According to a January report from the large national employment law firm, Seyfarth-Shaw*, the value of class-based employment-related litigation and enforcement actions reached an all-time high in 2015.
This does not include all those actions that are not class-action type lawsuits or enforcement proceedings. It reported that the top 10 settlements totaled $2.48 billion in 2015, an increase from $1.87 billion in 2014. This report also stated that federal and state courts allowed more class certification rulings for plaintiffs in employment-related cases in 2015 than ever before. As a result, employers are facing large numbers of employees’ claims in more and more lawsuits or enforcement actions—not just the claims of one employee. Finally, the report states DOL and the EEOC obtained a total of $82.8 million in settlements during 2015. This was back up substantially from an eight-year low of $39.45 million during 2014.
Class-Certified Lawsuits Increase
A big part of the increase in settlements and damages came from a record-high number of Fair Labor Standards Act (FLSA) lawsuits. Even in Amarillo, Texas, we have seen more class-certified FLSA lawsuits with large judgments or settlements in the last year or two. The U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) all over the country have continued aggressive enforcement litigation programs, frequently seeking class certification of employees.
Record Number of FLSA Cases
Seyfarth-Shaw reported that 8,954 cases based on FLSA complaints were filed in federal courts in 2015. Also, the study says federal courts in 2015 granted class certification to employment plaintiffs in 123 cases, and denied class certification in only in 23 cases. These numbers are staggering.
New Threats to Come
These trends are not likely to change in the near future. The wage and hour litigation probably will grow even more because of challenges to independent contractor status by governmental agencies and the plaintiff’s bar. In addition, if employers fail to stay up to date and be prepared for the DOL’s new overtime pay regulations, due mid- 2016, they can face increased litigation over improperly exempting employees from overtime pay.
Increasing Importance of HR Function
These statistics should help you justify your worth to your boss as an HR Manager. They highlight the importance of what you do to try to protect the employer from becoming the target of one of the many high-risk enforcement proceedings or lawsuits that abound today. In the alternative, they remind you of how important your job is and these numbers will keep you awake at night worrying!
*Seyfarth-Shaw, 12th annual Workplace Class Action Litigation Report