Articles Posted in Settlement Agreement

Lev Craig

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.

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.

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.

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.

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.

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:

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.

On August 28, 2013, the EEOC filed the lawsuit in the Spartanburg Division of the U.S. District Court for South Carolina against a Spartanburg transportation company on behalf of two of its employees. Both plaintiffs in the case–EEOC v. Atchison Transportation Services, Inc.–are over seventy years of age, both worked as drivers, and according to the complaint each was told by management, more or less explicitly, that he was being terminated because of his age. If true, these allegations imply that the company violated the Age Discrimination in Employment Act (ADEA), which states clearly in 29 U.S.C. § 623 that “it shall be unlawful…for an employer to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.” The plaintiffs won a settlement of $85,000, and the case was dismissed on October 2, 2014.

One plaintiff, William Thomas, claims that his Operations Manager informed him that he was terminating his employment because he was 75, although he had believed that Thomas was only 70. The same Operations Manager told Thomas that the company’s insurance policy contained a clause that did not allow anyone to drive after he or she reached the age of 75. No problems with Thomas’s performance at the job were ever discussed as part of this process.

The other plaintiff, Norris Locke, was terminated under similar conditions. Locke, a 76-year-old motor coach driver, was also told that the Defendant’s insurance carrier did not want to insure him any longer so he was terminated. Again, no performance problems were discussed.

On August 11, 2014, the U.S. District Court for the Southern District of California approved a settlement in the case Ambrosino, et al. v. Home Depot, U.S.A., Inc, which would award about $224,000 to the plaintiffs and about $113,600 to their counsel.

There was extensive legal wrangling about the constitution of the class of plaintiffs, and about confidentiality provisions in the settlement agreement, but the basic complaint in this case was relatively straightforward. Plaintiffs allege that Home Depot intentionally misclassified certain employees as managers in order to avoid paying them time-and-a-half for hours worked in excess of forty per week. Specifically, while the company paid its Department Heads, Supervisors, Store Managers, and Store Managers hourly wages and premium time-and-a-half pay when they worked overtime, another category of employees–Merchandising Assistant Store Managers (MASMs)–were classified as exempt from overtime pay under the Fair Labor Standards Act (FLSA) and never paid overtime.

In their complaint, plaintiffs allege that Home Depot classified them as “executives,” and thus as exempt under the FLSA, despite the fact that their job duties consisted primarily of non-managerial duties such as “packing and unpacking freight; setting product; cleaning the bathrooms and the store; picking up and taking out the garbage; returning shopping carts from the parking lot to inside the store; running registers; receiving trucks; building displays; cutting wood; painting displays; fixing tools; labeling product in overhead; and loading customers’ cars (‘tasking’). When Plaintiffs were not tasking and were on the floor, Plaintiffs spent the majority of their time providing customer service.”

On August 4, 2014, the U.S. District Court for Minnesota issued a consent decree approving a $182,500 settlement for the Plaintiff in Equal Employment Opportunity Commission v. Royal Tire, Inc., and ordering changes to the company’s policies and practices regarding sex discrimination in pay.

Plaintiff-Intervenor Christine Fellman-Wolf was promoted to the position of Human Resources Director at Royal Tire, Inc. in January 2008. The male employee who held that position before her was paid $82,800 per year. According to company policy she should have been paid between $66,268 and $82,825, but they actually paid her only $47,164. In addition, Ms. Fellman-Wolf’s predecessor had also been treated as part of its Executive Team and awarded a bonus of $58,000 in 2010, which was a typical year. However, the position ceased to be part of the Executive Team as soon as Fellman-Wolf took over, so she received only the $7,000 bonus paid to members of the management team. In short, the EEOC argued, Ms. Fellman-Wolf suffered substantial monetary losses due to Royal Tire’s discriminatory treatment of her, in spite of her repeated requests for equal pay.

The EEOC alleged in its complaint that Royal Tire violated the Equal Pay Act of 1963 (“EPA”) and Title VII of the Civil Rights Act of 1964, both of which prohibit sex discrimination in pay. John C. Hendrickson, Regional Attorney for the EEOC’s Chicago Discrict, said “Too many employers appear to think that it’s enough just to let women in the door, and that no one is going to notice if the money in their pay envelope is less than men’s who are doing the same work. Bad guess. Employers should know that such pay discrimination is a violation of federal law under two statutes and that it’s a top law enforcement priority for the EEOC. That should be the takeaway for employers-and women-who have been watching this case.”