Class Action Lawsuit Filed Against Bank of America on Behalf of Defrauded Unemployment Benefits Recipients

On January 26, 2021, Altshuler Berzon LLP, together with co-counsel, filed a federal class action lawsuit brought by plaintiffs Roland Oosthuizen and Rosemary Mathews on behalf of themselves and thousands of other Californians who have been victimized by fraudulent transactions in their Bank of America-issued unemployment benefit debit card accounts. The lawsuit seeks to hold Bank of America, N.A. accountable for its role in enabling widespread fraud and in depriving fraud victims of access to their unemployment benefits for months on end.

Since 2010, Bank of America has had an exclusive contract with the California Employment Development Department (EDD) to distribute EDD benefits through the use of Bank of America-issued prepaid debit cards. EDD is the state agency responsible for administering numerous benefit programs that provide Californians particularly critical lifelines during the COVID-19 pandemic, including Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PUA) benefits, among others. EDD benefits are issued on a Bank of America prepaid debit card by default; and California is one of only three states that does not offer a direct deposit option for unemployment benefits recipients.

The lawsuit alleges that, notwithstanding its assurances to the State and to cardholders that it would provide highly secure accounts and best-in-class fraud monitoring services, Bank of America failed to meet even basic industry standards for fraud prevention and detection. For example, the Bank used outdated and easily hacked magnetic stripe technology on its EDD debit cards rather than the far more secure EMV chip technology used on the Bank’s other commercial consumer cards, causing thousands of unemployed Californians to lose their EDD benefits to fraudulent transactions and to account hackings that could have been prevented.

The lawsuit further alleges that Bank of America failed to honor its commitment to provide 24/7 customer support to fraud victims and violated its legal duty to protect EDD account holders from liability for unauthorized transactions. Many EDD fraud victims report being repeatedly kept on hold with customer service for hours, only to be disconnected or given the run-around. Others report having their claims summarily closed without proper investigation, being denied legally required provisional credit while their claims remain under investigation, or having their accounts frozen without warning or explanation. As a result, thousands of Californians have been denied access to crucial unemployment income that they desperately need to pay for rent, food, and other basic necessities.

The complaint seeks damages as well as declaratory and injunctive relief.

Altshuler Berzon is co-counseling this lawsuit with Kemnitzer, Barron & Krieg, LLP.

A copy of the complaint can be accessed here.

News coverage of the lawsuit can be accessed here.

Ninth Circuit Holds That Neiman Marcus Unlawfully Interfered with Employee’s ADA-Protected Rights by Imposing Rights-Stripping Mandatory Arbitration Agreement

On January 26, 2021, after more than 13 years of litigation, a panel of the Ninth Circuit Court of Appeals ruled that Neiman Marcus unlawfully interfered with former cosmetics salesperson Tayler Bayer’s rights under Section 503(b) of the Americans with Disabilities Act (ADA), by forcing Bayer to choose between keeping his job or becoming bound by a mandatory rights-stripping arbitration agreement. In June 2007, Bayer requested accommodation at work for his emphysema. Neiman Marcus denied his request and Bayer filed a charge with the EEOC. Shortly after that, Neiman Marcus rolled out a new mandatory arbitration policy that required all employees who continued working past July 15, 2007 to be bound by its restrictive terms. Among other things, the agreement applied to all pending claims, and required the employee to agree to a shortened statute of limitations and other restrictions on statutory rights.

Represented by Altshuler Berzon LLP and co-counsel at McGuinn, Hillsman & Palefsky, Bayer filed a series of claims against the company challenging its attempts to strip him of his statutory rights, including a claim under the infrequently litigated Section 503(b) of the ADA, which prohibits employers from coercing, intimidating, threatening, or interfering with an employee in the exercise or enjoyment of ADA-protected rights.

After years of litigation, two previous appeals, and a one-day trial, the Ninth Circuit ruled in Bayer’s favor, finding that Neiman Marcus unlawfully interfered with Bayer’s statutory rights by forcing him “to choose between ending his employment … or, he was told, being bound by the [mandatory arbitration] agreement thereafter.” The Ninth Circuit rejected Neiman Marcus’s argument (which the district court below had accepted) that the company could not have violated Section 503(b) because it rolled out its mandatory arbitration policy to all its at-will employees, and did not specifically target Bayer. The Ninth Circuit ruled that by rolling out a mandatory arbitration policy that targets ADA-protected rights, the company had violated the anti-interference provision, even if the company did not target any particular individual employee.

Although the Court’s decision is unpublished, it should provide persuasive authority in support of other employees opposing rights-stripping mandatory arbitration agreements and other employer policies, including those bringing claims under not only the ADA, but also other statutes with similar anti-interference language, including the National Labor Relations Action, Family and Medical Leave Act, and Fair Housing Act.

The Court’s decision is available here.

Amicus Brief Filed in Support of Petition to Require OSHA to Issue COVID-19 Safety Standard

On January 18, 2021, Service Employees International Union (SEIU) filed an amicus brief in AFT v. OSHA, a Ninth Circuit action for a writ of mandate to compel the Occupational Safety and Health Association (OSHA) to issue a safety standard to protect healthcare workers from COVID-19 and other infectious diseases.  The union’s brief highlights how OSHA’s delay in issuing a standard has had devastating effects on frontline healthcare worker during the pandemic, including workers in often overlooked yet vital healthcare roles such as nursing home staff, homecare providers, and support staff like janitors, food service workers, and security personnel. 

SEIU is represented by Altshuler Berzon LLP. You can read SEIU’s amicus brief here.

Court Rejects Hollywood Talent Agency’s Motion to Enjoin Writers Guilds’ Collective Action to Protect Members’ Right to Unconflicted Agent Representation

On December 30, 2020, the Central District of California rejected an attempt by talent agency William Morris Endeavor (“WME”) to preliminarily enjoin the campaign by Writers Guild of America, West and Writers Guild of America, East (“the Guilds”) to eliminate talent agencies’ conflicts of interest.  WME sought to enjoin the Guilds from enforcing a talent agent Code of Conduct, which bars talent agencies that are authorized to represent Guild members from providing conflicted representation to Guild members.

 In April 2019, the Guilds adopted the Code of Conduct, which bars talent agency practices that result in serious financial conflicts of interest between Guild members and the talent agencies that the Guilds authorize to represent Guild members.  At that time, thousands of Guild members terminated their representation by talent agents who had not signed the Code.  Since that time, every talent agency in the industry except for WME has agreed to terms with the Guilds that prevent the talent agency from engaging in these serious financial conflicts of interest, allowing Guild members to resume representation by agencies other than WME.  In the lawsuit, WME challenges the Code of Conduct under federal antitrust law and, via its preliminary injunction motion, sought a court order permitting WME to represent Guild members, during the duration of the lawsuit, without abiding by the same restrictions that apply to every other talent agency.  As a result of defeating that motion, the Guilds may continue their campaign of ensuring that talent agencies that represent Guild members put Guild members’ interests first.  The Guilds and an individual writer-plaintiff are also continuing to pursue counterclaims against WME for breach of fiduciary duty, fraud, and California antitrust violations.

Altshuler Berzon is lead counsel representing the Guilds and individual writer-plaintiff in this litigation, William Morris Endeavor Entertainment LLC v. Writers Guild of America, West, Inc. et al.  You can read the decision here.