:: Increase Predicted For 2010 Workplace Litigation

The National Underwriter reports that the sixth annual Workplace Class Action Litigation Report by Seyfarth Shaw LLP indicates an increase in workplace litigation for 2010, both in terms of settlements and exposure. The report examines class action and collective action settlements over the past year, including 715 class action litigation rulings.

J. Stephen Poor, Chair and Managing Partner of Seyfarth Shaw, states that “since we began publishing this annual report six years ago, both the number of cases filed and the financial exposure that they pose to companies has increased exponentially.”

Six key trends from the report are epitomized by the firm as follows:

  • First, the plaintiffs’ bar increased the pace of the Fair Labor Standards Act (“FLSA”) collective action and the Employee Retirement Income Security Act (“ERISA”) class action filings seeking recovery for unpaid wages and 401(k) losses. As lay-offs increased, displaced workers also filed more age discrimination and Worker Adjustment and Retraining Notification lawsuits. Even more litigation is expected in 2010, as businesses re-tool their operations.
  • Second, wage & hour litigation continued to out-pace all other types of workplace class actions. Collective actions pursued in federal court under FLSA outnumbered all other types of private class actions in employment-related cases. Significant growth in wage & hour litigation also was centered at the state court level, and especially in California, Florida, Illinois, New Jersey, New York, Massachusetts, Minnesota, Pennsylvania, and Washington. This trend is likely to continue in 2010.
  • Third, the change in Presidential Administrations created heightened workplace litigation exposures for employers. The Obama Administration’s emphasis on regulation and enforcement also spawned more government-initiated litigation over workplace issues. It is expected that employers will encounter more investigations – and more governmental enforcement lawsuits – in 2010 as the newly augmented staffs of the DOL and EEOC carry out their law enforcement functions.
  • Fourth, the Class Action Fairness Act of 2005 (“CAFA”) continued to have significant effects on workplace litigation, and most significantly on wage & hour class actions filed in state court. As the plaintiffs’ bar continues to devise techniques to adapt to the CAFA, rulings on the scope, meaning, and application of the law are already numerous for a statute of such recent vintage.
  • Fifth, class action plaintiffs’ lawyers are a tight-knit community, which fosters quick evolution in case theories, and, in turn, impacts defense litigation strategies. As a result, cutting-edge developments are spreading rapidly throughout the substantive areas encompassed by workplace class action law.
  • Sixth and finally, the financial stakes in workplace class action litigation increased in 2009. Plaintiffs’ lawyers have continued to push the envelope in crafting damages theories to expand the size of classes and the scope of recoveries. These strategies resulted in a series of massive settlements in nationwide class actions, particularly in the context of wage & hour litigation. This trend is also unlikely to abate in 2010.

The entire report may be ordered from the Seyfarth Shaw website here.