Annual Workplace Class Action Report By Seyfarth Shaw Concludes That Wage & Hour Collective Actions Outpaced All Other Types Class Actions In 2005

Second Annual Survey Examines All Workplace Class Actions Litigation Rulings On A Circuit-By-Circuit And State-By-State Basis

Chicago, IL (February 13, 2006) - - An annual report by national law firm Seyfarth Shaw LLP examining all class action rulings by federal and state courts involving workplace issues concludes that wage & hour litigation outpaced all other varieties of class actions in 2005 and accelerated from past years, especially at the state court level. The Seyfarth Shaw report is unique in that it is the only national report in existence of such class action rulings.  Organized on a circuit-by-circuit and state-by-state basis, the report analyzes all 209 rulings issued over the past 12 months in workplace class actions.

The timely report (including rulings issued in the last week of December 2005) analyzes the impact of the Class Action Fairness Act (CAFA) of 2005 on workplace litigation, and its effects on litigation strategy and the structuring of class actions filed against employers.  The study notes how the plaintiffs' bar has started to devise techniques to address this reform measure and to avoid federal court removal through various stratagems.

“Our goal is for this report to guide corporate counsel through the sticky thicket of class action decisional law, and to enable them to make sound and informed litigation decisions while minimizing risk,” stated Gerald L. Maatman, Jr., general editor of the report and co-chair, Complex & Class Action Practice Group of Seyfarth Shaw.    The report, authored by Seyfarth Shaw’s employment attorneys, notes that the lesson to be drawn from 2005 is that private plaintiffs’ bar and government enforcement attorneys are apt to be equally if not more aggressive in 2006 in their pursuit of class action and collective action litigation against employers.  Identifying, addressing, and remediating class action vulnerabilities ought to be at or near the top of every corporate counsel’s priority list for 2006.

Easily referenced, the report is divided into chapters on leading class action settlements, and rulings in cases arising under Title VII of the Civil Rights Act of 1964 (Title VII), Equal Employment Opportunity Commission (EEOC) practice or practice lawsuits, the Age Discrimination in Employment Act (ADEA), the Fair Labor Standards Act (FLSA), the Employee Retirement Income Security Act (ERISA), and state court employment law, wage & hour, and breach of contract cases.  The report concludes that on balance, employers fared well in 2005 in defeating class certification motions in lawsuits brought under Title VII, FLSA, and ERISA.

“The past few years have seen an explosion in class action litigation over workplace issues,” stated J. Stephen Poor, managing partner of Seyfarth Shaw.  “The stakes in such litigation can be extremely significant, as the financial and operational impact of such cases are enormous.  More often than not, class actions adversely affect the market share of a major corporation and prejudice its reputation in the marketplace.  It is truly an exposure which keeps corporate counsel and business executives awake at night.”

The cases decided in 2005 foreshadow the direction of class action litigation in the coming year.  One certain conclusion is that employment law class action and collective action litigation is becoming ever more sophisticated and will continue to be a source of significant financial exposure to employers well into the future.  Employers also can expect that class action and collective action lawsuits increasingly will combine claims under multiple statutes, thereby requiring the defense bar to have a cross-disciplinary understanding of substantive employment law as well as the procedural peculiarities of opt-out classes under Rule 23 of the Federal Rules of Civil Procedure and the opt-in procedures in FLSA and ADEA collective actions.

Maatman noted that the plaintiffs’ employment bar continued to file significant class action and collective action lawsuits against employers the past year.  He added that the report notes federal and state courts faced a “myriad of new theories and defenses” in ruling on novel class action litigation issues.

Three key issues are manifested by developments over the past year:

1. Congress enacted significant reforms to federal class action procedures in 2005.  CAFA impacts all class actions, although that impact is different for particular types of workplace litigation.
2. The volume of wage & hour litigation continues to increase exponentially. The most significant growth is at the state court level - - especially in California - - and the trend is likely to continue in 2006.
3. The money at stake in workplace class action litigation continues to rise. Given the enormous financial stakes, trials of class actions are rare, but settlements in 2005 reflected a continuing trend from past years where significant monetary payments were made in mega-class actions.  Plaintiffs’ lawyers are pushing the envelope in crafting damages theories to expand the size of classes and the scope of their recoveries. The top ten private plaintiff settlements totaled $1.06 billion, while the top ten government litigation settlements totaled $396.15 million.

To request a copy of the 153 page report on CD-ROM, please send your contact information to seyfarthshaw@seyfarth.com.

Seyfarth Shaw has over 625 attorneys located in nine offices throughout the United States including Chicago, New York, Boston, Washington D.C., Atlanta, Houston, Los Angeles, San Francisco and Sacramento as well as Brussels, Belgium.  Seyfarth Shaw provides a broad range of legal services in the areas of labor and employment, employee benefits, litigation and business services.  The firm’s practice reflects virtually every industry and segment of the country’s business and social fabric. Clients include over 200 of the Fortune 500 companies, financial institutions, newspapers and other media, hotels, health care organizations, airlines and railroads. The firm also represents a number of federal, state, and local governmental and educational entities.  For more information, please visit www.seyfarth.com.

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