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Wage-and-hour litigation outpacing all other workplace class actions

Wage-and-hour litigation outpacing all other workplace class actions

Wage and hour litigation continues to be a concern for many companies. According to the “Annual Workplace Class Action Litigation Report” by Chicago-based law firm Seyfarth Shaw L.L.P., this litigation outpaced all other types of workplace class actions in recent years.

“This trend was manifested by the fact that in terms of case filings, collective actions pursued in federal court under the Fair Labor Standards Act outnumbered all other types of private class actions in employment-related cases,” says the report.

The report also points to decisions involving Rule 23 of Federal Rules of civil Procedures and the 29 U.S.C. 216(b) statute. Rule 23 governs class actions in federal courts and typically involves lawsuits that affect potential class members in different states “or that have nexus with federal law,” according to Seyfarth Shaw. The 29 U.S.C. 216(b) statute governs multi-plaintiff lawsuits under the FLSA as well as the Age Discrimination in Employment Act of 1967.

According to the report, wage and hour decisions by federal and state courts involving both Rule 23 and 29 U.S.C. 216(b) were more voluminous than in any other area of workplace litigation – and more than triple that for employment discrimination and ERISA class actions combined.

There was also significant wage and hour litigation in state courts, particularly in California, Illinois, New Jersey, New York, Massachusetts, Minnesota, Pennsylvania and Washington. “The crest of the wave of wage & hour litigation is not yet in sight, and this trend is likely to continue in 2012,” says the report.

Wage & hour litigation is the "No. 1 exposure area in corporate America as far as the plaintiffs class action bar is concerned,” said Chicago-based Seyfarth partner Gerald R. Maatman.

Employees who visit plaintiff lawyers are “more likely than not” to be asked what they are paid and probed for potential wage and hour claims, he said.

In one such case, East Hanover, N.J.-based Novartis Pharmaceuticals Corp. agreed in January to a $99 million settlement to resolve a wage-and-hour litigation class action settlement involving more than 7,000 current and former sales representatives.

The articles in this Solution Arc will help employers understand this growing risk and evaluate strategies for managing it.