Recent U. S. Supreme Court and Other Federal Court Decisions

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Recent U.S. Supreme Court and Other Federal Court Decisions

  • Recent U.S. Supreme Court and Other Federal Court Decisions

    • Christopher v. SmithKline Beecham (Decided 6/30/12)
      • Dismissed FLSA class action brought by outside sales representatives
      • Potential to reduce flood of wage and hour class actions against Pharma and other “outside sales” organizations
    • Hosanna-Tabor Evangelical v. EEOC  (Decided 1/11/12)
      • Unanimous decision, court affirms “ministerial exception” to employment discrimination suits brought by ministers
  • Recent U.S. District Court, No. California Decisions

    • California-focused Dukes v. Wal-Mart class action
      • Court allowed gender discrimination class action to contunue
      • Plaintiffs state they are following new guidelines for class actions in employment and discrimination cases as outlined in the Supreme Courts Wal-Mart vs. Dukes decision

EEOC 2011 Charge Statistics- Surge in Retaliation Filings

  • EEOC 2011 Charge Statistics- Surge in Retaliation Filings

    • In 2011, the EEOC received 99,447 charges from employees alleging employment practices violations—including discrimination, harassment, and retaliation—against their employers. For the second straight year, the number of charges set a new record, with 2011 charges being the highest in the agency’s history. Significantly, for the first time, retaliation charges led the pack with 37, 334 charges, representing over 37% of the total charges filed.
    • In addition, the EEOC obtained the highest-ever monetary recovery on behalf of employees—$364.6 million. The total was helped by the EEOC reducing its pending files by more than 10 percent; another “first” for an agency that has significantly improved its operations and increased staffing as a result of substantial government funding.
    • Given the rise in discrimination charges, particularly retaliation claims, it is important that employers remain proactive in preventing retaliation in the workplace. Supervisors and employees alike should be educated and regularly reminded about employment policies including sex harassment and discrimination policies, as well as how to report and handle complaints of discrimination and retaliation in the workplace.

Social Media Creates Exposure for Employers

  • Social Media Creates Exposure for Employers

    • The prevalence of social networking sites, such as Facebook, LinkedIn and Twitter is creating significant concern and potential liability for employers. The employment issues that companies face as a result of employees’ social media activities (whether during work hours or off duty) are very broad and include the following:
      • balancing the private and public, personal and work-related activities (as relates to use of private information in employment-related decisions) of employees
      • balancing employees’ freedom of speech versus the employer’s computer and internet usage policies
      • online recruitment and background checks on potential applicants.
    • The National Labor Relations Board has become a champion of employees’ rights to engage in “concerted activity” via social media. To this end, the NLRB recently issued a report, detailing the agency’s efforts to pursue administrative enforcement actions against employers (both union and non-unionized) with overly broad social media policies that prevent employees from voicing concerns about unfair working conditions or practices. Moreover, Congress is considering legislation to prevent employers from requesting that prospective job applicants and employees to provide their private social media site passwords as a condition of employment.

Social Media Creates Exposure for Employers

  • Social Media Creates Exposure for Employers

    • Although the most common claim arising from employees’ or employer’s access of social networking sites appear to be invasion of privacy, the practice could also lead to claims of discrimination if a supervisor only “friends” certain employees and not others, or defamation if certain disparaging comments are made about employees. The potential exposure is compounded by the fact that many employers now use social networking sites as part of their background checks on potential job applicants.
    • Therefore, in addition to educating managerial/supervisory employees about the traps of social networking sites, creating and implementing internet policies that bar or limit employees’ access to certain social networking sites may be the most prudent way for employers to limit their exposure for these claims; however, those policies must also be balanced against employees’ first amendments rights and anti-retaliation provisions of employment law statutes

Wage and Hour Filings Continue to Increase but Settlement Amounts Are Trending Lower

  • Wage and Hour Filings Continue to Increase but Settlement Amounts Are Trending Lower

    • According to Seyfarth Shaw LLP’s Eighth annual “Workplace Class Action Litigation Report, wage and hour claims filed in 2011 more than tripled the total number of employment discrimination claims and ERISA claims combined, and account for 84% of all employment class action lawsuits filed. This trend was particularly notable in California, Illinois, New Jersey, New York, Massachusetts, Minnesota, Pennsylvania, and Washington. The settlement value of these claims also outpaced settlements of employment discrimination claims, with a January 2012 settlement against a pharmaceutical company being one of the highest at $99 million.
    • On the bright-side, however, NERA reported recently in its “Trends in Wage and Hour Settlements: 2011 Update( that aggregate settlement amounts for wage and hour claims decreased in 2011; the mean of $4.6 million for cases settled in 2011 was lower than the prior four years; the average settlement amount per case of $20 million in 2007, decreased to $5 million in 2011; and the average per plaintiff settlement amount of $5,000 has remained steady from 2009-2011. Therefore, it appears that while the frequency of wage and hour claims remain high, the actual monetary recovery by plaintiffs in trending downwards.
    • To continue to minimize the wage and hour related exposures, clients are advised to stay abreast of changing laws in this area; engage third party providers and outside legal counsel to conduct regular wage and hour audits; and be vigilant as respects proper classification of employees as either exempt or non-exempt, or independent contractor or employees.
    • As respects insurance coverage for these claims, wage and hour claims (including related meals and rest period and/or unfair practices claims) remain largely excluded from coverage under EPLI policies. In addition, recently courts have been consistent in denying coverage for such claims on the basis of the Fair Labor Standards Act exclusions under EPLI policies and/or on public policy grounds. Despite the case law, some clients insist on challenging the carriers’ denial of coverage. Many of these challenges may be futile, however. That said, a growing number of EPLI carriers are offering “defense only,” albeit sub-limited coverage, often for private companies with less than 2,000 employees. Moreover, clients should be reminded that EPLI policies provide coverage for retaliation claims related to FLSA or similar claims, and FINPRO continues to work with markets to find an insurance solution to the overall wage and exposure.

  • $175 million: Wells Fargo agreed to settle a class action brought by the Department of Justice, alleging that the bank manipulated African-American and Hispanic borrowers into taking on more costly subprime loans or charging them higher fees than those issued to comparable white borrowers.

  • $168 million: A jury awarded a former physician at Catholic Healthcare West $168 million, after finding that the plaintiff made at least 18 complaints to the human resources department regarding alleged sexual harassment by hospital doctor. The plaintiff alleged that she was fired after her last complaint. The verdict included $125 million in punitive damages.

  • $95 million: The EEOC filed suit against Aaron’s, a large furniture retailer, on behalf of a customer service representative who alleged that her manager sexually harassed and assaulted her. The company also allegedly denied the employee a promotion after she complained of the harassment. $50 million of the award was punitive damages. The judge later reduced the total award to $39.8 million.

  • $32 million: Female advisors alleged that Wells Fargo provided them fewer business opportunities compared with their male counterparts. The plaintiffs also claimed that female advisors were at a disadvantage in other ways, specifically with respect to career advancement, work assignments and distribution of accounts

  • $29 million: Medline Industries settled a qui tam action with the government for $85 million. $29 million of the settlement went to a “whistleblower” employee who alleged that he was retaliated against after reporting to the government that Medline paid kickbacks to hospitals and other companies

  • $20 million: The EEOC filed a lawsuit against Verizon alleging that the company and its subsidiaries denied reasonable accommodation to hundreds of disabled employees and disciplined or fired other employees in retaliation for their complaints


  • US:

    • Stable market place
      • Lexington backing down from $25M limit primary placements
    • Rates trending up
      • Chubb
  • Bermuda:

    • Allied World and Alterra offering $500k retentions for individual and class action
  • London:

    • Beazley

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