18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 743 it was appropriate given the unique facts of this case for several reasons, including that class counsel had obtained a settlement that allowed for an immediate cash payment from the bankrupt estate, had litigated the action both in this Court and in the bankruptcy court, and took the matter on a contingency basis. Finally, Plaintiffs’ request of $126,666 represented a $197,884 deduction to their lodestar fees of $324,551.50. In other words, the fee request was 40% of their lodestar and thus amounted to a negative multiplier of .39. Accordingly, the Court determined that Plaintiffs’ request for fees was reasonable. Likewise, the Court found that the class representative awards of $2,500 were also justified. For these reasons, the Court granted Plaintiffs’ motion for final approval of the class action settlement. Romero, et al. v. Watkins & Shepard Trucking, Inc., 2021 U.S. App. LEXIS 24804 (9th Cir. Aug. 19, 2021). Plaintiff, a former employee, filed a class action alleging that Defendant failed to provide notice of a plant layoff in accordance with the Worker Adjustment and Retraining Notification Act (“WARN”). The District Court granted Defendant’s motion to compel arbitration of Plaintiff’s claims pursuant to the parties’ arbitration agreement. On Plaintiff’s appeal, the Ninth Circuit affirmed the District Court’s ruling. The District Court had concluded that: (i) the parties formed a contract to arbitrate; (ii) the Federal Arbitration Act (“FAA”) does not apply to it, (iii) Nevada law applied, and (iv) the class action waiver in the contract was enforceable under Nevada law. The Ninth Circuit agreed with the District Court on all findings and compelled arbitration of the WARN Act claims. The Ninth Circuit found that Plaintiff consented to arbitration when he signed the Schneider Mediation & Arbitration Policy (the "Arbitration Policy") by electronic signature. The Ninth Circuit also agreed with the District Court’s finding that the § 1 of the FAA exemption applied and where the FAA did not apply, the Arbitration Policy selected Nevada law. The Ninth Circuit concluded that there was substantial relationship between the chosen state and the parties or their transaction as Defendant was incorporated in Nevada. Finally, the Ninth Circuit determined that the Arbitration Policy was valid and enforceable, because employees were permitted to opt-out of the class action waiver, it was not "a condition of employment,” and the Arbitration Policy had appropriate provisions to ensure a fair forum. Accordingly, the Ninth Circuit affirmed the District Court’s ruling granting Defendant’s motion to compel arbitration. Schmidt, et al. v. FCI Enterprises, LLC , 2021 U.S. App. LEXIS 18870 (4th Cir. June 24, 2021). Plaintiffs, a group of former employees, filed a class action alleging that Defendant abruptly shut down and thereby laid off all employees without notice or payment for the preceding three week period, in violation Worker Adjustment and Retraining (“WARN”) Act and the FLSA. After a trial before an advisory jury, the District Court entered judgment on the WARN Act claim for Plaintiffs and for Defendant on the FLSA claim. On Defendant’s appeal of the WARN Act judgment, the Fourth Circuit reversed the District Court’s ruling. The Fourth Circuit determined that at the time of the shutdown, Defendant did not employ enough individuals to be liable under the WARN Act. It noted that the WARN Act only applies to "employers," which is defined as "any business enterprise that employs . . . 100 or more employees, excluding part-time employees," Id. at *11. Under the WARN Act, Defendant had to give its employees notice of their impending terminations on August 6, 2018, 60 days before its shutdown on October 5, 2018. The Fourth Circuit explained that the District Court incorrectly chose February 9, 2018, as the relevant date. The Fourth Circuit held that it was indisputable based on the evidence presented at trial that Defendant employed fewer than 100 employees, excluding "part-time" employees, on August 6, 2018. Accordingly, the Fourth Circuit ruled that Defendant was not an "employer" whose shutdown activities were covered by the WARN Act. For these reasons, it reversed the District Court’s ruling entering judgment in favor of Plaintiffs. (lxxxiv) Workplace Antitrust Class Actions Conrad, et al. v. Jimmy John ’ s Franchise LLC, 2021 U.S. Dist. LEXIS 142272 (S.D. Ill. July 23, 2021). Plaintiff filed a class action alleging that Defendant’s franchise agreement contained a "No-Poach provision," which effectively prohibited employees from switching between locations, thereby creating an anti-competitive competition for labor in violation of § 1 of the Sherman Act. Plaintiff filed a motion for class certification pursuant to Rule 23, and the Court denied the motion. Plaintiff relied on an expert report from an expert economist, Dr. Hal Singer, who opined that the no-poach provision suppressed wages for every employee by 8.4%. However, the Court excluded the report because Dr. Singer’s wage regressions suffered from a methodological flaw that failed to adjust for some of the wage data and thereby led to inflated estimates of antitrust impact. Id . at *7-8. Plaintiff argued that there were three common issues of law and fact, including: (i) "whether Jimmy John’s