Biggest Class Action Settlements Totaled $2.5 Billion (With a "B") Last Year, Report Finds
Author: Michael Cardman, XpertHR Legal Editor
January 27, 2016
Employers paid out a record $2.5 billion last year to settle 50 of the largest employment lawsuits, according to the 12th Annual Workplace Class Action Litigation Report from Seyfarth Shaw LLP.
The size of settlements had been decreasing since 2011, when the Supreme Court issued a ruling in the case Wal-Mart Stores Inc. v. Dukes that made it more difficult for plaintiffs to prove commonality to bring a class action.
But that downward trend reversed in 2015, as plaintiffs figured out ways to work around the Wal-Mart ruling.
The reversal "manifests a maturing of case architecture considerations, whereby plaintiffs' lawyers have 're-booted' their strategic approaches to take account of Wal-Mart, and crafted and refined class certification theories with better chances of success," the report states.
The $2.5 billion comprises the 10 largest settlements in each of the the following five categories:
- The Employee Retirement Income Security Act of 1974 (ERISA), totaling $927 million;
- Miscellaneous statutes such as workplace antitrust laws, the Worker Adjustment and Retraining Notification Act (WARN Act) and the Fair Credit Reporting Act (FCRA), totaling $714 million;
- The Fair Labor Standards Act (FLSA) and state wage and hour laws, totaling $464 million;
- Employment discrimination laws, totaling $296 million; and
- Enforcement actions by the Equal Employment Opportunity Commission (EEOC) and the US Department of Labor (DOL), totaling $83 million.
"Workplace class action litigation often poses unique 'bet-the-company' risks for employers," the report states. "An adverse judgment in a class action has the potential to bankrupt a business."