What is happening in employment law? We will be providing you with quick employment law updates on a bi-monthly basis in a new series called “The Bubbler.” It will let you know what’s what and who’s who in the continually-evolving, ever-important, hard-to-keep-track-of employment law world. The Bubbler delivers current events and other important news to our readers without the time or the interest to piece through the recent legislation, the ever-growing release of regulations and other agency guidance and the lengthy court decisions. We’re your colleagues at the water cooler who tell you just enough to pique your interest (but then provide links to satisfy your curiosity). Enjoy!
The Supreme Court is set to hear oral argument in October on whether class and collective action waivers are enforceable. While employers await the Supreme Court’s decision, other courts continue to weigh in on the matter. Just last week, a New York State appellate court in Gold v. New York Life Ins. Co., 2017 NY Slip Op 05695 (App. Div. 1st Dep’t, July 18, 2017), found itself aligned with those federal circuit courts of appeal invalidating these waivers. Given the continuing disagreement among courts across the nation – both federal and state – as to whether the Federal Arbitration Act’s policy favoring arbitration should trump the National Labor Relations Act’s prohibition on contracts that restrict the rights of employees to engage in collective action, the need for clarity from the Supreme Court is more urgent than ever. Employment Matters will of course continue monitoring these important developments, so please check back in for regular updates.
In an important victory for employers, the Supreme Court in Spokeo, Inc. v. Robins held that a plaintiff does not have Article III standing to sue in federal court under the Fair Credit Reporting Act (FCRA) and other federal statutes absent a sufficient allegation of the existence of a concrete injury. The Supreme Court was clear that alleging a bare procedural violation absent any concrete injury to the plaintiff was insufficient to move a case forward. While it remanded the case to determine whether the plaintiff sufficiently alleged a concrete injury, employers should welcome this decision as a potential end to costly FCRA (and other statutory) class actions based on trivial violations of procedural requirements that don’t harm anyone.
Everyone loves a good courtroom drama. So just imagine this pitch: henchmen of an evil dictator hack their way into a movie studio computer system. Once inside, they steal the most sensitive personal information of the studio’s stars, executives and employees. Their most intimate secrets, spilled over the Internet. Who can help these poor souls? Why, the brave and hard working class action lawyers, that’s who. Through grit, pluck and lawyerly derring-do, our intrepid heroes soon bring the evil wrongdoers to justice. Think “The Manchurian Candidate” meets “Erin Brockovitch”.
But real life is rarely like the movies, even when it involves the movies. Yes, Sony Pictures Entertainment (“SPE”) did suffer a cyberattack that disclosed employees’ personally identifiable information (“PII”). The data breach was allegedly perpetrated by North Korean hackers in retaliation for SPE’s release of “The Interview,” a satirical comedy depicting an attempt on the life of North Korean dictator Kim Jong-Un. And class action litigation predictably followed. But the evil wrongdoers who faced the wrath of class counsel? Alas, the hackers were inconveniently beyond the reach of our legal system and, thus, unavailable to answer for their crime. So SPE, the studio victimized by the hack, would have to do.
And the result of this drama?
The United States Supreme Court ruled Tuesday that Tyson Foods employees could use representative evidence to establish liability and damages for class certification purposes. The opinion gives the plaintiffs’ class action bar a second victory in the Court’s current term, albeit a far narrower one than many commentators had feared. (We covered the first victory here.) Perhaps, more importantly, the Court sidestepped a seemingly more controversial issue regarding whether a class may include uninjured class members. That issue will have to be decided another day. We analyze the Tyson Foods opinion below.
Continue Reading Taking an Evidentiary Approach, the Supreme Court Rules that Employees Can Use Representative Samples to Establish Classwide Liability and Damages, But It Leaves Open Question of Whether Classes Can Include Uninjured Class Members
Is the pick-off strategy to moot class actions still alive in the Southern District of New York? Possibly.
Last summer the Second Circuit issued an important decision that identified the proper test for determining whether an employer properly classified an individual as an unpaid intern. The decision was a victory for employers because the nature of the test required courts to utilize a highly-individualized analysis of each intern’s experience, and therefore, it did not necessarily lend itself to class action treatment. On rehearing, the Second Circuit has now amended this decision to clarify that the test is highly context-specific rather than dependent on the individualized experiences of each intern.
Last month, we wrote about the Supreme Court’s opinion in Campbell-Ewald Co. v. Gomez, in which the Court ruled that “an unaccepted Rule 68 Offer of Judgment for complete relief does not moot a plaintiff’s individual and class action claims.” While that decision was welcome news and remains welcome news for employees because it all but eliminated the employer-favored named plaintiff “pick-off” strategy, the Supreme Court did appear to leave open the possibility that employers could still pick off a named plaintiff in other ways: by either actually paying them the amounts allegedly owed, or similarly, by depositing the money with the court to be released to the plaintiff upon dismissal of the action. Just weeks later however, a New York Federal Court addressed this residual issue – the result: more welcome news for employees.
The Second Circuit struck a blow today to individuals pursuing collective/class actions alleging that unpaid interns should be classified as employees. The Court announced an employer-friendly test that asks who benefits more from the internship – if it’s the individual, then classification as an employee entitled to minimum wage and overtime is not necessary. The Court also threw out the lower court’s certification decision, finding that its new test required a highly-individualized look at each intern’s experience. The case is Glatt v. Fox Searchlight Pictures, Inc. Employers will largely welcome the decision, but we caution against claiming total victory just yet. We explain more fully below.
The Supreme Court has agreed to hear two cases during its Fall 2015 term that could further transform the wage and hour class action landscape. We briefly discuss those two cases below.