly oversee investigations of workplace misconduct such as sexual harassment.

Vendors and Business Partners: As companies face increasing demands to address ESG issues in their operations and throughout their supply chains, ESG requirements in commercial contracts are increasing in prevalence. Requirements imposed on vendors, suppliers, and partners – to ensure their operations do not introduce ESG risks (e.g., by using forced or child labor or employing unsustainable environmental practices) are becoming regular staples in a commercial context. In addition, as more companies report greenhouse gas emissions – and may soon be required by the SEC to report on them – they increasingly require companies in their supply chain to provide information about their own emissions. Furthermore, if the SEC’s proposed cybersecurity disclosure rules are enacted, companies also may require increased reporting regarding cybersecurity from vendors and others. These actions – and disclosures – provide fodder for “greenwashing” claims, where consumers claim that company statements about environmental or social aspects of their products are false and misleading. The theories in these class actions are expanding by encompassing allegations involving product statements as well as a company’s general statements about its commitment to sustainability.

State Consumer Protection and Employment Laws: The patchwork quilt of state laws create myriad causes of action for alleged false advertising and other misleading marketing statements. The plaintiffs’ bar also has invoked statutes like the Trafficking Victims Protection Reauthorization Act to bring claims against companies for alleged failures to stop alleged human rights violations in their supply chains. These claims typically allege that the existence of company policies and programs aimed at helping end human rights violations are themselves a basis for liability. In making human capital management disclosures a part of ESG efforts (including whether to disclose numeric metrics or targets based on race or gender), companies may find themselves in a difficult place with respect to potential liability stemming from stated commitments to diversity and inclusion. On the one hand, companies that fail to achieve numeric targets they articulate (e.g., a certain percent or increase in diversity among management) may subject themselves to claims of having overpromised when discussing their future plans. Conversely, employers that achieve such targets may face “reverse discrimination” claims alleging that they abandoned race-based or gender-neutral employment practices to hit numbers set forth in their public statements.

Government Enforcement Litigation: Federal, state and local government regulators have taken multiple actions against companies based on their alleged contributions to climate change or alleged illegal activities. For instance, in 2019, the U.S. Department of Justice investigated auto companies for possible antitrust violations for agreeing with California to adopt emissions standards more restrictive than those established by federal law. While the investigation did not reveal wrongdoing, it underscores the creativity that proponents and opponents of ESG efforts can employ.

Implications For Corporate America

The creation, content, and implementation of ESG programs carries increasing litigation risks for corporations but it is unlikely that ESG programs will diminish is size or scale in the coming years given increased focus by Fortune 100s and 500s and increased regulation at the federal and state levels.

Sound planning, comprehensive legal compliance, and systematic auditing of ESG programs should be a key focus and process of all entities beginning or continuing their ESG journey. As more and more companies adopt some level of corporative ESG strategy planning, compliance and auditing are some of the key imperatives in this new world of exposure to diminish and limit one’s exposure.

Duane Morris has an active Class Action Team to help organizations respond to the ever increasing need to be proactive to these types of risks. For more information or if you have any questions about this post, please contact Gerald (Jerry) L. Maatman, Jennifer Riley or the attorney in the firm whom you are regularly in contact with. We also have ESG and Sustainability Team to help organizations and individuals plan, respond to, and execute on your Sustainability and ESG planning and initiatives. For more information or if you have any questions about this post, please contact Brad A. Molotsky, David Amerikaner, Sheila Rafferty-Wiggins, Alice Shanahan, Jeff Hamera, Nanette Heide, Joel Ephross, Jolie-Anne Ansley, Robert Montejo, Seth Cooley, or the attorney in the firm with whom you are regularly in contact.

March 31, 2023March 30, 2023 by Class Action Defense

The Class Action Weekly Wire Podcast – Episode Six

Duane Morris Takeaway: This week’s episode of the Class Action Weekly Wire features Duane Morris partners Jerry Maatman, Jennifer Riley, and Alex Karasik with their analysis of significant rulings and trends in class action litigation under the Class Action Fairness Act of 2005 (“CAFA”). We hope you enjoy it!

March 30, 2023 by Alex W. Karasik

Illinois Trial Court Grants Class Certification In BIPA Class Action

By Alex W. Karasik, Gerald L. Maatman, Jr. and Jennifer A. Riley

Takeaways: In Palacios v. H&M Hennes & Mauritz, LP, Case No. 18-CH-16030 (Cir. Ct. Cook County, Ill. Mar. 16, 2023), a state trial court in Illinois granted Plaintiff’s motion for class certification in an Illinois Biometric Information Privacy Act (the “BIPA”) class action. Given the limited jurisprudence in BIPA class action certification rulings, this decision is an important read for corporate counsel, as the ruling likely will be used as a roadmap by the plaintiffs’ bar to support their efforts to certify such classes.

Case Background

Plaintiff alleged that Defendant required him and other employees to scan their fingerprints into a biometric time clock system to record the time they worked, and unlawfully collected, possessed, and transferred their biometric information without consent and without a proper retention and destruction schedule. Plaintiff sought to certify a class of all hourly employees who enrolled in or used Defendant’s timekeeping system while working for Defendant between August 9, 2014, and October 15, 2019.

In terms of the four factors to certify the class – numerosity, adequacy of representation, commonality, and appropriateness – Defendant did not challenge the numerosity factor. However, Defendant challenged the motion for class certification regarding the other three factors.

The Court’s Decision

The Court granted Plaintiff’s motion for class certification. First, the Court held that the named Plaintiff was an adequate class representative. Defendant argued that, based on Plaintiff’s deposition testimony, he was, “uninformed and disinterested in the facts, the litigation, and his role as class representative.” The Court rejected this argument, holding that, “while [Plaintiff] may not understand legal jargon . . . he understands the basic facts . . . understands he is making a legal claim for violation privacy rights on behalf of a class of other employees [and] has been in regular communication with his counsel and participated in discovery.” Accordingly, the Court found that Plaintiff would adequately represent the putative class.

Second, the Court held that the commonality factor was met. Defendant contended that Plaintiff was at odds with the rest of the class since he alleged that he suffered emotional distress damages. The Court rejected this argument, holding that Plaintiff testified that he was harmed through a breach of his biometric information privacy rights and was pursuing the same claims on behalf of class members. Accordingly, the Court held that common questions predominated over questions affecting individual class members.

Finally, the Court explained that, “a class action must be an appropriate method for the fair and efficient adjudication of the controversy.” Id. (citations and quotations omitted). The Court opined that many individuals incurred relatively small liquidated damages and their likely recovery was probably too small to justify a separate action. However, collectively, the Court could adjudicate the putative class’s claims, as it noted, “This is what class actions were designed to achieve.” Id. Accordingly, the Court held that a class action was the appropriate method for the fair and efficient adjudication of the controversy.

Implications For Employers

While employers are likely still recovering from the sting of adverse Illinois Supreme Court BIPA class action rulings from early 2023, this decision marks another victory for the plaintiff’s bar. Defendants in BIPA class actions who are facing motions for class certification would be wise to avoid duplicating the arguments made here. In light of the shrinking number of potential BIPA defenses and skyrocketing damages, employers must begin exploring alternative defense strategies to combat these bet-the-company cases.

March 30, 2023December 1, 2023 by Gerald L. Maatman, Jr.

Illinois Court Dismisses BIPA Class Action Brought Against Seller Of Point-Of-Sale Technology For Lack Of Personal Jurisdiction

By Gerald L. Maatman, Jr., Tyler Z. Zmick, and Shaina Wolfe

Duane Morris Takeaways: In White v. HungerRush LLC, No. 22-1206 (C.D. Ill. Mar. 28, 2023), the Court dismissed claims for violations of the Biometric Information Privacy Act (“BIPA”) brought against a company that sells point-of-sale technology for lack of personal jurisdiction. White serves as a reminder to businesses that personal jurisdiction in Illinois may be lacking where their conduct has only a tenuous connection to Illinois and/or where they do not “collect” or “possess” biometric data. This ruling – which is largely consistent with federal court decisions addressing the issue – is a rare win for companies facing BIPA class actions, and is a required read for companies facing privacy class action litigation.

Case Background

Plaintiff worked at a restaurant in Peoria, Illinois, which used a point-of-sale system sold by Defendant HungerRush LLC, a Texas-based company. While working at the restaurant, Plaintiff enrolled her fingerprint onto the point-of sale system as a means of clocking in and out of work. She later sued the Texas-based Company, claiming that it violated the BIPA in connection with its sale of the point-of sale system by (i) failing to develop a written policy made available to the public establishing a retention policy and guidelines for destroying biometric data, and (ii) collecting her biometric data without providing her with the requisite notice and obtaining her written consent.

In response to the complaint, the Company moved to dismiss on the basis that the Court lacked personal jurisdiction. In support of its jurisdictional argument, the Company submitted an affidavit signed by its Chief Administrative Officer and General Counsel.

The Company’s affidavit explained that: (i) it is a Texas-based company; (ii) it does not manufacture finger-scan devices or software; (iii) Plaintiff’s employer purchased a point-of-sale system from it and separately purchased a finger-scan device from a third-party; (iv) the finger-scan device operates independently from its software; and (v) finger-scan data is not transmitted to its point-of-sale software – instead, the finger-scan device sends only an approval signal to its software.

Based on these facts, Defendant argued that its limited contact with Illinois (i.e., selling a point-of-sale system to Plaintiff’s Illinois-based employer) was insufficient to establish personal jurisdiction.

The District Court’s Decision

The Court granted the Company’s motion to dismiss under Rule 12(b)(2).

First, the Court noted that “[w]here, as here, the defendant submits ‘evidence opposing the district court’s exercise of personal jurisdiction, the plaintiff must similarly submit affirmative evidence supporting the court’s exercise of jurisdiction.’” The Court explained that because Plaintiff failed to submit any evidence refuting the Company’s evidence, i.e. the sworn affidavit, the affidavit was considered “unrebutted.”

Second, the Court found that the Company’s unrebutted evidence demonstrated that it did not have sufficient minimum contacts with Illinois for this case and it was not reasonably foreseeable that Plaintiff’s claims related to the Company’s contacts with Illinois. Significantly, Plaintiff failed to submit any evidence refuting the affidavit’s sworn statements that Plaintiff’s Illinois-based employer initiated the transaction with the Company, that any contracts the Company makes with Illinois restaurants are made in Texas with Illinois restaurants reaching out to the Company, that the Company’s system has no cloud functions, or that the Company does not and has never manufactured a fingerprint scanner.

The Court held that because Plaintiff failed to offer evidence or adequate explanations refuting the Company’s sworn statements, she failed to meet her burden in establishing personal jurisdiction.

Implications For Employers

White serves as a reminder that companies must have sufficient contacts with the state in order for the courts to have personal jurisdiction over them. In other words, companies with only limited contacts with Illinois will not be subject to personal jurisdiction in courts within Illinois.

White also illustrates the importance of submitting extrinsic materials (e.g., sworn affidavits) in support of showing lack of personal jurisdiction. Significantly, once the defendant has submitted affidavits or other extrinsic evidence supporting lack of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction. Moreover, courts can dismiss BIPA class actions for lack of personal jurisdiction based on supporting affidavits – even where the affidavits speak in part to the merits of the case. See Order & Op. at 8.

March 24, 2023 by Alex W. Karasik

Illinois Supreme Court Holds Federal Labor Law Preempts BIPA Claims Asserted By Unionized Employees

By Alex W. Karasik, Tyler Z. Zmick, and Elizabeth C. Mincer

Duane Morris Takeaways: In the Illinois Supreme Court’s latest ruling in the biometric privacy space, it decided in Walton v. Roosevelt University, 2023 IL 128338 (Ill. Mar. 23, 2023), that claims brought under the Biometric Information Privacy Act (“BIPA”) by bargaining unit employees are preempted by Section 301 of the Labor Management Relations Act (“LMRA”) where an employer invokes a broad management rights provision in a CBA. This ruling – which is consistent with federal court decisions addressing the issue – is a rare win for defendants facing BIPA class actions. Employers with unionized workforces may now be able to assert an LMRA preemption defense in seeking dismissal of BIPA claims based on decisions issued by Illinois’s highest state court and the U.S. Court of Appeals for the Seventh Circuit.

Case Background

Plaintiff alleged that when he started working at Roosevelt University in 2018, Roosevelt required him to enroll a scan of his hand geometry onto a biometric timekeeping device as a means of clocking in and out of work. Plaintiff sued Roosevelt the following year, alleging that the university violated Sections 15(a), 15(b), and 15(d) of the BIPA in connection with Roosevelt’s use of the timekeeping system by (i) failing to develop a written policy made available to the public establishing a retention policy and guidelines for destroying biometric data, (ii) collecting his biometric data without providing him with the requisite notice and obtaining his written consent, and (iii) disclosing his biometric data without consent.

In response to the complaint, Roosevelt moved to dismiss on the basis that Plaintiff’s claims were preempted by Section 301 of the Labor Management Relations Act (“LMRA”). Specifically, Roosevelt argued that Plaintiff had been a union member while employed by Roosevelt, and the collective bargaining agreement (“CBA”) between Roosevelt and Plaintiff’s union contained a management rights clause broad enough to cover the manner by which union employees clocked in and out of work. As support, Roosevelt cited the U.S. Court of Appeals for the Seventh Circuit’s decision in Miller v. Southwest Airlines Co., 926 F.3d 898 (7th Cir. 2019), which held that federal labor law preempts BIPA claims when the claims require interpretation or administration of a CBA.

The Cook County Circuit Court rejected Roosevelt’s LMRA preemption argument, finding Miller distinguishable and holding that BIPA claims are “not intertwined with or dependent substantially upon consideration” of terms of a CBA because a person’s rights under the BIPA “exist independently of both employment and any given CBA.” Id. ¶ 6. Because the issue presented a close call, however, the Circuit Court certified the following question for interlocutory appeal: “Does Section 301 of the [LMRA] preempt [BIPA] claims asserted by bargaining unit employees covered by a [CBA]?”

The Illinois Appellate Court answered the certified question “yes.” In doing so, the court noted that the Seventh Circuit had recently come to the same conclusion in a case where “the relevant factual and legal circumstances . . . [were] indistinguishable.” Id. ¶ 8 (citing Fernandez v. Kerry, Inc., 14 F.4th 644 (7th Cir. 2021)). The appellate court determined that Fernandez reached the correct conclusion, as the BIPA “contemplates the role of a collective bargaining unit acting as an intermediary on issues concerning an employee’s biometric information.” Id. ¶ 10 (noting that the BIPA prohibits private entities from collecting biometric information without obtaining consent from the subject or the subject’s legally authorized representative).

The Illinois Supreme Court’s Decision

The Illinois Supreme Court subsequently allowed Plaintiff’s petition for leave to appeal, after which it affirmed the appellate court’s decision. The Supreme Court observed that the Seventh Circuit had twice held that federal law preempts BIPA claims asserted under similar circumstances, and it noted that when interpreting federal statutes, Illinois courts look to the decisions of the U.S. Supreme Court (“SCOTUS”) and federal circuit and district courts. It further noted that the SCOTUS’s interpretation of federal law is binding, and that in the absence of SCOTUS precedent, the weight given to federal circuit and district court interpretations of federal law depends on factors such as uniformity of law and the soundness of the decisions. See id. ¶¶ 23-24 (“[I]f lower federal courts are uniform in their interpretation of a federal statute, this court, in the interest of preserving unity, will give considerable weight to those courts’ interpretations of federal law and find them to be highly persuasive.”).

In comparing Plaintiff’s case to the Seventh Circuit decisions, the Supreme Court acknowledged that the relevant CBA provisions in Plaintiff’s case and in Fernandez both contained similarly broad management rights clauses. See id. ¶ 31 (noting the CBA between Roosevelt and Plaintiff’s union stated that “[s]ubject to the provisions of this Agreement, the Employer shall have the exclusive right to direct the employees covered by this Agreement” and that “[a]mong the exclusive rights of management . . . are: the right to plan, direct, and control all operations performed in the building [and] to direct the working force”).

In sum, because the Supreme Court did not find Miller and Fernandez to be “without logic and reason,” id., it deferred to the uniform federal case law on the issue and held that when an employer invokes a CBA’s broad management rights clause in response to a BIPA claim brought by a bargaining unit employee, the plaintiff’s BIPA claims are preempted by the LMRA.

Implications For Employers

Like the Seventh Circuit’s decisions in Miller and Fernandez, Walton reflects a rare defendant-friendly development and provides a basis for certain employers to seek dismissal of BIPA claims on LMRA preemption grounds. The defense applies only to a subset of employers, however, as it can be asserted only by (i) employers with unionized employees who (ii) have entered into a CBA with a union that contains a management rights clause broad enough to cover the manner by which employees clock in and out of work. Furthermore, unionized employees are not prohibited from seeking redress for alleged BIPA violations – they are simply required to first pursue those claims through the grievance procedures in their CBAs rather than in state or federal court.

Moreover, the National Labor Relations Board (“NLRB”) – the agency that enforces the National Labor Relations Act (“NLRA”) – has indicated that it intends to reshape current law regarding employee privacy and management rights provisions. If such changes take effect, they could reshape how courts assess federal labor law preemption in future BIPA cases.

The Walton ruling highlights the importance of carefully negotiating and drafting CBA provisions, particularly with respect to management rights. Employers in states with strict privacy laws (like the BIPA) should consider contract language that specifically provides management with the right to use and store certain biometric data and/or implement other new technologies.

March 24, 2023 by Class Action Defense

The Class Action Weekly Wire Podcast – Episode Five

March 23, 2023 by Gerald L. Maatman, Jr.

Introducing The Duane Morris Wage & Hour Class And Collective Action Review – 2023

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

Duane Morris Takeaways: Complex wage & hour litigation has long been a focus of the plaintiffs’ class action bar. The relatively low standard by which plaintiffs can achieve conditional certification under the Fair Labor Standards Act (FLSA), often paired with state law wage & hour class claims, offers a potent combination by which plaintiffs can pursue myriad employment claims. To that end, the class action team at Duane Morris is pleased to present the inaugural edition of the Wage & Hour Class And Collective Action Review – 2023. This new publication analyzes the key wage & hour-related rulings and developments in 2022 and the significant legal decisions and trends impacting wage & hour class and collective action litigation for 2023. We hope that companies and employers will benefit from this resource and assist them with their compliance with these evolving laws and standards.

Click here to download a copy of the Wage & Hour Class And Collective Action Review – 2023 eBook.

Stay tuned for more wage & hour class and collective action analysis coming soon on our weekly podcast, the Class Action Weekly Wire.

March 17, 2023 by Class Action Defense

The Class Action Weekly Wire Podcast – Episode Four

Duane Morris Takeaway: This week on the Weekly Wire podcast, we are pleased to present Duane Morris partners Jennifer Riley and Michael DeMarino and associate Tyler Zmick in our fourth podcast in our series on class action litigation developments. This week’s edition focuses on appeals in class action litigation. We hope you enjoy it!

March 15, 2023 by Alex W. Karasik

The EEOC’s 2022 Annual Performance Report Touts $513.7 Million In Worker Recoveries

By Alex W. Karasik, Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaways: On March 13, 2023, the EEOC published its fiscal year 2022 Annual Performance Report (FY 2022 APR), highlighting the Commission’s recovery of $513.7 million in monetary relief for more than 38,000 victims of employment discrimination, including nearly $40 million as a direct result of litigation resolutions.

This annual publication from the EEOC is noteworthy for employers in terms of recognizing the EEOC’s reach, understanding financial exposure for workplace discrimination claims, and identifying areas where the EEOC may focus its litigation efforts in the coming year. It is a must read for corporate counsel, HR professional, and business leaders.

FY 2022 Statistical Highlights

The EEOC’s recovery of $513.7 million in monetary relief represents a solid increase from the $485 million in monetary relief that it secured in FY 2021. More noteworthy is that the Commission secured monetary relief on behalf of 38,000 alleged victims in FY 2022, which is more than double the amount from FY 2021, when monetary relief was recovered on behalf of 15,000 alleged victims. This suggests that more complainants are being made whole through the EEOC’s litigation and alternative dispute resolution efforts.

Approximately $342 million was recovered for more than 33,298 victims of employment discrimination in the private sector and state and local government workplaces through mediation, conciliation, and settlements. Furthermore, $39.7 million was recovered for 1,461 individuals as a direct result of litigation resolutions. Notably, the EEOC indicated it successfully resolved 44% of its conciliations, and among those successes, 43.1% involved one or more Strategic Enforcement Plan priority areas. The EEOC also conducted 6,578 successful mediations, resulting in $170.4 million in benefits for charging parties.

In terms of charge intake, the EEOC reported 73,485 new discrimination charges, an increase of nearly 20% compared to fiscal year 2021. This statistic suggest workers are increasingly more apt to turn to the Commission to resolve workplace discrimination disputes.

Finally, the EEOC filed 91 lawsuits in FY 2022 on behalf of 53 individuals, including 25 non-systemic suits with multiple victims, and 13 systemic suits involving multiple victims or discriminatory policies. Approximately half of the EEOC’s newly filed lawsuits raised one or more the EEOC’s Strategic Enforcement Plan priorities.

Strategic Priorities

Addressing systemic discrimination has long been a top priority for the EEOC. In FY 2022, the EEOC resolved over 300 systemic investigations on the merits, obtaining more than $29.7 million in monetary benefits. The EEOC also resolved 10 systemic lawsuits, obtaining over $28 million in relief for nearly 1,300 individuals and significant equitable relief. To ensure the systemic lawsuit cupboard was not left bare, the EEOC filed 13 new systemic lawsuits.

Advancing racial justice was another strategic priority for the EEOC in FY 2022. The FY 2022 APR notes that the EEOC resolved 18 lawsuits alleging race or national origin discrimination, for approximately $4.6 million in relief, benefiting 298 individuals. In addition, nine of the new 13 systemic lawsuits include claims of race or national origin discrimination. The EEOC also conducted 468 race and color outreach events, which reached 52,675 attendees. This includes 143 racial justice events reaching 9,064 attendees.

Finally, in recent years the EEOC has indicated that the use of artificial intelligence (“AI”) and algorithmic fairness in employment decisions is a strategic priority. In addition to providing AI training to systemic enforcement teams in the EEOC’s field offices, the EEOC hosted 24 AI and algorithmic fairness outreach events for 1,192 attendees. The EEOC’s efforts culminated with one lawsuit filing in this area. Finally, the EEOC prepared two ADA-related guidance publications relative to the use of artificial intelligence.

Other Notable Developments

Beyond touting its monetary successes, the FY 2022 APR also highlights the EEOC’s efforts in the community. The EEOC conducted 3,302 outreach and training events, providing more than 225,906 individuals nationwide with information about employment discrimination and their rights and responsibilities in the workplace. Among these outreach programs were 399 events for small businesses, which were attend by approximately 18,878 individuals. Finally, 369 outreach events concerned the intersection of COVID-19 and employment discrimination laws. These COVID-19 programs had 26,041 attendees.

The EEOC also expanded its digital footprint, as the EEOC’s website had 10.8 million users. This marks a 3% increase over fiscal year 2021. There were 16 million user sessions, a 4.4% increase over fiscal year 2021. The EEOC had over 29 million page views, a 4.4% increase over fiscal year 2021, and there was a 3% increase in mobile traffic on the website. This data suggests that potential charging parties and other various constituents are more actively engaging with the Commission through its online platforms.

Takeaways For Employers

While the 2020 global pandemic may have slowed down the workforce developments and relatedly the EEOC for a few years, the FY 2022 APR suggests the EEOC is back to investigating and litigating employment discrimination claims in full gear. Employers should be mindful of these data points in terms of implementing and enforcing policies against employment discrimination.

We anticipate that the EEOC will continue to aggressively pursue its strategic priority areas, such as systemic discrimination, racial justice, artificial intelligence, and its underlying goal of providing access to justice for underrepresented groups of workers. We will continue to track EEOC litigation developments throughout the year.