The U.S. Equal Employment Opportunity Commission’s decision to erase, rather than modify, detailed harassment guidance increases uncertainty by creating a compliance gap that the agency’s Republican leadership isn’t likely to fill, experts say. 

… 

Pulling the whole thing down was a “stunning” decision, said Cohen Milstein Sellers & Toll PLLC partner Joseph M. Sellers, founder and co-chair of the worker-side firm’s civil rights and employment practice.  

“It seemed precipitous for them to remove the entirety of the harassment guidance, which had been built on prior harassment guidance that had been in place for decades, now leaving the commission with no guidance with respect to workplace harassment,” Sellers said.  

… 

That positioning suggests new Title VII harassment guidance isn’t likely on its way. Sellers of Cohen Milstein said their wholesale rejection of the harassment document makes him “seriously question whether they have any intention of replacing it with anything else.” 

The law remains unchanged, and Title VII still protects against workplace harassment. However, a dearth of EEOC-endorsed materials on the subject creates uncertainty for employers and workers. 

A maker of software for insurance brokers has further escalated its dispute with rival Applied Systems Inc., lodging a new lawsuit in Illinois federal court over an alleged campaign to eliminate a competitor it was unable to acquire.

Ardent Labs Inc., which does business as Comulate, filed a new lawsuit Monday accusing Applied Systems of using its control over 80% of the market for enterprise-level insurance agency management systems to eliminate a competitor in a new, related market for automated insurance accounting software.

The suit alleges that Applied employed sham litigation, false allegations of intellectual property theft and threats of lost access to discourage customers from continuing to use Comulate’s products.

. . .

Comulate is represented by Zachary Freeman and Brian Kerwin of Miller Shakman Levine & Feldman LLP, Rollo C. Baker, Silpa Maruri, Jared Ruocco and Brian Campbell of Elsberg Baker & Maruri PLLC, and Michael Eisenkraft and Nathaniel Regenold of Cohen Milstein Sellers & Toll PLLC.

The U.S. Supreme Court’s decision not to review a standard the Seventh Circuit recently established for issuing notice in collective actions left intact a landscape in which there are now four different approaches.

The denial of a certiorari petition on Monday in Eli Lilly and Co. et al. v. Monica Richards means Seventh Circuit courts will be able to keep using a flexible approach toward certification in wage and hour litigation. That approach departs from the longstanding two-step process most circuit courts have used for decades, as well as from tests the Fifth and Sixth circuits introduced in 2021 and 2023, respectively.

There is still a chance for the justices to weigh in, as there is a pending certiorari petition in Andrew Harrington et al. v. Cracker Barrel Old Country Store Inc . Cracker Barrel is challenging the Ninth Circuit’s upholding of the two-step approach.

. . .

Under this approach, a court first grants conditional certification for notice purposes based on a “modest factual showing” that the plaintiff is similarly situated to others. Later, after more discovery, the court considers whether to issue final certification, or weighs a defendant’s bid for decertification.

Rebecca Ojserkis of worker-side firm Cohen Milstein Sellers & Toll PLLC said enabling workers to opt in to a collective action earlier is important because the statute of limitations does not toll until each worker submits an opt-in form, and because earlier notice helps with discovery.

“Those workers themselves may have important information to share in determining whether or not they are similarly situated to the named plaintiffs,” she said. “So, if that analysis is being conducted without opt-in plaintiffs, whose contact information is typically known to defendants but not plaintiff’s counsel, you’re missing out on the exact discovery that’s needed to prove that ‘similarly situated’ question.”

. . .

But Ojserkis said the recent Ninth Circuit ruling in Cracker Barrel “takes the wind out of any accusations of forum shopping.”

Besides upholding the two-step approach, the panel in that case also held that each opt-in plaintiff needs to establish personal jurisdiction, following the view some other circuits have also taken.

“Any collective action involving workers beyond a single state will inevitably be brought where the employer is at home,” Ojserkis said. “It’s not the case that plaintiffs are going to be able to file nationwide collective actions anywhere they want.”

Second Circuit judges sounded sympathetic Tuesday to the idea that a former Luxottica employee has standing to pursue changes to its defined benefit pension plan, expressing skepticism at the company’s notion that her case is barred because she is seeking unavailable remedies.

. . .

Duke is represented by Peter K. Stris, Rachana Pathak and Jeff Hahn of Stris & Maher LLP and Michelle C. Yau, Ryan A. Wheeler and Kai Richter of Cohen Milstein Sellers & Toll PLLC.

Block & Leviton LLP, Hach Rose Schirripa & Cheverie LLP, Lieff Cabraser Heimann & Bernstein LLP and Cohen Milstein Sellers & Toll PLLC make this week’s list after a California federal judge ruled Tuesday that Block Inc. — the parent company of Square and Cash App — must face claims of compliance failures in a class action and separate derivative suit.

U.S. District Judge Noel Wise ruled that the derivative suit adequately pled that Block’s board failed to properly oversee the company’s compliance program. The judge also declined to dismiss the parallel class action, disagreeing with Block and its executives that the challenged statements in the complaint were not misleading.

The investors in the derivative suit are represented by Jason Leviton, Nathan Abelman, Jacob Walker and Lindsay Faccenda of Block & Leviton, and Daniel Rehns, Scott Jacobsen and John Baylet of Hach Rose.

The investors in the class action are represented by Richard Heimann, Katherine Lubin Benson, Courtney Liss, Steven Fineman, Daniel Chiplock, Nicholas Diamand and Gabriel Panek of Lieff Cabraser, and Julie Goldsmith Reiser, Claire Marsden, Michael Eisenkraft and Benjamin Jackson of Cohen Milstein.

A California federal judge has ruled that the parent company of Square and Cash App, Block Inc., and its officers and directors must face claims of compliance failures in a class action and separate derivative suit, finding, among other things, that the derivative suit adequately pleads that Block’s board failed to properly oversee the company’s compliance program.

U.S. District Judge Noel Wise issued two orders on Tuesday denying dismissal motions from Block and the company’s top brass, including Twitter co-founder Jack Dorsey.

The derivative suit, filed in February 2025, claims that Block’s executives and board members breached their fiduciary duties to investors by concealing Block’s allegedly lax customer due diligence practices, leaving the company vulnerable to regulatory scrutiny and litigation.

By failing to put adequate safeguards in place, investors said, Block “allowed the company to become a haven for unlawful activities” such as money laundering, trafficking of people and drugs, and terrorism financing, among other things.

In declining to dismiss the suit on Tuesday, Judge Wise agreed with investors that demand upon Block’s board before the suit’s filing would have been futile because a majority of the board members were not independent and faced a substantial likelihood of liability for the allegations in the complaint.

. . .

The investors in the class action are represented by Richard M. Heimann, Katherine Lubin Benson, Courtney J. Liss, Steven E. Fineman, Daniel P. Chiplock, Nicholas Diamand and Gabriel A. Panek of Lieff Cabraser Heimann & Bernstein LLP and Julie Goldsmith Reiser, Claire Marsden, Michael B. Eisenkraft and Benjamin F. Jackson of Cohen Milstein Sellers & Toll PLLC.

SEC Chairman Paul Atkins’ bid to curb “frivolous” shareholder complaints signals a new level of hostility toward investors and lawyers typically viewed as the Wall Street cop’s allies, and the effort has struggled to get off the ground as companies are slow to adopt mandatory arbitration clauses for shareholders. 

Championed as a way to boost IPO activity, Atkins’ push to funnel claims away from courts and into private arbitration marks a departure from how the 90-year-old Securities and Exchange Commission views its role as a regulator, shareholder lawyers and an investor advocate said. 

…

The SEC, now run solely by a GOP chairman and commissioners, unveiled its new stance on mandatory arbitration as a “clarifying” policy statement without noting any consideration of public input. 

The agency under the second Trump administration has frequently telegraphed its priorities through roundtable discussions instead of going through formal rulemaking. With the arbitration policy, Atkins is taking aim at shareholder litigation despite another safeguard in place to raise the bar for pleading securities fraud class action suits, the 1995 Private Securities Litigation Reform Act. 

“Most things that have come out of this SEC, they are solutions in search of a problem,” said Laura Posner, a partner in the securities litigation and investor protection practice at Cohen Milstein Sellers & Toll PLLC. “One of the things that the PSLRA, when it was passed 30 years ago, was actually quite effective at doing was ensuring that frivolous litigation does not move forward past the motion to dismiss stage.” 

…

Others argue that defending cases as individual arbitration actions would place a considerable burden on companies that choose to go that route, presenting logistical concerns that would otherwise be minimized in a consolidated class action, as well as a potentially larger price tag. 

“I don’t think it’s going to save you any money,” Posner said. “Institutional investors will still bring their claim in arbitration, and they’re not going to settle for 10, 15, 20 cents on the dollar. When they bring individual actions, they will be demanding higher percentages of their damages.” 

For now, it seems that public companies or those seeking to go public are exercising caution around mandatory arbitration and instead opting to tackle shareholder class actions in court. 

“We’ve been talking not only to corporate counsel, but also to issuers directly, to D&O insurers, to underwriters and accountants,” Posner said. “Pretty uniformly, at least from those who are sophisticated, they are advising and being very careful in their recommendations to clients about not proceeding down this road.” 

SEC policy shifts, rulings on investor class status and actionable company statements, and discussions about the future of artificial intelligence set the pace in 2025 and may have a lasting effect in securities cases in 2026.

A Securities and Exchange Commission pivot allowing companies to issue stock with the condition that disputes must be arbitrated remains one of the year’s most talked-about developments in securities litigation. Mandatory arbitration brings the potential to upend that area of practice by handing corporations a new means of avoiding class actions, while raising the specter of mass filings to arbitrators.

…

Companies that adopt arbitration provisions will lose advantages they have in court, including legal rules, the discovery stay, and the high pleading standard, said plaintiffs’ attorney Carol Gilden of Cohen Milstein Sellers & Toll PLLC. “Plus, lawsuits can still be brought in federal court against underwriters and accountants.” 

Unlike a class action, arbitration won’t give companies “total peace,” she said. “I would not expect mandatory arbitration to be embraced by companies on a widespread basis.” 

The Private Securities Litigation Reform Act prompted a sea change in securities class actions that reshaped the plaintiff’s bar and empowered institutional investors to take charge of cases.

The Private Securities Litigation Reform Act was once feared as the death of the securities class action.

Thirty years later, securities class actions are alive and kicking, even if getting there required law firms to change their business models and for a new type of plaintiff to come forward.

. . .

Remaking the Plaintiff’s Bar

Daniel Sommers, a partner at Cohen Milstein Sellers & Toll, was only a few years into what would be a decades-long career as a plaintiff’s attorney when the PSLRA passed.

“It was a new world,” he said. “The landscape of securities class actions had been radically changed.”

Before the PSLRA, the first to file a case would gain the lead plaintiff position. That race to the court was typically won by retail investors who held only a few shares of a company, Sommers said.

These plaintiffs would “have less incentive to supervise the lawyers to push the case along; many of them weren’t particularly sophisticated; they weren’t incentivized or suited to aggressively monitor the litigation and monitor the counsel,” said Sommers.

The PSLRA upended this system by stating that the person or entity with the largest financial stake in a case would be the class representative.

. . .

Putting an Institutional Investor in the Driver’s Seat

Empowering institutional investors led to other changes.

. . .

Sommers also recognized a difference in who the lead plaintiff is.

“There’s no comparison between someone who purchased ten shares of x, y, z company on one hand and a large state-wide pension fund with hundreds of billions of dollars under management,” said Sommers.

Cadence Bank has reached a $5.25 million deal to end negligence claims it faced in multidistrict litigation over the May 2023 breach of file transfer application MOVEit, a consumer affected by the breach has informed a Boston federal judge.

In a motion Wednesday, plaintiff Tammy Pratt asked U.S. District Judge Allison D. Burroughs to grant preliminary approval to the deal on behalf of a class of those notified by Cadence that their personally identifiable information was in files affected by the MOVEit data breach.

Pratt said Wednesday that the settlement agreement, which the parties executed on Dec. 15, is “fair, reasonable, and adequate as it provides immediate and guaranteed relief in the face of difficult, extensive, and expensive litigation that poses a significant risk that plaintiff and the settlement class might recover nothing from Cadence should litigation continue.”

Under the terms of the proposed settlement, class members can submit claims for reimbursement of ordinary losses up to $2,500, extraordinary losses up to $10,000 or an alternative $100 payment.

The deal was designed to give equal treatment to those who hadn’t incurred out-of-pocket losses and those who incurred expenses in connection with the breach requiring individualized compensation, the motion states, noting that the structure is similar to other court-approved allocation plans in other data breach cases.

Cadence is among over 100 commercial and government entity defendants facing liability in the multidistrict litigation stemming from the May 2023 breach.

. . .

The plaintiffs are represented by Kristen A. Johnson of Hagens Berman Sobol Shapiro LLP, E. Michelle Drake of Berger Montague PC, Gary F. Lynch of Lynch Carpenter LLP, Douglas J. McNamara of Cohen Milstein Sellers & Toll PLLC, Karen H. Riebel of Lockridge Grindal Nauen PLLP and Charles E. Schaffer of Levin Sedran & Berman LLP.