Employment-Related Class-Action Settlements at Record Highs

By Joanne Deschenaux Jan 19, 2016
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The monetary value of employment-related class-action settlements reached an all-time high in 2015. The top 10 settlements in employment-related categories totaled $2.48 billion in 2015, compared with $1.87 billion in 2014, Seyfarth Shaw said in a report released Jan. 12.

In its 12th annual Workplace Class Action Litigation Report, the law firm said federal and state courts also issued more favorable class certification rulings for plaintiffs in employment-related cases in 2015 than in previous years.

Other Key Trends

Other key trends for employment class-action litigation included the following:

  • U.S. Supreme Court decisions greatly impacted workplace class actions.
  • A record-high number of Fair Labor Standards Act (FLSA) lawsuits were filed.
  • Government enforcement lawsuits brought by the U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) continued the aggressive litigation programs of both agencies.
  • The plaintiffs’ bar focused more on private class actions.

These trends should continue in 2016, according to the report.

Employers also can expect continuing growth in wage and hour litigation under state and local laws brought on by challenges to independent contractor status and the gig economy, as well as the renewed focus on joint employer issues, the law firm predicted.

The DOL’s new overtime pay regulations, expected to be finalized in 2016, and new state and local minimum wage laws also could generate more class litigation, the report said.

More litigation over class-action waivers in arbitration agreements is probable as well, according to the report.

FLSA complaints filed in federal courts totaled 8,954 cases, rising for the sixth straight year. Federal courts in 2015 granted employment plaintiffs class certification in 123 cases, while denying their class-action motions in 23 cases, the report said.

The DOL and the EEOC obtained a total of $82.8 million in settlements during 2015, rebounding from an eight-year low of $39.45 million obtained during 2014, according to Seyfarth Shaw.

Try to Limit Vulnerabilities

“The one constant in workplace class action litigation is change,” the report noted. There were many changes in 2015, and more should be expected in 2016, the law firm said.

“These novel challenges demand a shift in thinking in the way businesses formulate their strategies,” the report said. It recommended that companies focus on “identifying, addressing and remediating class action vulnerabilities.”

Joanne Deschenaux, J.D., is SHRM’s senior legal editor.

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