2012 Landmark Year for Workplace Class Action Litigation: Study

January 14, 2013

When it comes to complex employment-related legal disputes, 2012 will be considered a landmark year, according to a new report on employment class action litigation.

Many of the key rulings of 2012 in class action cases hinged on the U.S. Supreme Court’s 2011 rulings in three milestone cases — Wal-Mart Stores, Inc. v. Dukes, AT&T Mobility LLC v. Concepcion, and Smith v. Bayer— according to the 9th annual edition of the “Workplace Class Action Litigation Report,” published by Seyfarth Shaw LLP. The report covers 1,059 class action rulings rendered by federal and state courts in 2012 on workplace laws.

Chief among these Supreme Court decisions, Wal-Mart’s impact on changing Rule 23 class certification standards dominated the legal landscape in 2012 and was cited by lower courts an astounding 541 times in 2012, generating a tidal wave of new class certification rulings and related decisions on a wide variety of class action issues.

“Marked by the halo effect of Wal-Mart, this past year created a number of lasting changes in employment law that will continue to alter the legal landscape and litigation strategies for employers in 2013,” said Seyfarth’s Gerald L. Maatman, Jr., co-chair of its Class Action Defense group and author of the report. “Meanwhile, wage and hour claims continue to rise with no sign of a crest in lawsuit filings and the EEOC’s renewed focus on systemic investigations also pose high-stakes challenges for employers.”

The Seyfarth report identifies six emerging workplace class action trends for employers to heed in 2013:

  1. The Supreme Court’s opinions in Wal-Mart and Concepcion had a profound influence in shaping the course of class action litigation rulings in 2012, beginning a new wave of creative case law theories that will continue to evolve and impact employers in the defense of their cases in 2013.
  2. Government enforcement remained “white hot” in 2012 with the U.S. Equal Employment Opportunity Commission (EEOC) garnering a four-fold increase in recoveries against employers for its systemic discrimination investigations. Government enforcement activity is expected to accelerate even more in 2013.
  3. Wal-Mart significantly influenced settlement strategies for workplace class actions in 2012, as employers settled fewer employment discrimination class actions and at a fraction of the levels experienced from 2006 to 2011 (a total of $48.65 million for the top 10 settlements in 2012 compared to $346.4 million in 2010 prior to the Wal-Mart ruling in 2011). Against this backdrop, the plaintiffs’ class action bar is “re-booting” its approach to class litigation and this trend may reverse itself in 2013.
  4. The sluggishness of the U.S. economy during 2012 fueled more class action and collective class action litigation. This trend is expected to continue in 2013 as businesses retool operations in an improving economy and the Obama Administration renews an emphasis on enforcing workplace laws.
  5. Wage and hour litigation continued to outpace all other types of workplace class actions in 2012, led by 7,672 Fair Labor Standards Act (FLSA) lawsuits filed this past year, an increase of 893 cases from the then record levels in 2011. These figures are expected to grow again in 2013, as well wage and hour class action litigation in employee-friendly state courts like California and New York.
  6. The plaintiffs’ class action bar has moved quickly to respond to Wal-Mart and craft new approaches to class-wide theories of certification, liability, and damages related to the Rule 23 developments, creating a new — and evolving — set of challenges for employers.

The 870-page report is available at http://www.seyfarth.com/publications/Ninth-Annual-Workplace-Class-Action.

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