18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 601 Texas Supreme Court had not yet addressed the issue of whether a city ordinance requiring private employers to provide paid sick leave to their employees was preempted by the TMWA , the Court pointed out that two Texas intermediate appellate courts had already concluded that identical paid-sick-leave ordinances were preempted by the TMWA, and therefore were unenforceable. In those rulings, the Texas appellate courts concluded that the paid-sick-leave ordinances mandating employees be paid their regular wage for hours not actually worked based on taking sick leave would result in an increased wage for hours worked in violation of the TMWA. Absent convincing evidence that the Texas Supreme Court would rule differently on this issue, the Court determined that it must follow the appellate courts’ interpretation of Texas law. Furthermore, the Court concluded that not granting the permanent injunction would mean Texas could not enforce the TMWA, at least as to the City of Dallas, thereby inflicting irreparable harm on the state. Without an injunction, the Court reasoned that employers would also face irreparable harm because they would have to pay additional costs to comply with the ordinance. Finally, the Court determined that public interest was best served by upholding the structure of government chosen by the citizens of Texas. Under the Texas Constitution, home-rule cities may not override public policy that the Texas legislature has enacted into law. For these reason, the Court granted Plaintiffs’ motion for summary judgment and granted their request for a permanent injunction. Farm Labor Organizing Committee, et al. v. Stein, 2021 U.S. Dist. LEXIS 175217 (M.D.N.C. Sept. 15, 2021). Plaintiffs filed a class action alleging constitutional violations of § 20.5 of North Carolina General Assembly Session Law 2017-108 (the "Farm Act"). Plaintiffs sought a preliminary injunction against Defendant Joshua Stein, in his official capacity as Attorney General of the State of North Carolina ("Stein" or "Defendant"), from enforcing the Farm Act, and a declaratory judgment invalidating the unconstitutional aspects of the Farm Act. The Magistrate Judge recommended that the Court issue an order and judgment: (ii) declaring unconstitutional the "Settlement Provision" of § 20.5 of the Farm Act; and (ii) permanently enjoining Defendant from threatening to enforce, taking any action to enforce, and/or enforcing § 20.5 of the Farm Act insofar as it declared that any provision that directly or indirectly conditioned the terms of an agreement not to sue or to settle litigation upon an agricultural producer’s status as a union or non-union employer or entry into or refusal to enter into an agreement with a labor union or labor organization was invalid and unenforceable as against public policy in restraint of trade or commerce in the State of North Carolina. Id . at *2. On Rule 72 review, the Court adopted the Magistrate Judge’s recommendations. The Court further ordered Defendant to promptly provide notice and a copy of the Court’s order detailing the injunction and declaratory judgment to employers and anyone else who participated with Defendant and his employees. The Court therefore adopted the Magistrate Judge’s findings, dissolved the preliminary injunction, and permanently enjoined Defendant from enforcing the unconstitutional provision of § 20.5. Government Employees Retirement System Of The Virgin Islands, et al. v. The Government Of The Virgin Islands, 2021 U.S. App. LEXIS 10235 (3d Cir. April 9, 2021). Plaintiff, the Government Employees Retirement System (“GERS”), an employee retirement fund, brought suit against Defendant, the Government of the Virgin Islands (“GVI”), alleging that Defendant was required to bring the GERS out of its $3 billion debt. Pursuant to a subsequent consent decree, the District Court awarded the GERS $18.9 million in principal for under-contributions by the GVI to the system from 1991 to 2018. The parties cross appealed to the Third Circuit challenging the District Court’s judgment awarding the GERS $18.9 million that the GVI failed to contribute to the fund between 1991 and 2018, plus $49.2 million in interest and penalties. At the outset, the Third Circuit framed the issue as being that Virgin Islands law seemingly failed to obligate anyone to fund the GERS when employee-compensation-based contributions and associated investment returns fell short of the assets required, based on actuarial assessments, to meet future pension commitments. For decades, the GERS had experienced annual deficits between its assets and projected liabilities to system participants. Its aggregate shortfall of 3 billion dollars left the GERS on the brink of insolvency. The Third Circuit held that the District Court did not err in awarding the $18.9 million to the GERS. However, the Third Circuit determined that because nothing indicated that § § 704 and 736 of the Retirement System Reform Act of 2005 were intended to apply retroactively, the District Court erred in imposing interest and penalties of about $43 million on contributions that the GVI missed before the statutes’ effective date. The Third Circuit further held that because there was no support in the text § 718(f) for imposing an obligation solely on the GVI to fund the GERS to the point of actuarial soundness, the District Court had properly held that the consent judgment did not obligate the GVI to contribute billions to actuarially equalize the GERS’s assets and its liabilities to pensioners in order to bring the