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'Waiving' Goodbye to Class Actions
It is no secret by now that employers, particularly those in such industries as the financial services, retail and health care, continue to be hit with the legal tsunami that is class action lawsuits. Employers are especially vulnerable, with limited defenses when it comes to wage and hour lawsuits, where a large class of employees alleges that their employers failed to pay minimum wage or overtime compensation. That vulnerability has been increased recently by the current economic climate, where employers look for ways to cut certain employee-related costs, and by advances in technology (e.g., the use of BlackBerries) that make it more difficult to monitor working hours and activities.
Internal Policies
One way to reduce potential exposure for alleged wage and hour violations is to review the company's internal policies and practices to determine whether there are any compliance issues that should and can be addressed before a lawsuit is filed, or before a government agency commences an audit. Another option has been reaffirmed by a federal district court within the Second Circuit, which permitted an employer to obtain a written waiver prohibiting its employees from pursuing employment-related claims on a class-wide basis in court. Such a “class action waiver” may be a valuable strategy for limiting the significant exposure and leverage that is presented with class action lawsuits in this context.
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