Surveying the Class-Action Landscape

Record amounts were awarded in wage-and-hour settlements in 2016, but will the change in government control impact the class-action landscape?

Thursday, February 2, 2017
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Wage-and-hour settlement values skyrocketed in 2016. That's just one of the key trends identified by Chicago-based Seyfarth Shaw's latest edition of its Workplace Class Action Litigation Report.

In compiling the 881-page report, attorneys from the firm analyzed more than 1,300 class-action rulings on a circuit-by-circuit and state-by-state basis to capture key themes from 2016 and emerging litigation trends facing U.S. companies in 2017.

According to the report, the value of the top 10 wage-and-hour class action settlements soared to $695.5 million in 2016, up from $463.6 million in 2015. With plaintiffs' lawyers scoring such significant victories, that will make class actions easier to prosecute and result in more certification orders, says Gerald Maatman, editor of the report, co-chair of Seyfarth Shaw's class-action defense group and a partner in the firm's Chicago and New York offices. Considering the ease with which a wage and hour case can be brought -- and the vast settlement amounts that hang in the balance -- Maatman expects a continuation of the trend toward such filings.

"In wage-and-hour [cases], the motion for certification can be done with just a couple of affidavits from the plaintiff and some co-workers," says Maatman. "No expert is needed, no discovery is needed and statistics show that plaintiffs won 76 percent of those motions."

Jeremy White, a partner at McDermott Will & Emery in Washington, believes that increased challenges in certifying employment discrimination class actions may be partially responsible for the massive number of wage and hour class action filings in recent years. Since the Supreme Court's Wal-Mart v. Dukes decision, he says, there seems to be a greater focus on wage and hour class actions. "We're not just talking about overtime pay, but claims relating to unpaid meal and rest periods, how frequently you pay employees and how soon someone has to be paid upon separation from the company," says White.

Another key factor in the wage and hour landscape is the amount of publicity that surrounded the political debates over raising the minimum wage and enacting new overtime regulations, according to Lori Armstrong Halber, a partner at Fisher Phillips in Philadelphia. That, combined with a Department of Labor and Equal Employment Opportunity Commission that were widely considered to be pro-employee under the Obama administration, contributed to increased wage-and-hour filings, she says.

"You have a plaintiff's bar seizing on this fertile ground for litigation and a more educated population looking at their paycheck in a different way," says Halber. "So it doesn't surprise me [that[ you would see a spike in that area of litigation, which coincidentally would likely lead to an increase of settlements in that area of law."

In recent years, the Supreme Court has accepted more class-action cases for review and issued more rulings than ever before. Those rulings have shaped and influenced class action dynamics, according to Maatman. In particular, Maatman cites the Tyson Foods and Spokeo cases as more pro-plaintiff and even pro-class action, which he believes "portend significant challenges for employers facing [similar] exposures in 2017."

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However, the transition from the Obama administration to the Trump administration is likely to present more than a few twists and turns for employers attempting to predict what recent litigation trends are likely to mean for their businesses. While Maatman says the DOL and EEOC were widely viewed as having an aggressive worker-friendly "push-the-envelope" agenda during the Obama years, those agencies are likely to be more employer-friendly under Trump. He suspects that less enforcement by government agencies will lead to the private plaintiff's bar stepping forward to "fill the void."

As organizations wait to determine the impact of the new administration's appointments and policies, Maatman says, HR should not have a false sense of security simply because Republicans now control the executive and legislative branches of government.

While Trump has clearly spoken out against governmental regulation, Maatman says, the laws of the land, including Title VII, ERISA and FLSA are still going to be enforced, regardless of who resides in the White House. Thus, HR must focus on compliance procedures, policies and practices because, he says, "compliance is the best antidote and the best preventive medicine to costly lawsuits."

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