Articles Posted in Settlement Agreement

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This month, New York State and New York City made groundbreaking expansions to the sexual harassment provisions of several state and city statutes and regulations, including the New York State Human Rights Law (NYSHRL), New York City Human Rights Law (NYCHRL), general business law, and civil practice law and rules. Some of the most important changes involve extending legal protections against sexual harassment to previously unprotected workers, including independent contractors and other non-employees; prohibiting mandatory arbitration of sexual harassment claims and non-disclosure provisions in sexual harassment settlement agreements; and requiring employers to provide sexual harassment training to employees.

As of April 12, 2018, the NYSHRL now protects all non-employees in New York State against workplace sexual harassment. Most other state employment discrimination statutes cover only employees, leaving most independent contractors (including models, actors, and other entertainers who are typically represented by agents), consultants, and other non-employees with few legal protections against workplace discrimination. The new changes to the NYSHRL, however, extend sexual harassment protections under state law to any “contractor, subcontractor, vendor, consultant or other person providing services pursuant to a contract in the workplace or who is an employee of such contractor, subcontractor, vendor, consultant or other person providing services pursuant to a contract in the workplace.” Under the NYSHRL, an employer is liable for sexual harassment of a non-employee if the employer knew (or should have known) about the harassment but did not take immediate and appropriate corrective action.

We have previously reported on the prevalence of—and problems with—mandatory arbitration agreements (which require employees to agree to resolve any future discrimination and harassment claims in a private forum, rather than in court) and nondisclosure provisions, better known as NDAs, in settlement agreements (which swear employees to silence about their experiences of discrimination in exchange for settling their claims). Beginning July 11, 2018, however, the New York general business law will be amended to prohibit New York State employers from forcing employees to arbitrate sexual harassment claims—including nullifying any arbitration agreements signed prior to that date. And amendments to New York’s civil practice law and rules and general municipal law will prohibit employers from including NDAs in settlement agreements concerning workplace sexual harassment claims unless the plaintiff specifically voices a preference for including the nondisclosure language. Together, these changes will hopefully begin to end the silence around workplace sexual harassment by giving victims of sexual harassment the chance to pursue their claims in court and share their stories of discrimination with others, unrestricted by silencing clauses in settlement agreements.

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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 June 15, 2017, U.S. District Judge John G. Koeltl of the Southern District of New York approved the parties’ consent decree in United States v. City of New York, a race discrimination case brought against the City of New York and the New York City Department of Transportation (NYCDOT) under Title VII of the Civil Rights Act of 1964 (Title VII). The lawsuit, filed by the U.S. Department of Justice (DOJ) in January 2017, alleged that NYCDOT management violated Title VII by systematically discriminating against racial minorities over a nearly ten-year period.

According to the complaint, the NYCDOT “engaged in a pattern or practice of racial discrimination and retaliation based on the failure to promote minority employees” within the Fleet Services unit, an NYCDOT division responsible for maintaining NYCDOT vehicles such as trucks, passenger cars, and heavy machinery. The complaint described a “culture of fear and intimidation” created by nearly a decade of discrimination and retaliation against minority employees in the Fleet Services Unit, perpetrated primarily by two NYCDOT executive directors.

The directors allegedly referred to African-American employees with racist epithets like “n*gger” and “monkey”; gave preferential treatment to white employees in promotions, hiring, and project assignments, including promoting less experienced white individuals over more qualified minority candidates and changing hiring procedures to disadvantage racial minorities; and retaliated against employees who complained of discrimination by cutting their hours and even physically threatening them.

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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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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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Lucie Rivière

On September 9, 2015, New York State Attorney General, Eric Schneiderman, and the U.S. Equal Employment Opportunity Commission (“EEOC”) announced a $3.8 Million settlement between Consolidated Edison Inc (“ConEd”), the Attorney General and EEOC regarding allegations of sexual harassment and gender discrimination against ConEd.

ConEd provides electric, gas, and steam service to approximately 3.4 million customers in New York City and Westchester County. Its female employees alleged that, between 2006 and 2014, they experienced harassment and discrimination at their workplace, including ConEd refusing to allow them to take necessary career-advancement courses, denying them adequate and sanitary restrooms and changing facilities, and failing to provide them with the same tools or safety gear as their male counterparts. The complaint states ConEd was made aware of the situation and failed to take action to improve the conditions. In February 2008, both the EEOC and Attorney General’s Civil Rights Bureau launched an investigation concerning violations of Title VII of the Civil Rights Act of 1964 and the New York State and City Human Rights Laws.

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On November 18, 2014, the U.S. District Court for the Central District of California approved a settlement for one of the two classes in the case Terry P Boyd v. Bank of America Corp et al., awarding $5.8 million to be distributed among the approximately 368 class members, after payment of $1,933,333.33 in attorneys’ fees plus $30,000 in litigation costs. The amounts to be distributed will be based on the number of adjusted eligible workweeks worked, resulting in an average recovery of $10,840, with an additional $30,000 divided between the two named plaintiffs. The Settlement Agreement also specifies that the defendants will reclassify these employees–Residential Appraisers and Review Appraisers–and that this reclassification will yield “significant, ongoing benefits” for class members.

Bank of America allegedly misclassified its Appraisers as exempt from the overtime requirements of the Fair Labor Standards Act and corresponding sections of the California Labor Code. According to Plaintiffs’ allegations, the job duties of Appraisers involved generating appraisals, under the direct supervision of company managers, by following pre-established guidelines. Thus, they argue, these employees should not have fallen under the administrative exemption from the FLSA’s overtime requirements, since they “lack significant discretion over appraisal values they assign.”

The Appraisers’ compensation was determined by the number of appraisals they completed, and they were required to meet a minimum number of appraisals. As a result, appraisers were required to work “far in excess of forty hours per week,” including regularly working holidays and weekends; in fact, it was common for appraisers to work seven days, and often for up to eighty hours, each week.

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From 2009-2011, the City University of New York‘s John Jay College of Criminal Justice (John Jay) undertook a huge expansion, including the construction of a new building. Among the many contractors hired for the construction project was Vamco Sheet Metals, Inc. (Vamco), which would become the target of a gender discrimination lawsuit by the Equal Employment Opportunity Commission (EEOC) on August 29, 2013.

The John Jay construction site was within the contractually-defined territory of Local 28 of the Sheet Metal Workers’ International Union (Local 28), and under the same contract Vamco was defined as an “out-of-town contractor.” Thus, only two workers on the project could be from the company’s home territory, and all others from Local 28. Vamco had to get sheet metal workers from Local 28, which used a ranking system of workers on its “out-of-work list” to choose which workers to send to Vamco.

According to the complaint, Vamco was required to employ a minimum of 6.9% female workers, and during the John Jay project they satisfied this requirement by employing seven female Local 28 members; however, “all but one of them worked for shorter tenures than male co-workers hired in or around the same time.” The commission describes several examples of discriminatory treatment of female sheet metal workers:

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If plaintiffs’ accusations in Equal Employment Opportunity Commission v. Braun Electric Company et al. are true, the claimant Samara Schmidt and others similarly situated were subjected to sexual harassment so severe and pervasive that it created a hostile work environment and effectively forced Schmidt to resign. The complaint refers to an array of extremely offensive sexual comments and behaviors, all of which were clearly unwelcome and brought many unanswered complaints to the company’s managers and human resources staff.

The EEOC alleges that the company knowingly failed to investigate, prevent, or correct this pattern of continuous harassment by the manager at the center of the complaint. “Despite multiple complaints of sexual harassment…beginning in 2004,” the state, “Braun finally got around to conducting an investigation in August 2010. Sadly, Bruan’s HR Manager Wood conducted only a cursory investigation…purposefully ignoring evidence that Robertson’s conduct was not an isolated incident directed at one employee. Despite being aware that other employees were present for Robertson’s comment, HR manager Wood decided to just interview Miller, never entertaining the idea of interviewing percipient witnesses.” Wood allegedly made “no efforts to ascertain whether Robertson had previously engaged in such conduct, as Wood ‘just didn’t think that was true…'” In the end Robertson received only a written warning that had no material consequences for his working life or career. There was no meaningful discipline, and no monitoring to ensure that the behavior would not continue. According to the plaintiff’s and claimants’ allegations, this was only the first of several complaints about sexual harassment that led to no action.

The terms of the settlement, approved by the District Court for the Eastern District of California on October 15, 2014, are not unusual for EEOC cases of this kind: claimants will receive monetary relief in the amount of $82,500; the defendant agrees to refrain from discrimination and retaliation for complaints made under Title VII; the defendant will retain and an Equal Employment Opportunity Monitor to oversee the administration of the settlement and “bear all costs associated with the selection and retention of the Monitor and the performance of his/her duties”; the defendant will be required to “review, implement, distribute and post its companywide policies and procedures against employment discrimination prohibited by Title VII,” following the Commission’s recommendations; the defendant will implement a sustained program of regular training for managers, non-managers, and human resources personnel regarding unlawful harassment and the proper handling of harassment complaints by employees; and the defendant will submit reports about the administration of these policies to the EEOC.

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