Young California Startup Logging its 3rd Class Action Lawsuit

A San Francisco, California startup in its early years is logging its third lawsuit. The shopping service, particularly popular with busy, urban professionals, has been repeatedly vilified by some of its own service workers. The company is planning to finalize a $4.6 million settlement in January 2018 to resolve the issues. The California class action overtime lawsuit was filed by employees and independent contractors of Maplebear Inc. (dba Instacart). 

The proposed settlement will resolve issues for which plaintiffs seek resolution including angst over numerous allegations. 

Allegations Made by Plaintiffs Against Maplebear, Inc. (dba Instacart):

• Service Fee Assumed by Consumers to be a Built-In Tip for Drivers
• Workers Collecting Earnings Translating to as Low as $1 Per Hour

Many users of the Instacart service assumed the service fee automatically added to their orders was a built-in tip for drivers, but it wasn’t. Some Instacart workers collected earnings that, after all was said and done, translated to a measly $1/hour. An amount that falls far short of legal minimum wage requirements per laws recognized by the State of California, as well as potential violations of federal overtime laws. 

Instacart was started by Apoorva Mehta, a Canadian and alma mater of the University of Waterloo who spent years working for tech companies such as Blackberry, Qualcomm and Amazon.com before deciding to move on and try his luck at start ups. Instacart was his 21st startup idea. It was aimed at busy, tech-savvy professionals that would benefit from an on-demand grocery shopping platform. The idea quickly gained traction. Orders were placed through the app in a similar fashion to order a car on Uber or Lyft. Instacart had both employees and independent contractors working as “shoppers” who filled orders and delivered them to customers. 

In 2015, Instacart was hit by a class action lawsuit due to misclassification of workers. Eventually, Instacart converted its workforce making most of their shoppers part-time employees with a small number qualifying for benefits. As of today, the startup has 300 full-time employees and tens of thousands of part-time shoppers. 

The company was hit by another class action in 2016, Husting et al. v. Maplebear, Inc. d/b/a Instacart. 

In February of 2017, the company faced another class action lawsuit due to alleged wage and hour violations. 

If you have questions about how to file a class action lawsuit or if you aren’t sure if you qualify for class certification, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

1st Ever Sexual Orientation Discrimination Lawsuit Filed by EEOC

Scott Medical Health Center was recently ordered to pay $55,000 by a federal judge in the first sexual orientation discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission. The judge’s three-page order found Scott Medical Health Center, the Scott Township-based pain management and weight loss services provider, responsible for “creating, facilitating, or tolerating” sexual harassment – which can refer to any harassment related to sexual orientation or sex or gender stereotypes/gender role stereotypes. 

Also ordered by the judge, the health center will provide the commission a written report including any and all complaints and/or allegations (both formal and informal) regardless of whether they are reported verbally or in writing related to sexual harassment/sex harassment made by any employee for the upcoming five years. 

EEOC attorneys released a statement hailing the ruling as historic. They set it apart as a precedent that sexual orientation is a protected status in any workplace. The EEOC also stated that protections for lesbian, gay, bisexual, and transgender individuals have been “stepped up” under sex discrimination provisions. They’re making it a priority at the national level. 

Sexual orientation is not actually protected under Title VII of the Civil Rights Act of 1964 governing workplace discrimination, but the EEOC interprets sex discrimination as including harassment of both gay and transgender workers. The EEOC sees this case as one of many that point towards the persistent and commonplace problem of anti-LGBT bias in the workplace throughout America. 

This lawsuit based on anti-LGBT bias, was filed in March 2016. The lawsuit describes a situation in which Dale Baxley, a telemarketer for Scott Medical Health Center, was taunted by a manager for being gay. This harassment occurred in Summer 2013. Robert McClendon, the manager accused of harassing Baxley for being gay was already under investigation at the time of the filing. Several female employees made claims against the same manager. According to the EEOC complaint, Baxley quit in August 2013 after complaining to the company president and seeing nothing change. 

In response to the claims, the health center’s lawyer stated that the Defendant was “blindsided” by the allegations, that they were unaware of Baxley’s sexual orientation, and that the commission had no authority to file the claim. 

Earlier this month, the federal district judge, Cathy Bissoon, ordered Scott Medical Health Center to pay damages in the amount of $50,000, which is the maximum penalty for this type of violation against an employer the size of the health center. In addition, the court ordered the company to pay Baxley $5,500 in back wages. 

For more information about sexual orientation lawsuits or to discuss what constitutes a hostile work environment, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Avis: FCRA Background Check Suit Ends in $2.7Million Deal

Avis, popular car rental company, recently agreed to pay out $2.7 million to resolve a FCRA background check lawsuit. According to the suit, Avis improperly acquired and used background checks in order to reject job applications. 

Angela Fuller, plaintiff, originally sought to certify a settlement class of approximately 45,000 people. Fuller now urges the court to grant final approval to the settlement deal, as she believes it is fair to all class members. Separately, Fuller’s lawyers sought $891,000 to cover fees and expenses (1/3 of the total $2.7 million proposed settlement). The final approval hearing will take place on November 28, 2017. 

Fuller originally sued Avis in June 2015. She claimed the company denied her a rental sales position in 2013 because they ran a background check that violated FCRA requirements. Fuller claims that Avis did not appropriately disclose in a form designated for that purpose alone that they might run a background check and access Fuller’s consumer report. Fuller also claims that the company did not provide her with a pre-adverse action notice alongside a copy of the report used to make the decision and a written description of her FCRA rights before they rejected her job application on the basis of her background check. 

The report used during Fuller’s job application process at Avis showed that she had received a $40 ticket for drinking a malt beverage as a vehicle passenger in 1985 in the state of North Carolina. In the complaint filed by Fuller, she states the reported information was incorrect as the ticket was only an infraction, not a conviction. According to FCRA, only convictions can be reported more than seven years after the incident. 

The proposed settlement was initially submitted for approval in March. It was granted preliminary approval at the end of July. According to the terms of the settlement, class members will receive cash payments or other compensation depending on which “group” they are in. The agreement will also offer relief to individuals whose claims against Avis rental company lay outside the FCRA’s two-year statute of limitations. 

A substantial portion of the funds would be paid to anyone who was the subject of a consumer report pulled by Avis to be used during the job application process or for other employment reasons between June 9th, 2013 and April 28, 2016 through a form similar to the one used by Fuller. This group is referred to as the “2-Year Inadequate Disclosure Group.” Members in this group number over 21,000 and would each receive a $45 payment for a total of $968,000. 

The second group will receive the largest individual payments. This group of 590 people was subject to a background report pulled by Avis to whom Sterling was advised to provide a pre-adverse action notice on the part of Avis between June 9, 2013 and April 28, 2016. Each will receive $45 for being a part of the first group as well as an additional $650. 

Other members of the class number about 25,000 people that were all the subject of a consumer report pulled by Avis between June 9, 2010 and June 8, 2013. 601 in this group were also supposed to receive a pre-adverse action notice from Sterling on Avis’ behalf during the same time frame. These claims are similar to Fuller’s but are outside the FCRA’s statute of limitations. All members with claims falling outside the statute of limitations will receive a $20 voucher to apply toward a weekday car rental at Avis. 

Fuller requested an additional $15,000 award for her services as the class representative.

If you have questions about background checks during the employment process or the statute of limitations for claims, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

3 ERISA Suits Against First Bankers Results in $16M Settlement Deal

In November 2017 First Bankers Trust Services Inc. agreed to a $16 million settlement in order to resolve 3 DOL ERISA suits alleging they breached fiduciary duties by allowing 3 employee stock ownership plans to overpay for their own companies’ stock. First Bankers also committed to reforming its practices and policies regarding the handling of employee stock plan transactions. 

The settlement will put an end to 3 DOL suits brought in 2012 after investigations into plans sponsored by SJP Group Inc., Maran Inc., and Rembar Co. Inc. Each of the plans gets payouts from First Bankers (SJP’s plan will receive $8 million, Maran’s plan will receive $6.6 million and Rembar’s plan will receive $1.1 million). The settlements offer reimbursement to plans and participants as well as committing First Bankers Trust Services to clear procedures and transparency in order to ensure appropriate compliance in future dealings. 

According to DOL, First Bankers was both trustee and fiduciary for all three of the plans cited and as such, they had an obligation under ERISA to make sure that the plans did not pay more than fair market value for company stock. Also according to DOL, First Bankers signed off on purchases without doing the due diligence required of their position. Their failure to do so allegedly resulted in the plans overpaying millions for the stock. 

SJP, a New Jersey based paving company: The case regarding SJP went to bench trial in New Jersey federal court in 2016. U.S. District Judge Michael A. Shipp issued a ruling in March finding that First Bankers breached is duties and engaged in ERISA-prohibited transactions resulting in SJP’s plan to overpay close to $9.6 million for SJP’s own stock. 

Maran, a New York based clothier: At a bench trial in April, U.S. District Judge George B. Daniels of New York’s Southern District agreed to hold off judgment due to settlement discussions between the parties. 

Rembar, a New York based maker of precision parts from refractory metals: The Rembar case was still awaiting trial at the time of the settlement discussions. 

These cases make it clear just how vital it is that those retained to advise a plan about stock purchases fulfill their fiduciary duties; making sure that the price a plan pays for the plan sponsor’s stock reflects true market value. 

If you have questions about ERISA or ERISA violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

NY Times Facing Discrimination & Misclassification Claims

Robert Stolarik, a photographer with an extensive working relationship with the New York Times, filed a lawsuit against the newspaper. He alleges that the New York Times misclassified him on the job, discriminated against him due to age, denied him assignments due to a past arrest, and retaliated against him when he made these claims public. During the course of his career as a photographer, Stolarik has had his photos featured on the front page of the New York Times over 30 times.

Stolarik filed the lawsuit on July 6th in the U.S. District Court for the Southern District of New York. He included a number of different accusations:

Classification as a freelancer instead of a full-time employee, which left him responsible for paying additional taxes and ineligible for the company’s benefits and retirement plan. Stolarik claims the editors referred to him as a “full time freelancer” for 14 years.

No overtime pay despite working close to 3,400 hours in overtime from 2005 through 2009.

When seeking to become a staff photographer/employee, Stolarik was told a number of times by different editors at the paper that his age (37 in 2006) prevented his hiring as a staff shooter. During that same time period, younger photographers (20-somethings) were hired on as staff photographers.

In August 2012, Stolarik was assaulted and arrested while covering a story in the Bronx. The Times made sure Stolarik had legal representation and submitted an angry letter to the NYPD about the incident. The officer was later charged and found guilty of a felony for lying about the arrest. Yet Stolarik was taken off the police beat (that he had covered for more than 10 years) in response to the arrest.

Stolarik claims that the unlawful and discriminatory practices of the New York Times resulted in a loss of income and benefits because he was denied both a staff position and freelance assignments. In addition, Stolarik claims the paper retaliated against him when he submitted a letter including these legal complaints to the paper in spring of 2016. Since that time, he has not received a single assignment from the paper’s editors.

If you have experienced workplace retaliation or you don’t know what to do about discrimination in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

The Weinstein Sex Scandal is Far From Over

While some have commented that in spite of the continuing sexual assault and harassment claims against Hollywood mogul, Harvey Weinstein, it would be difficult to build a criminal case, that doesn’t mean there will be no legal ramifications. It is very likely that Weinstein’s alleged mistreatment of women will lead to costly civil lawsuits that could have severe consequences for both the executive himself and his namesake film and TV company due to the significant potential liability involved.

According to California law, Weinstein Co. could be held liable for Weinstein’s alleged sexual harassment. Whether or not alleged victims could bring a lawsuit against 65-year-old Weinstein would depend on the California statute of limitations for civil sexual assault (2 years in California, although Weinstein has also been accused of similar behavior in New York where the state of limitations is 3 years). Experts in sexual assault and the law expect to see a flood of lawsuits head Weinstein’s way unless he has already settled with the victims outside of court.

Possibly to minimize any more legal trouble, Weinstein Co., fired Weinstein after a New York Times investigation discovered that Weinstein had reached a minimum of 8 legal settlements dating back to 1990 over various instances of alleged sexual harassment. The New Yorker published a story that included an array of allegations, but one stood out from the rest. The respected news outlet reported that Weinstein had raped 3 women in the last 2 decades, including well known actress, Asia Argento, from the 1999 drama “B. Monkey” distributed by Miramax. Weinstein has previously apologized for “his behavior,” but does deny claims of rape, stating that he believed all the relationships to be consensual.

Weinstein Co.’s board or directors publicly stated that they were shocked and dismayed by the allegations being made and that they supported investigations into the alleged acts.

If you have questions about sexual harassment or misconduct in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

A String of Harassment Lawsuits Aimed Right at Tesla

Many only know Tesla as a company who has goals of changing the world, but more and more are rethinking their opinion of the company as news headlines point out another major component in the Tesla workplace: harassment. The company proudly claims to be forward thinking on environmental matters, dedicated to diversity and center-left politics, and the many ways in which advanced technology can support progress in all these areas of concern. But many are now labeling the company as being caught up in the “bro” culture – a culture that can still be found in many offices throughout California. Other companies experiencing similar accusations include: Uber, Google, Social Finance, Greylock Partners, etc. Major news outlets like Bloomberg and CNBC have actually implied that the problem is worse than we think.

The latest case at Tesla involves Jorge Ferro, an assembly line worker who claims he was harassed because he is gay. He claims he was taunted, told to “watch your back,” and eventually fired. Ferro states that an old scar (from a 16-year old injury) drew the notice of Tesla Human Resources, who promptly dismissed him. But Ferro alleges he was actually fired due to retaliation for reporting the harassment.

When contacted about the issue, Tesla first attempted to side step the issue by claiming that both Ferro and his supervisor were not employees, but independent contractors. They also insisted that Tesla, as a company, takes all forms of discrimination and harassment very seriously. In fact, the Guardian reported that the company responded in even further detail by referencing their own track record, “…no company on Earth [has] a better track record than Tesla…they would have to have fewer than zero cases where an independent judge or jury…found a genuine case of discrimination.”

While Tesla insists that the recent influx of harassment and discrimination claims are due to their own notoriety and the opportunity this presents for media outlets and attorneys seeking acclaim and higher profiles, there have been other accusations of similar behavior in the last few years.

Just a week before Ferro’s claim surfaced, three former African-American workers filed a California lawsuit that they were subjected to verbal and written racist slurs.

Another instance involved a former Tesla engineer who claimed she was fired because she presented examples of gender discrimination at the company to the human resources department.

If you need to discuss instances of discrimination in the workplace or have questions regarding harassment on the job, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.