Settlements of the 10 largest private plaintiff employment discrimination class actions paid or entered into in 2010 totaled $346.4 million, more than four times the amount in 2009, according to an analysis released last week.

Looking ahead, decisions in three cases that the U.S. Supreme Court has agreed to consider could dramatically change the legal landscape for employers, according to the to the “Annual Workplace Class Action Litigation Report.”

The largest of the group last year was the $175 million settlement in Amy Velez et al. vs. Novartis Pharmaceuticals Corp., according to the report by Chicago-based law firm Seyfarth Shaw L.L.P.

The 664-page report analyzes 848 decisions rendered against employers in state and federal courts, including private plaintiff and government enforcement actions. The $346.4 million, after rounding, for the top 10 in 2010 compares with $84.4 million for the top 10 in 2009.

Velez, which received final approval Nov. 30, 2010, involved allegations that Basel, Switzerland-based Novartis discriminated against 5,600 current and former female sales representatives in pay and promotions. A jury originally granted the plaintiffs $250 million and the settlement was reached subsequently (BI, May 24, 2010).

Seyfarth Shaw Partner Gerald L. Maatman Jr., who wrote the report, said employment discrimination lawsuits “were in the headlines more than any other type of workplace challenge for a company” during 2010, unlike previous years when wage-and-hour settlements broke records.

The issue is on employees' minds “and so the manner with which you comply with the law, your internal systems and the way in which you react in the workplace to complaints of discrimination are very important,” Mr. Maatman said.

Wage-and-hour class actions were the most frequent type of workplace class action, according to the report. “This trend also was manifest in more wage-and-hour class action and collective action decisions by federal and state court judges than any other area of workplace litigation,” according to the report.

“That's the No. 1 exposure area in corporate America as far as the plaintiffs class action bar is concerned,” Mr. Maatman said. Employees who visit plaintiffs lawyers are “more likely than not” to be asked what they are paid and probed for potential wage-and-hour claims, he said.

The top 10 private wage-and-hour settlements in 2010 totaled $336.5 million, a 7.4% decline from 2009.

Among other trends discussed in the report were:

c The weak economy and low hiring rates last year fueled more class action and collective action litigation as the plaintiffs bar increased the pace of collective action filings under the Fair Labor Standards Act.

c With Democratic legislative initiatives for labor and employment reform stalled because of the midterm elections, the Obama administration continued to ramp up its enforcement efforts through the U.S. Equal Employment Opportunity Commission and the U.S. Department of Labor.

c The Class Action Fairness Act of 2005, which was intended to curb abusive class actions, continued to significantly affect workplace litigation, most significantly wage-and-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,” said the report.

c The plaintiffs bar “has been able to cultivate new strategies in response to fast-paced developments” in Rule 23, which governs class actions in federal courts, and 29 U.S.C. § 216(b), which governs multiplaintiff lawsuits under the Age Discrimination in Employment Act and the FLSA.

c Financial stakes in workplace class action litigation increased in 2010. “Plaintiffs lawyers have continued to push the envelope in crafting damages theories to expand the size of classes and the scope of recoveries,” the report concludes.

Meanwhile, the settlement in Velez came shortly before the U.S. Supreme Court agreed to hear Wal-Mart Stores Inc. vs. Betty Dukes et al. (BI, Dec. 13, 2010).

The 9th Circuit Court of Appeals in San Francisco had approved a class estimated at 1.5 million members in the case.

The Supreme Court's grant of certiorari puts the appeals court's decision “in flux and other decisions on hold, while the class action bar awaits the next chapter in the litigation,” says the report, which notes that the Supreme Court's ruling “is apt to be a bellwether decision.”

The Supreme Court's acceptance of Dukes as well as AT&T Mobility L.L.C. vs. Vincent and Liza Concepcion et al., and In Re Baycol “may signal a coming transformation of Rule 23 law in 2011,” according to the report. Concepcion concerns state law limits on class action waivers, while Baycol involves the question of whether, if a case is certified in state court under the same theories previously rejected by a federal district court, it is precluded under federal common law, according to the report.

Another issue facing employers this year is that the EEOC continues to follow a 2006 plan of bringing more systemic discrimination cases affecting large numbers of workers.

Class action litigation under the Employee Retirement Income Security Act of 1974 also is expected to accelerate in 2011, while the “ever increasing number” of FLSA collective actions and state law wage-and-hour class actions is expected to increase again in 2011, according to the report.

Copies of the report can be obtained by going to http://www.workplaceclassaction.com.