Wage and Hour Class Actions Rising

The Numbers

In 2013, the report revealed, wage and hour class actions increased over 2012, while other categories of class actions remained flat. The number of class actions filed under the Fair Labor Standards Act (FLSA) jumped from 7,672 in 2012 to 7,882 in 2013. In contrast, Employee Retirement Income Security Act (ERISA) class actions dropped from 7,908 in 2012 to 7,279 in 2013.

This increase in wage and hour litigation versus other areas of workplace law is likely caused in no small part by the troubled economy. However Maatman said another contributing factor is the interpretations of a landmark pro-employer ruling from 2011 ' the Wal-Mart Stores Inc. v. Dukes decision from the U.S. Supreme Court ' which has discouraged class action suits in other areas of employment law, but has had less weight in wage and hour cases.

“The Dukes ruling and other key class action rulings aren't being applied as consistently and defensive-mindedly in the wage and hour area,” said Maatman.

The report explains that Dukes has cast a long shadow over the workplace class action environment since the decision was handed down in June 2011. The decision concluded that female employees of Wal-Mart stores across the U.S. could not bring a gender discrimination class action against the retailer, because the class could not be certified under Rule 23 of the Federal Rules of Civil Procedure. According to the report, as of the end of 2013, the decision had been cited 561 times over the course of the year in lower federal and state court rulings.

Enforcement Actions

Maatman noted that employers should also keep a close eye on growing enforcement actions from the government in the employment space, particularly from the U.S. Equal Employment Opportunity Commission (EEOC). More charges were filed with the commission in 2013, the report said, than in all but three years since the EEOC was founded in 1964. The commission has also expanded its systemic investigation program, which targets large groups of potential plaintiffs.

Although the plaintiffs bar continues to pursue plenty of class action employment discrimination claims, Maatman said that the government is often more emboldened to fight for the “the biggest numbers possible” in employment discrimination settlements due to a strong drive for positive press.

Class Arbitration

Another theme in the workplace class action arena during 2013 that was cited by the report was class arbitration and the use of arbitration agreements by employers to prevent employees from bringing class action suits. Several federal courts, along with the Supreme Court in American Express Co. v. Italian Colors Restaurant and AT&T Mobility v. Concepcion, handed down decisions that support the use of carefully written arbitration agreements. Maatman said he believes that with these developments in the courts, employers who used to think the agreements were “too risky” just a few years ago will be more likely to consider implementing their own in 2014.

Rebekah Mintzer writes for Corporate Counsel, an ALM sister publication of this newsletter.

The year 2013 has come and gone, but the trends that emerged in workplace class and collective action litigation during those 12 months probably won't be going anywhere fast. Experts at Seyfarth Shaw have released the latest version of an annual study that tracks these trends and provides detailed information on relevant litigation.

The 2014 edition of Seyfarth Shaw's Annual Workplace Class Action Litigation Report, the only compendium of its kind published in the U.S., covers 1,123 class action rulings falling under numerous workplace laws. Among many of the important trends covered, the report revealed that in 2013, wage and hour class actions were on the rise and are expected to continue increasing in the new year.

“Right now, that is where I think corporate compliance ought to be focusing its efforts, because that will have the greatest impact in terms of keeping a corporation out of harm's way when it comes to workplace-type exposures and liabilities,” Gerald Maatman Jr., cochair of the Class Action Litigation Practice Group at Seyfarth Shaw, stated. Maatman is general editor of the report.

The Numbers

In 2013, the report revealed, wage and hour class actions increased over 2012, while other categories of class actions remained flat. The number of class actions filed under the Fair Labor Standards Act (FLSA) jumped from 7,672 in 2012 to 7,882 in 2013. In contrast, Employee Retirement Income Security Act (ERISA) class actions dropped from 7,908 in 2012 to 7,279 in 2013.

This increase in wage and hour litigation versus other areas of workplace law is likely caused in no small part by the troubled economy. However Maatman said another contributing factor is the interpretations of a landmark pro-employer ruling from 2011 ' the Wal-Mart Stores Inc. v. Dukes decision from the U.S. Supreme Court ' which has discouraged class action suits in other areas of employment law, but has had less weight in wage and hour cases.

“The Dukes ruling and other key class action rulings aren't being applied as consistently and defensive-mindedly in the wage and hour area,” said Maatman.

The report explains that Dukes has cast a long shadow over the workplace class action environment since the decision was handed down in June 2011. The decision concluded that female employees of Wal-Mart stores across the U.S. could not bring a gender discrimination class action against the retailer, because the class could not be certified under Rule 23 of the Federal Rules of Civil Procedure. According to the report, as of the end of 2013, the decision had been cited 561 times over the course of the year in lower federal and state court rulings.

Enforcement Actions

Maatman noted that employers should also keep a close eye on growing enforcement actions from the government in the employment space, particularly from the U.S. Equal Employment Opportunity Commission (EEOC). More charges were filed with the commission in 2013, the report said, than in all but three years since the EEOC was founded in 1964. The commission has also expanded its systemic investigation program, which targets large groups of potential plaintiffs.

Although the plaintiffs bar continues to pursue plenty of class action employment discrimination claims, Maatman said that the government is often more emboldened to fight for the “the biggest numbers possible” in employment discrimination settlements due to a strong drive for positive press.

Class Arbitration

Another theme in the workplace class action arena during 2013 that was cited by the report was class arbitration and the use of arbitration agreements by employers to prevent employees from bringing class action suits. Several federal courts, along with the Supreme Court in American Express Co. v. Italian Colors Restaurant and AT&T Mobility v. Concepcion, handed down decisions that support the use of carefully written arbitration agreements. Maatman said he believes that with these developments in the courts, employers who used to think the agreements were “too risky” just a few years ago will be more likely to consider implementing their own in 2014.

Rebekah Mintzer writes for Corporate Counsel, an ALM sister publication of this newsletter.