Federal Judge Grants Tens of Thousands of Oracle Corp. Plan Participants Class Certification

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On Tuesday, a federal judge out of Colorado granted tens of thousands of Oracle Corp. 401(k) plan participants class certification. The Employee Retirement Income Security Act (ERISA) suit alleges that the tech company piled up excessive record-keeping fees for the plan as well as holding on to funds that were performing poorly.

Plan participants allege Oracle was breached its duties in accordance with ERISA when they piled up tens of millions of dollars of excessive fees and failed in their duty to implement a prudent process for investment funds. The 18-page decision issued by U.S. District Judge Robert E. Blackburn created a class of all plan participants and beneficiaries of the named plan since January 2009. This will include tens of thousands of members. The judge did stipulate that the class will only apply to excessive fee claims since the original proposed class definition was too broad.

Judge Blackburn created two additional classes in connection to the case. One class was designated for plan participants in the Artisan Fund and the other was for plan participants in the TCM fund. Both will have time limitations applied to and will apply to imprudent investment claims. The other fund identified in the suit, PIMCO, did not receive a class certification because there was not a class representative listed.

Counsel for the plaintiffs intend to show at trial that the employees/retirees lost valuable retirement assets due to the excessive fees and poor plan management.

The original suit was filed in early 2016 by a group of plan participants. The group alleged that Oracle and its 401(k) committee breached their fiduciary duties. Allegations also claim that the company breached its duties by engaging in ERISA prohibited transactions and specifically claimed that the company filed to act on behalf of the interests of their plan participants.

According to the suit, Oracle’s record-keeping fees to Fidelity Management Trust Co., the plan trustee, were calculated on a revenue-sharing model that was scaled with the plan’s assets instead of calculating the fees in accordance with the number of participants. Plaintiffs claim that this lack of a fixed fee per participant resulted in significant losses for plan participants due to unreasonable expenses. In the time period between 2009 and 2014, the fund’s assets went from $3.6 billion to over $11 billion. So, while Fidelity revenue saw a drastic increase, the services they provided in exchange remained the same.

When alleging poor plan management and the retaining of poorly performing funds, the suit specifically identified Artisan, PIMCO and TCM, claiming that they caused significant overall losses.

If you have questions or concerns regarding a breach of fiduciary duty under ERISA, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Excessive Investment Fees Result in Agreed Upon $14M Settlement from Fujitsu

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In order to end a proposed class action close to $150 million, Fujitsu agreed to pay a $14 million settlement. The proposed class action alleged that the company paid more in investment fees for retirement funds than necessary affecting close to 23,000 current and former employees.

Workers hope the judge approves the deal that would be worth about $600 for each class member. They argue that it is a favorable comparison to other settlements in ERISA (Employee Retirement Income Security Act) suits regarding excessive fees. The settlement amount proposed is about 1% of the plan’s total value according to the class.

The workers’ unopposed motion for preliminary settlement approval urged the judge to approve the settlement stating that the amount was impressive in aggregate, when considered on a per-capita basis, and when viewed as a percentage of the plan’s assets. It compares favorably to other recent 401(k) settlements by all measures.

Workers originally sued Fujitsu in June 2016 alleging that the company mismanaged the employee retirement plan. Claims insisted that Fujitsu bought more expensive classes of funds than was necessary, deprived workers of returns, failed to monitor record keeping/administrative fees paid, and kept investments in plan offerings that were far too expensive.

Fujitsu first attempted to argue for dismissal claiming that the workers’ claims were based on “hindsight” and that the fees were appropriate and in line with those approved by the court in other suits. Their motion to dismiss was denied in April, but the judge did “leave open the possibility” that the arguments could win at summary judgment or trial. He also noted that some of the workers’ claims could be time-barred.

In September, the parties involved agreed on a draft deal after mediation efforts to reach a resolution. The draft deal was recently finalized and the workers now seek approval.

Approval of the settlement would mean that participants in the class (employees participating in the Fujitsu 401(k) plan between June 2010 and September 2017 would receive payment. The class includes 22,705 members. Close to a quarter of the settlement amount will likely go towards attorney fees and costs.

If you have questions about ERISA or your rights in regard to your employer provided 401(k) accounts, please get in touch with an experienced California employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Young California Startup Logging its 3rd Class Action Lawsuit

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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.

Dick’s Sporting Goods Facing Class Action for Texting Program

A proposed class action against Dick’s Sporting Goods, Inc. has been filed in California federal court. Accusations that the sporting goods retailer violated the Telephone Consumer Protection Act (TCPA) allege that the company sent text messages to consumers after they had opted out of the subscription based alert advertising program. Plaintiff, Phillip Ngiehm, states that he originally agreed to participate in the marketing program, but that he opted out in December 2015 by texting the word “stop” as instructed. According to the terms of the program, this would result in a halt of messages from the program to the subscriber – effectively removing him from the subscriber list.

Dick’s acknowledged that they received the termination of his consent to receive automated text ads, but the advertising messages continued. In fact, Ngiehm received an immediate response when he texted “stop” in order to halt his involvement in the program:

“You have been unsubscribed and will no longer receive messages from us. Reply ‘help’ for help.”

After receiving this acknowledgement, he received eight text messages. This led to the filing of the lawsuit that Dick’s Sporting Goods is currently facing. Plaintiff’s attorney states that all the SMS texts that were received by the plaintiff after he opted out as instructed, were sent without his consent and were thus unauthorized. This leaves the messages in violation of the TCPA. He seeks certification of a national class of people who were in receipt of messages from Dick’s Sporting Goods that were unauthorized. He estimates that the number of eligible class members could be in the thousands. The suit will seek statutory and treble damages as well as an injunction to prohibit Dick’s Sporting Goods from distributing unwanted advertisements by text. The suit will also seek attorneys’ fees and associated costs.

If you have questions regarding class action status and what it means to be eligible for class action membership status, please get in touch with the southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. We can assist you in determining how California labor law applies to your situation. 

Class Action: Weitz and Luxenberg vs. Lumber Liquidators, Inc.

April 15, 2015 -Weitz & Luxenberg, P.C. filed a class action lawsuit seeking to make Lumber Liquidators home improvements retailer pay restitution. Consumers who purchased certain brands of laminate flooring discovered later that it was found to emit high levels of formaldehyde – high enough to be potentially dangerous to their health. The class action contains allegations that the Toano, Virginia based home improvements retailer was aware of the problem (that the levels of formaldehyde being emitted were unhealthy and cancer causing) and purposefully concealed the information from consumers in order to continue selling their tainted product.

California air quality standards are the most stringent in the nation. Weitz & Luxenberg claim that Lumber Liquidators went so far as to advise their customers that the laminate flooring’s formaldehyde emissions met those extremely high air quality standards when they did not.

Six plaintiffs were named in the class action filed in Manhattan in federal court. The plaintiffs named were from 3 different states: Texas, New York and New Jersey. The suit seeks financial reimbursement from Lumber Liquidators to provide members of the class who bought the dangerous flooring with a full refund for their purchase price, and associated costs (installation, delivery, removal, etc.) It has also been requested that Lumber Liquidators pay damages (as permitted by the various states) in regards to false advertising and additional violations of a variety of other consumer protection statutes.

The class action lawsuit is a civil litigation device. When compared to criminal law, it’s important to note that civil law deals with private disputes. A private dispute is one in which one party accuses a second party of some type of injury and sues for damages that occurred as a result of that injury. Injury can come in many forms: physical, psychological, emotional, or financial. Class actions are most useful in cases where you alone would be David to the other party’s Goliath. If you alone attempted to sue a major “Goliath” sized company, it would be a painful process with slim chances for success. The class action lawsuit allows all the “Davids” to get together in one suit, which allows them to obtain a “Goliath” size lawyer to fight for their case; drastically increasing the chances for the “everyday Joe’s” chance of success against major corporations and massive organizations.  

If you need additional information on forming a class action lawsuit, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

California Labor Lawsuit Led to Class Action v. Barnes & Noble

A class action suit against Barnes & Noble based out of New York has roots in California. The California labor lawsuit will continue – a New York judge refused to grant summary judgment for the defendants. Barnes & Noble, the major chain and online bookseller, is being accused of avoiding the payment of overtime to employees by purposefully misclassifying them as exempt. Allegations would leave Barnes & Noble in violation of the Fair Labor Standards Act (FLSA).

Court documents indicate that until 2005, Barnes & Noble classified all assistant store managers as FLSA exempt. This meant that no assistant store managers were eligible for overtime pay on hours worked above and beyond the standard workweek or workday. Generally speaking, managers (who are paid a salary and perform managerial tasks) are properly exempt in just this fashion. However, Barnes & Noble assistant store managers in California filed suit citing violations of California labor law.

The assistant store managers who filed suit in this California case made allegations that they performed tasks that fell outside of the managerial realm. They also indicated that despite their official title (assistant store manager) they had no actual authority over other employees.

The lawsuit resulted in Barnes & Noble reclassifying its assistant store managers in California as nonexempt. As nonexempt employees, they can now qualify for overtime pay. But Barnes & Noble apparently did not make the change at other stores in other locations throughout the country until a much later date.

Barnes & Noble did eventually (in 2010) reclassify all of its assistant managers as nonexempt throughout the states. This was the basis for Barnes & Noble’s petition for summary judgment in the lawsuit (originally brought in 2005 as an action citing California labor code). It would seem that the FLSA violations ended in June 2010, but the wider lawsuit was filed in January 2013. The defendants cited that the lawsuit fell outside the FLSA’s two-year statue of limitations.  

US District Court Judge John Koeltl disagreed, pointing out that the FLSA two-year limit extends to three years when there is proof, evidence or suspicion that there was a willful violation. Considering that Barnes & Noble reclassified California based assistant managers as a result of the California labor lawsuit, but failed to do so nationwide for 5 years, it would be easy to suggest that there was at least some evidence that a jury could perceive as willful violation.  

The three plaintiffs (named) in the current, New York based lawsuit, are all former assistant store managers for Barnes & Noble. They note that their duties were not limited to managerial duties, they often performed tasks performed by other non-exempt employees, such as working the cash register, processing product returns, etc.

If you feel you have been misclassified as an exempt employee, contact the employment law experts at Blumenthal, Nordrehaug & Bhowmik today.