Articles Posted in Class Action

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).

Lev Craig and 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.

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.

Lev Craig

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.

Lev Craig

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.

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.

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.

By Owen Laird, Esq.

A recent decision by the Ninth Circuit Court of Appeals has cast into doubt the validity of a range of lawsuits against Uber by its drivers.  The decision held that the mandatory arbitration provision in Uber’s contracts with its drivers is enforceable; as a result, Uber drivers may be foreclosed from bringing vast majority of their claims against Uber in court.

The ongoing legal saga between Uber and their drivers is one of the most significant labor disputes in the United States today.  Uber – the multi-billion-dollar taxi app – and its Silicon Valley startup brethren seek profitability by transforming the way people interact, work, and live their lives.  In Uber’s case, a central aspect of that transformation is redesigning the traditional employee/employer relationship: Uber classifies its drivers as independent contractors, not employees.  This decision benefits Uber and disadvantages its drivers because independent contractors do not receive the same basic legal privileges ­– such as anti-discrimination protections, minimum wage, and overtime – that employees do.

Owen H. Laird, Esq.

For New Yorkers, both the Fair Labor Standards Act (FLSA) and New York Labor Law provide employees with rights to a minimum wage and, in many cases, overtime pay. However, many workers in New York still do not receive the pay to which they are entitled; for instance, employers may under-report employees’ hours, improperly withhold wages or tips, or simply pay a wage lower than the State minimum.

However, many employees choose to let these violations go because they are “minimal.” An employer might underpay an employee for by a half hour for each pay period, a loss that might only amount to a few dollars a month. The employee could hesitate to pursue those lost wages, afraid of upsetting things at work or doubtful that they can find a lawyer to pursue a smaller case. Despite these potential concerns, employees who believe they are being illegally underpaid should not be afraid.

Yarelyn Mena and Edgar M. Rivera, Esq.

Several state investigations have found that the retail practice of “on-call scheduling” – where workers must call their employers to check if they are needed for scheduled shifts and are not paid if their shifts are cancelled – is so prevalent that several state attorney generals are demanding that major retailers respond to questions regarding their scheduling practices and answer requests for documentation.

On April 12, 2016, the attorney general of eight states and Washington D.C. sent letters to fifteen retailers, including Aeropostale, Payless and Coach, asking whether they use on-call scheduling and, if so, how they implement it. The retailers must provide answers by April 25, 2016. The officials are concerned about workers’ well-being because on-call scheduling leads to erratic schedules, making it difficult to plan child care, work a second job, or take classes.  Essentially, workers must make themselves available but are not guaranteed work while employers receive the benefits of always having workers available if the store becomes busy without having to pay workers.  On-call scheduling can also lead to unexpectedly low pay because employers often send employees home on slow days without proper compensation.  Additionally, low income workers often do not have the financial flexibility to allow for this type of uncertainty in their pay. In sum, on-call scheduling lets employers quickly staff their stores on busy days, and send employees home early on slow days, thus, saving money on payroll at the expense of their employee convenience.