18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 317 her participation in the plan ended in 2016 after she signed the severance agreement and a general release in exchange for additional compensation. Plaintiff released all claims, including ERISA claims, against Defendants and expressly agreed that she would "have no right or authority for any dispute to be brought, heard or arbitrated as a class or collective action, or in a representative . . . capacity on behalf of a class of persons." Id . at *9. The Court determined that Plaintiff failed to establish that she was similarly-situated to any of the proposed class action members, as she did not allege that any other plan participants released their claims against Defendants. The Court held that Plaintiff could not demonstrate what incentive she had to advocate on behalf of a plan in which she no longer participated in and from which she released any right of individual recovery. Id . at *11. Accordingly, the Court held that Plaintiff’s claims were not typical of the claims of other plan participants who retained Chesapeake stock. For these reasons, the Court denied Plaintiff’s motion for class certification. (xi) Eleventh Circuit Gamache, et al. v. Hogue, et al., 2021 U.S. Dist. LEXIS 57719 (M.D. Ga. March 2, 2021). Plaintiffs, a group of current and former employees of Technical Associates of Georgia Inc. (“TAG”), filed a class action alleging that Defendants, the individual officers of TAG and TAG’s Administrative Committee, breached their fiduciary duties in violation of the ERISA. While employed with TAG, Plaintiffs participated in the TAG Employee Stock Ownership Program (“ESOP”). According to Plaintiffs, Defendants Hogue and Thompson covertly issued and acquired $8 million in new company stock, and also personally collected approximately $1.4 million in stock dividends. As a result of these actions, Plaintiffs claimed that Defendants devalued the shares owned by employees through the ESOP. Plaintiffs filed a motion for class certification, which the Court granted. In response to Plaintiffs’ motion, Defendants offered two primary arguments, including: (i) that Plaintiffs lacked Article III standing to represent the class; and (ii) that Plaintiffs failed to meet the requisite elements of Rule 23. As to standing, Defendants contended that Plaintiff Nofi lacked standing because, as a former employee, he was not a “participant” in the ESOP. Id. at *8. The Court rejected this argument. It noted that the ERISA defines “participant” as “‘any employee or former employee . . .’” and that the Eleventh Circuit case law authorities had consistently evaluated participant status at the time of the alleged violation. Id. at *8-9. Defendants further asserted that Plaintiffs as a whole lacked standing because they did not allege that they personally suffered an injury. The Court again disagreed, finding that Plaintiffs sufficiently alleged that their ESOP ownership stakes declined and were diluted as a result of the stock grants by Defendants Hogue and Thompson. With regard to the elements of Rule 23, the Court determined that Plaintiffs satisfied the numerosity requirement because the ESOP had 327 participants throughout the class period. Defendants further argued that Plaintiffs could not establish commonality because unique defenses concerning the statutes of limitations and repose warranted individual inquiries as to each class member. Defendants’ argument focused on Plaintiffs’ actual knowledge of the alleged conduct, but the Court reasoned that nothing in the record demonstrated Plaintiffs’ actual knowledge of the stock grants, so that this issue could be resolved on a class-wide basis. The Court also held that Plaintiffs established typicality by claiming that every putative class member’s injuries resulted from the same events regarding the ESOP. As to Plaintiffs’ adequacy of representation, Defendants contended that Plaintiffs could not properly prosecute the action because they lacked sufficient knowledge of their claims. However, the Court opined that this fact did not defeat Plaintiffs’ motion for class certification because the “ERISA itself is a dense regulations and claims arising out of it are complex. It is understandable that a Plaintiff might not fully grasp the facts and legal theories of an ERISA action.” Id. at *24-25. Defendants further asserted that Plaintiff Gamache’s open animosity toward Defendants Hogue and Thompson rendered Plaintiff Gamache an inadequate class representation, but the Court rejected this argument since Plaintiff’s comments did not rise to the level of creating a substantial conflict of interest. Finally, the Court reasoned that Plaintiffs’ satisfied the certification requirements under both Rule 23(b)(1)(A) and (b)(1)(B). For these reasons, the Court granted Plaintiffs’ motion for class certification. Stanton, et al. v. NCR Pension Plan, 2021 U.S. Dist. LEXIS 59160 (N.D. Ga. March 29, 2021). Plaintiff, a participant in his former employer’s defined contribution plan, filed a class action alleging that the Plan’s fiduciaries breached their fiduciary duties in violation of the ERISA. Plaintiffs filed a motion for class certification pursuant to Rule 23. The Court denied the motion on the grounds that Plaintiff failed to establish that the class met the numerosity requirement. Plaintiff asserted that he could show numerosity because: (i) the Plan’s 2018 Form 5500 "as of December 31, 2018 had 5,687 retired or separated participants receiving benefits under the Plan, 5,070 other retired or separated participants entitled to future benefits, and 1,011 deceased participants