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 For example, the lawsuit alleges that the Bank used outdated and easily hacked magnetic stripe technology on its EDD debit cards rather than the far more secure EMV chip technology used on the Bank’s other commercial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.

Unions File Briefs and Evidence in Support of California’s Crucial COVID-19 Workplace Protections

On January 19, 2021, Altshuler Berzon LLP filed amicus briefs and evidence to support emergency regulations adopted by Cal-OSHA in November 2020 to slow the spread of COVID-19 in the State, in two cases brought to overturn those regulations. Altshuler Berzon LLP represents, and filed the amicus briefs on behalf of, a multi-union coalition comprising the Service Employees International Union (“SEIU”), SEIU California State Council, United Farm Workers of America (“UFW”), International Brotherhood of Teamsters (“IBT”), United Food and Commercial Workers Union Western States Council, California Teachers Association, California School Employees Association, California Federation of Teachers, Transport Workers Union, California Federation of Interpreters, SMART-Transportation Division California State Legislative Board, and California Labor Federation.

After the emergency regulations were issued, two sets of industry groups filed suit and sought preliminary injunctions to block implementation of these critically important workplace protections, specifically challenging key provisions that require employers to provide paid leave to workers who need to quarantine because they have contracted or been exposed to COVID-19 in the workplace. The multi-union amicus briefs highlight the role that workplaces have played in the COVID-19 outbreak, particularly those workplaces in which employers have not followed public health guidance, and the importance of the emergency regulations in protecting essential workers. The unions also filed appendices of evidence, including numerous OSHA complaints filed by fast food workers as part of the Fight for $15 campaign, declarations from a public nuisance case filed by Altshuler Berzon LLP on behalf of fast food workers and their relatives at an Oakland McDonald’s restaurant in which unsafe workplace practices led to a COVID-19 outbreak, declarations from a similar case involving UFW and Foster Farms, and declarations from workers and union leaders at SEIU-United Service Workers West, UFW, and the IBT emphasizing the real and severe health threat caused by COVID-19 transmission in the workplace.

On February 25, 2021, the San Francisco Superior Court denied the industry groups’ request for a preliminary injunction, holding that the groups were unlikely to succeed on the merits of their challenges and that, even if they had been likely to succeed, the economic costs of compliance would be outweighed by the worker safety and public health considerations necessitating the standards.

Here are the brief and appendix in the National Retail Federation case, and here are the brief and appendix in the Western Growers Association case. The San Francisco Superior Court’s decision denying the preliminary injunction motions can be found here.

Service Employees International Union, Drivers, and Consumer File Constitutional Challenge to Proposition 22

On Thursday, February 11, 2021, the Service Employees International Union (“SEIU”), SEIU California, three drivers, and a consumer filed a constitutional challenge to Proposition 22, the November 2020 ballot measure that purported to exempt, from California’s labor and employment protections, drivers who work for transportation and delivery companies like Uber, Lyft, DoorDash, and Instacart.  These companies have long misclassified their drivers as independent contractors rather than employees, depriving them of the protections of state law.  Instead of complying with the clear mandates of the law after the enactment of Assembly Bill 5, the companies decided to spend over $200 million to convince voters to adopt a ballot measure exempting them.  However, as the petition filed today in Alameda County Superior Court demonstrates, that ballot measure violates the California Constitution and must be invalidated.

First, Proposition 22 deprives the California Legislature of its constitutional authority to establish and maintain a workers’ compensation system that protects workers’ health and safety and compensates workers in the event of workplace injuries.  Because Proposition 22 provides that the entire initiative is invalid if any application of its provision designating drivers as independent contractors is held invalid, Proposition 22 is invalid in its entirety.  Second, by designating certain subjects that are not even addressed by Proposition 22 as “amendments” to Proposition 22 that are off-limits to the Legislature except by a 7/8 vote of both houses, Proposition 22 interferes with the constitutional authority of the judicial branch to decide what constitutes an amendment to a ballot measure.  Third, in doing so, Proposition 22 also interferes with the California Legislature’s constitutional authority to legislate in areas that the ballot measure does not address.  Fourth, the provisions of Proposition 22 purporting to define “amendments” violate the California Constitution’s single subject rule, a constitutional mandate that protects voters against deceptive initiatives and that requires that Proposition 22 be struck down in its entirety.

The Alameda County Superior Court filing can be found here.

Altshuler Berzon LLP is counsel for petitioners in the case, along with Olson Remcho LLP.

Alaska State Employees Association Defeats Alaska Governor’s Attempt to Undermine Public Employee Collective Bargaining and Interfere with Union Membership

On February 8, 2021, the Alaska State Superior Court delivered a complete victory to the Alaska State Employees Association, AFSCME Local 52 (“ASEA”) in a dispute with the State of Alaska about the deduction of voluntary union membership dues.

In 2019, Alaska’s Governor Michael Dunleavy and now-former Attorney General Kevin Clarkson announced that the State would immediately and unilaterally implement a new policy to terminate all state employees’ union dues deductions and require state employee union members to annually renew their dues deduction authorizations after receiving a government “warning” that doing so would involve waiving their constitutional rights.  The State then sued ASEA, Alaska’s largest public employee union, seeking a declaratory judgment endorsing the executive branch’s new policy.  ASEA, represented by Altshuler Berzon LLP and Alaska counsel Dillon & Findley, PC, defended against the State’s claims and countersued, alleging that the State’s actions violated the collective bargaining agreement between the State and ASEA, the Alaska Public Employment Relations Act, and the Alaska Administrative Procedures Act, violated the separation of powers enshrined in the Alaska Constitution, and constituted bad faith dealing in violation of Alaska state law.

In late 2019, the Superior Court entered a temporary restraining order and preliminary injunction prohibiting the State from implementing its new policy while the case was pending.  On the parties’ subsequent cross-motions for summary judgment, the Superior Court granted ASEA’s motion in its entirety, denied the State’s motion, awarded ASEA more than $186,000 in damages, and permanently enjoined the State from taking any further action to enforce its unlawful policy.

The Superior Court’s summary judgment order can be found here.  The Superior Court’s prior Temporary Restraining Order and Preliminary Injunction Order can be found here and here.  And ASEA’s summary judgment briefs can be found here and here.

Settlement of Voting Rights Act Litigation Ensures Spanish-Language Ballots, Election Materials, and Assistance in 31 Florida Counties for Ten Years

On February 1, 2021, voting rights advocates represented by Altshuler Berzon LLP entered a 10-year settlement agreement with 31 Florida county Supervisors of Elections to provide Spanish-language ballots, election materials, and oral assistance to help ensure that Spanish-speaking voters educated in Puerto Rico and protected by Section 4(e) of the federal Voting Rights Act can vote effectively.  The settlement marks the successful resolution of Marta Rivera Madera, et al. v. Kim Barton (formerly Laurel Lee) (formerly Ken Detzner), et al., N.D. Fla. Case No. 1:18-cv-152-MW/GRJ.  The case is one of the largest lawsuits ever brought under Section 4(e) of the Voting Rights Act, and even before the settlement had already resulted in substantial expansions of access to Spanish-language ballots, election materials, and assistance throughout Florida. 

Under the settlement, 31 Florida county Supervisors of Elections will provide the following Spanish-language services in their counties for the next 10 years:

  • Spanish-language official ballots
  • Spanish-language polling place materials and assistance
  • Spanish-language vote-by-mail ballots and request forms
  • Spanish-language secrecy envelopes (including voter’s certificates) and instructions with all Spanish-language vote-by-mail ballots
  • Spanish-language translation of the Supervisor’s official websites
  • A county-specific hotline to assist Spanish-speaking voters during voting periods
  • Spanish-language signage at the Supervisor’s offices informing voters of the availability of these Spanish-language resources

The full settlement and motion to dismiss pursuant to the settlement can be found here and here.

For a summary of the history of the case, previous injunctive relief won before the 2018 and 2020 elections, and statewide rules adopted in response to this litigation in the spring of 2020 that now require Spanish-language ballots across the entire state of Florida, see here.

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.

Federal Court Vacates Trump Administration Rule Targeting Homecare Workers’ Unions

The U.S. District Court for the Northern District of California today issued a decision in State of California, et al. v. Azar, vacating a Trump Administration regulation that sought to prohibit homecare workers who provide services under states’ Medicaid programs from paying for benefits like health insurance and union dues via payroll deduction. The Court held that the regulation was legally erroneous and contrary to law.

Homecare workers, who are predominantly women of color, do critical, lifesaving work but are typically paid poverty wages and denied benefits like health insurance or sick leave.  Oregon, Washington, California, Illinois, Minnesota, Connecticut, Massachusetts, and Virginia have enacted laws allowing Medicaid-funded homecare workers to collectively organize and bargain with state Medicaid agencies over basic terms and conditions of employment, such as wages, sick leave, and insurance.  As a result, homecare workers in these states have greatly improved their wages and benefits, and the states have benefitted from a homecare workforce that is better trained, resourced, and has much less turnover.

In July of 2019, the Centers of Medicare & Medicaid Services issued a rule that, for the first time in history, interpreted a longstanding provision of the Medicaid Act to prohibit Medicaid-funded homecare workers from using payroll deductions to pay for benefits like insurance or union dues.  This legal theory was promoted by anti-union groups, and if allowed to stand, would have weakened homecare workers’ unions and threatened homecare workers’ hard-fought gains.  States could have lost millions of dollars in Medicaid funding simply for recognizing homecare workers’ right to organize.  Today’s court order restores the status quo.

The lawsuit was initiated by a coalition of states led by California.  Altshuler Berzon LLP represented Service Employees International Union Local 503, United Domestic Workers AFSCME Local 3930, and several individual homecare workers from across the country, who intervened in the lawsuit to challenge the regulation.