Duane Morris Takeaways: On May 7, 2025, in Pospisil, et al. v. ATP Tour, Inc., et al., 25 Civ. 02207, 2025 WL 1327363 (S.D.N.Y. May 7, 2025), Judge Margaret M. Garnett of the U.S. District Court for the Southern District of New York granted in part and denied in part Plaintiffs' motion for relief under Rule 23(d) regarding Defendants' communications with putative class members. The lawsuit – brought by professional tennis players and The Professional Tennis Players Association – challenges the Defendants' alleged anticompetitive practices in running professional tennis tours. Plaintiffs had sought an order preventing all Defendants from communicating with putative class members about the litigation. While the Court stopped short of granting that broad relief, it prohibited Defendant ATP from retaliating or threatening retaliation against potential class members and ordered ATP to issue a corrective notice to putative class members. This ruling serves as a reminder to employers defending class action lawsuits to tread carefully when communicating with potential class members about the litigation. Ensure that any statements you wish to make to employees about the pending lawsuit are vetted by outside counsel to avoid any appearance of coercion.
Case Background
On March 18, 2025, Plaintiffs filed a putative class action on behalf of professional tennis players against Defendants (ATP and other professional tennis organizations) alleging that Defendants engaged in anticompetitive practices in administering their professional tennis tours. Id. at *1. Plaintiffs filed a motion for relief three days after filing the lawsuit, alleging that the day after they filed their Complaint, ATP engaged in coercive communications with putative class members (professional tennis players) during the Miami Open tournament. Id. at *2.
Specifically, Plaintiffs alleged that a member of Defendant ATP's Board of Directors approached various players with a pen asking them to sign a statement denouncing the litigation filed by Plaintiffs. Id. Plaintiffs argued that this action, coupled with Defendants' near-total control of the putative class's ability to earn a living as professional tennis players, was unduly coercive and entitled Plaintiffs to relief under Rule 23(d), including a restriction on Defendants' ability to engage in any future communications with putative class members. Id.
On April 11, 2025, the Court held a hearing on Plaintiffs' motion for relief that included testimony from Plaintiffs, as well as from the ATP representative who allegedly approached putative class members during the Miami Open. Id.
The Court's Order
The Court granted Plaintiffs' motion for relief in part, and prohibited ATP from retaliating or threatening retaliation against any of its members who are participating (or considering participating) in the putative class action. The Court further directed ATP to distribute a corrective notice drafted by the Court to all putative class members who are members of ATP, and to preserve all documents related to its efforts to communicate with its members concerning the litigation. Id. at *12.
Plaintiffs had moved for relief under Rule 23(d), which courts can use to protect putative class members from misleading communications about the pending lawsuit that would pose a threat to the fairness of the litigation process. Id. at *2. The Court noted that its authority to regulate communications under Rule 23(d) extended to communications in a situation where there is a relationship that is inherently coercive. Id. at *3.
After weighing the parties' submissions and the live testimony at the evidentiary hearing, the Court held that regardless of ATP's intent in its communications with putative class members at the Miami Open, such communications could have been viewed as potentially coercive, deceptive, or abusive, which warranted limited relief under Rule 23(d). Id. at *4. The Court found that ATP was the near-exclusive organizer of tournaments that allowed male professional tennis players to earn a living, and that ATP administered incentives for its players including bonus pools and retirement programs. Id. at *4-5. The Court found that ATP had a near-total control over its members' compensation and benefits. Id. at *5.
Additionally, reviewing the factual record as to ATP's conduct at the Miami Open, the Court found that ATP unilaterally targeted putative class members with information about the pending lawsuit in at least two instances. Id. at *6. The Court noted that a member of ATP's Board approached players during the Miami Open with a pen in hand asking them to sign a position statement denouncing the lawsuit. Id. The Court held that regardless of ATP's intent in this conduct, when paired with ATP's control over its members' livelihoods, it had a tendency to unduly influence putative class members and discourage them from participating in the class action. Id. at *8. Moreover, the Court held that ATP's conduct in encouraging putative class members to sign a statement denouncing the lawsuit posed a threat to the fairness of the litigation process, the adequacy of representation, and the administration of justice generally. Id. at *9.
Although the Court faulted ATP for its conduct, the Court held that Plaintiffs' requested relief was overbroad, in part because it sought to enjoin all Defendants from communicating with class members rather than just ATP. Id. at *11. ATP was the sole Defendant whose conduct was at issue. The Court noted that narrowly tailored relief was appropriate and granted Plaintiffs relief as to ATP by prohibiting ATP from retaliating or threatening retaliation against its members related to the litigation, requiring ATP to distribute a Court-drafted corrective notice to all of its members, and ordering ATP to preserve all communications related to its efforts to communicate with its members. Id. at *12.
Implications For Companies
The Court's ruling emphasizes the need for caution by employers when communicating with employees about pending class action lawsuits. Employers hold an inherent position of power and often control the financial livelihood of their employees. Accordingly, if an employer wishes to communicate with its employees about a pending class action lawsuit, those communications must be carefully scrutinized to avoid the appearance of coercion.
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