Week Adjourned: 6.26.09

Top Class Actions

Quiet Company…loud ex-employees? Seems some former Northwestern Mutual (NML) employees missed the “Shhhh!” memo when they worked there. The Milwaukee-based life insurance giant has been slapped with a $200 million class action lawsuit by former employees who allege NML violated the federal Fair Labor Standards Act and California’s overtime and minimum wage laws. Their complaint also states that NML “intentionally and repeatedly” misclassified sales employees as independent contractors: independent contractors are exempt from federal and state wage and hour laws, while full-time employees are not.

Any of this sound familiar? It should. NML was sued on similar allegations in Pennsylvania in 2008. That time around NML won the lawsuit, which resulted in their being able to maintain their financial representatives as ‘independent contractors.’ According to media reports, NML has about 7,000 “financial representatives nationwide.” Be interesting to see if history does repeat itself here.

Fill ‘er kinda up? If you’ve been running out of gas sooner than expected—and I’m referring to propane here, check your cylinder. If it’s from Blue Rhino and AmeriGas, you might be interested to know that they are facing a class action lawsuit over allegations that they reduced the amount of propane provided in tanks sold as ‘full’ without telling their customers.

Of course, they did it with your best interests at heart. They wanted to save you money—so instead of raising the price of a full tank of propane (approxmately 17 lbs) to reflect rising fuel costs they reduced the amount of propane in “full” bottle to about 15 lbs. Thoughtful? Possibly a little too thoughtful.

Top Settlements

Landmark Autism Class Action Reaches Important Settlement: It is being hailed as a landmark autism case—a class action lawsuit brought against Blue Cross Blue Shield, by 100 families of autistic children over reimbursement for screening and treatment for the children. The settlement, $1 million, represents a significant victory for the families.

The suit, filed by the family of an autistic child, alleged that Blue Cross failed to acknowledge the scientific validity of a treatment called applied behavioral analysis, or ABA. The complaint also claimed that Blue Cross treated ABA as experimental, which was arbitrary, among other things, and contradicted years of science that backs up the validity of ABA.

The settlement comes on the heels of legislation being enacted in several states across the US, stipulating that insurance companies must pay for screening and treatment of autism. According to www.autismvotes.com,  13 states have so far passed autism insurance reform laws relating to the funding for treatment and screening of autism. The most recent converts are Nevada, Colorado, and Connecticut. Legislation in Pennsylvania goes into effect July 1, 2009.

That’s it for this week. See you at the bar.

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