Wednesday, April 6, 2016

California Supreme Court Clarifies that Most Employers Must Provide Employees with Seats for Tasks that May Reasonably Performed While Sitting

On Monday, the California Supreme Court provided much-needed guidance on a little-known state regulation that requires employers to provide employees with “suitable seats” when reasonable. The Supreme Court’s opinion in Kilby v. CVS Pharmacy, Inc. clarified that whether an employer must provide a seat depends on the individual tasks the employee regularly performs and whether any of those tasks may reasonably be performed while sitting, not whether the majority of tasks performed by the employee could be performed seated. It further clarified that employees who regularly work standing must be provided with a seat during breaks.

Despite the standing-desk trend amongst office workers, for workers who spend most of their shifts on their feet, sitting down for part of the workday reduces fatigue and promotes overall health. The Supreme Court’s interpretation of the seating requirement thus forces employers to evaluate the physical conditions of their employees’ workspaces through the lens of safety and health.

The U.S. Court of Appeals for the Ninth Circuit had requested guidance from the California Supreme Court to resolve two cases which implicated the seating requirement: one involving cashiers at CVS Pharmacy and another involving tellers at JPMorgan Chase Bank. The requirement is contained within the Industrial Welfare Commission’s wage orders, which regulate wages, hours, and working conditions for various job categories. (It impacts most workers in California, with the exception of those regulated by wage orders covering agricultural, construction, drilling, logging, and mining jobs, which have different seating rules.)

The California Supreme Court first traced the history of the seating provision, which dates to a 1911 law requiring that female employees in the mercantile industry be allowed to sit during breaks. A few years later, the Industrial Welfare Commission incorporated seating requirements for women and children into the various wage orders, including a requirement that garment and laundering workers be permitted to work while sitting. Seating requirements evolved over the following decades, and became applicable to employees regardless of gender in the early 1970s. In its current form, the relevant seating provision states:

14. SEATS
(A) All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.
(B) When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats shall be placed in reasonable proximity to the work area and employees shall be permitted to use such seats when it does not interfere with the performance of their duties.

In interpreting the seating requirement, the Court rejected the employers’ position that “the  nature of the work” language calls for a review of all tasks performed by an employee throughout the day to categorize work into “sitting jobs” and “standing jobs.” The Court explained: “There is no principled reason for denying an employee a seat when he spends a substantial part of his workday at a single location performing tasks that could reasonably be done while seated, merely because his job duties include other tasks that must be done standing.” However, the Court also rejected the employees’ argument that if a single job task could be performed sitting, a seat must be provided.

The Court was instead persuaded by guidance from the Division of Labor Standards Enforcement which cautioned that the all-or-nothing approach obscures what tasks a worker actually performs (and their duration) and ignores the central purpose of the wage orders to provide a minimum level of protection for workers. But the Court also noted that, contrary to the argument advanced by the employees, the reasonableness standard in the provision means that a seat likely need not be provided where seated tasks comprise very little of the workday.

The Court’s standard thus requires an examination of all relevant factors and a balancing of the employee’s need for a seat against the impact on the employer’s business. Relevant considerations would include whether tasks in a given location could be performed sitting, whether sitting would significantly interfere with other standing tasks, and the impact on overall job performance. The Court further explained that the inquiry is an objective one and an employer’s mere preference for standing work is irrelevant.

Finally, the Court explained that sections 14(A) and 14(B) are not mutually exclusive and that both may apply to the same employee during different parts of the workday. For instance, an employee who performs both seated and standing work may be entitled to a seat during breaks in addition to while performing seated tasks.

The Supreme Court’s guidance is significant because employees who suffer violations of the seating requirement may be able to file an action under the Private Attorneys General Act of 2004 (PAGA). PAGA provides a cause of action for workers to enforce Labor Code violations in court on behalf of themselves and other aggrieved employees. In the context of the seating requirement, employers who fail to provide seats when it is reasonable to do so could be on the hook for penalties starting at $100 for each aggrieved employee per pay period. See Home Depot U.S.A., Inc. v. Superior Court (2010) 191 Cal.App.4th 210, 218; see also Cal. Labor Code § 2699(f)(2). Given that risk, many employers will likely find it more cost-effective to simply buy more chairs.

If you believe that your employer has unreasonably denied you access to seating while performing work or during breaks, please contact Bryan Schwartz Law.

Wednesday, March 30, 2016

A Close Call for Unions and the Employees they Represent at the U.S. Supreme Court

Public-sector unions will live to fight another day after the U.S. Supreme Court issued a 4-4 split decision in Friedrichs v. California Teachers Association on Tuesday. The ruling—which comprised of a single sentence and has no precedential value outside the Ninth Circuit—is most notable for what it did not do: that is, provide a means to gut unions for both public- and private-sector employees nationwide.


Friedrichs challenged a long-standing rule, first applied to public-sector unions in the 1977 Supreme Court case Abood v. Detroit Board of Education, 431 U.S. 209, 235-36. In Abood, the Court determined that public sector unions could require non-members to pay an agency fee (also known as a “fair share fee”)  to support the union’s collective-bargaining and-grievance adjustment activities from which all employees would benefit regardless of their union membership. Id. at 225-31. The Court distinguished these expenditures from a union’s political spending, for which a non-member could not be compelled to contribute to the union under the First Amendment. Id. at 232-36. The Abood decision in turn relied on earlier decisions by the high court which affirmed the right of private-sector unions to require all employees within a bargaining unit to contribute to non-political union expenditures. See Machinists v. Street, 367 U.S. 740 (1961); Railway Employees’ Department v. Hanson, 351 U.S. 225 (1956).

As a practical matter, a union’s ability to ensure that all employees pay their fair share of collective bargaining expenses is essential to its survival. A union bargains on behalf of all employees, regardless of whether those employees are members. Without the ability to require fair share fees, a union faces a collective action problem: why would an individual employee pay union dues when that employee can reap all of the benefits of the union’s collective bargaining efforts for free?
The necessity of fair share fees to the survival of unions has made them an enticing target for conservative efforts to attack unions and worker protections generally. The Roberts Court (or rather, its five most conservative members) signaled its eagerness to overturn the nearly forty-year old Abood precedent in its 2014 decision Harris v. Quinn, in which Justice Alito’s majority opinion criticized Abood extensively and declined to extend its holding to home health care workers paid by the state of Illinois. See Harris v. Quinn, 134 S.Ct. 2618 (2014). After Harris, the conservative advocacy group the Center for Individual Rights took the bait and brought the Friedrichs case with the goal of eliminating fair share fees from public-sector unions. Then, after the oral argument in Friedrichs this January, those same five justices from the Harris majority appeared primed to overrule Abood, notwithstanding the consequences for unions nationwide and the millions of workers they represent. 

Thus, little doubt exists that were Justice Scalia still on the Court, Friedrichs would have crippled public-sector unions and provided a blueprint to apply the same reasoning to target private-sector unions as well. That decision would have paralyzed the collective bargaining rights of teachers, firefighters, healthcare workers, and countless other public employees in the 23 states that allow fair share fees.

Unions and workers had a good day on Tuesday, but the fight continues. The Center for Individual Rights has already announced its intent to file a petition for rehearing of Friedrichs in light of the split decision. The future of public-sector employee unions thus rests in the hands of the Supreme Court’s next member. 

Tuesday, March 22, 2016

High Court Affirms Workers’ Right to Prove Mass Wage Theft Cases With Statistical Evidence

Today, the United States Supreme Court affirmed a basic principal underlying lawsuits challenging mass wage theft – if employers fail to keep records of employees’ work, then employees get to use their best estimate to prove their employer’s wage theft, including estimates based on statistical and representative evidence. The Court also confirmed that representative evidence may be used beyond the wage and hour context.

As we wrote here, the Court seemed unpersuaded at oral argument last fall that it should overrule seventy years of precedent, first established in Anderson v. Mt. Clemens Pottery Co., that employees may use a “representative sample to fill an evidentiary gap created by the employer’s failure to keep adequate records.” Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, 2016 WL 1092414, at *9 (Mar. 22, 2016). Writing for a 6-2 majority, Justice Kennedy affirmed this long-standing and critical rule of law.
Importantly, the Court went beyond the lenient standard of proof established in Mt. Clemens, which is unique to the Fair Labor Standards Act context, and thereby confirmed that representative evidence can be used as common proof of classwide liability and damages in other legal contexts. In particular, the Court clarified that Wal-Mart Stores, Inc., v. Dukes, the infamous decision that struck down a nationwide gender discrimination class action and has been the cause of much consternation for worker and consumer advocates, “does not stand for the broad proposition that a representative sample is an impermissible means of establishing classwide liability.” Id. at *10. Instead, the Court correctly recognized that representative evidence, like any evidence, can be persuasive or unpersuasive to a jury depending “on the purpose for which the sample is being introduced and on the underlying cause of action.” Id. at *8. In cases where “each class member could have relied on that sample to establish liability if he or she had brought an individual action,” representative evidence is more appropriate in contrast to cases where affected individuals are not sufficiently “similarly situated.” Id. at *8, *11. Thus, any doubt about the propriety of representative evidence to prove classwide liability in the wake of Wal-Mart and Comcast Corp. v. Behrend has been dispelled. The new battleground appears to be not if, but when representative evidence can be deployed to establish an element of a cause of action on a classwide basis. Id. at *8.
Interestingly, the Court observed that the district court would have erred in denying class certification if its sole basis for denying class certification were the lower court’s perception of the expert report as unpersuasive. Id. at *11. Only if the lower court “concluded that no reasonable juror could have believed that the employees spent roughly equal time donning and doffing” would denying class certification have been proper. Id. See also Amgen Inc. v. Connecticut Ret. Plans & Trust Funds, 133 S. Ct. 1184, 1194-95 (2013) (“Rule 23 grants courts no license to engage in free-ranging merits inquiries at the certification stage.”) The takeaway appears to be that the Court will require aggrieved plaintiffs seeking to use representative evidence to first establish that they were “similarly situated” such that the defendant’s harmful conduct affected them “roughly” in the same way. Id. However, once this threshold is met, the representative evidence may be used to establish classwide liability if it is otherwise admissible – no “Trial by Formula” concerns in sight.
Also, as anticipated by comments at oral argument, the Court declined to consider the important question of whether the possibility of uninjured class members prevents a district court from certifying a class action because Defendants abandoned the issue. The district court will have to address this issue in the first instance on remand. If not addressed in this case, the issue of possibly uninjured class members likely will continue to be raised by employers seeking to avoid accountability for their wrongdoing by arguing that if they didn’t steal from each of its employees, then its victims cannot stand together because unaffected employees might possibly receive a windfall. Thus, the employer should be let off the hook, or so the defense bar’s argument goes. A patently ridiculous argument, but one that will be resolved another day. 
            Lastly, the Court cautions that any representative evidence that relies upon expert witnesses, sampling, and similar evidence remains subject to a Daubert challenge, and thus, must be methodologically sound. This is in line with California Supreme Court jurisprudence that a class action may be certified using representative evidence, but the methodology behind the representative evidence must be credible and free of defects such as sampling errors. See Duran v. U.S. Bank Nat. Assn., 59 Cal. 4th 1, 13, 50-8 (2014) (Liu, J., concurring). See also here and here for discussion of the holding in Duran, and issues relating to the use of representative proof to advance the cause of workers.

            Thus, Tyson Foods, far from spelling the end of representative evidence in class actions, has breathed new life into class actions used to protect the interests of consumers, workers, and the general public. 

Friday, March 4, 2016

District Courts in Ninth Circuit Increase Scrutiny of Reversions After Allen v. Bedolla (9th Cir. 2015)

Last year, this blog covered the Ninth Circuit’s opinion in Allen v. Bedolla, vacating a class action settlement for, among other reasons, the parties’ agreement to a reversionary settlement. 787 F.3d 1218 (9th Cir. 2015). Since Bedolla was handed down from on high, district courts throughout the Ninth Circuit have applied the teachings in Bedolla by increasing their scrutiny of class action settlements containing reversions.

In a variation on the common pairing of a claims-made, reversionary settlement, the parties in Banks v. Nissan North America, Inc., a consumer class action related to faulty car brakes, agreed to a reversion of any reduction in attorney’s fees ordered by the court. No. 11-CV-2022-PJH, 2015 WL 7710297, at *13 (N.D. Cal. Nov. 30, 2015). The district court denied plaintiffs’ motion for final approval of class action settlement because, not only did class counsel attempt to receive twelve times the amount paid to class members, class counsel agreed to revert to defendant any “reduction of the attorneys’ fee award.” Id. at *12. Put more plainly, if the court found that class counsel was asking for too much money from the class, then defendant would have received a windfall instead of the class benefiting from the savings. Id. at *13. While there were additional reasons given by the court for its denial of final approval, the presence of a reversion was an important indication that the proposed settlement was not “fair, reasonable, and adequate.” Fed. R. Civ. Proc. 23(e).

Bedolla has also been invoked to strike down a proposed class settlement where any funds not claimed by the class would have been used to pay defendants’ employer taxes instead of the class or cy pres. The court in Sanchez v. Frito-Lay, Inc. rightfully wondered “why it would be fair to the putative class members to satisfy Defendant's employer payroll tax obligation out of the residual settlement amount” instead of directing those funds to the cy pres.  No. 1:14-CV-00797 AWI, 2015 WL 4662636, at *11 (E.D. Cal. Aug. 5, 2015) report and recommendation adopted, No. 1:14-CV-797-AWI-MJS, 2015 WL 5138101 (E.D. Cal. Aug. 26, 2015); see also Millan v. Cascade Water Servs., Inc., 310 F.R.D. 593, 612 (E.D. Cal. 2015) (also citing to Bedolla, denying proposed class settlement, and noting that “[i]f unclaimed funds are to revert to a defendant the parties should explain why those funds should revert to Defendant.”)

Furthermore, the court pointed out that “[t]o the extent that the parties contend that this does not act as a reversion, as the money is not directly returned to Defendant, the net effect is the same” because “there is no indication that class members benefit from that provision of the settlement.” Id. Just like calling a clerical employee a “manager” does not make him so, parties cannot fix the inherent problems with reversions in class settlements by sending the class’s money to the IRS on behalf of the defendant instead of directly returning the money to the defendant. Accordingly, the court kiboshed plaintiffs’ motion for class and conditional certification.

Even where a proposed settlement is eventually approved, a court is given pause by the presence of a reversionary settlement, especially when attorney’s fees are pegged to the nominal common fund instead of the percentage of the fund actually claimed by the class. For example, the court in Tait v. BSH Home Appliances Corporation was “concerned” about the presence of all three factors laid out in Bedolla that indicate “class counsel have allowed pursuit of their own self-interests … to infect negotiations”:

(1) ‘when counsel receive a disproportionate distribution of the settlement;’

(2) ‘when the parties negotiate a “clear sailing” arrangement’ (i.e., an arrangement where defendant will not object to a certain fee request by class counsel); and

(3) when the parties create a reverter that returns unclaimed fees to the defendant.

No. SACV100711DOCANX, 2015 WL 4537463, at *5 (C.D. Cal. July 27, 2015), appeal dismissed (Jan. 13, 2016) (internal citations omitted) (emphasis added). Predictably, the court’s reluctance to grant final approval was due, in part, to the caution in Bedolla “that proportionality should be determined with reference to the actual amount paid to the class” rather than the nominal value of the settlement without taking into account the unclaimed funds that would revert to the defendant. Id. at *6.
Importantly, the “problematic incentives inherent” in reversionary settlements caused the court to discount the views of counsel regarding the quality of the settlement despite acknowledging that “[c]ounsel on both sides of this case are experienced litigators” and that “[c]lass counsel competently investigated and litigated the factual and legal issues raised in this action….” Id. at *8. Thus, a court might take a dim view of class counsel, even exceptionally qualified and diligent class counsel, if they support a reversionary settlement on behalf of the class.
            In sharp contrast to the cases discussed above, the court in Aichele v. City of Los Angeles – a class action brought on behalf of peaceful protestors whose constitutional rights were violated by Los Angeles police officers – granted plaintiffs’ motion for attorney’s fees because “none of the warning signs for a settlement that may be influenced by improper favorable treatment of class counsel exists here.” No. CV1210863DMGFFMX, 2015 WL 5286028, at *6 (C.D. Cal. Sept. 9, 2015). The court supported its decision, in part, by reference to the fact that none of the “class fund revert to Defendants, and [do not] result in a highly disproportionate fee in relation to the actual (as opposed to theoretical) monetary recovery of the class.” Id.; see also In re High-Tech Employee Antitrust Litig., No. 11-CV-02509-LHK, 2015 WL 5158730, at *14 (N.D. Cal. Sept. 2, 2015) (approving ~$40m in attorney’s fees for class counsel in part because “Class Counsel [did not] agree that any portion of the $415 million common fund could revert back to Defendants.”)

            At best, reversionary settlement agreements result in heightened judicial scrutiny of your proposed class settlement and a judicial stink eye that may affect your reputation with the court in the future. At worst, including a reversion will cause a court to strike down what you have worked tirelessly to secure. With district courts vigorously applying Bedolla and its forbearers to class settlements, why risk including a reversion in your hard-fought settlement? 

Business Owners, Beware: Comply, or Pay Big


Bryan Schwartz Law Announces Jury Verdict for Minimum Wage Class Action Plaintiff Wrongfully Terminated from Server Job

She Lost only $3,000 in Wages but Recovers over $375,000 in Damages

Oakland, CA – Today, employment and civil rights attorney Bryan Schwartz announced a jury verdict won in Orange County Superior Court, complex division (Hon. William D. Claster), on behalf of a lead class plaintiff, Amanda Quiles, in her suit alleging unpaid minimum wages. Just a few weeks after filing her class action, the company, Koji’s Japan, Inc., and its owner, Arthur J. Parent, Jr., fired Quiles.

Quiles brought her case against the small sushi restaurant chain in November 2010 as a class action alleging wage violations, which is still pending. Quiles, who was still employed there as a server, was promptly fired. Though the jury found her wage loss damages from being fired were very limited (she worked for minimum wage plus tips, and got a new job within a couple months), she asserted a retaliation claim under the federal Fair Labor Standards Act, 29 USC 215(a)(3).

“We have to protect our clients who are brave enough to step forward and assert class claims,” said Schwartz, celebrating the victory.

Years after filing suit, Quiles and her attorneys learned that the company's owner, Parent, told his subordinate managers to "get rid of her," and "leave a paper trail." 

Parent closed his restaurants in 2012, hoping the suit would vanish, but it did not. The plaintiff and Schwartz’s firm redoubled their efforts to hold Parent personally responsible. He filed personal and corporate bankruptcy the first day of trial in January 2015, but Quiles’s attorneys obtained a stay from the Chapter 7 action as to the restaurants, and his Chapter 13 individual bankruptcy was dismissed. In May 2015, Parent was sanctioned over $50,000 to pay Quiles’s attorneys’ fees and costs for dealing with the bankruptcy, by the United States District Court for the Central District of California, for his frivolous, strategic bankruptcy filing.

After a bench trial over the course of several weeks last year, the court found that Parent was a joint employer under the FLSA because he had "absolute control" over the restaurant chain and had the "ability if not the inclination" to enforce the wage laws. 

Plaintiff offered to settle the case for $20,000 plus her fees and costs in fall 2015, but Parent ignored the offer. In October and December 2015, Quiles and her counsel arrived to try the case, but it was delayed until February 2016. In October 2015, however, the trial court permitted the addition of a punitive damages claim, which ultimately proved very substantial.

The jury’s verdict on March 2 and 3, 2016 was for $3,000 in lost wages, plus $27,500 in compensatory damages, plus $350,000 in punitive damages - with liquidated damages (and attorneys’ fees and costs) still to be determined by the court.

During the trial, Parent was impeached as to his whereabouts when the lawsuit was served. He claimed that he had not seen the lawsuit before Quiles was fired, in early December 2010. Plaintiff’s counsel first attempted service on November 24, 2010 - the day before Thanksgiving. Parent was then shown an email which was forwarded from his account, later that same day, mentioning the lawsuit in the subject line.

Parent then invented a story that he was in Hawaii that day, and might have been "on a cruise," and did not have email access, so it must have been one of his subordinates who sent the email from his account. However, evidence of his postings on his public Facebook page showed that he did go to Hawaii, but on November 25th. The title of his picture posted on Facebook was "At the Airport, LAX, Thanksgiving Day." He was not on a cruise, but rather, sitting in first class on a plane. Another image from Facebook showed him standing on the beach at Waikiki at sunset on Thanksgiving.

In the punitive damages phase of trial, the jury heard about Parent's 103-foot yacht, and plaintiff’s counsel used a long tape measure to show how big the yacht was (more than twice the length of the courtroom) that Parent was riding around on, while Quiles was fighting to get her minimum wages paid.

“I am so grateful to the jury, and to my attorneys, for finally bringing me justice,” said Quiles, who still works as a server. “Maybe someday I will open my own restaurant with this money – but I will pay my workers properly and give back to my community!”

The case is Amanda Quiles, et al. v. Koji’s Japan, Inc., and Arthur J. Parent, Jr., case number 30-2010-00425532-CU-OE-CXC, in the Superior Court for the County of Orange.
# # #

About Bryan Schwartz Law

The firm's principal, Bryan Schwartz, opened the practice in January 2009. Bryan Schwartz Law is dedicated to continuing the struggle for civil rights and equality of employment opportunity and helping Americans from every background to achieve their highest career potential. The firm focuses on individual, class, and collective actions involving discrimination and retaliation, harassment, denied disability accommodations, whistleblower reprisal, wage and hour violations, federal employees' rights, and severance negotiations.


Bryan Schwartz Law is located at 1330 Broadway, Suite 1630, Oakland, CA 94612. The telephone number is (510) 444-9300. For more information, please click on www.BryanSchwartzLaw.com

Thursday, January 21, 2016

U.S. Supreme Court Rules against Defendants’ Attempts to Shut Down Employment and Consumer Class Action Suits by Paying Off Named Plaintiffs

On Wednesday the U.S. Supreme Court handed a rare 6-3 victory to consumers and employees seeking to bring class claims in Campbell-Edwald Co. v. Gomez. The Court was tasked with deciding whether a defendant can properly dispose of a class case by offering full relief to the named plaintiffs in an effort to render moot their individual claims and thus get rid of the entire case. Such efforts by defendants to dispose of class cases by paying off the named plaintiffs have become commonplace in consumer and employee class actions.

The case involved a consumer class action under the Telephone Consumer Protection Act (TCPA) against a Navy contractor hired to send recruiting text messages to young people. The TCPA prohibits sending such marketing text messages without the cellular phone user’s prior consent. Jose Gomez, who had not provided consent and nonetheless received the Navy’s recruiting text message, filed suit on behalf of a putative consumer class seeking treble statutory damages for Cambell-Edwald’s knowing and willful violation of the TCPA, as well as an injunction against further unsolicited text messages by Campbell-Edwald.

Before Mr. Gomez’s deadline to file a motion for class certification, Campbell-Edwald filed an offer of judgment to Mr. Gomez under Federal Rule of Civil Procedure 68. Mr. Gomez did not accept that offer. However, Campbell-Edwald contended that by providing Mr. Gomez with an offer of complete relief, his claim became moot. Because his claim was mooted before he moved for class certification, Campbell-Edwald argued, the putative class claims also became moot. The district court rejected those arguments and ruled in favor of Mr. Gomez on that issue. The Ninth Circuit Court of Appeals agreed.

At the Supreme Court, Justice Ginsberg wrote for the majority, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. (Justice Thomas concurred in the judgment but did not sign Justice Ginsberg’s majority opinion.) Ultimately, Justice Ginsberg resolved the mootness question according to fundamental principles of contract law, stating that “an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.”

In reaching that conclusion, Justice Ginsberg addressed a 2013 decision of the Court, Genesis HealthCare Corp. v. Symczyk, 133 S.Ct. 1523 (2013), a collective action brought by employees under the Fair Labor Standards Act. In that case, the named plaintiff had conceded in the lower courts that her individual claim was rendered moot when she did not accept her employer’s Rule 68 offer to settle her individual claim. Based on that early concession, a five-justice majority held that without a named plaintiff’s live individual case, a class suit could not be maintained. The four dissenting Justices, led by Justice Kagan, argued that the employee’s unaccepted offer of judgment could not properly moot a case.

Justice Ginsberg thus adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare and secured a majority with the votes of Justices Kennedy and Thomas. The decision was a rare victory for employees and consumers before a Supreme Court that has often been hostile toward class action lawsuits. See previous blog posts here, here, and here. Justice Kennedy’s decision to join the majority in deciding not to dispense with class actions as a means to vindicate vital statutory rights – including job protections--should delight employee and consumer advocates.

The argument advanced by Chief Justice Roberts and the dissenters is a cynical one in its claim that a lawsuit brought on behalf of a class is rendered moot if the defendant offers to pay off the named plaintiffs, even if those named plaintiffs refuse the payment. The Chief’s contention that no live case or controversy exists because a defendant offers to resolve one of potentially thousands of putative class members’ claims cannot be taken at face value.

Practically speaking, what company would not pay a few thousand dollars to the named plaintiffs to escape the possibility of multi-million dollar exposure? Simply put, a seemingly small point of procedural law could have spelled the end of vigorous enforcement for numerous employee and consumer protections enacted by Congress.

Although Justice Ginsberg confined her majority opinion to a relatively narrow set of facts—suggesting the outcome could be different if Mr. Gomez had in fact accepted full payment—employees, consumers, and those who advocate on their behalf can breathe a collective sigh of relief that class actions will live to fight another day.

U.S. District Court Finalizes Approval for Distribution of $36 Million in Landmark Bank of America Wage Settlement

“Your lawyering has just been excellent….I think the results were exceptional; and by that, I mean, there were tremendous risks for the plaintiff….So you have nothing but the Court's praise and compliment. I think you're excellent counsel. You worked very hard. Your briefing was just extraordinary.”

--Hon. David O. Carter, United States District Court, Central District of California (addressing Bryan Schwartz and other counsel, approving their $36 million settlement of wage claims, Jan. 19, 2016)

On January 19, 2016, Bryan Schwartz Law’s principal announced court approval of a $36 million settlement between Landsafe Appraisal Services, Inc., a subsidiary of Bank of America (NYSE: BAC) and 369 current and former employees working as residential real estate staff appraisers. At the hearing where final approval was granted, the federal court in Orange County, Judge David O. Carter, remarked on the exceptional result and the excellent representation provided throughout the lawsuit, which alleged wage violations. Plaintiffs and the other class members should receive average gross payments of nearly $100,000 within the next month.

The lawsuit was first filed in April 2013 in federal court in Orange County. It alleged that Bank of America erroneously applied the "administrative" and "professional" exemptions to residential staff appraisers. Plaintiffs maintained that they typically worked from early in the morning until late at night, churning out reports that are a required part of every mortgage loan. The job required no special academic degree - just a state license. 

In approving the settlement, at the hearing, the court noted favorably that, as a result of the lawsuit, the new owner of Landsafe – CoreLogic – has begun paying all appraisers overtime.

One of the named plaintiffs, Ethel Joann Parks of Manteca, California worked for Bank of America’s Landsafe until 2012. For years, she regularly toiled from 6 a.m. to 10 p.m. completing appraisal reports and, in the process, missing out on daily life and major family events. Rarely did she have time throughout the day to take a break to eat or rest because the artificially short deadlines set by Bank of America forced her to constantly keep working.

Ms. Parks decided to step forward because she felt that bank failed to treat her, and other staff appraisers, “as human beings” with “family and personal needs that should be acknowledged.” She added, “I am vindicated by this lawsuit and the exceptional relief obtained on behalf of the class.  I hope it will force banks and appraisal management companies throughout the country to reconsider pressuring their staff appraisers to work long hours without paying overtime.”

“We are delighted by the court’s recognition of this outstanding result, which not only provides meaningful compensation to hundreds of people, but, we hope, will lead to industry change for many thousands more,” said Bryan Schwartz, founder of Bryan Schwartz Law, lead counsel for the 369 class members, along with the Los Angeles-based firm of Schonbrun Seplow Harris & Hoffman. 

Witnesses supporting the settlement, including an appraiser and industry expert, testified that, as Schwartz hopes, the settlement will send waves and affect change throughout the real estate appraisal industry.

Judge Carter certified a nationwide class action in December 2013 under the federal Fair Labor Standards Act, and certified a class action in California in June 2014 under the California Labor Code. In May 2015, the Court granted plaintiffs summary judgment as to the major defenses Bank of America was asserting, and rejected the bank’s effort to kick the suit out of court.  This resulted in a ruling under which Bank of America would likely owe the workers considerable back wages for overtime and missed meal and rest periods.

The bank then asked the Court for permission to appeal the summary judgment decision immediately, denying any wrongdoing. The case was set to go to trial in August 2015, but the parties reached the $36 million settlement finally approved this week.

For Attorney Schwartz, this is just one of many recent settlements in service of employees who were denied lawful compensation for their efforts.  In 2014, Schwartz and his co-counsel settled another part of the same case against Bank of America (as to review appraisers) for $5.8 million. This makes nearly $42 million for workers in the suit as a whole.  Schwartz has also achieved numerous other multi-million dollar settlements on behalf of thousands of misclassified workers nationwide.

“Employers take grave risks by cutting corners, and not fairly compensating their employees in tune with state and federal law.  My firm and many others, including my co-counsel, are working to end wage theft in the economy…quickly,” added Schwartz.

The case is Terry P. Boyd et al. v. Bank of America Corp. et al., case number 8:13-cv-00561, in the U.S. District Court for the Central District of California.

# # #
Bryan Schwartz Law is dedicated to continuing the struggle for civil rights and equality of employment opportunity and helping Americans from every background to achieve their highest career potential. The firm has recovered tens of millions of dollars in individual, class, and collective actions involving discrimination and retaliation, harassment, denied disability accommodations, whistleblower reprisal, wage and hour violations, Federal employees' rights, and severance negotiations.