Caveat Propraetor: Private Equity Firms Operating In California and Beyond Should Be Wary Of Expanding Labor And Employment Class Action Costs

Seyfarth Synopsis: News Flash: “Caveat Propraetor” or “Proprietor Beware” might soon replace “Eureka” as the state motto of California. Okay, that’s just melodramatic hyperbole, but one can imagine that business owners in the state might feel similarly given California’s increasingly hostile business environment. Ever expanding litigation exposure, particularly with regard to labor and employment class actions, weighs heavily on the minds of businesses operating in California, and increasingly nationwide. It should come as no great surprise that class action costs to U.S. companies are at their highest in a decade. According to a recent report by Carlton Fields, spending on class action litigation has reached its highest level in the United States since 2008, and that figure is expected to climb even further. [1] Of the $2.46 billion spent in 2018, labor and employment matters account for a full quarter of the total, with most legal departments highlighting wage and hour class actions as their chief area of concern.[2] Private equity firms should thus take note as these escalating expenses pose increased risks to their investments, particularly because of labor and employment law.

Read the full blog post.