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.

Lamar Dawson’s Lawsuit Against the NCAA, Pac-12 is Dismissed

Lamar Dawson, ex-USC football player, filed a California lawsuit against the NCAA and Pac-12 that was dismissed earlier this month by a federal judge, Judge Richard Seeborg. Dawson’s class action was filed in September 2016 seeking minimum wage and overtime pay as well as additional compensation as a result of alleged NCAA and Pac-12 Fair Labor Standards Act and California Labor Code violations.

Lamar Dawson started out at USC as a linebacker his freshman year in 2011, but was injured. His injuries disrupted his football career and he lost his shot at the NFL – mostly due to a torn ACL that occurred in 2013. He redshirted in 2014 and played in 8 games throughout the 2015 season, finishing with 31 tackles.

This decision to dismiss was reminiscent of a similar case last year involving former track and field athletes from the University of Pennsylvania. The three-judge panel in the 7th U.S. Circuit Court of Appeals in that case ruled former student-athletes at NCAA Division I schools are not technically considered employees under the rules set down by the Fair Labor Standards Act.

Dawson contended during the course of the case that his specific situation was different than the case of University of Pennsylvania’s track and field athletes because football is a revenue-generating sport (in comparison to track). The judge ruled that revenue generation as a determination of employment status is not supported legally. Seeborg set aside the policy question of how Division I FBS college football players should be compensated for what he considered a more fundamental issue determining the direction of the case and his eventual ruling: legal basis for finding them employees under the FLSA. He found none.

The NCAA and Pac-12 were not surprised by the ruling. Both had previously stated similar opinions regarding the validity of Dawson’s claim dating back to the original filing. The NCAA is pleased with the outcome and reiterated their stance that there is no legal support for college athletics participation constituting “employment” with the university. They went on to specify that playing college sports is an opportunity for students to obtain a quality education and build skills that prepare them for educational success at the college level. They concluded their thoughts on the matter by regretting the wasted funds and resources that are spent on cases such as this that will eventually be dismissed. The Pac-12 was also pleased with the ruling finding that it reaffirmed their conviction that college athletes are students – not employees.

If you have questions regarding employment status or whether or not you are misclassified on the job, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Teamsters Object to $27 Million Lyft Deal, but are Rejected

Katie when teamsters’ objected to the proposed $27 million settlement between Lyft and the class of 163,000 California drivers, their objection was rejected by a federal judge. But the same judge also delayed finalizing the proposed deal.

The case has been all over the news and many have heard bits and pieces as the proceedings proceed. To recap, the Uber Lyft Teamsters Ride Share Alliance (known as ULTRA) filed a brief opposing the deal in October. Claims were made that the proposed settlement fails to adequately compensate full-time drivers and also forces workers to waive their right to sue the company due to Fair Labor Standards Act violations. During settlement approval, the U.S. District Judge Vince Chhabria appeared to become frustrated when the objecting attorney did not provide specific information supporting his argument that the deal should be rejected. The attorney argued that doubling compensation for individuals who driver 30+ hours per week for Lyft was not adequate because that would leave part-time drivers with a fairly high compensation for their work in comparison to full-time drivers. Yet could not tell the judge what he suggested an appropriate multiplier should be for full-time workers.

A similar argument occurred when the attorney suggested more data would be necessary in order to come up with such a number and the judge asked what data was necessary only to have the attorney unable to say precisely what data he would need to calculate the needed number.   

Other issues discussed during the proceedings were: the settlement provision shielding Lyft from lawsuits over alleged Fair Labor Standards Act (FLSA) violations and the workers’ right to opt in to waive their rights to sue, the addition of the condition post- Cotter v. Lyft suit, and appropriate (and timely) notification to workers of the settlement terms and their rights to opt out or object to the deal, the inability to access the actual text of the agreement online, and adequate time for class members to object to the motion for attorneys’ fees (13.6% or $3.67 million in fees), objections regarding Lyft policy and procedure being inadequate in the case of a deaf driver,

According to attorney for the plaintiffs in the class action lawsuit against Lyft, 84,000 drivers (or 51% of the class) have filed claims for reimbursement so far. As of mid-November, attorneys estimated that drivers who drove over 2,000 hours for the rideshare service since May 2012 should receive distributions of about $11,000 for vehicle expenses reimbursement and unpaid overtime wages. As part of the settlement, drivers would agree to waive their claims that Lyft misclassified them as independent contractors in order to be denied employment benefits. Drivers may continue to submit claims for a portion of the settlement up until the first distribution is allocated to drivers in the class, which should occur about six months after final approval of the settlement is granted by the judge.

For additional information about overtime pay, overtime pay violations or class action certification, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Samsung Advices New Galaxy Note 7 Owners to Turn Phones Off Immediately

If you are the proud owner of a new Samsung Galaxy Note 7, Samsung needs you to turn it off immediately. The alert was issued soon after release of the highly anticipated new smart phone when it became clear that there was an identifiable trend of the product spontaneously catching fire. The alert came directly after Samsung halted all production of the devices now best known for their dangerous glitches.

Samsung made an official corporate statement on the issue, assuring the media and the public that it was also planning to request that all carriers and retail partners worldwide to stop sales and exchanges of the Galaxy Note 7 immediately to allow Samsung time to investigate the problem. They also made it very clear in their public statement that any consumers who own the original Galaxy Note 7 or the replacement Galaxy Note 7 devices should turn them off and stop using them immediately.

In response to the situation, the company’s stock dropped more than 5% after the announcement.

The product, 5.7 inch Galaxy Note 7, was released by Samsung in August 2016 as an anticipatory move due to Apple’s impending release of the new iPhone 7 in the fall. Yet almost immediately after the exciting new product was launched, reports of phones catching on fire started to circulate. The company has indicated that faulty lithium-ion batteries were overheating and causing the devices to ignite. As of early September 2016, Samsung had recalled millions of devices across the world. When Samsung offered replacement phones, they started to spontaneously combust as well. One user reported that his replacement device caught fire and it wasn’t even plugged in. Another device began to smoke while aboard a Southwest Airline plan prior to departure resulting in the cancellation of the flight. (This incident is still being investigated by the U.S. Consumer Product Safety Commission).

Samsung users were advised to stop using the power down their Original Note 7 phones in early September, but after the increasing incidents, Samsung is now issuing similar warnings regarding the replacement devices that were supposed to act as a solution to the problem.

According to the U.S. Federal Regulators, Samsung users affected by this problem are entitled to a full refund.

If you have questions or concerns regarding the safety of your Samsung Note 7 or if you have similar concerns regarding another product and need to discuss your legal options, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Celadon Being Held to the Ruling in Favor of Drivers by the Eighth Circuit Court

In recent news, the Eighth Circuit was asked to reconsider their decision favoring a class of workers suing Celadon Trucking Services, but they refused to budge on the layoff notice ruling. In refusing to reconsider their ruling, the Eighth Circuit repeated their prior conclusions that the commercial trucking company should have provided drivers with notice prior to laying them off.

The Eighth Circuit’s brief order stated its intent to stand firm behind the July rejection of Celadon’s argument that it did not have a legal duty to provide a 60 day Worker Adjustment and Retraining Notification Act notice in connection to the termination of over 400 Continental Express Inc. truck drivers. The mass layoff occurred after the company purchased Continental at the end of 2008 for $24.1 million.

The appeals court denied Celadon’s petition that took issue with the panel’s conclusion that the district court found the situation to be more than just a sale of assets. This conclusion effectively transferred the responsibility for providing workers with notice from Continental to Celadon. Celadon’s petition argued that the ruling was in conflict with both the Eighth Circuit and the U.S Supreme Court precedent. They pointed to questions of exceptional importance that they indicated the full appellate court should hear. They also included a challenge to the panel for endorsing a legally flawed basis for determining damages and liability for damages for the employees in connection to the rejection of claims that the lower court’s decision was founded on inadmissible evidence.

The class argued against Celadon’s attempt to have the case reconsidered in circuit court stating that the commercial trucking company had no new arguments to be considered and did not specify which evidence was objectionable. They argued that Celadon’s request for reconsideration was not valid because the district court and Eight Circuit panel did not commit any clear errors.

The suit was filed by drivers in January 2009 seeking damages under the WARN Act. The drivers obtained class certification for 449 employees (including full-time workers of Continental’s operations in Little Rock, Arkansas employed on Dec. 4, 2008, and suffering a employment loss as defined by WARN Act, but not in receipt of the mandatory 60 days notice of a plant closing/mass layoff.

The case was referred to a magistrate judge in order to establish whether the workers had sown that all 449 individuals qualified as class members. According to documents of the court, three individuals were excluded from the class before the workers were awarded $2.1 million in statutory damages.

Additionally, the Eighth Circuit panel defended the district court’s actions in denying Celadon’s motion to decertify the class of workers and in rejecting many of the findings of the magistrate judge. They found that the district court did not abuse its discretion.

If you have questions or concerns regarding class certification, mass layoffs or mandatory notice of plant closure or mass layoffs, please get in touch with one of the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

California Lawsuit: Did Starbucks Add Ice to Defraud Customers?

In a California lawsuit, accusations were flying that Starbucks was defrauding customers. What did they do? Allegedly? Claims were made that they were defrauding customers by adding ice to cold beverages. In recent action, Judge Percy Anderson tossed the proposed class-action lawsuit.

The federal judge who stopped the California Starbucks lawsuit in its tracks stated that any reasonable customer would know that ordering iced coffee or iced tea would include ice. He also stated reasoned that customers would be able to see the ice through the plastic cups that the Starbucks iced beverages are served in. He further reasoned that, in fact, even a child would be able to see it and “get it.”

His line of reasoning for opposing the class action status of the California lawsuit continued as he explained that young children learn that they are able to increase the amount of beverage they receive by ordering it with “no ice.” In the ruling Anderson issued in U.S District Court, Anderson supported his action by explaining that if kids have figured out that having ice in a code beverage decreases the amount of liquid they will receive in the cup, the court can only conclude that a reasonable consumer would not be deceived by the presence of ice.

The California lawsuit against Starbucks Corp. was filed in May by Alexander Forouzesh. He claimed fraud, breach of warranty, false advertising, etc. Forouzesh, a Los Angeles resident, insisted that the popular coffee chain was regularly cheating customers out of iced coffee and tea by filing the cups the beverages are served in with ice – “as much as halfway.” After the ruling, Forouzesh stated that he planned to file an appeal and that he was insulted by the judge’s remarks on the matter.

Starbucks, on the other hand, was pleased with both the judge’s decision and his remarks on the matter.

If you have questions about this or other California lawsuits or obtaining class action status for your California suit, please get in touch with the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Yahoo Confirms 500 Million Accounts Stolen

In recent news, Yahoo confirmed that 500 million user accounts were stolen in late 2014. This one instance of data loss is said to constitute the largest cyber security breach in history. Yahoo has publicly stated that they believe that someone who was acting on behalf of the government was actually responsible for the data breach. They have gone so far as to describe the individual as being “state-sponsored.”

Quick Facts On the Yahoo Data Breach: Largest Cyber Security Breach in History

Data Involved in the Breach: Information accessed during the data breach include: names, email addresses, phone numbers, birthdates, partial passwords (referring to passwords presented while hashed and with bcrypt), as well as some security Q&As.

Data Believed NOT to be Involved in the Breach: Bank account numbers and credit card data are believed NOT to be included in the stolen information.

Yahoo Recommended User Response: Yahoo encouraged users to alter their passwords and security questions as well as review their accounts for any suspicious activity.

Yahoo advised the public that they would continue to work with law enforcement to address the data breach. Rumors of the large-scale data breach started circulating in August when a hacker (“Peace”) claimed to be selling data pulled from 200 million online Yahoo users. Previously Peace claimed to sell account information stolen from LinkedIn and MySpace. When rumors began to circulate, Yahoo claimed they were aware of the situation and were conducting an investigation. It turns out the situation was even worse than rumors indicated.

The hack is being described by experts as “massive” and is expected to have a ripple effect online for years. In response to this and other, similar, situations, U.S. Senator Richard Blumenthal is calling for tougher legislation to require companies to provide prompt notification to consumers in the event customer data is compromised.

For more information on customer database breaches and appropriate notification of breaches as required by law, please contact the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.