Seyfarth Synopsis: Over the past few weeks, we have been covering the release of our 14th Annual Workplace Class Action Litigation Report. Today’s post focuses on an emerging trend in the workplace class action space — regarding workplace antitrust class actions. In this video blog, Associate Ashley Laken of Seyfarth Shaw, joined by Partner Jerry Maatman and Senior Counsel Tim Haley, provides an overview on the expected rise in class action filings alleging no-hire or no-poaching agreements.
At the core of our topic today are anticipated filings of workplace class actions alleging wage suppression in violation of Section 1 of the Sherman Act. The Department of Justice (“DOJ”) has recently stated that it is currently investigating a number of no-hire or no-poaching agreements among employers, and it anticipates announcing what may be criminal enforcement actions in the next couple of months. We previously blogged about this announcement here.
DOJ enforcement actions such as this frequently lead to follow-on private class actions. For example, this is what occurred in the highly publicized consolidated class action entitled In Re High-Tech Employee Antitrust Litigation. High-Tech involved and alleged series of agreements among large Silicon Valley companies not to cold call each other’s employees. After the Court granted plaintiffs’ motion for class certification, the case settled for a total of $435 million.
As our team explains in this video, we believe the key issue in these cases is class certification. Employers have had little success prevailing on motions to dismiss or motions for summary judgment. The potential damages, which are trebled under the antitrust laws, are staggering putting enormous pressure on employers to settle the case if class certification is achieved. When defendants win at the class certification stage, they are able to resolve these cases on very favorable terms. However, when they lose class certification, they have settled for tens or hundreds of millions of dollars. Speaking from decades of experience, Jerry and Tim elaborate on this strategy and more in the video, making the clip an absolute must-watch for employers!