Dive Brief:
- The 5th U.S. Circuit Court of Appeals upheld a lower court’s dismissal of a former Cargill employee’s discrimination and wage-and-hour claims against the company, according to a Wednesday decision.
- A district court consolidated several claims against Cargill into one case, Ellis v. Cargill Meat Solutions. The plaintiff, who is gay and Black, alleged he experienced racially motivated drug testing, harassment and retaliation on the basis of race and sexual orientation. He also alleged that the 2021 ransomware attack against UKG’s Kronos service caused delays and inaccuracies in his paychecks in violation of the Fair Labor Standards Act.
- The lower court dismissed all claims. The 5th Circuit upheld, finding that the plaintiff failed to state a claim under Title VII and that his FLSA claims lacked subject matter jurisdiction because Cargill offered an unconditional tender of maximum compensation in addition to his calculated overtime wages, which he was paid after reconciliation. “Where an employer’s compensation makes an FLSA plaintiff whole, his claim is moot,” the 5th Circuit said.
Dive Insight:
Wednesday’s decision also represented a victory for UKG, whom the employee sued separately alleging that the company violated his privacy through the potential disclosure of his personal information. The 5th Circuit held that this claim, too, was properly dismissed, noting that the plaintiff did not allege that a criminal or any third party accessed his data. Further, the risk of exposure to crime because of the hack was not sufficient to support his allegations.
UKG previously agreed to pay $6 million to settle claims brought by individuals affected by the 2021 hack, which resulted in an outage to its Kronos Private Cloud payroll and timekeeping platform. It has also faced lawsuits by employers over the incident; a California federal judge dismissed one such action brought by an assisted living facility operator in September, holding that both parties foresaw the possibility of economic losses resulting from a service outage affecting UKG services.
Cargill similarly agreed to a $2.4 million settlement to current and former employees who claimed they were not paid for all hours worked as a result of the outage. That suit, filed in a Minnesota federal court, is separate from Ellis.
In its decision, the 5th Circuit held that the plaintiff’s Title VII claims were “conclusory at best,” stating that his claims of race-based discrimination did not identify specific persons responsible for the conduct nor specific moments when it occurred. It said the same of the discrimination claims regarding his sexual orientation.
“Such ‘naked assertions’ do not ‘allow the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,’” the court said, quoting from the U.S. Supreme Court’s 2009 decision in Ashcroft v. Iqbal.
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