Epstein Becker Green Assists Insurer in Defeating Class Certification in Wage and Hour Case
In May 2017, Epstein Becker Green attorneys achieved a major victory for a national insurance company in a wage and hour class action pending in Los Angeles Superior Court. The Epstein Becker Green team convinced the trial court to deny the plaintiffs’ motion for class certification on all claims. The lawsuit had alleged that property inspectors who worked for the insurance company had been misclassified as independent contractors, had not been paid minimum wages or overtime, did not receive meal periods and rest periods, and were not reimbursed for business expenses, among other things.
The Epstein Becker Green team included Michael S. Kun and Kevin Sullivan.
Epstein Becker Green Achieves Victory in Class and Collective Action Against Transportation Client
Epstein Becker Green has obtained a significant victory for its client Corporate Transportation Company and affiliated entities (collectively, “CTG”) when the U.S. Court of Appeals for the Second Circuit handed down its long-awaited decision involving whether “black car” drivers in New York were employees or independent contractors. The Second Circuit, in Saleem v. Corporate Transportation Group, Ltd., Case No. 15‐88‐cv (2d Cir. April 12, 2017), unanimously ruled for CTG, holding that CTG’s “black car” drivers in the New York City area are independent contractors, not employees.
The drivers had brought this action in the U.S. District Court for the Southern District of New York, asserting claims pursuant to the Fair Labor Standards Act (FLSA) and the New York State Labor Law (NYLL) for unpaid overtime. Epstein Becker Green defeated plaintiffs’ motion for class certification in November 2013 and, in early 2014, filed a motion for summary judgment on behalf of CTG. The district court granted CTG’s motion for summary judgment on the FLSA and NYLL claims as to both the named and opt-in plaintiffs, concluding that, as a matter of law, plaintiffs were properly classified as independent contractors rather than employees for purposes of both statutes. The plaintiffs filed an appeal.
After Epstein Becker Green presented its oral argument to the appeals bench, the Second Circuit found that the plaintiffs independently determined (1) the manner and extent of their affiliation with CTG; (2) whether to work exclusively for CTG accounts or provide rides for CTG’s rivals’ clients and/or develop business of their own; (3) the degree to which they would invest in their driving businesses; and (4) when, where, and how regularly to provide rides for CTG clients. In short, the workforce was composed of individuals who came and went as they pleased. Thus, the Second Circuit agreed with the district court that, even when the historical facts and the relevant factors were viewed in a light most favorable to plaintiffs, the plaintiffs constituted independent contractors as a matter of law, despite the broad sweep of the FLSA’s definition of “employee.”
Attorney Evan J. Spelfogel led the Epstein Becker Green team in this case.
Epstein Becker Green Obtains Dismissal of Statewide Representative Suit Brought Against California Client
In December 2016, Epstein Becker Green obtained the dismissal of a statewide representative action against a California employer. The plaintiff had alleged that our client did not pay several thousand California employees for all time worked, denied them meal and rest periods, and gave them inaccurate wage statements.
The suit was brought under California’s Private Attorneys General Act (“PAGA”), which allows employees to file representative actions—similar to class actions—on behalf of all “aggrieved employees.” Epstein Becker Green filed a motion to dismiss the statewide claims on a variety of procedural and substantive grounds.
After reviewing Epstein Becker Green’s motion to dismiss, plaintiff’s counsel conceded that the motion would be granted and agreed to dismiss all of the statewide representative claims. The plaintiff will now be proceeding with individual claims only, which we believe he is required to arbitrate.
The Epstein Becker Green team included Michael S. Kun and Amy B. Messigian.
Epstein Becker Green Is Victorious in Persuading a Federal Court to Dismiss a Class and Collective Action Alleging Worker Misclassification
On September 16, 2014, Judge Jesse Furman of the U.S. District Court for the Southern District of New York handed down a major victory for Epstein Becker Green and its client Corporate Transportation Group in the case Saleem and Singh v. Corporate Transportation Group, a class and collective action brought two years ago under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL), alleging that defendants, black car companies in New York City, had for years misclassified approximately 1,500 drivers as independent contractors. Plaintiffs sought reclassification as employees and seven-figure amounts of damages in this “bet the company” case.
Epstein Becker Green defeated plaintiffs’ motion for class certification in November 2013 and, in January and February 2014, filed a motion for summary judgment on behalf of defendants and opposed a competing motion for summary judgment brought by plaintiffs. On September 16, 2014, Judge Furman concluded that plaintiffs were properly classified as independent contractors rather than employees for the purposes of both the FLSA and the NYLL.
Member of the Firm Evan J. Spelfogel and Associate Margaret C. Thering led the Epstein Becker Green team, along with Associate Dustin E. Stark.
Epstein Becker Green Persuades California Court to Deny Class Certification Against Insurance Client
On March 24, 2014, after five years of litigation, Epstein Becker Green succeeded in defeating a motion for class certification in a significant class action lawsuit brought against our client Farmers Group, Inc., an insurance company, in Los Angeles Superior Court. In the case, the plaintiffs alleged that the persons who work for vendors performing property inspections for Farmers Group were wrongly classified as independent contractors, that Farmers Group was their "joint employer," and that they were entitled to overtime pay, minimum wages, reimbursement for business expenses, and a variety of penalties on a class-wide basis. Epstein Becker Green convinced the court that there were individualized issues that prevented class-wide determinations of whether the individuals had been misclassified as independent contractors, whether Farmers Group was their "joint employer," and whether Farmers Group could be held liable on any of the substantive claims. EBG also succeeded in convincing the court that the plaintiffs had not established the critical "superiority" element for class treatment.
The Epstein Becker Green team that represented Farmers Group included Michael S. Kun, Aaron F. Olsen, Lisa M. Watanabe, and Amy B. Messigian.
Epstein Becker Green Obtains Dismissal of Wage and Hour Class Action Brought Against Health Care Client
In March 2014, Epstein Becker Green obtained a significant victory in a wage and hour class action brought against a health care client in California. Although our client was confronted with potential exposure in the millions of dollars, the case was resolved without any payment by our client. Epstein Becker Green obtained this result by first filing motions to dismiss and to strike portions of the Complaint. Those motions were granted in part, essentially cutting the case in half (the court dismissed the class claims, subject to plaintiff's right to attempt to amend the Complaint). When the plaintiff's attorneys chose not to try to amend the Complaint during the time permitted, Epstein Becker Green was able to convince the plaintiffs to dismiss the rest of the case based on documentation showing that the remaining claims were meritless.
The Epstein Becker Green team representing our client included Adam C. Abrahms, Michael S. Kun, and Deanna L. Ballesteros.
Epstein Becker Green Secures Favorable Settlement in Class Action Case
Epstein Becker Green recently concluded a favorable class action settlement for a leading in-flight Internet service provider.
In 2014, the client was sued in a putative class action in the Eastern District of New York. The claims against the client centered on its monthly subscription, pursuant to which its customers are afforded access to the Internet on all flights equipped with the client’s devices and agree to have their credit cards charged each month until they take steps to cancel the service. The complaint alleged that the client did not sufficiently apprise customers of the recurring nature of the charge, and sought restitution, requesting nearly $24 million in charges on behalf of the class.
After the judge denied the client’s motion for stay or dismissal in favor of arbitration, Epstein Becker Green appealed the case to the U.S. Court of Appeals for the Second Circuit. In response, the judge set a hearing for class certification two months hence. In the face of both the likely success of the appeal and extensive discovery demands that we served on the class certification issue, plaintiffs’ counsel requested that the matter be stayed so that the parties could conduct a formal mediation. After two days of meditation, a settlement was brokered in which the client offered promotional codes to affected class members to settle the action. Because so-called “coupon settlements” warrant higher scrutiny under the Class Action Fairness Act and current case law, the court required three hearings for approval, including the submission of expert reports on the particular sophistication of the client’s customers. Final approval was granted in April 2016, the time for appeal has expired, and the settlement is now final.
The Epstein Becker Green team included Newark attorneys Anthony J. Laura, Robert M. Travisano, and Yael Spiewak and New York attorneys Scarlett L. Freeman and Matthew Savage Aibel.
Epstein Becker Green Persuades Federal Court in California to Deny Certification of Wage and Hour Claims Against Technology Client
Epstein Becker Green has achieved a major victory in a wage and hour collective/class action in a federal court in California. In this case, the plaintiffs filed a collective and class action alleging violations of the Fair Labor Standards Act ("FLSA") and the California Labor Code against one of our clients, a global technology company. The named plaintiffs are former information technology employees who alleged that their job duties consisted primarily of providing computer support, trouble shooting, testing related to repairs and problem-solving, and technical services. The plaintiffs claimed that they were improperly classified as exempt, worked in excess of 40 hours per week without overtime pay, and were not provided with required meal and rest breaks. Previously, the judge had conditionally certified an FLSA class. Ruling on the parties' respective motions in September 2013, the court denied the plaintiffs' motion to certify a Rule 23 class action under California law, and it granted our client's motion to decertify the conditionally certified FLSA class.
Interestingly, the law firm that represented the plaintiffs in this case represented a similar group of employees in a prior class action brought against a prior owner, and settled that case for approximately $16 million. The Epstein Becker Green team, which was led by Michael S. Kun and included Aaron F. Olsen and Lisa M. Watanabe, crafted and executed a creative strategy that led to a very different result for our client.
Epstein Becker Green Persuades California Court to Deny Certification of Misclassification, Meal Period, and Rest Period Claims Against Restaurant Client
After more than five years of litigation, a Los Angeles Superior Court has denied a motion for certification of a class action against Epstein Becker Green client Joe's Crab Shack Restaurants on claims that its managers were misclassified as exempt and denied meal and rest periods in violation of California law. The Epstein Becker Green team, which was led by Michael S. Kun, argued on behalf of the defendant that the plaintiffs' claims could not be certified for class treatment because, among other things, individualized inquiries would need to be conducted because managers' experiences differ from restaurant to restaurant, position to position, and day to day.
In denying the plaintiffs' class certification motion, Judge Charles Palmer found that the plaintiffs had not established adequacy of class representatives, typicality, commonality, or superiority. In addition, Judge Palmer noted that handling this case as a class action would require every individual member to prove whether or not he or she spent more than half his or her time on exempt managerial tasks, which would be time-consuming and burdensome for the court. This ruling also emphasized a defendant's due process right to provide individualized defenses to class members' claims.
Epstein Becker Green Assists Two Health Insurers in Defeating Data Breach Class Certification
After more than five years of litigation, on April 26, 2016, a three-judge Superior Court panel in Pennsylvania upheld the denial of a motion for certification of a class action against Epstein Becker Green clients Keystone Mercy and AmeriHealth Caritas Health Plans.
In December 2010, the plaintiff, on behalf of his daughter, filed a lawsuit against the two insurers, claiming that they violated state consumer protection laws by losing a flash drive containing the personal health information (PHI) of more than 283,000 individuals and by failing to live up to their promise to protect and safeguard these individuals’ PHI.
In denying the plaintiff’s class certification motion, the panel found that the trial court had “carefully considered the numerosity, typicality, adequacy of representation, and fair and efficient method of adjudication requirements for class certification under Rule 1702 [('Prerequisites to a Class Action')] and found the class action requirements were not met.” In addition, the panel agreed with the trial court’s ruling that the plaintiff could not properly represent potential class members because he was unable to conclusively link his daughter to the PHI contained on the lost flash drive. Also, the panel left in place the trial court’s finding that, as there was no there was no actual harm associated with the data breach, the plaintiff failed to fulfill the typicality requirements for a class action.
The Epstein Becker Green team was led by Stuart M. Gerson and included Patricia M. Wagner and Tanya Vanderbilt Cramer.
Providing Protection from “Joint Employer” Liability
More and more, employees are bringing claims on a “joint employer” theory, seeking to hold their employer and another entity liable for alleged unlawful conduct. The “joint employer” argument frequently comes up in the context of temporary employees who are assigned by temporary staffing companies to work for clients. Often, employees will claim that one “joint employer” is liable for the other’s alleged conduct, sometimes doing so in class action lawsuits.
Epstein Becker Green has experience successfully representing companies on “joint employer” issues. For example, we recently achieved an important victory for our client, a temporary staffing company, in a joint-employer class action in California. The temporary staffing company had assigned the plaintiff, a temporary worker, to work for one of its clients, which the plaintiff alleged denied her statutorily required meal periods. The plaintiff filed a class action lawsuit in state court, claiming that both companies were “joint employers” and that the temporary staffing company was vicariously liable for alleged meal period violations committed by the client. This issue of vicarious liability for “joint employers” on such a claim is one that had never been addressed by the appellate courts in California. Epstein Becker Green convinced the lower court and, subsequently, an appellate court that “joint employers” are not vicariously liable for each other’s alleged meal period violations—and, in particular, that temporary staffing companies are not liable for the wage and hour violations committed by their clients. Accordingly, the plaintiff’s class action lawsuit was dismissed as to the temporary staffing company.
Defending Against Consumer Class Action Liability
Businesses nationwide have been plagued by litigation under the Telephone Consumer Protection Act (TCPA), a law meant to protect consumers from unsolicited auto-dialed and prerecorded phone calls, text messages, and faxed advertisements. When the damages—$500 (for negligent violations) or $1,500 (for willful violations) for each unlawful call, text, or fax—are aggregated in a class action lawsuit, a business could face massive financial exposure. As the U.S. Chamber of Commerce warned in 2017, TCPA cases “sprawl across the country, targeting companies in virtually every industry.”
Epstein Becker Green has experience helping our clients avoid liability under the TCPA. For example, the firm recently represented a health care client in a potential TCPA class action brought by a plaintiff who received a text message from our client encouraging him to make an appointment for a preventive treatment. After a lower court sided with our client, the plaintiff appealed. Epstein Becker Green argued—and the appellate court agreed—that the plaintiff provided express consent when he gave his contact information to our client during the registration process, and the client’s text message fell within the scope of that express consent. With the case now dismissed, our client can continue to assure the health of its patients and the public by transmitting phone and text messages to patients who voluntarily provide their phone numbers so that they can receive vital treatment messages.