Study: Workplace Law Still Potential Employer Minefield

January 22, 2007 ( - The big news in the world of workplace law during 2006 was that Fair Labor Standards Act (FLSA) litigation "far outpaced" the filing of class action lawsuits over employment discrimination claims, a new study found.

A news release from Chicago law firm Seyfarth Shaw LLP about its analysis of 407 rulings issued over the past 12 months said FLSA plaintiffs continued to win court-ordered certification of their wage & hour claims. However employers also won several “significant” victories in defeating conditional certification and obtaining decertification in other cases.

The Seyfarth Shaw report is organized on a federal appellate circuit-by- circuit and state-by-state basis of class action and collective action rulings involving claims brought against employers in all fifty state court systems, including decisions pertaining to employment discrimination laws, wage & hour laws, and Employee Retirement Income Security Act (ERISA) actions.

“Federal and state courts faced a myriad of new theories and defenses in ruling on class action and collective action litigation issues,” the law firm wrote. “Employment class action and collective action litigation has become more sophisticated and will remain a source of significant financial exposure to employers well into the future. “

The study said the financial services sector, in particular, saw a series of FLSA class action cases over the year. Seyfarth researchers noted: “Big impact FLSA collective actions are expected to continue this trend in 2007.”

Even though it was rare for a class action to go to trial, settlements of class actions in 2006 reflected a continuing trend from past years where significant monetary payments were made in mega-class actions, the news release said.

“It is a fact of the modern American workplace that class action and collective action litigation is very attractive to the plaintiffs’ bar,” observed J. Stephen Poor, Managing Partner of Seyfarth Shaw, in the news release. “The stakes in such litigation can be extremely significant, as the financial and operational impact of such cases are enormous. Consistently, we are seeing that workplace class actions can adversely affect the market share of a major corporation and can prejudice its reputation in the marketplace.”

Settlements in FLSA collective actions and ERISA class action bested employment discrimination class action settlements in terms of overall settlement values, Seyfarth noted. Of particular note were a series of ERISA settlements stemming from the meltdown of Enron.

The law firm’s analysis also indicated that the U.S. Equal Employment Opportunity Commission (EEOC) became “increasingly activist on the litigation front” over the year. The commission announced a new strategic enforcement and litigation plan in April 2006, which centers on systemic discrimination cases with broad impact and affecting large numbers of workers, such that prosecution of pattern or practice lawsuits is now an agencywide priority.

“As a result,” the law firm wrote, “the EEOC is focusing its investigations and resources on systemic discrimination issues and institution of EEOC pattern or practice lawsuits increased dramatically in 2006. Employers are likely to face even more such claims in 2007.”

To request a copy of the report on CD-ROM, send an e-mail to .