Press & News

Fourth Annual Seyfarth Shaw Workplace Class Action Litigation Report Featured in Employment Law360
01/15/2008

Jerry Maatman Quoted in Four Articles:

“Wage-And-Hour Class Actions Top Workplace Suits”

“Workplace Class Actions Brought Big Bucks in 2007”

“Plaintiffs Favor State Court for Class Actions: Study”

“Employers Faced CAFA Challenges in 2007: Study”

Seyfarth Shaw’s Fourth Annual Workplace Class Action Litigation Report was featured in four articles published by Employment Law360 on January 15, 2008. Each of the articles reports on a trend covered in the report, and each quotes Jerry Maatman, General Editor of the report.

Jerry remarks that plaintiffs lawyers are migrating from employment discrimination and ERISA cases to wage-and-hour litigation. He notes, “In these (wage-and-hour) cases, it’s really easy to launch a ship with just one plaintiff.” Jerry observes that many large settlements have resulted from wage-and-hour class actions, and “success begets copycats… You have the exponential increase in cases and decisions under the FLSA, and at the same time significant growth in wage-and-hour litigation in state court.” He further states that “California seems to be ground zero for the really big cases,” noting that seven of the top 10 settlements in wage-and-hour cases in 2007 came out of federal or state courts in the Golden state.

Jerry points to inflation as one of the factors contributing to the rise of the financial stakes in workplace class actions. He notes, “When you’re dealing with back pay, people’s salaries rise over time. Back pay today is worth more than back pay a few years ago.” Additionally, plaintiffs lawyers negotiated their ways to expand the size of classes and the scope of recoveries in workplace class action litigation. The report states, “These strategies resulted in a series of massive settlements in nationwide class actions. This trend is also unlikely to abate in 2008.”

Jerry notes that state courts offer an attractive venue for wage-and-hour suits for several reasons, hence plaintiffs lawyers filing more of them in such venues. Historically employee-friendly states, including California, Florida, Illinois, New Jersey, New York, Pennsylvania and Texas, have been particularly active in this regard. Jerry observes, “The state court cases can assert different claims based on state law theories. For example, California has broader regulations requiring specific rest and meal breaks, while Illinois allows punitive damages claims.” Therefore, employers may be compliant with federal rules while not following specific state labor law regulations. Furthermore, since state court wage-and-hour cases allow for opt-out class action suits while federal cases brought under the Fair Labor Standards Act can only be collective actions, Jerry points out that “[i]n state cases you can have more expansive damages and it’s easier to certify a bigger case under the opt-out class action rule, meaning the class can be bigger in a state court action.” California is particularly popular among plaintiffs lawyers because in addition to stricter workplace requirements and the opt-out class option, California also allows for recovery of attorneys’ fees and extends its statute of limitations to four years. Jerry notes, “We are starting to see plaintiffs lawyers not only filing wage and hour cases in state courts, but employment discrimination suits in state courts as well. That is something we haven’t seen in past years. Additionally, state laws in states such as California, New Jersey and Illinois have been amended to allow for big employment discrimination suits to continue in state court. So look for that trend to continue.”

The Class Action Fairness Act of 2005 continued to have a significant impact on employment litigation in 2007, according to the report. The report explains that class actions are being filed in federal courts more and more because of the removal mechanisms put in place by CAFA. Jerry points out, however, that plaintiffs’ attorneys are gaining experience in keeping state court cases in state courts, which tend to be more employee-friendly than federal courts. Jerry observes, “Federal judges tend to be more rigorous in their enforcement of discovery rules, as opposed to state court where discovery tends to be more liberal… Defendants can save money if discovery is confined. Also, in summary judgment and other rulings, federal courts tend to be more defense-oriented. There are exceptions to the rule, but by and large, employers believe they would rather have big class actions before federal judges.” In light of CAFA, the report notes that plaintiffs’ attorneys have tried various tactics to keep wage-and-hour suits in state court venues. Jerry remarks, “There has been significant amount of litigation over the means and methods by which an employer can remove a case from state to federal court under CADA, which affects the ability of employers to do so.” He further points out that, “[e]xpert class action plaintiffs lawyers who know how to litigate their cases are becoming much more adept at keeping their cases in state court. It’s become a battleground that we didn’t see before because of the passage of CAFA in 2005. It’s a whole new ballgame in light of that law.” Jerry remarks, “If an employer is facing a class action suit, one of the first things on its checklist now is, ‘How does my case compare to previous CAFA rulings and what kind of arguments can we make to remove our case to federal court?’… Rulings under CAFA are so vitally important in class actions now.”