Ninth Circuit Reverses Preliminary Injunction Preventing State from Enforcing Assembly Bill 5’s Worker Misclassification Test Against Trucking Companies

On April 28, 2021, the Ninth Circuit issued its decision in California Trucking Association v. Bonta, which reversed a preliminary injunction preventing the State of California from enforcing Assembly Bill 5’s “ABC” test against trucking companies.  Under that test, a worker is presumed to be an employee unless the employer can establish all three of the following requirements: (A) the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; (B) the worker performs work that is outside the usual course of the hiring entity’s business; and (C) the worker is customarily engaged in an independently established trade, occupation, or business.

The plaintiff trucking company association had argued that the B-prong of that test was preempted by the Federal Aviation Administration Authorization Act (“FAAAA”), a federal statute that deregulated the trucking industry.  A district court had agreed with the trucking association that the law was likely preempted and so enjoined it, but the Ninth Circuit reversed on appeal, holding that Congress did not intend for the FAAAA to preempt “laws of general applicability that affect a motor carrier’s relationship with its workforce.”  Under the decision, the State is permitted to use the “ABC” test, in its entirety, to combat misclassification in the trucking industry.

Altshuler Berzon LLP represents the International Brotherhood of Teamsters, which intervened in the case to defend the law alongside the state.  A news report on the decision can be found here.  A copy of the decision can be found here.

Ninth Circuit Reverses NLRB Decision Denying Protection to Worker Sexual Harassment Protests

On April 28, 2021, the United States Court of Appeals for the Ninth Circuit issued its decision in SEIU Local 87 v. NLRB (Preferred Building Services), reversing a decision by the National Labor Relations Board that had upheld the firings of workers who had protested sexual harassment and other intolerable working conditions outside an office tower.

The underlying unfair labor practice charge arose when janitorial services workers at an office building in downtown San Francisco decided to stage picket-line protests outside the building in which they worked, in response to their supervisor’s harassment and wage-and-hour violations.  In response to the protests, several workers were fired, and the janitorial services contractor terminated its contract to service the building.  The NLRB’s General Counsel alleged that the workers’ termination in response to the protests violated the National Labor Relations Act’s prohibition on retaliating against workers for engaging in protected, concerted activity.  After a multi-day hearing, an NLRB Administrative Law Judge agreed.  The NLRB, however, reversed the ALJ’s decision, concluding that the workers’ protests were unprotected because they impermissibly targeted neutral “secondary” parties –specifically, the building manager and tenants of the building where they worked.  The Ninth Circuit reversed, concluding that the NLRB had erred in concluding that the workers’ protests had a “secondary” object.

Altshuler Berzon LLP represents SEIU Local 87, which filed the unfair labor practice charge with the NLRB and the Ninth Circuit petition for review.  A news report about the decision is available here.  A copy of the decision is available here.

Federal Court Approves Landmark ADA Consent Decree Against Nike

Lawsuit alleged Nike failed to accommodate California customers with hearing disabilities

April 22, 2021 – Describing the parties’ settlement as “fabulous” and “incredible,” and a “great result for people who really needed help,” federal district court judge Yvonne Gonzalez Rogers on April 20, 2021 granted final approval to a landmark disabilities rights settlement negotiated under the Americans with Disabilities Act and California’s Unruh Act, Disabled Persons Act, and Unfair Competition Law by Altshuler Berzon LLP partners Michael Rubin and Eve Cervantez and their co-counsel. The court’s written settlement approval order, dated April 22, 2021, is attached here.

Plaintiff Cali Bun, a 22-year-old college student who is profoundly hard of hearing, brought this case in the fall of 2020 after employees at a Nike retail store in San Diego, who were wearing opaque masks in response to the COVID-19 pandemic, refused to accommodate her hearing disability, thereby making it extremely hard for her communicate. Ms Bunn brought this action on behalf of a statewide class of all persons who are deaf or hard of hearing and who visited or attempted to visit a Nike store in California on or after July 2020, when Nike’s mask mandate went into effect.

Although the Unruh Act and Disabled Persons Act provide statutory penalties of $4,000 and $1,000 per violation, respectively, Ms. Bunn and her counsel decided to focus on the class members’ need for immediate injunctive relief. With the assistance of Altshuler Berzon LLP attorneys, plaintiff successfully an injunctive-relief-only settlement under Rule 23(b)(2), which did not require class notice or a two-step approval procedure, and which went into effect on January 22, 2021, just four months after the lawsuit was filed and three months before judicial approval of the settlement – a true example of prompt and comprehensive justice.

Under the judicially approved settlement:

  1. Nike is required to provide all of its California stores with (a) transparent face masks (i.e., cloth masks with clear-plastic inserts that permit the customer to observe the store employees’ facial expressions) and (b) clean pen-and-paper sets, to be used whenever  a customer requests a hearing accommodation;
  2. Nike is required to post notices at all of its California store entrances (using language and graphics negotiated in the settlement) informing customers that accommodations are available for customers with hearing loss; and
  3. Nike is required to provide guidance and communications to its California store employees to accommodate customers who are having difficulty communicating due to an employee wearing an opaque face covering.

Each of these mandatory terms remains in effect and requires ongoing compliance until the pandemic eases and Nike’s retail store employees are no longer required to wear masks when interacting with customers in California.

Because the settlement focused on obtaining immediate injunctive relief, it left undisturbed any claims for monetary damages or statutory penalties that any class members may subsequently assert against Nike in their own lawsuits. The class releases expressly carve out all such economic claims, other than the named plaintiff’s, whose efforts in bringing this lawsuit and assisting in its prosecution drew special praise from the district court judge – who also noted that counsel’s appearance for the settlement approval was the first court appearance by counsel in the case. The lawsuit was thus successfully resolved without any discovery disputes, pre-trial motions, or other court proceedings that could have delayed the negotiation or implementation of the groundbreaking settlement terms.

According to Nike’s post-settlement compliance report, the company achieved full compliance with all required terms of the injunction by the agreed-upon deadline of January 22, 2021.

Altshuler Berzon LLP Files Consolidated Class Action Complaint Against Bank of America and Motion for Preliminary Injunction Seeking Immediate Relief for Tens of Thousands of Unemployment Benefits Recipients Denied Access to Their Benefit Payments

On April 1, 2021, Altshuler Berzon LLP, together with co-counsel Cotchett, Pitre & McCarthy LLP, filed a Consolidated Class Action Complaint and Motion for Preliminary Injunction against Bank of America, N.A., seeking immediate relief for tens of thousands of California unemployment benefits recipients who have been denied access to their public benefits as a result of the Bank’s alleged misconduct.

Since 2010, Bank of America has had an exclusive contract with the California Employment Development Department (EDD) to distribute EDD benefits, including Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PUA) benefits, through the use of Bank of America-issued prepaid debit cards. During the pandemic, Bank of America has distributed EDD benefits through Bank-issued debit cards to millions of Californians eligible for unemployment benefits.

Over the course of the pandemic, thousands of cardholders have had their unemployment benefits stolen out of their accounts through fraudulent transactions and account hackings, which the lawsuit alleges resulted from the Bank’s failure to meet basic industry standards for fraud prevention and detection. For example, the lawsuit alleges that 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.

The lawsuit also alleges that despite the Bank’s own “Zero Liability” policy and its federal statutory obligations to promptly reimburse cardholders for unauthorized transactions, the Bank has summarily denied claims of third-party fraud without investigation or explanation. The Bank has also allegedly frozen the accounts of benefits recipients who report third-party fraud, thereby preventing them from being able to access any remaining public benefits funds still in their account and cutting off their ability to receive ongoing unemployment benefits from EDD. According to the consolidated class action complaint, despite the Bank’s promises to provide 24/7 customer support to fraud victims, account holders who call Bank of America’s customer service hotline to try to reopen their claims and unfreeze their accounts are routinely kept on hold for hours, disconnected, and/or told the Bank is unable to assist them.

As detailed in more than three dozen supporting class member declarations, the Bank’s alleged misconduct has had devastating consequences for Californians who depend on unemployment benefits as a lifeline to help them weather this pandemic. As a result of the Bank’s challenged policies and practices, countless victims have found themselves unable to pay their rent, car payments, phone and utility bills, childcare expenses, and medical bills, while struggling to feed themselves and their families.

The motion for preliminary injunction asks the Court to require the Bank to unfreeze the accounts and reopen the fraud claims of claimants whose accounts were frozen based on their reports of fraud; maintain customer service levels that ensure cardholders can report fraud and obtain assistance; reopen fraud claims of claimants who request such reopening through a streamlined process; conduct reasonable, good faith, and timely investigations into all fraud reports; and credit claimants’ accounts for the amount of the stolen funds as required by law.

A news report on the recent filings can be found here.  A copy of the consolidated class action complaint can be found here.