18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 3 for duties performed “for a reasonable time immediately before or after” a tipped duty. Before that final rule took effect, the Biden Administration delayed its effective date and then rescinded and replaced it with a more complicated, worker-friendly final rule that limited use of the tip credit effective December 28, 2021. Similarly, effective on March 16, 2020, the Trump DOL established a rule that set forth a four-factor balancing test for determining when a business would be considered the “employer” of a worker who simultaneously performs work for another business. The Biden DOL rescinded the Trump DOL rule, effective September 28, 2021, in favor of the more expansive and less predictable “economic reality” test applied by some courts. While the DOL acted swiftly to reverse course on many fronts with the change of administrations, other agencies continue to operate under Trump-appointed majorities and, as a result, have been slower to pivot. Likewise, the chair of the EEOC shifted with President Biden’s inauguration, and major rule shifts came through other avenues. On June 30, 2021, for example, President Biden signed a joint resolution narrowly passed by Congress to repeal a Trump-era rule that would have increased the EEOC’s information-sharing requirements during the statutorily mandated conciliation process. The agency’s filings over the past year reflect this state of affairs. For instance, after more than doubling its inventory of systemic filings between FY 2016 and FY 2018 (with 18 in FY 2016, 30 in FY 2017, and 37 in FY 2018), the EEOC’s systemic filings dropped to 17 in FY 2019, 13 in FY 2020, and 13 in FY 2021. Total filings followed a similar trajectory, with 136 in FY 2016, 202 in FY 2017, 217 in FY 2018, but only 149 in FY 2019, 101 in FY 2020, and 114 in FY in 2021. When the EEOC’s current leadership shifts away from a majority of Trump-appointed Commissioners in mid-2022, employers should anticipate a stark shift in the EEOC’s litigation enforcement program. Fourth, COVID-19 class action litigation became more pervasive in reaching across new industries and spawning new challenges on the workplace class action front. The COVID-19 pandemic had a significant, continuing impact on all aspects of life in 2021. Its impact extended to the legal system in general and workplace class actions in particular. As we reported last year, in 2020, as state and local governments responded to the COVID-19 threat, many employers moved their employees to tele-work or work-from-home arrangements, many companies laid off or furloughed workers, and many businesses shut down or postponed critical operations. In 2021, as vaccines became widely available and state and local governments continued to manage the COVID- 19 threat, many employers attempted to move their employees to “return to work” or “hybrid” work arrangements. Such developments prompted federal regulators to enact vaccine-or-test mandates and fueled employers to adopt or expand health screenings, temperature check protocols, and mandatory vaccination policies. These steps, in turn, led to waves of controversy as workplace class actions brought by states, employee advocates, unions, and employer groups erupted over regulatory actions and employer policies. Litigants challenged agency rule-making contending that it exceeded executive authority to regulate conditions of employment. These challenges have met mixed results, as courts have granted approximately 41% of requests for temporary restraining orders or preliminary injunctions to date. Other litigants have challenged employer policies on various grounds, including on the bases that they allegedly discriminated against employees by failing to provide disability or religious accommodations, or retaliated against workers who expressed COVID-related concerns or sought such accommodations. Such challenges have met a lower rate of success, as courts have granted approximately 82% of motions to dismiss such class claims in whole or part. In sum, the pandemic has continued to spike class actions (of all varieties) and litigation over all types of workplace issues. Employers are apt to see these workplace class actions continue to expand and morph in 2022 as the pandemic endures. Fifth, workplace arbitration programs continued to influence the nature of class action litigation and shift the types of claims filed in 2021 as the plaintiffs’ bar continued to find ways to work around such obstacles. As employers clawed for cover from the increasing weight of workplace class action litigation in recent years, workplace arbitration continued to gain steam, aided by the U.S. Supreme Court’s transformative ruling in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). Epic Systems reaffirmed that the Federal Arbitration Act requires courts to enforce agreements to arbitrate according to their terms, including mandatory agreements that provide for individual proceedings and include class action waivers. Bolstered by such precedents, more than half of non-union, private-sector employers and more than two-thirds of large employers have adopted mandatory arbitration agreements. Such programs have continued to shift class action litigation dynamics in critical ways as they have led to more front-end attacks on proposed class and collective actions and, as the result of such attacks, to the defense bar dismantling more workplace class and collective actions by fracturing