The US Supreme Court issued a highly anticipated decision on May 21, 2018 in Epic Systems Corp. v. Lewis, holding that class action waivers in arbitration agreements are fully enforceable, notwithstanding the right to engage in concerted activity under the National Labor Relations Act (NLRA). With a 5-4 opinion authored by Justice Neil Gorsuch, an ideologically divided Supreme Court resolved a circuit court split in favor of class and collective action waivers, allowing employers to require workers to arbitrate claims on an individual rather than group basis. Although employers now have a tool to effectively eliminate most employment class actions through the use of arbitration agreements, several other important nuances remain to be considered before rolling out an arbitration program. But the Supreme Court’s decision is nevertheless a clear win for employers seeking to avoid the expense and disruption of class litigation. And the Court’s broad opinion lends support to the enforcement of employment arbitration agreements in other contexts, notwithstanding state laws that might otherwise impede arbitration.
In August 2016, the US Judicial Conference’s Committee on Rules of Practice and Procedure (“Committee”) published proposed amendments to Federal Rule of Civil Procedure 23 governing class actions. The proposed amendments were available for public comment from August 12, 2016 through February 15, 2017. The Committee held several public hearings to discuss the proposed amendment in late 2016 and early 2017. The proposed changes were submitted to the Supreme Court on October 4, 2017. If the Supreme Court accepts the Committee’s proposal, the changes will become effective on December 1, 2018.
Proposed changes and practical implications
The proposed amendments are intended to modernize the notice process, to allow for notice to class members via electronic communications; impose affirmative obligations on a court to consider specific factors relevant to the fairness, reasonableness, and adequacy of a proposed settlement; to curb abuses from “bad faith” objectors; and clarify that certain orders granting “preliminary approval” of class certification may not be appealed.. Each is summarized briefly below.
EUROPE – The European Commission is exploring ways that it might expand consumer access to justice, and in particular increase the availability of “class” or collective civil litigation across the EEA while avoiding what it characterises as US style excess in class litigation.
- Non-legislative options: to enhance qualified entities’ capacity to manage both injunction and redress actions.
- Targeted revision of the Injunctions Directive: amends several key areas, in particular by expanding the scope of the Injunctions Directive to protect consumers in areas such as financial services, energy, telecommunications and environment.
- Targeted revision of the Injunctions Directive + consumer collective redress: aims to introduce further procedural efficiencies such as a “one stop shop” where representative bodies could ask the courts and/or administrative authorities to stop any breach of the law that harms consumers and obtain redress for anyone that has suffered loss.
UNITED STATES – Companies that operate in Illinois should take notice of the flurry of litigation that has arisen under the Illinois Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1, et seq. The State of Illinois promulgated the BIPA in 2008 amid the public’s growing concerns relating to companies’ collection of biometric data for business and security purposes. The General Assembly cited “finger-scan technologies at grocery stores, gas stations, and school cafeterias” as an example of the biometric data that it intended to regulate. 740 ILCS 14/5(b). Under the BIPA, among other requirements, a company must inform the person whose biometric data is being collected that it is collecting their data and specific details relating to its data collection and preservation. 740 ILCS 14/15(b). Companies must also receive a “written release” from the person before collecting any biometric data. Id.
Significantly, the BIPA provides a private right of action for any person aggrieved by a BIPA violation, and allows a claimant to recover liquidated damages of $1,000 for each negligent violation, and $5,000 for each intentional or reckless violation (or actual damages, whichever is greater). 740 ILCS 14/20. The BIPA also expressly provides that the prevailing party in a BIPA action may recover its reasonable attorneys’ fees and costs. Id.Read more…