Is Congress Trying to Outlaw Class Action Lawsuits?

(Above: Rep. Bob Goodlatte; photo credit: Gage Skidmore)

According to more than 120 civil rights groups, that’s exactly what they’re doing.

On February 9, 2017, Representative Bob Goodlatte (R – VA) proposed the Fairness in Class Action Litigation Act of 2017, “To amend the procedures used in Federal court class actions and multidistrict litigation proceedings to assure fairer, more efficient outcomes for claimants and defendants.”

On February 15, the House Judiciary Committee passed the bill, H.R. 985, by a vote of 19 to 12. Next it will move to the House of Representatives for a vote.

If passed, this bill could eliminate cases that have already been filed and pending in an MDL for years. attorney Laura Yaeger says that the bill “seeks to essentially eliminate the rights of all Americans to seek redress in our court system through class actions or multidistrict litigation efforts, which are often the only viable options for injured patients and consumers to level the playing field and seek compensation when they have been harmed by large corporations.”

Ms. Yaeger adds, “This bill seeks to have retroactive application, which means that, if passed, it could eliminate cases that have already been filed and pending in an MDL for years.”

She encourages every consumer to visit to contact his or her representative and urge them to stand up for the rights of all Americans to hold corporations accountable, and to vote no on H.R. 985.

H.R. 985 in a Nutshell

The Fairness in Class Action Litigation Act would make sweeping changes in the way class action lawsuits are formed, tried, and awarded. Here are some of the many provisions put forth in H.R. 985:

  • Classes will only be certified if every member of the class has “suffered the same type and scope of injury as the named class representative.” Though the terminology is vague (more on this later), in short the bill wants to prohibit class action lawsuits in which class members have suffered varying degrees of losses—or no losses at all.
  • The bill aims to rein in attorneys’ fees, which it says must be “limited to a reasonable percentage of any payments directly distributed to and received by class members.” Moreover, H.R. 985 says that attorneys’ fees must never “exceed the total amount… received by all class members.”
  • The bill also seeks more transparency and accountability in terms of attorneys’ fees. Prior to the payout of attorneys’ fees, the bill demands reporting of all funds paid to counsel by the defendant, as well as every payment made to class members, the number of class members, average amount paid, etc.
  • Attorneys may not represent relatives or any client they have previously represented in a class action. They also may not have any business ties to their clients outside of the class action lawsuit. (This provision seeks to cut down on conflicts of interest, especially attorneys’ friends and family serving as class representatives.)
  • Plaintiff lawyers must supply a “reliable and administratively feasible mechanism” with which they can identify and distribute money to their clients. The question of who exactly is a member of a class is called ascertainability, and this measure aims to clarify and tighten ascertainability.
  • The bill would also reform the procedures for multi-district litigation (MDL), requiring plaintiffs to provide evidence of injury prior to acceptance into the MDL. Cases that don’t meet this requirement will be dismissed within a month.
  • It also requires 80 percent of MDL settlement money to go to clients (versus attorneys).

Critics Say Bill Will “Obliterate” Class Action Lawsuits

“If this bill were enacted into law, it would obliterate class actions in America.”

H.R. 985 prompted swift outrage from civil rights, labor, and environmental groups, 70 of which signed a letter condemning the bill. Among the dozens of organizations that signed are the AFL-CIO, the Center for Biological Diversity, the Farmworker Association of Florida, the National Disability Rights Network, the National Employment Lawyers Association (NELA), Public Citizen, the Southern Poverty Law Center (SPLC), and the Workers’ Rights Center.

The letter states, “If this bill were enacted into law, it would obliterate class actions in America… The fact that the Committee would even consider such a sweeping, reckless legislation without holding a single hearing is an outrage.”

It goes on to say that requiring every member of a class action to have an injury of the same type and scope

…would sound the death knell for most class actions. Classes inherently include a range of affected individuals, and virtually never does every member of the class suffer the same “scope” of injury from the same wrongdoing. Certainly, many civil rights, discrimination and employment class actions, including cases involving refusals by companies to properly pay workers, would not satisfy these criteria.

A second letter, signed by 121 civil rights groups—including the American Civil Liberties Union (ACLU), the Equal Justice Center, Farmworker Justice, NELA, and SPLC—highlighted “the most egregious of [the bill’s] many harms.”

The letter emphasizes that “class actions are critical for the enforcement of laws prohibiting discrimination in employment, housing, education, and access to public areas and services.” For this reason, these groups feel strongly that H.R. 985 presents a grave threat to American civil rights.

Subtler Aspects of Bill Could Be More Troubling

Defendants of H.R. 985 say that the sky-is-falling rhetoric of critics is overblown and misleading. Daniel Fisher of Forbes writes, “It wouldn’t close the courthouse door to consumers, as critics are sure to say… What it would do is discourage lawyer-driven litigation, where plaintiff attorneys target a company… knowing full well the bulk of their clients will never learn of the lawsuit or seek to claim their piece of the settlement.”

H.R. 985 “will create a lot of unnecessary litigation over what the bill really means.”

Transparency and accountability are good things, proponents argue. They say that cutting down on frivolous lawsuits that endeavor only to fatten the pockets of attorneys is a step in the right direction.

Jay Edelson, a prominent plaintiffs attorney in Chicago, considers the bill problematic—but not for the reasons people think. He doesn’t feel it will “obliterate” class actions, and he is in favor of transparency, accountability, and making sure attorneys’ fees don’t soar out of control (especially if their clients only take home a few bucks apiece).

But Mr. Edelson also says that H.R. 985 “will create a lot of unnecessary litigation over what the bill really means.” He says that the similar-type-and-scope-of-harm wording is “unbelievably unclear,” and will inevitably cause delays as the Courts hash out just what that means.

He also feels that a less notorious aspect of the bill is worrisome and even potentially unconstitutional:

You can’t have a class rep who’s a family member, someone who works with you. That’s fine. But then they go further and say you can’t have them be a class rep if you’ve ever represented them before in any case. And that’s crazy. Congress coming in and telling people, “no, you can’t use your attorney, you have to find someone you don’t know at all,” is really shocking and should be offensive to all attorneys. I think it would face constitutional challenges. People have a right to choose their lawyer.

One thing everyone seems to agree on is that this bill would make class action lawsuits more difficult. But whether that’s a good thing—and whether or not H.R. 985 will pass—remains to be seen.

Is Your Car Among the 63 Million That Were Recalled?

A new Carfax study has found that a jaw-dropping 63 million cars on American roads are recalled vehicles that have not been fixed. That’s a 34 percent increase over the previous year, and certainly a worrisome number for drivers, many of whom may not realize they are behind the wheel of a dangerously defective car.

Sixty-three million cars on American roads are recalled vehicles that have not been fixed.

The rise in unrepaired recalled vehicles is in part a result of the Takata airbag crisis, the largest automotive recall in history. But the National Highway Traffic Safety Administration (NHTSA) has also been more aggressive in recent years, while automakers like Volkswagen, GM, and BMW have played a major role in the flood of recalls.

The number of auto recalls hit an all-time high in 2015, the second year in a row it had peaked. The numbers are not out yet, but it’s expected that auto recalls crested again in 2016.

File a Lawsuit

Failure to repair the vehicles, meanwhile, seems to stem from some combination of consumers not realizing their car has been recalled—or at the inconvenience of taking the car to the shop and being without it for an extended period of time.

In many cases, the parts required to repair the car are not available and/or there is a long waiting list for them, which makes owners reluctant to take them in. Plus, many automakers are still installing faulty Takata airbags in new cars, while used car dealers do not hesitate to unload a recalled vehicle on an unwitting driver.

In fact, earlier this month the Center for Auto Safety, Consumers for Auto Reliability and Safety, and the U.S. Public Interest Research Group sued the Federal Trade Commission (FTC) for allowing  used car dealers to claim that recalled vehicles with unrepaired defects are “safe.”

Use the NHTSA’s VIN lookup to see if your vehicle has been recalled, and see The New York Times to learn “How to Buy a Used Car in an Age of Widespread Recalls.”

There are so many recalls these days, it can be hard to keep track of them all. But let’s try.

Airbag Sensor Issue Is Latest Defect to Plague GM

General Motors’s (GM) ignition switch defect prompted a recall of 2.4 million vehicles in 2014, was linked to 124 deaths and 275 injuries, and generated many lawsuits, which GM settled in 2016. Now the automaker has an airbag problem.

GM’s ignition switch defect was linked to 124 deaths and 275 injuries.

The airbag sensor in 107,000 GM sports cars—the 2006-2010 Pontiac Solstice and 2007-2010 Saturn Sky—can become damaged and disable the front passenger airbag. This means the airbag could not deploy in the event of a crash, but GM says it has not yet received any reports of injuries caused by the defect.

Unfortunately, it also has not yet figured out how to repair these vehicles. GM says it will notify Pontiac Solstice and Saturn Sky owners once it develops a fix.

BMW Issues Recalls for Dangerous Airbags, CV Joints

Earlier this month, BMW recalled 230,000 3-Series vehicles (model years 2000-2002) because the cars’ airbags could contain dangerously defective Takata parts that were installed as replacements or spare parts. (The cars didn’t originally contain Takata airbag parts.)

A week and a half later, on February 14, BMW announced the recall of 8,752 cars that may have a faulty rear driveshaft constant velocity (CV) joint. The joint can break, causing the car to lose thrust and potentially causing an accident.

Models impacted by this defect include:

  • 2011-2012 135i Coupe, 1 Series M Coupe, and 135i Convertible
  • 2011 Z4 sDrive 35i, 335i, 335d, 335i Coupe, 335is Coupe, 335i Convertible, 335is Convertible, 535i, 535i xDrive, 535i Gran Turismo and 550i xDrive Gran Turismo
  • 2012 740i and 740Li

The recall should begin on or around March 27. After an inspection, BMW dealers will replace the CV joint (if needed) at no charge to owners.

Owners can contact BMW at 1-800-525-7417 if they have questions or concerns about these recalls.

2017 VW Passats Leak Brake Fluid 

A thousand VW Passats may leak brake fluid over time, making it take longer for the car to stop.

On February 15, Volkswagen—still smarting from its Dieselgate scandal—announced a recall of roughly 1,000 cars that may leak brake fluid from the brake lines. These leaks occur slowly over time, but they can lead to reduced efficiency in the brakes and potentially cause accidents, as it may take a car longer to stop than it should.

Passat owners can contact Volkswagen at 1-800-893-5298. The number for this particular recall is 47N3.

If you or a loved one has suffered physical or financial harm because of one of these recalled, defective vehicles, please contact us today to learn your rights. Don’t wait; you may be entitled to compensation.

John Yanchunis Is Lead Counsel in Yahoo Data Breach Case attorney John A. Yanchunis will serve as Lead Counsel on the largest class action lawsuit in history—the Yahoo data breach that allegedly compromised the private data of hundreds of millions of people around the world.

In an order filed Thursday, February 9, 2017 in the Northern District of California, U.S. District Judge Lucy H. Koh appointed John A. Yanchunis of Morgan & Morgan and to serve as Lead Plaintiffs’ Counsel and Chair of the Plaintiffs’ Executive Committee.

Read the Order

Four firms filed motions to serve as lead counsel: Morgan & Morgan, Kaplan Fox & Kilsheimer LLP, Kessler Topaz Meltzer & Check LLP, and Susman Godfrey LLP. At a hearing in San Jose before Judge Koh made her decision, Mr. Yanchunis argued that a large firm of Morgan & Morgan’s stature—with more than 300 attorneys at its disposal—would be the best choice to take on a case of such magnitude.

At a press conference Saturday, Mr. Yanchunis said, “Morgan & Morgan is the biggest law firm of its type in the country. We have the legal talent and financial strength to take on anyone in this country.”

Mr. Yanchunis also noted that Morgan & Morgan (motto: “For the People”) only represents consumers, and never large companies.

Yahoo’s 2013 data breach (announced last year) compromised the data of roughly one billion users. A separate breach in 2014 compromised the data of 500 million users.

Mr. Yanchunis said Saturday that the lawsuit will represent everyone in the world whose data was breached.

Yanchunis Heads Five-Person Executive Committee

The other firms that filed motions to serve as lead counsel argued that the case was not as complex as it appeared, despite its mammoth size. They also claimed that a single firm should work the case, instead of the committee of firms helmed by Mr. Yanchunis.

Judge Koh thought they made “excellent points,” but ultimately disagreed.

Joining Mr. Yanchunis on the Executive Committee are Gayle Blatt of Casey Gerry Schenk Francavilla Blatt & Penfield LLP, Stuart Davidson of Robbins Geller Rudman & Dowd LLP, Karen Riebel of Lockridge Grindal Nauen PLLP, and Ariana Tadler of Milberg LLP.

As Lead Counsel and the Plaintiffs’ Executive Committee, Mr. Yanchunis and the abovementioned attorneys must review and record all billing records and “impose and enforce limits on the number of lawyers assigned to each task,” among other key duties.

Lawsuit Seeks Tighter Security, Hundreds of Millions in Damages

At the press conference, Mr. Yanchunis cited the long gap between the breaches and their announcement as one of the most concerning aspects of Yahoo’s actions.

“Those breaches either remained undetected or Yahoo failed to inform the public [for years].”

“What’s alarming about this is that the first breach occurred in 2014, but Yahoo did not announce it until September of 2016,” Mr. Yanchunis said. “The breach announced in December occurred in 2013. And yet, those breaches either remained undetected, or Yahoo failed to inform the public about the breaches.”

He also noted that most states have laws on the books requiring companies to inform consumers of data breaches within 30 days of discovering them.

Mr. Yanchunis said the lawsuit will seek stronger cybersecurity measures from Yahoo “to make sure that this never happens again.” Moreover, for those who suffered financial losses as a result of the breach, the lawsuit will seek damages.

Asked how much those damages might total, Mr. Yanchunis said it’s too early to say, but likely in the hundreds of millions of dollars.

“It will be extensive,” he said.

Experience with High-Profile Breaches Proved Crucial

In determining whom to name Lead Counsel for the largest class action ever, Judge Koh weighed the following chief criteria:

  • “Knowledge and experience in prosecuting complex litigation, including class actions, data breach, and/or privacy cases”
  • “Willingness and ability to commit to a time-consuming process”
  • “Ability to work cooperatively and efficiently with others”
  • “Access to sufficient resources to prosecute the litigation in a timely manner”
  • “Commitment to prioritizing the interests of the putative class”

The first criterion, experience, may have clinched the win for Mr. Yanchunis. He and Morgan & Morgan previously litigated two massive data breach cases—the Home Depot Inc. and Target Corp. cases. Those lawsuits were settled for $19 million (Home Depot) and $10 million (Target), respectively.

Now Mr. Yanchunis and his team will take on the biggest breach of all, and aim to hold Yahoo accountable for allegedly endangering the privacies and identities of hundreds of millions of people.

Wage and Hour Awards Skyrocketed in 2016

Class action lawsuits against employers for alleged violations of minimum wage, overtime, and other wage and hour protections decreased slightly in 2016. But they remain on track for long-term growth under a more business-friendly Trump administration, according to a new report.

Wage and hour class action filings were down in 2016, but settlement values were up.

That said, Supreme Court nominee Neil Gorsuch has sided with businesses on past labor issues and could provide the deciding vote in an upcoming high court review that could curb workers’ ability to file class action lawsuits.

If your employer violated wage and hour laws, you may be eligible for a lawsuit. Learn more during a free case review from

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Wage and Hour Lawsuits Soared in Value

Corporate defense firm Seyfarth Shaw issues an annual report on workplace class action litigation that covers employment lawsuit trends from the previous year and offers analysis of what to expect in the year ahead.

More than 70% of all employers violate federal wage and hour laws.

Wage and hour lawsuit filings have increased by more than 450% over the last 15 years, reports Seyfarth Shaw, which notes that these lawsuits cause the most concern for employers. That’s because more than 70% of all employers violate federal wage and hour laws, according to the Department of Labor (DOL). Such cases also tend to be high stakes lawsuits from an employer’s perspective, since many result in large settlements.

Key wage and hour litigation insights from the 2017 report include:

  • One hundred and ninety-five wage and hour class actions were allowed to proceed in 2016, compared to 175 certifications in 2015. Wage and hour cases were certified at a higher rate than any other employment class action type in 2016.
  • Although the number of wage and hour cases filed in 2016 decreased for the first time in more than a decade, the value of the top ten wage and hour lawsuits increased significantly, to $695.5 million—nearly quadrupling in value compared to 2014.
  • The top two wage and hour settlements of 2016—both involving FedEx—were valued at $240 million and $226 million. Both cases settled claims that FedEx employees had been misclassified as independent contractors.
  • Wage and hour litigation is expected to continue its overall growth in 2017 and beyond based on new federal overtime regulations, local minimum wage laws, independent contractor misclassification lawsuits, and increased public awareness of employees’ rights.

How Trump Could Impact Wage and Hour Cases

Not all wage and hour disputes are taken up as class action lawsuits. Through the Department of Labor, the federal government also files lawsuits against employers that violate wage and hour laws and obtains settlements on workers’ behalf.

DOL enforcement lawsuits are typically pursued far more aggressively under Democratic administrations than under Republican administrations. The DOL aggressively sued employers for wage and hour violations during the Obama years. Since 2009, the DOL’s Wage and Hour Division closed 200,000 cases and recovered more than $1.8 billion in back pay for more than two million workers.

Sixty percent of CKE restaurants investigated by the DOL were caught violating labor laws.

While the scope of labor enforcement policies in the Trump administration remains to be seen, if the new Administration’s Department of Labor does back off wage and hour enforcement, plaintiffs’ attorneys would likely pick up the slack by filing more private wage and hour employment lawsuits.

Critics of Mr. Trump’s pick for labor secretary, CKE Restaurant Holdings Inc. CEO Andy Puzder, claim CKE chains such as Carl’s Jr. and Hardees are some of the nation’s worst labor law violators.

A fast food worker advocacy group called Fight for $15 says that 60% of CKE restaurants investigated by the DOL since 2009 were caught violating labor laws.

Neil Gorsuch Could Curb “Frivolous” Lawsuits

Perhaps the biggest wage and hour wildcard of the Trump Administration is how his Supreme Court Justice will shape labor law outcomes. Of particular importance to wage and hour cases is an upcoming review that will decide whether employers can use arbitration agreements that prohibit workers from filing class action lawsuits.

Mr. Trump has nominated conservative justice Neil Gorsuch to fill the void left by the late Antonin Scalia. As a federal appeals court judge, Mr. Gorsuch opined against what he perceived as government agency overreach. In his private legal career, Mr. Gorsuch supported curbs on what he deemed “frivolous” class action lawsuits.

The court is expected to hear the class action waiver case in the 2017 term, which begins in October. Judge Gorsuch should sit on the bench by then, barring a refusal by Senate Democrats to confirm him.

Gerald Maatman, lead author of the Seyfarth Shaw report, told The Chicago Tribune, “I think employers have a supporter with [Mr. Gorsuch], who is unwilling to go along with agencies just because they interpret the law in a certain way.”

“If you think that workers need more protection, then he’s probably not your guy.”

Richard Trumka, President of The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), also sees an employer ally in Gorsuch.

“He’s been a very, very strong advocate for corporations at the expense of working people,” said Mr. Trumka. “If you think that workers need more protection and corporations need less protection, then he’s probably not your guy.”

ClassAction.Com Attorneys File Lawsuit Against L’Oreal, Matrix

While many of us take advertising slogans with a grain of salt, we do at least trust that the products we buy contain the ingredients listed on the bottle. filed a lawsuit against L’Oreal and Matrix over an array of hair products that appear not to contain the protein keratin.

We used to, anyway.

In the latest case of a company allegedly promising ingredients and benefits its products do not offer or contain, last week filed a false advertising lawsuit against L’Oreal USA and Matrix Essentials over an array of hair products that appear not to contain the protein keratin.

The plaintiffs in this class action lawsuit are Brandi Price of New York and Christine Chadwick of California.

Read the Complaint

The products cited in the complaint are the following:

  • Matrix Biolage Keratindose Pro-Keratin + Silk Shampoo
  • Pro-Keratin + Silk Conditioner
  • Pro-Keratin Renewal Spray

“Consumers are tired of not getting what they pay for,” said attorney Jonathan B. Cohen. “If a company uses a coveted hair care ingredient on a label or in the name of a product, that ingredient better be in the product or consumers are going to hold the company accountable.”

Complaint Alleges False and Deceptive Advertising

The 39-page complaint—filed in the Southern District of New York on January 26, 2017—states:

Through its uniform, nationwide advertising campaign… Defendants have led consumers to believe that their Keratindose Products actually contain keratin and will confer the claimed benefits of keratin to the consumer.

In reality, the Keratindose Products do not contain any keratin at all and are incapable of providing the claimed benefits of keratin to the consumer.

The complaint states that the products’ labels are “false, deceptive and misleading, in violation of the Federal Food Drug & Cosmetics Act and its parallel state statutes, and almost every state warranty, consumer protection, and product labeling law throughout the United States.”

The plaintiffs seek relief for damages, for the defendants to stop engaging in the deceptive advertising alleged in the complaint, and any other relief the Court deems just and proper.

Labels, Slogans Emphasize Healing Powers of Keratin


According to the lawsuit, L’Oreal and Matrix consistently tout the restorative powers of keratin in the hair products in question. The complaint cites the following phrases lifted from the products’ labels and marketing campaigns:

  • “Pro-Keratin + Silk”
  • “Pro-Keratin Renewal Spray”
  • “Formulated with Pro-Keratin and Silk, Matrix’s keratin treatment for damaged hair provides targeted reinforcement for over-processed, weak or fragile hair”
  • “Prevent[s] damage”
  • “Restore[s] overprocessed hair”
  • “Shampoo for Overprocessed Hair”
  • “Conditioner for Overprocessed Hair”
  • Makes hair “90% more conditioned after one application” when combining the “system of Keratindose Shampoo, Conditioner and Pro-Keratin Renewal Spray vs. a non-conditioning shampoo”

The complaint states that the plaintiffs enlisted a subject-matter expert to analyze the products in question, “after which the expert confirmed that the Products do not contain keratin.”

The expert confirmed that the products do not contain keratin.

For many, the lawsuit calls to mind the Johnson & Johnson lawsuits—settled for $5 million—over J&J proclaiming its Baby Bedtime Powder “scientifically proven” to help babies fall asleep faster.

Or the recent spate of aloe vera lawsuits, which were filed against several manufacturers and retailers of aloe vera gels and other products that allegedly do not contain any aloe vera, let alone the 100% advertised.

“The beauty industry has preyed upon consumers’ fascination with self-improvement for decades, selling products that do contain promised ingredients and cannot perform as advertised,” Mr. Cohen said. “Companies must be held accountable for attempting to gain a competitive advantage through the deceptive labeling of products.”

Hold the Beauty Industry Accountable

If you purchased a hair product that claimed to contain keratin, you could be entitled to compensation. Please contact us immediately for a free, no-obligation case review to learn your rights and seek justice.

Our attorneys have won more than $2 billion for our clients, and we have never represented a large company. We will fight for you and hold negligent companies accountable.

Johnson & Johnson Pays for Baby Bedtime Products

Desperate parents are usually willing to try anything to help their babies fall asleepeven if it means paying more for a lotion or body wash. Recent class action lawsuits argue that Johnson & Johnson took advantage of parents by falsely advertising their baby bedtime products.

The company offered to settle four class action lawsuits for $5 million last week. The lawsuits alleged that the company deceived consumers into paying a premium for their products by carelessly using the term “clinically proven” to support claims that their bedtime products helped babies fall asleep.

J&J Tests Their Bedtime Routine, Not Products

“J&J did not test the ‘routine’ with products other than the bedtime products.”

On its website, Johnson & Johnson advertises a three-step bedtime routine for babies, which includes a warm bath, massage, and quiet time. Throughout the description of the routine, the company recommends using one of their bedtime products. They include references to “studies” and “research” that supports the effectiveness of each step.

The complaints filed against Johnson & Johnson didn’t challenge whether or not the routine worked, but the role their products played.

One complaint filed in California stated: “J&J did not test the ‘routine’ with products other than the bedtime products, such as J&J’s long-sold ordinary bath products, another company’s products or with no products at all.”

The baby sleep routine could very well be effective, but Johnson & Johnson doesn’t have research to support that their products are superior to others.

From the consumers point of view, this absence of research is hard to tell just by looking at the products. The routine and suite of bedtime products are so intermixed, especially on the product labels, that consumers can be deceived into thinking that the products are also “clinically proven” to help babies sleep.

A complaint filed in Illinois states that this misunderstanding isn’t surprising because Johnson & Johnson “does not sell routines—it sells bedtime products.” It wouldn’t make sense for them to just advertise a routine and not one of their products.

Claims Violate FTC’s Advertising Standards

Johnson & Johnson’s claims violate the Federal Trade Commission (FTC)’s advertising standards, which prohibit companies from making claims that are likely to mislead consumers and affect whether or not they will purchase a product.

While Johnson & Johnson is paying for it this time, the cosmetics industry is filled with similar cases of deceptive advertising, which may be caused by little federal regulation.

Federal regulations for cosmetics are only one page in length and haven’t been updated in 75 years.

Currently cosmetics products do not need FDA approval to go to market, and they are not required to share their ingredients. In fact, federal regulations for cosmetics are only one page in length and haven’t been updated in 75 years.

Weak regulations make it easier for cosmetics companies to make false claims, like aloe vera gels that don’t contain aloe vera, or keratin hair products that don’t contain keratin. 

Greater Federal Oversight is Just What J& J Needs

While false claims cause consumers to spend more money on premium products, the lack of federal oversight can result in more dangerous consequences, which Johnson & Johnson knows only too well.

The company continues to face lawsuits over its baby powder, which has been linked to ovarian cancer. More than 1,000 lawsuits have been filed against Johnson & Johnson for failing to warn consumers of the powder’s cancer risk.

In 2015, the Personal Care Products Safety Act was introduced in the Senate to address the current lack of oversight in the cosmetics industry. If passed, the bill would require companies to register their ingredients with the FDA and allow the FDA to recall unsafe products.

More oversight is just what companies like Johnson & Johnson may need.

If you have been harmed by Johnson & Johnson’s baby powder or duped into paying for pricey products that don’t deliver their promised claims, we want to hear from you. Contact our legal team for a free, no-obligation review.


Can Employers Ban Class Actions? Supreme Court to Decide

“Class action waivers may be one of the most important issues facing workers today.”

The Supreme Court announced on Friday that it will review whether or not class action waivers violate national labor laws. Companies frequently include these waivers in arbitration agreements to prohibit employees from forming class action lawsuits. For years though, district and appellate courts have disagreed on whether or not the practice is legal.

“Class action waivers may be one of the most important issues facing workers today, and many are unaware it is such an issue,” said attorney C. Ryan Morgan, co-chair of Morgan & Morgan’s Employee Rights Group. “Class action waivers are detrimental to the vast, vast majority of workers and hinder workers from having knowledge of their rights.”

40% of Employers Use Class Action Waivers

“Most workers would be shocked if they knew that many employers force workers to sign these agreements.”

Arbitration agreements and class action waiverswhich are usually buried deep within an employer’s contractrequire employees to handle their legal disputes in private arbitration, without a judge or jury. Employers prefer arbitration because proceedings are faster and are less costly than typical lawsuits. And, companies are more likely to win.

In arbitration, companies set the rules of proceedings and hire the arbitrator. A Cornell University study found that out of nearly 4,000 workplace arbitration cases filed between 2003 and 2007, only 21% were awarded in favor of employees. And, on average, employee litigation awards were 5 to 10 times greater than arbitration awards.

Employees are usually unable to opt out, and some courts, like the Sixth Circuit, have ruled that by simply showing up to work, an employee has agreed to the arbitration terms.

Favorable court decisions have only encouraged the practice. In 2015, about 40% of employers used class action waivers in their arbitration agreements.

“Most workers would be shocked if they knew that many employers force workers to sign these agreements and certain courts enforce the agreements,” said Carlos Leach, an employee rights attorney for Morgan & Morgan.

Class Action Waivers May Violate the National Labor Relations Act

Stephanie Sutherland was told that pursuing her case in arbitration would cost her $200,000.

Agencies like the National Labor Relations Board (NLRB) argue that class action waivers violate the National Labor Relations Act (NLRA) because they strip away employees’ rights to collective action. Employers, however, often argue that the Federal Arbitration Act, which permits class action waivers, trumps the NLRA.

The Supreme Court will decide whether or not the NLRB’s interpretation is correct by reviewing three cases involving Murphy Oil, Epic Systems, and Ernst & Young.

Epic Systems and Ernst & Young are appealing decisions made by the Seventh and Ninth Circuits respectively that declared their class action waivers were illegal. The Chicago and San Francisco-based appellate courts were the first to rule against class action waivers in 2016.

For smaller disputes, a class action lawsuit is usually the most cost-effective legal method since plaintiffs can share legal costs. Stephen Morris and Kelly McDaniel are fighting for their right to form a class action lawsuit against Ernst & Young, whom they allege withheld overtime pay from employees. 

In a similar case filed by another former Ernst & Young employee, Stephanie Sutherland was told that pursuing her case in arbitration would cost her $200,000. Though a New York federal court overrode the class action waiver since arbitration fees would prevent her access to the courts, it was later reversed by the Second Circuit Court of Appeals.

Employee Rights Advocates Are “Cautiously Optimistic”

“I am cautiously optimistic that the [Supreme Court] will do the right thing and side with the NLRB.”

Experts caution that the possibility of a 4-4 split and the looming justice vacancy far from guarantees a decision in favor of class action rights.

However, the Supreme Court announcement comes on the heels of President Obama’s Fair Pay and Safe Workplaces executive order, which rules that companies with federal contracts of $1 million or greater cannot require employees to sign arbitration agreements. And, last year, the Senate introduced the Restoring Statutory Rights Act, which would prohibit arbitration agreements that violate employee discrimination laws.

“As an attorney who constantly fights against these agreements on behalf of employees, I am cautiously optimistic that the [Supreme Court] will do the right thing and side with the NLRB’s position that class action waivers violate workers’ fundamental rights to join together versus their employer,” said Carlos Leach.

Opening briefs are scheduled to begin in February; a decision will likely be made sometime this summer.


Lawsuits Slam JCPenney, Macy’s for Duping Consumers

You know what they say: “If it sounds too good to be true, it probably is.”

The lawsuits allege that these department stores listed misleading “original prices” on products so they could offer false discounts.

Lending further weight to that adage, the city of Los Angeles has filed several lawsuits against JCPenney, Macy’s, Kohl’s, and Sears, alleging that the department stores listed misleading “original prices” on products so they could slash them, luring in customers with false discounts.

For example, Kohl’s listed a strapless dress with an “original price” of $50, on sale for $35 and then $15. According to the lawsuit, the dress was never actually sold for $50.

This deceptive tactic is called “false reference pricing,” and companies do it because it works. Here are some other alleged examples cited in the complaints:

  • Macy’s sold a men’s V-neck t-shirt for $19.99, supposedly down from a $29.50 list price, a price at which the shirt was never actually sold.
  • Sears sold a Kenmore front-loading washing machine at $999.99, nearly $200 cheaper than its “list price” of $1,179.99. The washer was never sold at that price, and later went for as low as $650.
  • JC Penney marketed a maternity bathing suit top as $15 off its original price of $46. The price then dropped from $31 to $22, and then $15, just one-third the “original price.” One problem: the top was allegedly never sold for $46.

In a statement, City Attorney Mike Feuer said, “Customers have the right to be told the truth about the prices they’re paying—and to know if a bargain is really a bargain.”

Unfortunately, distinguishing true discounts from phony ones is harder than ever.

Hold Retailers Accountable

Brick-and-Mortar Stores Desperate for Deals

 This isn’t the first time these companies have faced litigation for misleading consumers. JCPenney and Kohl’s both faced similar claims in 2015, and both settled those class action lawsuits for sizable sums: JCPenney settled its suit for $50 million, and Kohl’s settled its claims for $6 million.

Ron Friedman, a Los Angeles-based retail expert, tells the Los Angeles Times, “There is no regular-priced merchandise, especially in stores like Sears or Kohl’s or TJ Maxx. The whole category is all about the sale price.”

Mr. Friedman says these kinds of brick-and-mortar stores are struggling to compete with online retailers, so they rely heavily on amazing deals and sales to lure customers away from sites like Amazon, Wayfair, and Overstock.

According to, there were 24 of these kinds of lawsuits filed just in the first half of 2016, against retailers like Macy’s, J. Crew, Gymboree, Ann Taylor, and Ralph Lauren. (In all of 2015, there were 25 such suits.)

Of course, as anyone who shops online knows, false reference pricing is not limited to brick-and-mortar stores.

Amazon Begins Phasing Out List Prices

Seemingly every product on Amazon is (or was) on sale, often at incredible savings—75% or hundreds of dollars off the “list price.” How is this possible? Well, because like the “original prices” at JCPenney and Kohl’s, all too often the item was never actually sold with such a hefty tag.

If everything is always on sale, then nothing is ever on sale.

In the wake of criticism about its pricing—and perhaps to avoid the rash of lawsuits vexing other companies—earlier this year Amazon started phasing out its list prices. In place of List Prices, many if not most items now just say “Price.” Presumably (ideally), this is a more accurate reflection of the product’s cost.

Amazon still has deals, of course. But the gradual elimination of list prices suggests we may not see the ubiquitous, unbelievable discounts to which we’ve become accustomed—and, arguably, desensitized. As TruthInAdvertising’s executive director Bonnie Patten pointed out to the Times, if everything is always on sale, then nothing is ever on sale.

Instead of emphasizing discounts from original or list prices, on their Amazon Wish Lists customers now see if the price of an item has dropped since it was added to the list. This is a clever way for Amazon to have its cake and eat it too: it has managed to have perpetual “deals” occur without deceiving consumers.

If only JCPenney, Macy’s, Sears, and Kohl’s could do the same.

Samsung’s Exploding Washers Leave Consumers Rattled

At this point, the word “Samsung” is almost synonymous with “explosive.”

Samsung has received 733 reports of the washers malfunctioning.

Right on the heels of its massive Samsung Galaxy fiasco, last month the Korean electronics giant recalled nearly three million washing machines over hundreds of reports of the machines vibrating excessively and even firing their tops off.

The recall—which Samsung announced more than a month after the Consumer Product Safety Commission (CPSC) warned consumers of the washer risks—impacts 34 models encompassing 2.8 million machines. (For a full list of affected models, see the official CPSC page.) Samsung says it has received 733 reports of the washers malfunctioning, and at least nine reported injuries.

The CPSC page says injuries include “a broken jaw, injured shoulder, and other impact or fall-related injuries.”

Though the recall offers consumers either a free in-home repair or rebate to be used toward a new washer, many aren’t satisfied with Samsung’s response.

Consumers Get “Market Value” for Broken Machines

Unless a consumer purchased a washer after October 6, 2016, he or she has two options:

(1) A free in-home repair of the busted machine, which includes a one-year extension of the product’s warranty, or

(2) A rebate applied to the purchase of a new machine, plus a free installation of that machine and free removal of the old one.

At first glance, this sounds like an okay deal (especially #1). But many consumers have complained about delays in their machine repairs, or not even being able to reach Samsung.

Meanwhile, the rebate in the second option will be for the broken washer’s “current market value,” which naturally will be much lower than it was upon purchase. (Washing machines are like cars: their values plummet as soon as you take them home.)

So, Samsung is offering consumers either a partial refund/rebate for a defective machine that Samsung produced and marketed—or, a repair that has been plagued by delays.

It’s no wonder so many people are heading to court to hold Samsung accountable.

Samsung Faces Multiple Class Action Lawsuits

Way back in March, Suzann Moore and Michelle Soto Fielder filed a class action lawsuit against Samsung, alleging that their washers blew their tops. Ms. Moore said that after two uneventful years, her machine “violently exploded” in December 2015.

The complaint, filed in New Jersey (where Samsung U.S.A. is headquartered), also contends that Ms. Fielder’s machine blew up in February 2016 “with such ferocity that it penetrated the interior wall of her garage.” As with Samsung’s Galaxy phones, there are numerous YouTube videos that appear to show these devices post-explosion.

In the town of Trail, British Columbia, a man filed a lawsuit against Samsung not over physical damage or injuries, but because allegedly the rebate offered by Samsung fails to fully compensate consumers.

For example, a woman who joined the Canadian lawsuit, Brandy Robertson, received only a $410 rebate for a machine that originally cost her $900. Ms. Robertson also said she had to pay a $200 delivery fee for the new machine.

She told CTV News in Vancouver, “They should be replacing full cost of the top loaders… I think they are making money off of their recall.”

If you or a loved one have suffered physical or financial damage because of a faulty Samsung washing machine, contact us today to learn your rights.

Comcast’s Hidden Fees Could Be Illegal

A new class action lawsuit filed in the Northern District of California on October 15, 2016 alleges that Comcast’s notorious hidden fees constitute false advertising. Among the other charges in the 76-page complaint:

  • Comcast falsely advertised its cable TV service at flat monthly rates when it intended to charge more than promised via a Broadcast TV Fee and/or a Regional Sports Fee.
  • Comcast did not adequately disclose and describe these fees to plaintiffs.
  • Comcast’s representation of these fees on customers’ bills was deceptive.
  • Comcast breached its own contracts by charging these fees.
  • Comcast failed to give adequate notice to plaintiffs before increasing fee amounts.
  • Comcast misled and lied to customers about the nature and purpose of its fees.
  • Comcast breached the implied covenant of good faith and fair dealing with customers.

Though Comcast requires all customers to agree to an arbitration clause (as part of their service agreements) that ostensibly forbids them from taking the cable giant to court, the complaint argues that this clause is “unconscionable, illusory, and unenforceable,” and that plaintiffs were not informed of the clause and/or did not agree to it.


In response, Comcast will likely point not only to the arbitration clause but to the fact that its “hidden” fees are usually noted in the fine print of advertisements and bills.

(That fine print helps explain why the cable industry is one of the most hated in America, along with airlines—though these aren’t the only ones whose actual prices dwarf their advertised ones.)

Comcast may have the law on its side, but it certainly won’t have public opinion in its corner—or the Federal Communications Commission (FCC).

FCC Fines Comcast $2.3 Million for Shady Billing Practices

Just days before the class action was filed, the FCC hammered Comcast with a $2.3 million fine for charging customers for equipment and services they hadn’t requested or authorized. In many cases, customers had even rejected the service offers when speaking to Comcast reps.


The FCC’s Enforcement Bureau chief, Travis LeBlanc, said in a statement:

“It is basic that a cable bill should include charges only for services and equipment ordered by the customer—nothing more and nothing less. We expect all cable and phone companies to take responsibility for the accuracy of their bills and to ensure their customers have authorized any charges.”

The practice of “negative option billing”—charging customers for services or equipment they never asked for—is rampant in the cable industry, among others. Though Comcast acknowledged its bills could have been clearer and its customer service better, it denied any wrongdoing or even “problematic policy.”

In a statement, the company said the FCC simply found “isolated errors or customer confusion.”

WA Attorney General Sues Comcast for $100 Million

If the billing and customer service practices cited above are just isolated errors, they bear a striking resemblance to the ones outlined by Washington State Attorney General Bob Ferguson.

In August 2016 Mr. Ferguson filed a $100 million lawsuit against Comcast, alleging the company violated the state’s Consumer Protection Act (CPA). Among that complaint’s charges:

  • Comcast duped 500,000 consumers into paying $73 million in subscription fees for a supposedly comprehensive “protection plan” that actually does not cover the vast majority of wiring work done at consumers’ homes.
  • Comcast hit subscribers with fees for service visits related to malfunctioning Comcast equipment and networking errors. (Despite the company’s guarantee: “We won’t charge you for a service that results from a Comcast equipment or network problem.”)
  • Comcast authorized service technicians to charge for work that should be performed for free.
  • Comcast performed thousands of unauthorized credit checks on customers, negatively impacting their credit scores.

Comcast’s policy states that customers with good credit scores can waive the deposit fees. At least 6,000 times, though, customers opted to pay the deposit fee—only to have Comcast check their credit anyway.

“This case is a classic example of a big corporation deceiving its customers for financial gain.”

In his press release announcing the lawsuit, Mr. Ferguson stated, “This case is a classic example of a big corporation deceiving its customers for financial gain. I won’t allow Comcast to continue to put profits above customers—and the law.”

If you have been the victim of false advertising and/or deceptive billing practices, contact us to learn your rights. You may be entitled to compensation for financial losses and other damages.

Tyson Foods in Hot Water After Price-Fixing Conspiracy

Tyson Foods has never had a saintly reputation, but that hasn’t stopped it from growing into a poultry powerhouse and America’s largest producer of meats. In 2015, Tyson Foods raked in $41 billion in sales.

But several major scandals, a slew of class action lawsuits, one damning report from Pivotal Research, and another from Oxfam have left investors scattering.

Since September 22, Tyson’s share price has dropped from $76.76 to $70.67 (as of this writing), at times bottoming out at $67.75—its largest dip in six years. Meanwhile, the Supreme Court and a U.S. District Court in Iowa recently upheld a $6 million award for Tyson employees who hadn’t received full pay for their labor.

If the new antitrust charges stick, those financial blows could be just the beginning.

Fight for Your Employee Rights

Chicken Makers in Cahoots?

On September 2, 2016, New York-based Maplevale Farms filed an antitrust lawsuit in Illinois alleging that the $30 billion poultry industry had hatched a scheme in 2007 to inflate and fix chicken prices. That class action has since spawned five others, which will likely be consolidated into a multi-district litigation (MDL) later this year.

Of course, if the Justice Department deems this a legitimate antitrust case, they could take the reins of the lawsuit.

Source: Bloomberg
Source: Bloomberg

Among the 14 defendants are Tyson, Perdue Farms, Pilgrim’s Pride, Sanderson Farms, and Simmons Foods. The lawsuit claims that Big Chicken jointly agreed to limit production (in some cases by simply killing off chickens early) and raise prices on chicken.

The complaint says this was a coordinated, industry-wide effort facilitated in part through a data service called Agri Stats, which allows these companies to track each other’s propriety information.

Since 2007, chicken prices—which historically fluctuate over time—have risen steadily.

Peter Carstensen, a former antitrust lawyer for the Justice Department, tells Bloomberg, “It makes sense to cut back production if, and only if, your competitors cut back, too.”

Mr. Carstensen seems bullish on the antitrust lawsuit, saying, “You’re asking the court to infer collusion. With Agri Stats, those meetings, and then, if you can line up the conduct to show reasonable uniformity, that would pretty much do it.”

Pivotal Report Reverberates on Wall Street

Like Peter Carstensen, Tim Ramey—a stock analyst for the Pivotal Research Group—feels that “the narrative of this suit fits the fact-pattern of poultry pricing and margins over the past seven years.”

“The narrative of this suit fits the fact-pattern of poultry pricing and margins over the past seven years.”

On October 7, Mr. Ramey urged investors to sell their Tyson stock. He also lowered its target share price by 60%, from $100 to just $40. Investors listened: Tyson’s price plummeted that day by nearly 10%.

Mr. Ramey called the lawsuits “powerfully convincing” and wrote, “If [the allegations are] true, it explains a lot. It explains why Tyson can offer EPS guidelines with remarkable precision; boasting of margins at record levels well into the future.”

Unfortunately for Tyson, these antitrust suits are not the only class actions threatening its business.

Fight for Your Employee Rights

Courts Uphold $6 Million Verdict

In March the Supreme Court voted 6-2 to uphold a $5.8 million award for Tyson workers in Storm Lake, Iowa who had not been paid for the time spent at work donning and removing protective gear: a clear violation of the Fair Labor Standards Act (FLSA).

Tyson wanted the case thrown out, claiming there was not enough evidence to determine the damages owed each worker. According to Mother Jones, the company also wanted

the court to issue a broad ruling that would effectively immunize it against future class actions for wage and hour theft, and make it much harder for workers everywhere to join together to bring such claims. If it wins this case, Tyson could have it both ways: It could effectively continue to violate the FLSA and escape liability for it in court.

Thankfully the Supreme Court did not let that happen. But Tyson didn’t stop there: in June, the company asked the U.S. District Court in Sioux City, Iowa for a retrial. Judge John Jarvey denied that appeal.

It looks like Tyson will just have to pay its workers what they’re owed—which is the least it can do, given how the company allegedly treats them.

Tyson Employees Wear Diapers to Work

The Iowa case is not the first time Tyson employees have described abuse. In May, Oxfam America released a report titled “No Relief” which detailed myriad human rights violations by Tyson Foods, Pilgrim’s, Perdue, and Sanderson Farms.

The report alleges that poultry workers “earn low wages, suffer elevated rates of injury and illness, toil in difficult conditions, and have little voice in the workplace.”

Incredibly, Oxfam also writes that, due to long hours and a lack of adequate bathroom breaks,

Workers urinate and defecate while standing on the line; they wear diapers to work; they restrict intake of liquids and fluids to dangerous degrees; they endure pain and discomfort while they worry about their health and job security. And they are in danger of serious health problems.

“The vast majority of workers report a lack of adequate bathroom breaks,” the report says.

Tyson denied Oxfam’s claims, while the National Chicken Council questioned their validity given the workers’ anonymity.

But if the “No Relief” report is true, Tyson could soon have yet another class action lawsuit on its hands.

A Timeline of Monsanto’s Roundup Controversy

Monsanto is no stranger to controversy. This is the company that brought us Agent Orange, an herbicide deployed during the Vietnam War that wound up traumatizing both the Vietnamese and our own troops. (Monsanto would later reach a $180 million settlement with Vietnam vets over diseases like leukemia, Hodgkin’s disease, non-Hodgkin’s lymphoma, Parkinson’s disease, and respiratory cancer.)

Hold Monsanto Accountable

In 1974, four years after the U.S. stopped using Agent Orange, Monsanto introduced Roundup (glyphosate)—another powerful herbicide that quickly became a mainstay on most American farms.

But like Agent Orange, Roundup would be linked to cancer. This herbicide, too, could wind up costing the company millions due to lawsuits.



Monsanto patents and releases Roundup-Ready seeds, which are genetically modified to withstand the ubiquitous Roundup herbicide. (These seeds/crops are known as GMCs: genetically modified crops.) This allows farmers to kill weeds (in the short term, at least) without also dooming their own crops.

Over the next 20 years, Roundup-Ready crops will come to dominate their respective markets, eventually reaching a 90% share.

Thanks to the Roundup-Ready patent and relevant legal protections—and Monsanto’s aggressive acquisitions of its competitors—some argue that Monsanto has a monopoly on the biotech industry. (Without question, it is the largest biotech company in the world.)


The Oscar-nominated documentary Food, Inc. is released on June 12. The film shows Monsanto in a harsh light, portraying the company as mobilizing an army of attorneys to bully farmers into using their Roundup-Ready soybeans—and suing those who won’t cooperate.

Importantly, the film emphasizes that the Roundup-Ready seeds are “terminating” seeds. That means farmers can’t replant them; instead, they must go back to Monsanto to buy more seeds whenever they run out.

Food, Inc. inflicts so much damage on Monsanto’s reputation that the company creates several pages on its website just to respond to the charges lobbed in the film.


Entropy—a peer-reviewed scientific journal based in Switzerland—publishes a study that concludes

glyphosate enhances the damaging effects of other food borne chemical residues and environmental toxins. Negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body.

According to the study, one of the consequences of this negative impact is cancer.

Hold Monsanto Accountable


In March, the International Agency for Research on Cancer, or IARC (part of the World Health Organization, or WHO) assesses the potential cancer-causing (carcinogenic) effects of glyphosate (Roundup). It determines that glyphosate is “probably carcinogenic to humans.”

That fall, plaintiffs file the first of at least 25 lawsuits against Monsanto over Roundup’s allegedly cancer-causing effects. Many plaintiffs, like Yolanda Mendoza, just sprayed Roundup on their yard every week.

Ms. Mendoza, a mother of three, contracted Non-Hodgkin’s Lymphoma in 2013. (After intensive chemotherapy, her cancer is currently in remission.)

“What everyone has in common is that they all used Roundup and they all have non-Hodgkin’s lymphoma.”

Her attorney Robin L. Greenwald tells CBS News, “Some people are landscapers, some people are migrant farm workers, some people are farmers. What everyone has in common is that they all used Roundup and they all have non-Hodgkin’s lymphoma.”

For the year, Monsanto rakes in $4.75 billion in herbicide sales.


In April, the Journal of Occupational and Environmental Medicine (JOME) publishes a study that concludes that herbicides like glyphosate are “associated with a high risk of cutaneous melanoma” (skin cancer), “in particular among those exposed to occupational sun exposure.”

In September, pharmaceutical giant Bayer AG announces it will buy Monsanto for $66 billion, raising serious concerns about rising prices for farmers. (This is the second massive merger of the year after the Dow-DuPont deal.)

Later that month, the U.S. Food and Drug Administration (FDA) finds trace amounts of Roundup in various oatmeals, cereals, and baby foods.

The next month, federal judges consolidate 21 Monsanto Roundup lawsuits into a multi-district litigation (MDL) in the Northern District of California.


If you or a loved one contracted cancer after using Roundup, please contact us today to explore your legal options. Our firm is one of the most successful consumer protection firms in the country, with more than 300 attorneys and a support staff of 1,500. We have a history of standing up to bullies and have never represented a large corporation—that’s why our motto is “For the People.”

We may be able to help you get relief for medical bills, lost wages, pain and suffering, and other expenses. Don’t wait; these lawsuits are time-sensitive, and you may be owed compensation.

Wells Fargo Under Fire for Bogus Accounts Scandal

Wells Fargo must pay $185 million in fines for secretly opening unauthorized debit and credit card accounts for customers in a scheme engineered to boost stock prices and executive pay.

The money will go to the Consumer Financial Protection Bureau, the City and County of Los Angeles, and the Office of the Comptroller of the Currency. Also in line to receive restitution are the victims of the scheme, who had accounts unwittingly opened in their names.

Hold Wells Fargo Accountable

But while governments and consumers have scored a victory in the scandal’s resolution, there has been no financial relief for Wells Fargo employees claiming they were fired or demoted for playing by the rules and not opening secret accounts to meet sales quotas.

“Cross-Selling” Goes Back to at Least 2002

Federal regulators say Wells Fargo employees opened 1.5 million bank accounts and applied for 565,000 credit cards without customers’ permission. The bank has fired more than 5,000 employees involved in the scheme.

During a Senate Banking Committee hearing, Wells Fargo CEO John Stumpf defended the bank’s publicly stated goal of opening eight accounts per customer, whch it calls “cross-selling.” Wells Fargo set the goal of eight accounts as early as 2002, according to a Public Citizen report.

Stumpf earned $19.3 million in 2015 as the company’s stock became a Wall Street favorite. Wells Fargo is currently the most valuable bank in the world.

“Cross-selling is shorthand for deepening relationships,” he told the Committee.

Stumpf said Wells Fargo fired workers between 2011 and 2015 for the sales practices in question, but also said the issue didn’t reach the board level until 2013. He claims he wasn’t personally aware of the extent of the problem until 2015.

He maintained there was no orchestrated deception by Wells Fargo, and that the 5,300 employees it fired for creating false accounts were acting independently.

But this explanation does not square with the claim made by regulators and former workers that Wells Fargo employees were encouraged to open the unauthorized accounts through a compensation scheme that awarded them for increasing their cross-sale numbers.

Former Wells Fargo Workers Sound Off

Dennis Russell, a telephone banker with Wells Fargo in Orange County, California for five years, said he was fired in 2010 for not meeting sales quotas. He told the New York Times that he couldn’t legitimately offer banking products to the customers he spoke with because many of them were already behind on their mortgages, credit cards, and cars.

“They established the culture that made this happen—it comes down from the top.”

Russell lost his home after losing his job with Wells Fargo. He scoffs at John Stumpf’s claim that the bank did not encourage fraudulence in the pursuit of cross-sale quotas.

“It’s a crock,” Russell said. “They established the culture that made this happen—it comes down from the top.”

Christopher Johnson told the Times he was fired from Wells Fargo in 2008 after a five-month stint as a business banker for refusing to go along with pressure from his manager to open accounts for his friends and family, even if he didn’t have their permission to do so. He reported his concerns to the company’s ethics hotline and was fired three days later for “not meeting expectations.”

Johnson lost his home and possessions and spent the better part of a year living out of his truck.

Hold Wells Fargo Accountable

The Wells Fargo scandal is just the latest example of executives at major companies concocting schemes that benefit them at the expense of low-level employees.

If Wells Fargo will not do the right thing and compensate the real victims of its fraud—the employees that were fired for not engaging in unethical business practices—it is up to the workers themselves to demand justice.

If you are a former Wells Fargo employee who refused to set up accounts without customers’ knowledge and were punished for it, we would like to hear from you. Contact us for a free, confidential case review.

Often the lead class action plaintiff receives extra compensation for his or her role in the case.