Wage and Hour Cases - Not Going Away Anytime Soon

A recent National Economic Research Associates (“NERA”) report, “Trends in Wage and Hour Settlements: 2011 Update,” quantified what most working in the wage-hour litigation field already knew - wage and hour cases continue to be a source of potential liability for employers. The report identified 107 settlements of wage and hour cases in 2011, slightly more than the approximately 90 identified cases settled in both 2009 and 2010, and well above the less-than 40 publicized settlements in 2007 and 2008. In addition, the average per-plaintiff, per-class period year settlement dramatically increased from approximately $900 in the 2007-2010 period to $1,500 in 2011.

It’s not all bad news - aggregate settlement amounts continued a downward trend from an average of over $20 million per case in 2007 to under $5 million in 2011. Additionally, the median settlement amount in 2011 was $1.6 million, significantly lower than $12.8 million in 2007. The majority of wage and hour cases that settled in 2011 did so for between $1 million and $2.5 million. 

A number of case-specific factors affect the aggregate settlement amount. Not surprisingly, the number of class members and the duration of the class period are particularly important drivers in wage and hour settlement values. Plaintiffs’ alleged damages are often a function of the number of work-days in the class - more plaintiffs and a longer class period lead to more work days and higher alleged damages. 

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