18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 509 about the uniforms, with issues of: (i) skin irritation (1,192); (ii) allergies (419); and (iii) crocking (358). Id. The UAA permitted Delta employees to return uniform pieces that were unsatisfactory, and several employees utilized the return process. In November 2019, Delta changed its policy to permit employees to wear black and white clothing instead of the uniform if they wished. Defendant argued that class certification would be improper because of the numerous individualized questions of law and fact. As to the first claim, Plaintiffs sought certification of a nationwide class of Delta employees who were not 100% satisfied with the uniforms provided by Defendant. The Court explained that to succeed, Plaintiffs would need to show that they were active Delta employees who returned their uniform pieces with the proper form, but Defendant refused to provide them a refund or exchange. Id . at *11. The Court found that Plaintiffs did not even allege that they tried to return their uniforms, much less that Defendant refused to provide refunds. Additionally, Defendant submitted unrefuted evidence showing that it never denied a refund or exchange to any named Plaintiff who asked for one according to the procedures in the UAA, and that employees who returned garments were easily able to do so. As to the breach of express warranty claim guaranteeing that the uniforms would be free of defects in material and workmanship, Plaintiffs sought to represent a class of Delta employees who experienced crocking or dye transfer. The Court found that the proposed class failed to meet the commonality requirement of Rule 23, as Plaintiffs did not provide evidence that would help them prove, on a class-wide basis, that each class member who experienced crocking had a uniform piece that failed to meet industry tolerances and UAA testing requirements or was otherwise defective under the UAA. Further, the Court opined that there were various garments were worn by Delta employees in a variety of work situations, and the vast majority of them did not have crocking problems. For these reasons, the Court therefore denied Plaintiffs’ motion for class certification. (xviii) Class Actions Relative To Sexual Harassment Issues Oklahoma Law Enforcement Retirement System, et al. v. Papa John ’ s International, Inc., 2021 U.S. Dist. LEXIS 20660 (S.D.N.Y. Feb. 3, 2021). Plaintiff, a retirement fund that purchased Defendant’s stock, brought a putative class action alleging that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and the corresponding rule of the U.S. Securities and Exchange Commission ("SEC"), Rule 10b-5. The Court previously had dismissed Plaintiff’s First Amended Complaint ("FAC”), which alleged that Defendants made false and misleading statements about Defendant’s workplace culture and failed to disclose material information about systemic workplace harassment and discrimination. The Court granted Defendants’ motions to dismiss the FAC because the allegedly false and misleading statements upon which Plaintiff relied were inactionable "puffery," and because Plaintiff’s allegations about Defendant’s workplace culture were far too speculative to meet Rule 12(b)(6), Rule 9(b), and the Private Securities Litigation Reform Act (“PSLRA”) pleading standards. Plaintiff filed a Second Amended Complaint ("SAC") that made the same claims and essentially relied upon the same set of facts that Plaintiff pled in the FAC. The Court subsequently granted Defendants’ motions to dismiss the SAC with prejudice. During the class period Defendants faced a range of negative publicity including an article that Forbes published in which unnamed, former employees described disturbing instances of workplace sexual harassment and misconduct in which senior executives of the company engaged, including the founder of the company. Plaintiff claimed that, with the rise of the #MeToo movement, it was likely that their wrongdoing would come to light and harm the company’s reputation, thereby adversely impacting operations and revenue. Defendants contended that Plaintiff failed adequately to plead two of the elements of securities fraud under § 10(b)(5) and Rule 10b-5, including: (i) a material misrepresentation or omission; and (ii) scienter. Defendants also argued that the SAC failed to state a § 20(a) claim. The Court concluded that the SAC failed plausibly to allege that Defendants’ positive assurances about Defendant’s culture exceeded the protected bounds of generic puffery. Further, the Court determined that the SAC had not plausibly alleged that the risk that Defendant would face a #MeToo reckoning was so concrete and substantial that there arose an affirmative duty to disclose it. Because the Court held that Plaintiff had not adequately pled a material misrepresentation or omission under § 10(b) or Rule 10b-5, the Court did not address Defendants’ alternative grounds for dismissal. Likewise, because Plaintiff had not stated a viable claim for a primary violation of the Exchange Act by any controlled person, the Court held that Plaintiff’s claims under § 20(a) were also incapable of surviving Defendants’ motions to dismiss. As such, the Court granted Defendants’ motions and dismissed Plaintiff’s complaint with prejudice.