Articles Posted in Class-Action

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Imagine going into a store to buy something. A few months later, without having returned to the store, you find out the store bought one of their products on your behalf, without bothering to tell you about it or get your permission. That’s essentially what a class of consumers are alleging Wells Fargo did for more than a decade while its aggressive sales team were encouraged to do everything in their power to meet their quotas.

According to a recent class action consumer lawsuit, Wells Fargo allegedly created more than 2 million credit cards, lines of credit, checking accounts and savings accounts, without first getting approval from the customers for whom they were opening the accounts. Not only were the customers made to pay the fees to open these accounts they never wanted, but some of them suffered damage to their credit history as a result of credit cards and lines of credit that were opened for them and then never used.

After a class of consumers filed a class action lawsuit seeking claims against the bank for the sham accounts, Wells Fargo offered to settle the lawsuit for $110 million, but later raised their offer to $142 million after an investigation found that the practice of opening these sham accounts went back as far as 2002. That revelation prompted the plaintiffs’ attorneys to up their estimate of sham accounts from 2.1 million to 3.5 million, although they may not see a similar increase in the number of plaintiffs, as some plaintiffs allegedly had multiple sham accounts opened in their name.

The settlement amount is in addition to the $185 million Wells Fargo has already been made to pay to regulators after their practice of opening sham accounts on behalf of unsuspecting (and unwilling) customers was revealed. The resignation of the bank’s CEO at the time, John Stumpf, was another result of the scandal. Continue reading

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The Federal Arbitration Act was created in 1925 to provide a faster, more efficient method for businesses of equal bargaining power to settle disputes between themselves without crowding the courts. The part about the parties needing to be of equal bargaining power is vital, especially since arbitration is private and was not designed to handle class-action lawsuits.

Unfortunately for consumers, arbitration clauses have started appearing in the fine print of their contracts with almost every provider: banks, websites, merchants, car dealers, credit card companies, even their employers. This means that every dispute someone has with a company has to be settled by arbitration, which is private, offers no written opinion on the matter (i.e. no explanation for the ruling), and is often biased in favor of the large companies that bring in lots of business for the arbitrator (although there are a few arbitration companies that are known for their fairness).

The reality is that individuals very rarely, if ever, have the same bargaining power as giant corporations with a team of attorneys at their disposal. In particular, arbitration agreements cripple individuals by preventing them from combining their claims into class actions. Since most individuals have small claims against corporations, class actions are the only method they have for justifying the costs of the lawsuit. If your bank charged you $100 dollars in illegal fees and filing a lawsuit costs $2,000 to hire an attorney and pay for court costs, no reasonable person is going to pursue the matter. They’d rather let it drop, which lets the bank continue to illegally collect thousands of dollars from hundreds of customers who don’t have any way to redress the wrong. Continue reading

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The Equal Employment Opportunity Commission just proved it is more interested in fostering real change than fining large corporations.

Sterling Jewelers just settled the lawsuit filed by the EEOC, alleging it discriminates against its female employees, without admitting to having done anything wrong or paying any money to the class of plaintiffs. Instead, Sterling Jewelers (which owns Kay Jewelers and Jared the Galleria of Jewelry, among others) has agreed to hire an independent employment expert who will review employment and promotion practices within the jewelry company.

But Sterling still has to deal with a separate class-action arbitration case in which female employees of the company are accusing Sterling of regularly paying women less than their male counterparts, overlooking women for promotions and other opportunities for advancement, and fostering a work culture in which sexual harassment was the norm.

Signet (which is Sterling’s parent company) is continuing to fight the arbitration claims and said it has already investigated the allegations of sexual harassment on its own without finding anything to back up the allegations. Continue reading

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As more and more of our personal information ends up online (either through our own actions or someone else’s) we must all be increasingly vigilant about taking the necessary steps to insure our privacy from hackers. Businesses and website hosts need to be especially careful about protecting themselves from liability in the event of a data breach.

Class action lawsuits claiming damages against businesses that allegedly did not take the proper measures to protect against security breaches have been popping up with increasing frequency all over the country, but depending on the case, proving actual damages can be easier said than done.

Most, if not all, banks and credit card companies offer identity theft protection – for a fee. They’ll cover the costs of any unverified charges if your information gets stolen, but only if you pay them a monthly fee. The fee is usually around $5/month, but even that can be prohibitive for low-income consumers. As a result, most plaintiffs suing as a result of a data breach at least sue for the costs of purchasing identity theft protection. Continue reading

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The days of trading items for other items are all but gone. Individuals might still maintain this practice in private between one another, but when it comes to how companies can pay their workers, they usually only have two choices: cash or check.

The rise of technology has led to other options, such as direct deposit and debit cards, but not all of these new options are allowed under the relevant labor law. According to Pennsylvania’s Wage Payment and Collection Law (WPCL), employers are permitted to use only cash or checks to pay their workers.

But a recent class action wage and hour lawsuit filed against a Pennsylvania McDonald’s franchisee, alleges the franchisee’s use of debit cards to pay employees their wages is a violation of the WPCL.

The class action lawsuit was filed against Carol and Albert Mueller, who, together, operate 16 different McDonald’s franchise locations across Pennsylvania. They allegedly used debit cards to pay almost 2,400 employees their wages from late 2010 until the summer of 2013. Continue reading

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Seventh Circuit Court of Appeals Judge Richard Posner made quick work of a recent class action suit brought by glaucoma patients who alleged that Allergan, Inc., and other drugmakers manufactured prescription eyedrops that were too large in order to increase their profits (Eike, et al., v. Allergan, Inc., et al., No. 16-3334, 7th Cir. (2017)). The case was on appeal from a district court ruling certifying eight classes of plaintiffs consisting of Illinois and Missouri residents who alleged that Allergan and six other pharmaceutical companies made eye drops that were unnecessarily large, in violation of the Illinois Consumer Fraud Act and Missouri Merchandising Practices Act.

Each eyedrop exceeded 16 microliters, beyond the optimal size the plaintiffs contended was necessary for treatment of glaucoma and therefore wasteful because the additional microliters added no therapeutic value, instead serving only to pad the companies’ profits. The plaintiffs sought damages amounting to the difference between the price per drop of the eye drops at their present size and the presumably lower price of smaller drops, multiplied by the number of drops purchased by the class members.  Continue reading

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Trump won his campaign on a platform that promoted him as a hard-hitting businessman who doesn’t back down until he gets what he wants. That worked for about half the plaintiffs in a lawsuit filed against Trump National Jupiter Golf Club, but the other half still want their money back.

When Trump bought the struggling golf club from Marriott Vacations Worldwide in 2012, he paid the relatively low price of $5 million, but there was a catch. As part of the agreement, Trump had to take on $50 million in debt. The club had a refund policy regarding a deposit members paid when they purchased their membership. But when members wanted out of the club, it couldn’t afford to refund all their deposits.

Rather than pay up, as agreed, Trump did what he does best: he allegedly played hardball. He allegedly told the members they could cancel their membership, after which they would no longer be allowed to use the club’s facilities, but they would have to continue paying their membership dues to the club. They were also allegedly told they would not receive their refunds until new members had been found to replace them, which could potentially take years to accomplish. Continue reading

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The federal Fair Labor Standards Act (FLSA) is pretty clear on the definition of overtime and what employers are required to provide for their workers who spend more than eight hours a day or forty hours a week working. All hourly, nonexempt employees are entitled to one and one-half times their normal hourly rate for all overtime worked.

But according to a recent wage and hour class action lawsuit against Bed Bath & Beyond (BBB), the retail chain allegedly miscalculated the overtime wages earned by its managers and customer service representatives in several of its New Jersey locations. In doing so, BBB allegedly violated both the FLSA and New Jersey Wage and Hour Law.

The named plaintiffs were each paid an annual salary ranging from $63,000 to $70,000. Rather than figure an hourly rate based on their annual salary, BBB allegedly took its employee’s weekly base salary, divided it by the number of hours the employee worked that week, divided the solution in half, then multiplied that number by the number of hours the employee spent working after 40 that particular week. In addition to allegations that the formula violated the FLSA, the wage and hour complaint further alleges that it resulted in the class members receiving less than minimum wage for all the hours they spent working.

Certain employees can be held exempt from the FLSA’s overtime requirement, but only if they are paid a salary of at least $23,600 and meet very specific conditions. These qualifications include providing administrative assistance directly to an executive, spending more than half their time at work managing other employees (including weighing in on the hiring and firing of employees), or exercising a particular set of skills or level of education in the course of performing their jobs. Any employee who does not meet all the necessary requirements for one of the categories of overtime exemption is entitled to the premium overtime compensation for all the time they spend working after eight hours a day or forty hours a week. Continue reading

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We live in a world in which everyone constantly feels like they don’t have enough time, which is why most of us hate to feel like anyone is wasting our time. That feeling only gets worse when we don’t have any control over it, such as when our employer keeps us waiting.

According to a recent wage and hour lawsuit filed against Labor Ready, a temp agency, the company allegedly kept its temporary workers waiting to receive assignments without paying them for the time they spent waiting. The company also allegedly refused to pay them for the time they spent traveling to their assignments and also allegedly charged them a fee to cash their paychecks.

Most workers don’t think of the time they spend traveling to and from work as time they should be paid for, but there are certain instances in which that time is compensable. For those who work at the same location every day and simply commute between home and work, no payment for that time is required. On the other hand, some workers who are required to travel between different work sites in the course of a day should be paid for the time they spend traveling between sites.

The same goes for those who need to check in at one location before traveling to another site to perform their actual tasks for the day. This can sometimes be the case for those working for temp agencies when they’re technically employed by the temp agency, but the work they’re actually doing is for the agency’s client, usually at a separate location. Continue reading

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It’s often more cost effective for companies to hire independent contractors to perform certain jobs, rather than hiring employees. Even for part-time employees, companies are responsible for paying things like employment taxes and Social Security, none of which they have to worry about with independent contractors. There are benefits to working as a true independent contractor, but because independent contractors are not protected by the federal Fair Labor Standards Act (FLSA), workers have to meet very specific requirements in order to legally be considered independent contractors.

Under the FLSA, workers classified as independent contractors must be able to negotiate their own rates, have control over their own schedule, the environment they work in, and have a certain level of discretion as to how they perform their duties, among other things. Any and all workers who do not meet all of the necessary qualifications for independent contractors must be classified and compensated as employees, including benefits (such as health insurance) for full-time employees.

Many employers have been illegally classifying drivers as independent contractors and FedEx is just one of several companies to have recently faced multiple class action wage and hour lawsuits from drivers alleging they should have been classified as employees.

Current and former FedEx drivers from approximately 40 different states have been filing wage and hour lawsuits against the giant shipping company for more than ten years now. Many of those lawsuits were consolidated into multidistrict litigation (MDL) and then certified as class actions so that drivers from all across the country could combine their claims against FedEx. Continue reading