Articles Posted in Class Action

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Leah Kessler

On March 27, 2018, in Del Toro Lopez v. Uber Technologies, Inc., Uber agreed to pay a $10 million settlement and make systemic changes to the way it evaluates employees to settle a class action brought by three Latina engineers, who alleged that they were paid less than their white and Asian male colleagues due to Uber’s unfair evaluative methods. The settlement will compensate about 285 women and 135 men of color for financial and emotional harm stemming from the alleged discriminatory practices.

In October 2017, Ingrid Avendaño, Roxana del Toro Lopez, and Ana Medina—all of whom are Latina women who were employed as software engineers at Uber—filed suit in California on behalf of themselves and other aggrieved employees, claiming that Uber engaged in unfair business practices and violated the California Equal Pay Act and Private Attorneys General Act. The complaint alleged that Uber uses a “stack ranking” system for evaluating employees, meaning that Uber evaluates each employee from “worst to best.” The result, as the suit claims, is that “female employees and employees of color are systematically undervalued….because [they] receive, on average, lower rankings despite equal or better performance.” These stack rankings are used, in part, to determine promotions.

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Owen H. Laird, Esq.

In 2016, we reported on Kerrie Campbell’s class action complaint against Chadbourne & Parke, LLP, in which Ms. Campbell alleged that Chadbourne & Park, LLP, had underpaid and blocked female partners from leadership roles at the firm.  Earlier this week, the parties filed papers revealing that they were able to reach a proposed settlement in the case.

Since the action began in 2016, Chadbourne & Parke merged with Norton Rose Fulbright, another large international law firm.  Additionally, two more plaintiffs joined the case, Mary Yelenick and Jaroslawa Johnson, former Chadbourne partners who allege similar facts as Ms. Campbell.

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On February 15, 2018, Judge William Alsup of the U.S. District Court for the Northern District of California granted class certification in Dulberg v. Uber Technologies, Inc., a suit filed in February 2017 alleging that Uber’s pricing and payment model deprives drivers of fair pay for their work. This decision will allow as many as 9,197 Uber drivers from across the United States to pursue their claims as a class.

Uber is among the most successful of a number of rapidly growing companies that are part of the so-called “gig economy.” The U.S. Department of Labor defines a “gig” as a “single project or task for which a worker is hired, often through a digital marketplace, to work on demand.” Gig economy and freelance workers, such as Uber drivers, are becoming an increasingly visible and important component of the U.S. workforce; an estimated nearly four million freelancers work in the New York City area alone. Yet while gig economy workers may enjoy certain benefits—such as scheduling flexibility—they are also often at a disadvantage in comparison to traditional employees. Gig economy workers are almost invariably classified as independent contractors and are thereby cut off from most of the legal protections afforded to employees, including minimum wage and overtime laws, as well as employment benefits like health insurance—and many freelancers report difficulty getting paid for their work on time or at all.

Uber’s treatment of its gig economy workers has gained particular attention over the past several years, as drivers have brought a number of lawsuits against the company and have protested many of Uber’s internal policies, such as its recently revoked harsh termination policy, under which any driver with three complaints would be automatically terminated without investigation. Recently, a U.K. court issued a landmark decision, finding that Uber’s London drivers were employees, not independent contractors, and we have previously reported on several lawsuits brought by Uber drivers concerning whether drivers’ on-call time is compensable, drivers’ arbitration agreements with Uber, and class actions challenging Uber’s classification of drivers as independent contractors.

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Harrison Paige

The U.S. District Court of Colorado recently certified a class action lawsuit filed against GEO Group, Inc. (“GEO”), a billion-dollar private prison conglomerate. Plaintiffs claim that they were forced to clean the Aurora Detention Facility (the “Facility”) while detained and awaiting immigration hearings, in violation of federal slave labor laws, and that GEO was unjustly enriched by Plaintiffs’ work. This is the first time that a court has certified a class action claiming that a private U.S. prison violated the Trafficking Victims Protection Act (“TVPA”). The TVPA’s prohibitions against forced labor state that obtaining labor or services via means or threats of force, restraint, harm, abuse, threatened abuse of law, or deceptive schemes is illegal. The approval of class action status means that up to 60,000 current and former inmates of the Facility “are now part of the lawsuit without having to actively join as plaintiffs.

First, Plaintiffs claim that GEO violated the TVPA “by requiring detainees to clean the private and common areas of the Facility without any compensation and under the threat of solitary confinement and other punishments.” Allegedly, GEO chooses a handful of inmates each day and forces them to work as janitorial staff for the 1,500-bed Facility, violating Immigration and Customs Enforcement’s (“ICE”) own sanitation policy, which only mandates that “all detainees perform personal housekeeping,” like making their own beds, organizing their bunk area, and keeping the floor free of clutter. The sanitation policy does not include any mandate regarding detainees working as janitorial staff for the entire Facility. Thus, Plaintiffs claim that Facility staff’s threats of solitary confinement and additional criminal charges to solicit detainee labor violates the forced labor provision of the TVPA (18 U.S.C. §§ 1589, 1595).

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Shelby Krzastek

Earlier this week, on March 6, 2017, class members and McDonald’s management requested final approval of a $950,000 proposed settlement in James Wesley Carter v. Shalhoub Management Co., et al., a class action filed in the U.S. District Court for the Central District of California. The approximately 2,300 class members allege that Shalhoub Management Co. (“Shalhoub”), a California-based McDonald’s franchise operator, did not comply with its obligations under the Fair Credit Reporting Act (“FCRA”) when it conducted background checks on employees and job applicants without their knowledge and used those background checks to determine whether to hire or terminate those individuals.

The FCRA is a comprehensive statute that regulates how consumer reporting agencies store, disseminate, and use consumer information. Under the FCRA, employers requesting background information, such as credit reports or criminal background checks, from job applicants must get the applicant’s written permission and inform applicants in writing—in a separate notice not included in the employment application—that the results of the background check may be used to make employment decisions. If an employer then takes an adverse action against an employee or refuses to hire a job applicant based on the received background information, the employer must provide the employee or applicant with a copy of the relevant report, inform the individual that they were rejected or terminated based on the report, and provide an opportunity to dispute or explain any inaccurate or negative information.

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By Shelby Krzastek

Former UBS Securities, LLC (UBS) employees Shannon Zoller and Alexander Beigelman claim that UBS forced laid-off employees to release claims against UBS to receive deferred compensation to which they were already entitled under their employment contract. The policy allegedly breaches UBS’s employee contract and violates New York and Illinois state labor laws, the Age Discrimination in Employment Act, and the Older Workers Benefit Protection Act. On December 12, 2016, Zoller and Beigelman filed a putative class action against UBS in the U.S. District Court of Illinois.

The suit alleges that, in February 2013, numerous subsidiaries of UBS implemented a policy requiring any employee laid off during staff reductions to sign a waiver and release of claims in order to receive previously earned deferred compensation. According to Zoller and Beigelman, UBS hid the policy in an appendix to a document accompanying the employee contract.

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Last Friday, the parties submitted a settlement agreement for approval in Cote v. Walmart, a class action suit filed in federal court alleging that Walmart discriminated against gay Walmart employees by denying spousal health insurance coverage to same-sex married couples. The settlement would provide $7.5 million for current and former Walmart employees who could not obtain employer health insurance benefits for their same-sex spouse.

The suit was the first class action filed on behalf of gay employees after the Supreme Court’s June 2015 ruling extending marriage equality in Obergefell v. Hodges, according to the Boston-based LGBT legal advocacy group GLAD. Jackie Cote filed suit in the District of Massachusetts in July 2015, bringing claims against Walmart under Title VII of the Civil Rights Act of 1964 (Title VII) and the Massachusetts Fair Employment Practices Law on behalf of Walmart employees who were married to a same-sex spouse and did not receive spousal health insurance benefits from Walmart between 2011 and 2013.

Cote had been employed by Walmart since 1999 and received employee health insurance as part of her benefits package. In 2004, Cote married her partner, Diana Smithson. Beginning in 2008, Cote repeatedly tried to enroll her wife, who was suffering from ovarian cancer, in Walmart’s employee health insurance plan. However, all of Cote’s requests for coverage were denied, according to the complaint: When Cote attempted to enroll Smithson in her employee insurance plan, Walmart’s online enrollment program refused to let her continue after she marked her spouse’s sex as “female.” Each time Cote contacted Walmart about the issue, she alleged, she was told that Walmart “did not offer health insurance coverage to same-sex spouses.”

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On September 8, Wells Fargo was fined $100 million by the Consumer Financial Protection Bureau (CFPB)—the largest fine in the agency’s history, according to its director—after an investigation found that bank employees had opened over two million bank accounts and credit cards without customers’ knowledge or consent between May 2011 and July 2015.

In addition to fines, Wells Fargo will be required to compensate any affected customers for fees incurred on the unauthorized accounts, such as annual fees or overdraft fees. On September 16, three plaintiffs in Utah filed suit against Wells Fargo, alleging theft and fraud and seeking class action status on behalf of up to a million customers who may have been affected.

When the scandal came to light, Wells Fargo confirmed that it had fired approximately 5,300 employees—around 1% of the company’s total workforce—due to “inappropriate” conduct in relation to the creation of unauthorized accounts. Now, former employees of Wells Fargo have stepped forward, claiming that Wells Fargo retaliated against them for whistleblowing and for refusing to participate in the illegal activity.

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Rose Asaf

Last Friday, we reported on Kerrie Campbell’s class action complaint against Chadbourne & Parke LLP.  Ms. Campbell, through her attorneys, Sanford Heisler, LLP, alleges that Chadbourne’s female partners “have been disparately underpaid, systematically shut out of Firm leadership, demoted, de-equitized and terminated.” Not all female partners in Chadbourne, however, agree with those allegations, which has prompted pushback against Ms. Campbell and Sanford Heisler, LLP.

In a letter addressed to David Sanford, a founding partner of Sanford Heisler, 14 female partners from Chadbourne expressed that Campbell’s complaint does not properly characterize their experiences with Chadbourne. In their attack, the women state that Sanford Heisler “did not make our voices heard…but rather have attempted to silence us.” The letter asserts that the complaint “makes a group of very accomplished, assertive and intelligent professional women look like they are victims unable to hold their own with their male colleagues.” The female partners also criticize Sanford Heisler for not reaching out to them before filing the suit.

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Edgar M. Rivera, Esq.

On August 31, 2016, Kerrie Campbell—a seasoned trial lawyer and leading practitioner in the defamation and product disparagement, First Amendment rights and consumer product safety fields—filed a class action complaint in the Southern District of New York against Chadbourne & Parke LLP—an international firm of approximately 400 lawyers and tax advisors, including former New York Governor George Pataki, with over $285 million of annual revenue. Campbell claims that Chadbourne systematically discriminated against its female partners.

According to the complaint, in January 2014, Campbell joined Chadbourne as a lateral partner in the litigation department. Campbell brought in approximately 40 new matters for over 20 clients, generating over $5 million in total revenue for Chadbourne. Campbell’s productivity and revenue generation was consistent with the Chadbourne’s top performing male partner, yet her pay consistently was at the bottom ranks of male partners, who brought far less revenue to Chadbourne. Chadbourne opposed the gender-based pay and asked Chadbourne’s all-male five-member Management Committee, Managing Partner, and Head of the Litigation Department to address and rectify these issues. On February 19, 2016, Chadbourne’s Managing Partner, Andy Giaccia, and Head of the Litigation Department, Abbe Lowell, told Campbell that Campbell’s practice did not “fit” with the “strategic direction” of Chadbourne and that she must leave. To incentivize Campbell’s speedy ouster from Chadbourne, they slashed her pay.

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