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Employee class action suit may hit Circuit City
Class Action News |
2007/08/31 16:37
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The California Supreme Court handed workers a major victory Thursday, allowing them to bring class-action lawsuits alleging labor code violations even if they had signed agreements with their employers requiring them to arbitrate such disputes. By letting workers bypass these now-ubiquitous arbitration clauses, the ruling probably will add to the high volume of back-pay and overtime class-action cases already on court dockets, experts say, and will probably set a standard for courts in other states to follow.
"For many workers, class-action lawsuits are the only type of lawsuits they can bring against their employer" because attorneys are reluctant to take on individual suits in which the potential awards are small, said Michael Rubin, a San Francisco lawyer who represented a former Circuit City worker in the case that went to the state Supreme Court.
"Today's decision prevents employers from continuing this divide-and-conquer approach and reinstitutes the worker's rights to join with their fellow workers to sue for common violations of statutory rights," Rubin said.
Some of the primary beneficiaries of the ruling would be thousands of white-collar workers in industries such as retail, food service, insurance, technology and banking who are called managers or assistant managers but who spend much of their day ringing up sales, stocking shelves or sweeping the floor alongside the workers they supervise.
Class-action lawsuits by such employees seeking back pay for overtime and missed breaks have risen dramatically over the last decade. Most eventually settle, with employers typically paying millions of dollars to avoid the prospect of bigger losses at trial. In response to these suits, thousands of employers have asked their workers to sign agreements promising to resolve their disputes through arbitration instead of going to court, Rubin said.
Thursday's decision centered on the agreement that Circuit City asked its 46,000 employees to sign, waiving their right to file a class-action lawsuit and limiting damages, the statute of limitations to bring their claims and the attorney fees they could recover.
In a 4-3 ruling, the high court said that some of those agreements undermined employees' "unwaivable statutory rights" and "pose a serious obstacle to the enforcement of the state's overtime laws."
"Corporations are trying to wipe out their employees' ability to hold them accountable" by barring class actions in wages-and-hours cases, employment discrimination and sexual harassment cases, said Arthur Bryant, executive director of Washington-based Public Justice, a public interest law firm that filed an amicus brief on behalf of the plaintiff in the Circuit City case. Thursday's ruling, he said, "essentially preserves employment class actions in California."
The decision follows a ruling two years ago in which the justices invalidated an arbitration clause barring bank customers from bringing class actions to resolve consumer disputes. This month, a San Francisco federal appeals court ruled that Cingular Wireless could not compel customers to sign away their right to file class-action lawsuits against the company. That ruling applies in several Western states.
The Circuit City case was filed by former customer service manager Robert Gentry in 2002, claiming that the retailer had illegally denied him overtime pay. The Los Angeles resident signed an arbitration agreement when he began working for the company in 1995 but later claimed that the agreement violated state labor laws and was unconscionable because employees were coerced into signing and feared retaliation if they didn't.
Circuit City countered that the agreement was not unfair to workers, noting the documents highlighted the advantages of arbitration for employees -- for instance, that their disputes could be resolved faster and more cost-effectively than through litigation. Moreover, the retailer argued that employees had 30 days to opt out of the agreement once they signed it and Gentry had not done so.
The trial and appellate court judges agreed with those arguments and rejected Gentry's claim.
But the Supreme Court called the company's "explanations of benefits . . . markedly one-sided" for failing to mention "any of the additional significant disadvantages" of Circuit City's agreement. For instance, the agreement limited back pay to one year, but an employee filing suit could potentially recover up to three years of back pay.
The high court did not issue a blanket ban on provisions such as the one Gentry signed but remanded his case to the trial court, instructing it to void such agreements if employees can more effectively pursue their rights through class actions.
Circuit City pointed to the lack of a blanket ban as a silver lining in an otherwise disappointing loss and expects "that when the Superior Court considers this case in light of the Supreme Court's new decision, it will once again fully enforce our arbitration agreement," said Jim Babb, company spokesman.
Lawyers say the ruling will spark more class actions.
The decision "dashes the hopes of employers that contractual class-action waivers will be an effective tool to stem the flow of debilitating class-action litigation," said Colleen Regan, a Los Angeles attorney who represents employers.
The "good news," she said, is that the decision does not affect the viability of a "properly constructed arbitration agreement" that does not bar class actions and meets other legal requirements.
Although the Gentry decision binds only California employers, it will probably undermine arbitration waivers nationally. California law tends to set the standard in labor cases, Regan said. "National companies really desire consistency in their human resources policy, so they set the bar at California," she said.
Circuit City operates 652 stores nationwide, including 90 in California. |
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Shareholder Class Action Filed Against GPC Biotech AG
Class Action News |
2007/08/24 09:00
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| The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP: Notice is hereby given that a class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of securities of GPC Biotech AG ("GPC" or the "Company") from December 5, 2005 through July 24, 2007, inclusive (the "Class Period"). If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@sbtklaw.com. The Complaint charges GPC and certain of its officers and directors with violations of the Securities Exchange Act of 1934. GPC is a biopharmaceutical company engaged in the discovery, development and commercialization of new drugs to treat cancer. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the U.S. Federal Drug Administration ("FDA") had previously expressed disapproval regarding the Company's choice of methodology and a primary endpoint in the satraplatin studies; (2) that the Company continued to evaluate satraplatin using the disputed endpoint; (3) that the Company disregarded the FDA's previously expressed concerns about the disputed primary endpoint, and submitted the satraplatin study results to the FDA with the disputed primary endpoint supporting its satraplatin New Drug Application ("NDA"); (4) that the FDA's evaluators would be unable to determine disease progression from the Company's NDA submission; and (5) that the interim data submitted with the NDA would not allow the FDA to conclude that satraplatin was more effective than placebo in terms of overall survival. Throughout the Class Period, the Company reported positive results from its satraplatin Phase 3 trial, and indicated that data from the trial would form the Company's New Drug Application ("NDA") with the FDA. The Company reported a 40 percent reduction in risk of disease progression for study participants who received satraplatin, and reported that the study data showed that the results for PFS were highly statistically significant. The Company's investors were shocked on July 20, 2007, when the FDA released its "Briefing Document" in advance of the FDA's Oncology Drugs Advisory Committee's meeting to consider the satraplatin NDA. Therein, the FDA cited five "issues" that it had with the Company's satraplatin NDA. On this news, the Company's shares declined $7.80 per share, or over 24.5 percent, to close on July 20, 2007 at $24.00 per share, on unusually heavy trading volume. On the following trading day, the Company's shares declined an additional $3.05 per share, to close on July 23, 2007 at $20.95 per share. Then on July 24, 2007, the FDA's advisory panel voted 12-0 to recommend delaying a decision on satraplatin until the Company gathered additional data to determine whether satraplatin actually helped men with prostate cancer live longer. In response, the Company disclosed that it did not expect to have the necessary survival analysis for another year. On this news, the Company's shares declined an additional $7.19 per share, or 35.36 percent, to close on July 25, 2007 at $13.16 per share, on unusually heavy trading volume. Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit www.sbtklaw.com If you are a member of the class described above, you may, not later than September 24, 2007, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Schiffrin Barroway Topaz & Kessler or other counsel of your choice, to serve as your counsel in this action. |
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Delphi Corp. Class Action Plaintiffs: Agreement Reached
Class Action News |
2007/08/23 11:27
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Plaintiffs in a class action against Delphi Corp. (DPHIQ) said they reached an agreement with the Troy, Mich., auto parts maker, which is currently in bankruptcy protection under Chapter 11. A law firm for the plaintiffs said the terms of the proposed agreement include a comprehensive settlement with Delphi's insurers. The firm said the terms of the settlement are currently confidential. The agreement is still pending approval by the bankruptcy court. A spokesman for Delphi could not be reached immediately for comment. |
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Motorola Faces Purported Class-Action Suit
Class Action News |
2007/08/22 12:26
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Motorola Inc. (MOT) faces a purported class action lawsuit alleging it made material misrepresentations to the market, artificially inflating its stock price, attorneys from Brodsky & Smith LLC of Bala Cynwyd, Pa., said Tuesday. The suit was filed in U.S. District Court for the Northern District of Illinois on behalf of shareholders who purchased shares of Motorola, a Schaumburg, Ill., telecommunications company, between July 19, 2006, and Jan. 4. A spokeswoman for Motorola said the company is reviewing the complaint and will respond at the appropriate time. She also said Motorola plans to vigorously defend itself against the allegations. |
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Countrywide lawsuit seeks class action status
Class Action News |
2007/08/21 12:36
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Law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP on Monday filed a lawsuit against mortgage lender Countrywide Financial Corp that seeks class action status. The suit was filed in the U.S. District Court for the Central District of California on behalf of purchasers of Countrywide common stock during the period between Jan. 31, 2006 and Aug. 9, 2007, the firm said in a statement. |
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AT&T Class Action Suit to Proceed
Class Action News |
2007/08/20 16:59
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A lawsuit alleging that AT&T's mobile phone customers received inferior service after the company's wireless division was sold to Cingular Wireless can proceed as a class action, a federal appeals court ruling, quoted by an Associated Press report said.
The Associated Press report said at issue was a clause in old Cingular contracts that forced customers to litigate their grievances independently, instead of grouping together for a class action lawsuit.
A three-judge panel in the 9th U.S. Circuit Court of Appeals ruled that the contract was a violation of California law.
The ruling is further condemnation of so-called "class action waivers," which other courts have ruled illegally shield companies engaged in potentially harmful conduct, the report said.
The court took a "clear position protecting consumers and their right to pursue class action relief," Bill Weinstein, one of the plaintiffs' lawyers, was quoted by the report as saying.
The case was filed as a national class action lawsuit in 2006 by Kennith Shroyer of Porterville, California, the report said.
Shroyer had switched his AT&T cell phone accounts to Cingular after Atlanta-based Cingular's $41 billion acquisition of AT&T Wireless Services in October 2004.
Shroyer claimed Cingular let AT&T's service deteriorate in a scheme to force AT&T customers to switch to Cingular under less favorable contract terms.
The US District Court for the Central District of California ordered the case into individual arbitration last year because of the class action waiver in Shroyer's contract, the report added.
The company said the ruling is based on language in an old contract, but didn't provide details as to how its new contracts differed. |
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