Articles by Our Attorneys

Employment lawsuits have been as active as ever in September 2022.  Among them are interesting cases affecting a prominent ride-sharing company, the U.S. military, and the government agency in charge of investigating discrimination claims in the Commonwealth of Pennsylvania.  My analysis and insights are below.

Ride-hailing Giant Lyft Facing Flood of Lawsuits Over Sexual, Physical Assaults

Lyft Inc. was on the receiving end of 13 lawsuits filed in California state court this month alleging that the company’s systemic failure to conduct thorough background checks and screenings exposed both drivers and passengers to sexual and physical assaults.  The plaintiffs’ legal counsel have revealed that they also filed arbitration demands on behalf of other assault victims, and therefore the full number of claims against Lyft is unclear.

In the lawsuits, eleven passengers and two drivers, all female, from eleven states filed separate actions in San Francisco Superior Court asserting negligence, vicarious liability, misrepresentation and other claims against Lyft. The passengers claim that Lyft has been aware of a sexual predator crisis among its drivers for years but failed to take adequate measures to conduct background checks and monitor its drivers.  The claims by the drivers similarly allege failures on the part of Lyft to ensure the safety of drivers from predatory passengers.  The lawsuits describe disturbing acts of unwanted solicitations, groping and sexual assault.

Lyft released its first-ever Community Safety Report in October 2021, which stated that during the three-year period from 2017 to 2019, Lyft received reports of 4,158 sexual assaults, ranging from nonconsensual touching or kissing to rape.  Lyft nevertheless asserts that from 2017 to 2019, over 99% of trips occurred without any reported safety incident, with the safety incidents referenced in the report accounted for just 0.0002% of all trips.  The company also defended its driver screening procedures, saying it requires an initial and annual background checks, and continuous criminal and driving record monitoring, among other things. Lyft said it developed in-app safety features that allow riders and drivers to share their location with family and friends, connect directly with Lyft Support, and quickly and easily access emergency assistance from the Lyft app.  

​​​​​​​Sikhs Denied Bid To Start Marine Corps Training With Uncut Hair and Beards

A federal judge has refused to allow three Sikhs prospective recruits to start basic training with uncut hair and beards pending an appeal over related U.S. Marine Corps policy, saying doing so could negatively affect the Marines’ “national security mission.”

The three plaintiffs had filed suit in April, saying the Marine Corps had wrongly refused to accommodate their requests to keep their hair and beards, and carry other articles of faith. According to the complaint, maintaining uncut hair, including uncut facial hair, is an essential part of the Sikh religion.  During basic training, the Marine Corps requires recruits to comply with uniform grooming standards including shaved heads and beards, which it asserts is necessary to ensure that Marines are prepared to think as a team before thinking as individual and to serve in extreme environments.  The plaintiffs noted in their arguments for the injunction that the Marine Corps already allows certain recruits to maintain beards for medical reasons and female recruits not to shave their heads.

The court concluded that the public interest and balance of equities had weighed in favor of the Marine Corps at the preliminary stage of the case.  The plaintiffs subsequently said they would appeal the denial of their injunction.

Jury Clears Pa. Human Relations Commission In Staff Atty’s Retaliation Suit

The state agency charged with policing discrimination in the workplace, the Pennsylvania Human Relations Commission (“PHRC”), has been cleared of allegations of unlawful retaliation brought by African American former employee.  In a somewhat ironic series of events, the PHRC had entered into a settlement agreement in the employee’s earlier discrimination lawsuit in 2017 in which the PHRC was supposed to, among other things, create a diversity committee.  Following the settlement, the employee claimed that the agency was not following through its obligations.  In the same timeframe, the employee, a former staff attorney, was terminated from employment, and the employee brought a second lawsuit alleging unlawful retaliation for his complaints about the agency’s alleged failure to follow the settlement.  The agency defended by asserting that it let the employee go because he sent an email from his work account containing sexually suggestive material and forwarded confidential work documents to his personal email.

A jury in the Middle District of Pennsylvania found the PHRC’s arguments more persuasive and ruled in favor of the PHRC.  The case is Cooper v. Pennsylvania Human Relations Commission, case number 1:19-cv-02230, in the U.S. District Court for the Middle District of Pennsylvania.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

In the world of employment law, August 2022 brought a potentially landmark decision for transgender workers, increased tensions in the battle over unionizing Starbucks, and a significant potential class action lawsuit against American Express. Find out more below:

Fourth Circuit Rules that ADA covers Gender Dysphoria

A divided Fourth Circuit panel ruled that gender dysphoria can qualify as a disability under the Americans with Disabilities Act (“ADA”).  Although the ruling was a divided decision, this was the first federal appellate decision to extend the ADA to transgender people, and paves the way for transgender people to bring a lawsuit alleging they faced disability discrimination based upon their gender dysphoria.  The decision revived a transgender woman’s disability discrimination case over a Virginia detention center’s decision to place her in men’s housing.

The dissent pointed out that the majority’s opinion seemed to go against the intent of Congress, which expressly excluded “gender identity disorders” from falling within the ADA when the law was passed in 1990.  However, the majority supported its decision by distinguishing gender dysphoria: “nothing in the ADA, then or now, compels the conclusion that gender dysphoria constitutes a ‘gender identity disorder’ excluded from ADA protection.”  The Court also observed that the diagnosis of “gender identity disorder” was removed from the APA diagnostic manual nearly a decade ago.

Tensions rise between Starbucks and the NLRB in Ongoing Unionizing Fight

In the ongoing saga over unionizing Starbucks, Starbucks issued a letter earlier this month to the National Labor Relations Board (“NLRB”) asserting that multiple regional offices of the NLRB “secretly colluded” with the Workers United union to unfairly sway mail-in ballot union elections.  The alleged conduct includes giving the union duplicate ballots, mishandling ballots, allowing certain workers to vote outside of normal agency procedures, and providing the union with confidential, real-time information about votes to enable the union to target individuals who had not yet voted.  The letter asked the NLRB Inspector General to investigate the matter, and urged the agency to suspend all mail-ballot votes nationwide.

Not to be outdone, roughly a week after the Starbucks letter the NLRB’s Seattle office filed a complaint accusing Starbucks Interim CEO Howard Schultz of making unlawful comments that promised increased benefits for nonunion stores and threatened workers who had voted to unionize.  Among other relief, the complaint seeks to require Schultz to read a notice on video to Starbucks’ workforce about their unionizing rights under the NLRB, and to require Starbucks to send apology letters.

Thus far, unionization efforts at Starbucks locations across the country have been largely successful.  Out of 344 reported cases of unionizing efforts, the union has prevailed in 218 of them.

Proposed Class Action lawsuit by White Manager alleges American Express favors African-American Workers

A white former Manager at American Express filed suit this month alleging that American Express implemented a system that favored African-American workers and forced out white workers.  According to the Complaint, the plaintiff claims that the company implemented illegal racial quotas and a policy in which executives were given financial incentives that enhanced their bonuses if the executives reduced the percentage of white employees in their departments.  Moreover, that during recent layoffs, white employees were disproportionately let go, while other white workers were allegedly either forced out or suffered mental stress because of the “racially repressive environment”.  This allegedly included “constant” racial training on topics like “microaggressions” and “unconscious bias”.  The action seeks to certify a class of white American Express employees who held certain managerial positions and who have allegedly been discriminated against.  The case is Netzel v. American Express Co. et al., case number 2:22-cv-01423, in the U.S. District Court for the District of Arizona.

This case comes on the heals of a federal lawsuit in North Carolina against Novant Health in which a white male executive was awarded a multi-million dollar verdict after a jury found that he was improperly fired as a consequence of the company’s efforts to diversify its workforce.  Notably, this August the court in that matter reduced the damages awarded to the plaintiff from $10 million to $3.7 million to bring the award in line with Title VII’s damages cap, however the court denied the employer’s request to eliminate the punitive damages award altogether.  That case is Duvall v. Novant Health Inc., case number 3:19-cv-00624, in the U.S. District Court for the Western District of North Carolina.

Time will tell if these cases are harbingers of future claims asserted on behalf of white workers in response to the growing push for diversity and inclusion programs across the United States.

Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment.  Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.

Phil Mickelson, Bryson DeChambeau and nine of their fellow golfers filed a lawsuit against the PGA Tour. The 101 page Complaint alleges, among other things, that the PGA Tour violated the Antitrust Laws of the United States by acting as a monopoly to crush competition. The competition that the PGA Tour is allegedly attempting to crush is, of course, the upstart Saudi Arabia-backed LIV golf tour. The lawsuit is pending in Federal Court in the Northern District of California.  

Unless some settlement is reached (which seems highly unlikely), this lawsuit promises to be both entertaining and precedent setting for possible future lawsuits against professional sports leagues. Given the behemoth law firms that will be involved on both sides, it is also likely that this case could impact antitrust law in other industries for years to come.  

The antitrust laws in this country are found in the Sherman Act (15 U.S.C. § 1, et seq.). These laws provide, among other things, that it is illegal to acquire or maintain a monopoly through anticompetitive conduct. In order to establish a violation of Section 2 of the Sherman Act, Phil Mickelson and his fellow golfers will have to show (1) the possession of monopoly power in the relevant market, and (2) the willful acquisition or maintenance of that power. Stated in layman’s terms, Phil’s attorneys are arguing that the PGA Tour is, essentially, the only game in town and that the PGA Tour is using its power to quash competition (namely the LIV tour). This is a highly complex area of the law.

One of the benefits of an antitrust lawsuit is that the statute permits the prevailing plaintiff to receive trebled damages. This means that any award the plaintiff is able to obtain for violation of antitrust laws entitles the plaintiff to three times what is awarded. The prevailing plaintiff also receives attorney’s fees and costs.  

Interestingly, the Sherman Antitrust Act is not necessarily designed to just protect the plaintiff golfers here.  The golfers will need to focus their arguments on establishing that the PGA Tour’s alleged anti-competitive behavior somehow harms consumers (the public that views these golf tournaments). The argument will have to be that the PGA’s actions restrict competition to such an extent that the quality of the product is diminished for the viewing public.  This will undoubtedly be a focus of the PGA’s defense. The PGA will also likely assert that there is no monopoly as the plaintiff golfers are permitted to play in other tours.

The allegations in the Complaint go beyond the alleged violations of the Antitrust Act. The Complaint also charges the PGA with unlawful restraint of trade and breach of contract. The contract in question is the agreement that all players enter into when they agree to be members of the PGA.

While the lawsuit could potentially go on for years, we could have an early indication of the Court’s thinking on plaintiffs’ case as three of the golfers are seeking an immediate injunction. These three golfers want an early ruling so that they may be permitted to take part in the very lucrative FedEx Cup playoffs, set to begin shortly after the filing of the Complaint.

This is by no means the first antitrust action brought with regards to professional sports.  In 1986, the upstart USFL filed an antitrust lawsuit against the NFL.  The USFL alleged (similar to the golfer plaintiffs here) that the NFL engaged in anticompetitive behavior to crush the upstart league. After an extended Court battle, the USFL actually won a jury verdict against the NFL. The NFL was found to have violated the antitrust laws.  But this result shouldn’t give Phil and his friends comfort.  Unfortunately for the USFL, the jury famously (or infamously) awarded only $1.00 in damages.  But with the treble damages provision of the Sherman Act, the award was increased to $3.00.  After years of litigation and millions spent in legal fees, the final award (with interest) was a whopping $3.76.

We will follow the Mickelson v. PGA case closely.  Stay tuned …!

*Robert A., Burke is a trial attorney and a Partner in MacElree Harvey’s Commercial Litigation Department

Recently, the Supreme Court of New Jersey issued a decision clarifying whether and how third party beneficiaries with default judgments against insured entities may recover on those judgments against insurers.  The decision reinforced New Jersey’s strong policy favoring arbitration.

In Crystal Point Condo. Ass’n, Inc. v. Kinsale Ins. Co., No. 085606, 2022 WL 2793326 (N.J. July 18, 2022), a condominium association (“Association”) obtained default judgments and writs of execution against a structural engineering firm and a construction inspection company for professional negligence involving construction defects in the Association’s managed properties.  A single insurer (“Insurer”) covered both entities for such claims through a policy which contained an arbitration clause to resolve coverage disputes.

The Association sought to recover on the default judgments and brought a declaratory judgment and breach of contract action against the Insurer pursuant to New Jersey’s Direct Action Statute, N.J.S.A. 17:28-2 (“Statute”).  The Statute authorizes an injured victim with an unsatisfied judgment against an insolvent or bankrupt policyholder to file a direct legal action against the policyholder’s insurer under certain circumstances.  Those circumstances including proceeding under the terms of the policy.  The Court noted that the purpose of the Statute was for a third-party judgment creditor to directly pursue an insurer without the need for the insured party’s cooperation.

The Court determined that the Associations’ claims could be directly asserted against the Insurer pursuant to the Statute.  First, the Court clarified that the text of the Statute was broadly applicable to such claims and did not limit the Statute to motor vehicle or animal-related property damage claims. Second, the Court noted that the Association had sufficiently demonstrated that the two entities were insolvent or bankrupt.  Specifically, the Court held that proof of the writs of execution on the judgment being returned unsatisfied constituted prima facie evidence that the two insured entities were insolvent (the sheriff found that the two companies did not exist at their respective addresses).

Importantly, the Court also provided a partial win for insurers within New Jersey.  Specifically, the Court stated that the Association’s direct action under the Statute was subject to arbitration pursuant to the terms of the insurance policy issued to the insolvent, insured entities.  The Statute requires that a third party’s claim be brought under the terms of the policy.  While the Association did not sign off on the policy and its arbitration provision, it was nevertheless claiming rights that were purely derivative of the rights the insured could claim against the Insurer.  Consequently, permitting the Association to avoid arbitration would grant it greater rights than what the insured could have asserted under the policy and would contravene the Statute’s terms.

This decision reinforced New Jersey’s strong public policy favoring arbitration and made clear that an injured plaintiff’s rights under the Statute were purely derivative of the insured’s policy rights.  Therefore, to recover under an insured’s policy, the third-party beneficiary has to take the proverbial “good” with the “bad” under a policy, including subjecting itself to an express arbitration provision.

*The author was involved in the representation of the insurance entity at one point during the course of the appellate process.

I have been very successful recently in having tax sales completely overturned and the property given back to my clients.

In the first case, the hearing started off with the Judge yelling at my clients because they had not updated their address with the tax assessment office so when the tax claim bureau tried to serve the notice of tax sale on them they never received it. We won that case on a technicality which requires the tax claim bureau to provide proof that they sent the notice of tax sale to the owner(s) by first class mail after the certified mail was returned unclaimed. The solicitor for the tax claim bureau told me after the case that he didn’t even know that was a requirement. The Judge completely changed her tune after I gave her a trial memo which showed that the court was required to overturn the tax sale if the tax claim bureau did not have proof of mailing by first class mail which was the case in this matter. In addition, we were able to have the Judge order the tenant to vacate the property and my client was only required to pay her $4,500.00 for her expenses in moving in and moving out.

In another case, while our client was in prison, the tax claim bureau sold his property at tax sale and never gave him any notice. Even though the tax claim bureau obtained a court order allowing them to sell certain owners’ property without having them personally served, we had the sale overturned on the grounds that the tax claim bureau did not do a reasonable search to find our client. All the tax claim bureau had to do was go on the judicial website and put in my client’s name and it would show what prison he was in. It is kind of like one hand of the government takes someone and locks them up and while he is there the other hand of the government sells his property without giving him notice or an opportunity to be heard. The Judge found that the tax claim bureau did not engage in reasonable notification efforts to ascertain the whereabouts of the property owner. He found that without personal service of the notice of tax sale or the establishment of good cause to waive personal service, the tax 4590599v1 000001.00019 sale of the property was void and would be set aside. We made new law in the case. We also sued the people who bought our client’s property at tax sale while he was in prison and obtained a default judgment against them because while he was in prison they went in and took every item of personal property that he had in the house and disposed of the vast majority of it without providing an accounting and then rented his property to a third party. They had no right to do that especially since they never secured a deed to our client’s property.

The most important thing to remember is to hire counsel experienced in this area of the law as soon as you learn of the tax sale. The sooner you act, the better your chances are to be successful.

Contact Michael G. Louis at [email protected] or via phone at (610) 840-0228.