Class Action Quarterly Update
Logistics & Transportation
Class Actions Quarterly Update: Employee Misclassification in the Logistics Industry
The vast majority of class action litigation in the logistics industry over the past quarter, and indeed the last few years, has been focused on the issue of worker misclassification. In particular, as state legislatures continue to propose and pass strict independent contractor statutes, such as AB5 in California, or S2404/S863 in New Jersey, truck drivers across the country have brought class action claims alleging misclassification and attendant wage violations.
One key question that Courts have been grappling with is whether these restrictive state laws are preempted when applied to certain motor carrier operations by the Federal Aviation Administration Authorization Act of 1994 (FAAAA). Circuit Courts across the country have come out differently on the issue over the past few years. The Ninth Circuit is the most recent Court to take up the issue, which we predict will soon find its way to the Supreme Court.
Class Actions Quarterly Update: Supreme Court
The Supreme Court ruled on several cases involving class actions in the last few months. A case awaiting certiorari could dramatically change the jurisdictional requirements for plaintiffs in class actions across the country.
At the end of the 2019-2020 term, the Court issued opinions in Thole et al. v. U.S. Bank N.A. et al., 140 S. Ct. 1615 (2020) and Barr v. Am. Ass’n of Political Consultants, Inc., 140 S. Ct. 2335 (2020). In Thole, the Court addressed whether a putative class of plaintiffs had Article III standing to bring claims against their former employer and other defendants under the Employee Retirement Income Security Act of 1974 (ERISA). The plaintiffs argued that defendants breached the duties of loyalty and prudence under ERISA by poorly investing the assets of their defined-benefit retirement plan. In a defined-benefit retirement plan, retirees receive a fixed payment each month, and the payments do not fluctuate with the value of the plan or based on investment decisions by plan fiduciaries. The Court drew a distinction between these plans and defined-contribution plans, like 401(k)s, where the benefits are tied to the value of the accounts and can turn on plan fiduciaries’ investment decisions. The Court affirmed the lower Court’s dismissal because the plaintiffs lacked Article III standing, specifically noting that regardless of the outcome of the case, the plaintiffs would still receive the exact same monthly benefits they are already entitled to receive.
Fashion & Retail
Class Actions Quarterly Update: Fashion and Retail Quarterly Update
In this issue of the Arent Fox Class Action Quarterly Update, we will be focusing on one recent California Supreme Court decision and two court of appeal decisions impacting the fashion and retail industries.
Key Retail Class Action Case
Background: In 2013, a group of employees at a major retail store brought a class action claiming that time spent on the company’s premises waiting for, and undergoing, required exit searches of packages, bags, or personal technology devices voluntarily brought to work purely for personal convenience by employees was compensable as “hours worked”. Under the company’s policy, the employees were required to clock out before submitting to an exit search, which they estimated could take 5 to 20 minutes. A federal judge initially granted the company’s motion for summary judgment, concluding that the searches were not working hours for which the company needed to compensate employees. The employees appealed, and the Ninth Circuit certified the question to the state Supreme Court because no clear controlling California precedent existed. In certifying the question, the Ninth Circuit emphasized that the question was of importance to numerous employees and employers in California
Labor & Employment
Class Actions Quarterly Update: Labor and Employment
Garner v. Inter-State Oil Co., 52 Cal.App.5th 619, Cal. App. 3 Dist., June 26, 2020, as modified (Jul 23, 2020)
Plaintiff filed a class action alleging that his employer, Inter-State Oil Co., violated a variety of wage and hour laws. The employer petitioned to compel arbitration of the individual claims and sought dismissal of the class claims entirely. Plaintiff argued that the agreement’s plain language gave him the right to pursue his class claims in arbitration. The trial court disagreed, holding that the language of the agreement indicated Plaintiff waived his right to class claims across the board and granting the employer’s petition to compel.
On appeal, the California Court of Appeal reversed in part, carefully considering the plain language of the agreement. It called out two particular sentences. The first stated that the parties agreed to mandatory arbitration for “all claims arising out of or related to  employment that could be filed in a court of law.” That sentence listed a series of claims subject to arbitration, including class actions. Read in isolation, the Court held this sentence meant the parties agreed to arbitrate any of the listed claims — including class actions. The second sentence stated that the agreement served as a “waiver of all rights to a civil jury trial or participation in a civil class action lawsuit.” Although the employer argued this provision waived all class claims, the Court of Appeal interpreted “lawsuit” to mean a court action, not an arbitration. The employee waived only his right to bring class claims in Court but not to arbitrate them.
Privacy & Data Protection
Class Actions Quarterly Update: Biometric Privacy Claims Not Barred by Illinois Workers’ Compensation Act
Class actions brought under the Illinois Biometric Information Privacy Act (BIPA) continue to trend upward in favor of plaintiffs. Enacted in 2008, BIPA regulates the collection, use, storage, retention, and destruction of biometric identifiers and information. A biometric identifier is a physically unique characteristic used to identify an individual, including a fingerprint, voiceprint, face geometry scan, or eye or hand scan.
In January 2019, the Illinois Supreme Court held in Rosenbach v. Six Flags Ent. Corp. that individuals can pursue statutory damages for technical violations of BIPA even when no actual harm is alleged or sustained. The decision opened the door for increased BIPA class actions, many of which target employers that use biometric technology (typically fingerprints) for timekeeping purposes.
Telephone Consumer Protection Act
Class Actions Quarterly Update: What You Need To Know About The TCPA Landscape This Election Season
During this past political season, there’s no doubt that candidates and political groups were urging their supporters – and complete strangers – to get to the polls by sending an unprecedented amount of text messages. But even with the polls (mostly) closed, Telephone Consumer Protection Act (TCPA) class action litigation may be lurking around the corner for campaigns depending on (1) the type of text messaging platform campaigns used and (2) where the message recipient is located.
Simply put, there are two wildly different interpretations of what constitutes an autodialer under the TCPA currently employed by different federal circuit courts, with the Supreme Court set to weigh in shortly. Here is what you should know about the current TCPA autodialer landscape.
Class Actions Quarterly Update: How Have Plaintiffs’ Class Actions Suing For Coverage for Business Interruptions From Covid-19 Fared Thus Far?
Our initial alert highlighted various hospitality and service industry businesses suing their insurers to recover for losses arising out of closure and stay-at-home (Civil Authority) orders. Since then, thousands more individual and class action coverage actions have been filed seeking business interruption coverage as a result of Covid-19. This article assesses how these new actions have fared thus far.