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Who to Sue for Construction Accidents

When construction workers are injured on the job, they are usually unable to bring personal injury lawsuits against the most obviously responsible party, their employers, due to the Workers’ Compensation Law. Fortunately, New York’s legislature enacted New York’s Labor Laws, designed to protect construction workers who often do not have control over their working conditions. The Labor Laws, specifically, Labor Law 240 and 241(6), provide that the building owner and general contractor may be held liable for injuries to construction workers, even when the owner and general contractor have no direct involvement in the incident. The goal of the legislation is to shift the burden of such injuries away from the powerless workers and State (who support injured workers through public assistance programs, if they cannot return to work) and onto the parties with both the financial means to pay (insurance) and the ability to control the work environment.

When pursuing a Labor Law claim, it is extremely important to have an attorney who can identify the proper parties to sue. Information such as who holds the deed for a property may be available online (in New York City, via the ACRIS system) or at local county record keeping offices. In cases involving apartment buildings, though, this is just the first step. Next, the attorney must determine whether the building is a rental building, a condominium or a housing cooperative (coop), to determine the proper party to sue. This can be very complicated and can lead to suing the wrong party, if the investigation is not thorough. For example, in a recent First Department Appellate Division case, Jerdonek v. 41 West 72 LLC, et al. (Index No. 590726/10), the Court found that one defendant could not be held liable under Labor Law because it had converted the building to condominiums, after which a different entity, the Board of Members, was given ownership of the boiler room where the accident occurred. As another example, when there is a lawsuit based on an accident that occurred within an apartment in a coop, the individual coop owner residing in the apartment is usually exempt from the Labor Law, but the coop board is not.

It is equally crucial to identify the general contractor. Sometimes, the general contractor will have signage at the construction site advertising their presence, making this determination easy. Otherwise, permits and other records can be searched at government offices to identify the general contractor. Even this, though, can be difficult, as, on more than one occasion, the general contractors listed on permit applications have taken the position that despite the listing, they were just used for paperwork and were not the real general contractor, a defense that has been permitted by the Court.

Overall, the important thing to appreciate is that a sophisticated attorney is crucial to success when bringing a Labor Law claim arising from a construction accident. Trief & Olk regularly represents individuals injured on construction sites in a wide variety of circumstances. If you have been injured in a construction accident, contact Trief & Olk by telephone or via our website’s submission form to find out more about how Trief & Olk can help you.

Don’t Forget The Tip (and Consider Leaving Cash)

Under current federal law, the minimum wage is $7.25 an hour. For tipped employees, like restaurant servers, who work in states other than Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington, their wage is likely to be even lower since under federal law an employer is allowed to take a “tip credit” (provided it meets certain requirements) against the minimum wage and pay that employee a “tipped wage” of only $2.13 an hour. (This practice is also permitted under state law other than in the seven listed above, although many states have set a higher tipped wage (and minimum wage). For example, under current law, the minimum tipped wage is $7.50 per hour while the full minimum wage in New York is $9.00 per hour.) Unlike the regular minimum wage of $7.25 per hour, which has increased periodically over the last 30 years, the federal tip wage has been stuck at $2.13 for over 20 years – losing 40% of its value in real terms over that period.[1] As a result, restaurant servers, who are predominantly women, are three times more likely to live in poverty than other Americans.[2]

Consumers may not realize that servers are dependent on the tips they receive to pay their bills. Additionally, when a customer pays by credit card (including the tip), it is permissible under federal law for the employer to reduce the employee’s tip to account for the processing fee that the credit card company the employer, as long as the deduction does not cause the employee to earn less than the minimum wage. For example, where a credit card company charges an employer a 3% processing fee, the employer may deduct the same 3% (paying the tipped employee only 97% of the tips) without violating the law. When a server is earning the sub-minimum wage of $2.13 an hour, a 3% reduction in tips can be significant. Receiving no tip at all can be devastating.

While some states are considering eliminating the distinction between tipped and non-tipped wages and pressure on Congress to increase the minimum wage would likely also include an effort to increase the federal tipped wage may eventually be raised, that day is not here yet, a fact you should keep in mind when you dine out or order take-out.





Understanding Your Homeowner’s Insurance Coverage

Homeowners assume that once they have obtained insurance for their home, they are protected if a loss – such as damage to due to a fire or storm, stolen property, etc. – later occurs. Unfortunately, it is often only after having a claim denied by the insurance company that the homeowner realizes that the policy did not in fact provide the coverage that the insured homeowner thought she had paid for.

The gaps in coverage may result from one of the following common occurrences:

  • The insurance policy defines the “residence” that is covered in specific terms but the home does not meet that definition. For example, if “residence” is defined as the location where the insured is currently living but the insured is temporarily living elsewhere, the insurer can deny coverage.
  • The insurance policy covers losses for certain contents or personal property but the amount of coverage is much lower than the amount of losses suffered.
  • The insurance policy excludes losses from certain types of events or arising under certain circumstances. For example, most basic policies do not include coverage for damage due to flooding; a separate policy would be required to cover this type of loss.

Courts in New Jersey and New York expect the homeowner to have read the policy and will allow an insurer to deny a claim if such a denial is clearly based on the policy’s terms. See Busker on the Roof P’Ship v. Warrington, 283 A.D. 2d 376, 377 (1st Dep’t 2001) (citing Metzger v. Aetna Ins. Co., 227 N.Y. 411, 416 (1920)); Martinez v. John Hancock Mut. Life Ins. Co., 145 N.J. Super. 301, 310 (App. Div. 1976), cert. denied, 74 N.J. 253 (1977).

To avoid being unpleasantly surprised to find that expected coverage does not pan out, it is essential to read and understand your policy. In particular:

  • Review the definitions and the types of losses that are covered and those that are excluded. If there is a gap, consult your agent or broker to see if you can purchase additional coverage. For example, it may be possible to purchase additional flood insurance if the policy excludes this type of loss.
  • Review the dollar amounts on any limits to the coverage offered and compare those limits to the value of your home and contents. If you think the proposed coverage may not be adequate, ask your broker what a higher level of coverage would cost in terms of the additional insurance premium so you can make an educated choice between lower coverage (with a lower premium) and higher coverage (with a higher premium).
  • If you have a tenant occupying part or all of your residence (whether part-time or full-time), make sure you understand how your coverage is impacted by the tenant. If the tenant causes damage to your personal property, is the loss covered? If the tenant damages the premises she is renting, is the loss covered? If you are unable to rent the premises, does the policy cover lost rental income?
  • Review any conditions imposed by the insurance company for changes in circumstances. For example, if you will be away from the home for more than 30 days, the home may be technically “abandoned” under the terms of the policy, in which case the insurer could deny coverage for losses that occur in your absence. Advance planning is essential, as it may be possible to maintain coverage if your provide notice or purchase additional coverage for the home while it is unoccupied. Similarly, if the insured property is unoccupied while substantial renovations are undertaken, check with your insurer to see if the home would be covered or if separate coverage can be purchased.

Trief & Olk represents homeowners (and businesses) in claims against insurance companies and brokers for denial of claims relating to fires, theft, and other losses. If you have suffered losses from an insurance company’s failure to pay a claim, please contact our attorneys, who are licensed in New York, New Jersey, and Massachusetts, for more information or to discuss your case.

CFPB Considers Ban on Arbitration Clauses

The Consumer Financial Protection Bureau (“CFPB”), the federal agency responsible for regulating the consumer financial industry, appears poised to regulate arbitration clauses that restrict consumers’ relief when a dispute arises between them and their financial service provider.

In recent years, large corporations – particularly those in financial services industries – have been including mandatory arbitration clauses in their customer agreements. These provisions, which are generally buried in the fine print of an already lengthy “take or leave it” contract, often include a class action waiver, which blocks the consumer from bringing a class action – whether in court or in arbitration – to remedy harm suffered by them and other consumers. Because these class action waivers are deliberately designed by financial service providers to block consumers from effectively vindicating their rights, the CFPB is taking a hard look at these contract provisions. While the CFPB is not considering banning arbitration clauses entirely, it has proposed making arbitration clauses inapplicable in cases that are filed as potential class action lawsuits.

The need for the CFPB to intervene is clear. In a recent study published by the CFPB, the agency found that arbitration clauses are pervasive, with tens of millions of consumers covered by such clauses in contracts involving financial services, including credit cards, checking accounts, student loans, and mobile wireless contracts. That study also looked at the number of claims pursued through arbitration or federal lawsuits by consumers against such firms over a two year period, finding that only about 25 cases per year involved consumers’ claims seeking $1,000 or less demonstrating that consumers generally did not seek redress for individual matters that involved small claims. In stark contrast, the CFPB study found that 32 million consumers each year who were not restricted by arbitration clauses were able to join class action lawsuits and therefore were able to obtain redress through class action settlements. These class actions also brought about necessary change to improper business practices, providing consumers with additional valuable relief.

In a recent speech given by CFPB Director Richard Cordray, he recognized that “[b]y joining together to pursue their claims as a group, affected consumers would be able to seek and, when appropriate, obtain meaningful relief that as a practical matter they could not get on their own” and that the proposals the CFPB is considering “would deter wrongdoing on a broader scale.” As Mr. Cordray aptly stated “[c]ompanies should not be able to place themselves above the law and evade public accountability simply by inserting the magic word ‘arbitration’ in a document and dictating the favorable consequences.”

The CFPB has received feedback in response to its proposals and the next step will be for the agency to publish a Notice of Proposed Rulemaking and seek public comment before finalizing the rule.

Trief & Olk, which represents consumers in class actions brought against financial service providers, is encouraged by the CFPB’s actions and will continue to monitor the progress of CFPB’s rulemaking as it unfolds.

Supreme Court Permits Use of Representative Evidence [Update re Tyson Foods]

Plaintiffs in class actions scored a victory in the Supreme Court, with a 6-2 opinion authored by Justice Kennedy, in Tyson Foods, Inc. v. Bouaphakeo, 577 U.S. ____ (2016). In Tyson Foods, the Court affirmed that the use of so-called “representative evidence” – such as a statistical sample – is permissible for establishing liability in a class or collective action.

In Tyson Foods, employees who worked in a Tyson pork-processing facility in Iowa, brought overtime claims against the company under the Fair Labor Standards Act (FLSA) and state law for the company’s failure to pay them overtime compensation for donning (putting on) and doffing (taking off) personal protective gear before their shifts formally started and after their shifts ended. The district court certified the FLSA claim as a collective action and the state law claim under Rule 23 of the Federal Rules of Civil Procedure. The plaintiffs prevailed at trial, proving liability and damages by using information from individual plaintiffs’ timesheets, along with a study performed by an expert, who analyzed the average times for donning, doffing, and walking to their assigned stations, based on 744 employee observations.

The defendant challenged the use of this study, and sought to have the Supreme Court issue a sweeping rule preventing class action plaintiffs from using statistical sampling altogether, relying on an earlier Supreme Court case, Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011). Justice Kennedy rejected the defendants’ argument that Wal-Mart v. Dukes stands for a wholesale rejection of representative evidence. Slip op. at 13. Instead, he explained that “[w]hether a representative sample may be used to establish classwide liability will depend on the purpose for which the sample is being introduced and on the underlying cause of action. . . . The fairness and utility of statistical methods in contexts other than those presented here will depend on facts and circumstances particular to those cases.” Slip op. at 15.

Here, because Tyson Foods had no records from which the plaintiffs could establish the amount of time spent donning and doffing the protective gear and walking to their workstations, the jury could rely on the plaintiffs’ expert’s statistical study. Because Tyson Foods did not offer evidence to discredit the substance of the statistical analysis (such as evidence that the study was inaccurate or that the sample was not statistically valid), the jury could draw reasonable inferences – as it did – regarding the amount of time spent on the activities at issue.

Barely a week after Tyson Foods, the Supreme Court signaled its acceptance of the use of “representative evidence,” when it declined to review a pair of cases on appeal from the Pennsylvania Supreme Court, in Wal-Mart Stores, Inc. v. Braun and Wal-Mart Stores, Inc. v. Hummel. There, the Pennsylvania state court permitted the plaintiffs to calculate damages for the entire class of almost 200,000 employees based on expert analysis extrapolating from testimony of six plaintiffs. Wal-Mart appealed to the Pennsylvania Supreme Court, protesting what it viewed as “trial by formula.” With the U.S. Supreme Court’s denial of the review, the Pennsylvania court’s ruling will remain good law.

Trief & Olk represents employees in actions under the FLSA and state laws challenging unlawful wage and hour practices, such as failing to pay minimum wages and overtime, both in collective and class actions. Employees that come to Trief & Olk often express concern that they cannot bring a lawsuit against their employer for unpaid wages because their employer did not keep any records of their time. These recent decisions by the Supreme Court reaffirm what has long been the law – an employee may prove such claims even if they can only extrapolate from the experience of other employees to prove their own claims.

Unaccepted Offers Do Not Halt Class Actions

One of the many tools defendants use to stem class actions involves paying a claimant their full damages at the outset of the lawsuit. The theory being, if the person bringing the lawsuit is now fully compensated, they have no standing to carry the case forward and thus no standing to represent a potential class action. This practice was recently addressed by the U.S. Supreme Court.

In Campbell-Ewald Co. v. Gomez, No. 14-857, the Supreme Court held that an unaccepted settlement offer of complete relief to a named plaintiff—proffered under Rule 68 of the Federal Rules of Civil Procedure—had “no force” and did not moot a class action. The Court reasoned that like any unaccepted contract offer, there were no lasting rights or obligations created between the parties. Thus, once the offer lapsed, adversity between the parties remained and a court was not deprived of its subject-matter jurisdiction.

At first glance, the decision may appear to bolster the class mechanism, yet the Court carefully noted that the holding was predicated upon the strictly prescribed facts of the case. That is, Campbell involved a situation in which the defendant merely tendered an offer to the named plaintiff, but did not take any additional steps such as placing the settlement funds with the court or some third-party.

The Court specifically declined to address this hypothetical, noting:

We need not, and do not, now decide whether the result would be different if a defendant deposits the full amount of the plaintiff’s individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount. That question is appropriately reserved for a case in which it is not hypothetical.

However, there should be little doubt concerning how the Court would rule in such an instance. Indeed, the dissents go on to offer a step-by-step guide—culminating with a defendant “deposit[ing] a certified check with the trial court”—explaining how to properly utilize a Rule 68 Offer of Judgment to moot a case.

Trief & Olk was recently on the receiving end of this guidance, wherein a defendant directly wired our named plaintiff a settlement offer in excess of her individual damages.

Hidden Arbitration Clauses Curtailed in NJ

A spate of recent decisions out of New Jersey has cast doubt on the practice made popular over the last decade by large corporations of burying small-font arbitration clauses deep into boilerplate agreements, hiding them from consumers. These arbitration clauses, in addition to requiring that all disputes be settled in arbitration—not in court—prohibit consumers from bringing any type of class action in any venue. Thus, consumers are permitted only to pursue individual claims where the costs often times outweigh the rewards. Relying on the Federal Arbitration Act, the U.S. Supreme Court has, in several recent opinions, upheld such class action waivers in mandatory arbitration provisions, based on the supposed importance of encouraging arbitration as a more efficient means of dispute resolution.

New Jersey courts’ first effort to push back against this practice came in a 2014 New Jersey Supreme Court decision, Atalese v. U.S. Legal Servs. Grp. Finding that the arbitration provision in question was an affront to the principles of mutual assent that are vital to formation of a valid contract under New Jersey state law, the Court refused to enforce an arbitration provision that was buried within a longer agreement because it “did not clearly and unambiguously signal to the plaintiff that she was surrendering her right to pursue her statutory claims in court.”

This decision, framed by the New Jersey Supreme Court as purely a matter of New Jersey contract law, has spawned a progeny of state and federal cases grappling with the issue. The most recent—Noble v. Samsung Electronics America—involved consumers who brought a class action, seeking to hold Samsung to account for its allegedly unreliable Galaxy Gear S smartwatch. In that case, Samsung sought to have the case dismissed from court based on the class action waiver buried in the customer agreement. In ruling on its motion, the question before District Judge Madeline Cox Arleo of the District of New Jersey was whether an arbitration clause appearing on page 97 of a 137-page owner’s manual was sufficiently conspicuous to provide consumers with notice that they were waiving their legal rights and effectively foreclosing any legal remedy. Arleo rejected Samsung’s attempt to enforce the contract, noting that the “shrink-wrap agreement,” found in a product manual bearing no clues that it contained a waiver of legal rights, was insufficient to alert a reasonable consumer as to its implications.

Notwithstanding the U.S. Supreme Court’s apparent willingness to enforce any and every class action waiver in a mandatory arbitration agreement, these recent opinions by the New Jersey courts indicate that the ability of corporations to foist these agreements on unsuspecting consumers appears to be narrowing. Future developments will be posted here.

Trief & Olk is a class action firm representing consumers.

Representative Evidence Challenged In Supreme Court

Currently pending before the United States Supreme Court is Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, in which the employer is challenging certification of a class of employees seeking unpaid overtime. After oral argument was held on November 10, 2015 (which was prior to Justice Scalia’s death), the principal issue appears to be whether representative evidence—in this instance, a proposed statistical analysis calculating the “average” time spent on a particular task as opposed to an employee’s actual individualized and personal circumstances—is sufficient to prove liability and damages at trial. A decision is expected to be issued before the Court’s term ends in June 2016.

In Tyson Foods, employees who worked in a Tyson pork-processing facility in Iowa, brought overtime claims against the company under the Fair Labor Standards Act (FLSA) and state law for the company’s failure to pay them overtime compensation for donning (putting on) and doffing (taking off) personal protective equipment and clothing before their shifts formally started and after their shifts ended. The district court certified the FLSA claim as a collective action and the state law claim under Rule 23 of the Federal Rules of Civil Procedure. After a nine day trial the jury returned a verdict in the plaintiffs’ favor. The plaintiffs had proved liability and damages by using individual timesheets, along with the average times for donning, doffing, and walking to their assigned stations calculated from 744 employee observations.

On appeal, the company took issue with the use of “averaged” representative evidence to prove liability and damages at trial and argued that the district court erred in certifying a class given the factual differences among the class members. The company heavily relied on the Court’s decision Walmart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2561 (2011), in which the Court disapproved of representative evidence in a sex discrimination class action, which it characterized as “Trial by Formula.”

For almost 70 years, however, the Court’s decision in Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), has been the applicable standard applied in FLSA cases, permitting employees to use representative testimony to prove their case when their employer has failed to keep accurate time records. Relying on this precedent, the Department of Labor, which enforces the FLSA, argued in an amicus curiae brief submitted in support of the employees that because this case was brought under the FLSA (not a discrimination statute like the one in the Dukes case) the employees’ proof was sufficient.

At oral argument, several justices, including Justice Kagan and Justice Kennedy, appeared to agree with the government and focused on the application of Mt. Clemens and the use of representative evidence by employees in FLSA cases. In fact, he Court’s more recent decision in Dukes was not raised at all by the Court at oral argument. Notably, Justice Kennedy appeared to suggest that the burden of proof was lower in FLSA cases than in other employment-related class actions because in this case Mt. Clemens was the substantive law that applied. Justice Kennedy’s questions at argument further suggest that he may vote with the four more liberal Justices of the Court (Justices Breyer, Ginsberg, Kagan, and Sotomayor), allowing the Court to issue a precedential opinion issued by a majority of the Court (rather than issuing a 4-4 tie opinion, which would be the outcome if Justice Kennedy were to rule with the three more conservative justices who remain on the Court after Justice Scalia’s death).

Trief & Olk represents employees in actions under the FLSA and state laws challenging unlawful wage and hour practices, such as failing to pay minimum wages and overtime, both in collective and class actions. Employees that come to Trief & Olk often express concern that they cannot bring a lawsuit against their employer for unpaid wages because their employer did not keep records of the hours they worked. If the comments from the Justices of the Supreme Court are any indication, employees can remain assured that the standard provided in Mt. Clemens, which has been the law for almost 70 years, will remain intact and they will be able to use testimony and other representative proof to demonstrate their claims.

Trief & Olk Announces Promotions

Trief & Olk is pleased to announce the following promotions: Shelly L. Friedland has been elevated to partner and Jordan Rutsky is now Senior Counsel, effective January 1st of this year.

Ms. Friedland, who joined Trief & Olk in 2014, graduated cum laude from Harvard Law School, and received her B.A. in economics from Columbia University, graduating summa cum laude. Ms. Friedland has experience in a broad range of matters, including antitrust, securities, and consumer class actions, and general commercial litigation, representing both plaintiffs and defendants. At Trief & Olk, Ms. Friedland has represented hourly employees in actions brought to enforce state and federal minimum wage laws, with a specific focus on enforcement of wage and hour regulations designed to protect tipped employees, who earn less than minimum wage. Ms. Friedland also represents both insureds and insurance brokers in litigation relating to insurance coverage disputes, including denial of coverage under life insurance and home owner’s insurance policies. Ms. Friedland is admitted to practice law in New York and New Jersey and is certified to practice in several federal courts, including the Southern and Eastern Districts of New York, the District Court of New Jersey, the Eastern District of Michigan, and the United States Court of Appeals for the First and Eighth Circuits. Ms. Friedland is a member of the American Bar Association and co-chaired the Emerging Issues Subcommittee for the Class Action and Derivative Suits Committee of the ABA’s Litigation Section.

Mr. Rutsky joined Trief & Olk in 2005. He received his J.D. from Fordham Law School in 2004, and his B.S. and B.A. in Business Administration – Finance and Political Science, respectively, at the University at Buffalo in 2001, where he was part of the Honors Program and earned the President’s Disparate Majors Award. While at Trief & Olk, Mr. Rutsky has focused primarily on medical malpractice, products liability and Labor Law construction accident claims. He has also represented clients in serious automobile accident cases, insurance denial claims, false arrest/false imprisonment/malicious prosecution claims, commercial claims, and in various other tort claims. Mr. Rutsky is admitted to practice law in New York and New Jersey and is certified to practice in several federal courts, including the Southern and Eastern Districts of New York and the District of New Jersey. He is a member of the New York State Trial Lawyers Association and the New York Academy of Trial Lawyers.


OtisKnee Investigation

Trief & Olk is currently investigating OtisMed Corporation, the maker of OtisKnee, for intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA). If you believe that an OtisKnee guide was used in your knee replacement surgery, contact the product liability attorneys at Trief & Olk for a free consultation.

By way of background, OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making accurate bone cuts specific to individual patients’ anatomy based on magnetic resonance imaging (MRI) performed prior to surgery.  None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.

“Companies and individuals put the public health at risk by not complying with FDA regulatory requirements for the pre-market review of medical devices,” said Acting Director Philip J. Walsky for the FDA’s Office of Criminal Investigations.  “We will continue to assure consumer confidence in FDA-regulated products by investigating and bringing to justice those who endanger patient safety by distributing unapproved surgical devices.”

Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.