In one of the largest settlements of its type, oil refinery workers and ConocoPhillips Co. have reached a $15 million settlement of allegations that the workers were not relieved of all duties during meal breaks, as required by law. The settlement is now before Judge Phillip Guitierrez, who has granted plaintiff’s motion for preliminary approval, and before whom parties will conduct a fairness hearing on April 1, 2013. See United Steelworkers v. ConocoPhillips Co., No. 08-2068 (C.D. Cal. Dec. 12, 2012) (order granting preliminary approval).

The case was originally filed in Los Angeles Superior Court in 2008 and was removed to U.S. District Court later that year. In the intervening years since, the state of California’s meal and rest break laws have gone through a period of great transition, leading up to the California Supreme Court’s landmark decision in Brinker in April of 2012. Although Brinker is widely viewed as a mixed result for the plaintiffs’ bar, favoring employers in some respects while also creating employee-friendly doctrines, the substantial settlement here suggests that workers may benefit most from the Court’s ruling in Brinker. The $15 million total value of this settlement makes it the largest post-Brinker settlement of meal break claims.

The settlement agreement includes $15,000 incentive awards for the three named plaintiffs, which they will collect in addition to their recovery as class members. The award also includes an allocation of $3.5 million in attorneys’ fees, which amounts to less than the 25% benchmark that the Ninth Circuit has set for such fees.

The new year began auspiciously for consumers and the plaintiffs’ bar with the Ninth Circuit issuing a twin victory for consumers by underscoring the focus on defendants’ conduct under the “fraudulent” prong of California’s Unfair Competition Law (UCL) and holding that the defendant waived any entitlement to compel arbitration. See Gutierrez v. Wells Fargo Bank, NA, ___ F.3d ___ (9th Cir. Dec. 26, 2012). Though the ruling remanded the action for the district court to apply the proper remedy, and in so doing vacated a judgment entered in favor of the plaintiff class, the Court of Appeals panel affirmed both the district court’s granting of class certification and the finding of classwide liability. See Slip op. at 2-4.

As to the class’ allegations that Wells Fargo made affirmative misstatements about its practices for posting deposits and transactions and making overdraft assessments to consumers’ accounts, the Ninth Circuit first concluded that the UCL is not preempted by federal banking legislation. See Slip op. at 25-27. With the preemption issue resolved, the panel found that the plaintiffs had adduced sufficient evidence of Wells Fargo making misleading statements as to how the bank would post deposits and charges, in particular the order in which such transactions would be recorded, which has direct implications as to the assessment of overdraft fees. See Slip op. at 34.

The court did not respond favorably to Wells Fargo’s contention that individual reliance issues predominate because “some class members would have engaged in the same conduct irrespective of the alleged misrepresentation,” stating, “we are hard pressed to agree that any class member would prefer to incur multiple overdraft fees.” Slip op. at 32.

Additionally, the Ninth Circuit clarified Article III standing vis-à-vis class actions by holding that only a single named class representative – not every class member – must have standing. Slip op. at 30-31.

Finally, with respect to arbitration, the Ninth Circuit held that Wells Fargo had waived any right to seek to compel arbitration, rebuffing Wells Fargo’s contention that seeking to move the action to an arbitral forum would have been futile before the U.S. Supreme Court’s AT&T Mobility v. Concepcion decision. See Slip op. at 10-17.

Bank of America agreed to two settlements this week in connection with the home mortgage meltdown and Bank of America’s ill-fated acquisition of now-defunct mortgage lender Countrywide. In doing so, the bank took substantial, if costly, steps to shed itself of the Countrywide albatross.

The first settlement, between Bank of America and Fannie Mae, is valued at $11.6 billion and seeks to resolve claims resulting from mortgage-backed derivative investments. The value of these investments precipitously fell as some borrowers were unable to repay home loans, while others with “underwater” mortgages – in which the outstanding balance on mortgages exceeded appraised home values – simply opted to stop making regular payments. Under the terms of the settlement, Bank of America has agreed to repurchase some of the $6.75 billion in loans that Countrywide had sold to Fannie Mae, and also make a direct cash payment of $3.6 billion in cash to Fannie Mae. An additional $1.3 billion will be paid as effectively a punitive assessment for Bank of America’s delayed response to foreclosures.

The second settlement arises from a suit brought by the federal government against Bank of America and a host of other mortgage lenders. This settlement is valued at $8.5 billion and is intended to benefit individual consumers. While substantial, the settlement is only expected to yield payments to about ten percent of the 4 million consumers who were subject to foreclosure.

Bank of America’s common stock declined in value by only 8 cents per share in trading following the announcement of the more than $20 billion in settlements, suggesting that the prospect of settlements of this magnitude was already largely reflected in the share price.

Bank of America’s Countrywide acquisition was inauspiciously finalized in the summer of 2008, just weeks before the demise of Lehman Brothers set off the events underlying the “Great Recession.” Countrywide was not Bank of America’s only problematic acquisition, as last fall, Bank of America agreed to pay $2.43 billion to settle a class action related to its similarly troubled $20 million Merrill Lynch acquisition.

Now that we’ve said goodbye to 2012 and 2013 has begun, employers and employees alike should take note of the various changes to California’s labor and employment laws. Among the legislation which took effect on January 1, 2013, are the following, each of which is likely to rely principally on private litigation for its enforcement.

• Pay Stub Statute Clarified: Labor Code section 226 is clarified, by SB 1255, to specify that “suffering injury” is generally coextensive with an employer’s violation of one of the nine enumerated requirements of wage statements issued in California. This is expected to foreclose the argument that the “suffering injury” requirement gives rise to individual inquiries, thereby precluding class treatment of pay stub claims.
• Social Media Privacy: AB 1844 prohibits employers from requiring that either job applicants or employees disclose user names and/or passwords to provide the employer with access to private social media information.
• Enhanced “Whistleblower” Protection: AB 2492 expands the cover age of California’s False Claims Act (aka “Baby Qui Tam”) beyond employees, to cover all contractors and agents.
• Right to Inspect Personnel Files: AB 2674 clarifies that employers must retain employee personnel files for at least three years after an employee’s tenure ends.
• Breastfeeding Discrimination: AB 2386 expands the California Fair Employment and Housing Act (FEHA) definition of “sex” to include breastfeeding, thereby making discrimination based on breastfeeding actionable.
• Religious Clothing: FEHA’s coverage of employers’ reasonable accommodation of employees’ religious beliefs is expanded by AB 1964 to include dress and grooming under the rubric of “beliefs and observances.”