workplace class action

By: Gerald L. Maatman, Jr.

Seyfarth Synopsis: Seemingly overnight, the #MeToo movement emerged as a worldwide social phenomenon with significant implications for the workplace and class action litigation. In this age of connectivity, societal movements have unprecedented speed and reach. Traditional means of spreading information and generating social change have been supplemented — if not outright replaced — by the near-instantaneous ability of an idea or cause to go viral on social media. Nowhere over the past year was this more evident than with the #MeToo movement, as the chorus of victims’ voices and the media spotlight exposed sexual misconduct in the workplace.

Against this backdrop, many predicted that allegations of on-the-job sexual harassment would increase. The EEOC’s release of data on workplace harassment data in October of 2018 confirmed that reality and the widespread impact of the #MeToo movement throughout the country.

At the same time, many states reviewed their laws in the past year in response to the #MeToo movement. Washington and California changed their laws in 2018 to bar employers from use of mandatory non-disclosure agreements for employees asserting sexual harassment and abuse claims. Several states also explored extending or ending statutes of limitations, spurred on by revelations of sexual abuse in the Catholic Church and in #MeToo reports. More than any other state, California has been in the forefront of introducing “#MeToo bills,” including banning mandatory arbitration clauses in contracts, which require workers to waive the right to take an employer to court in the event of a dispute.

The increasing number of sexual harassment claims in the corporate world as part of the #MeToo movement also has led to a number of high-profile employment-related claims. These types of settlements gained momentum in 2018, as plaintiffs’ lawyers secured a $215 million class action settlement for victims of sexual abuse from the University of Southern California, and a $500 million settlement for victims of sexual assaults from Michigan State University.

On the heels of those claims are a growing number of shareholder derivative and securities class actions. In 2017, 21st Century Fox reached a $90 million settlement with shareholders over losses related to two harassment scandals. Additional class actions were filed against other organizations in 2018. The derivative lawsuits are brought by plaintiff-shareholders purportedly acting on behalf of the company asserting claims for breaches of fiduciary duty and waste of corporate assets against board members and corporate executives. These complaints generally allege that these executives or board members had actual knowledge of or declined to act on sexual misconduct incidents and that, once aware of the incidents, they failed to take appropriate action or concealed the misconduct from shareholders and other stakeholders in the company. Derivative plaintiffs may also allege the misuse of corporate assets and legal resources for settlements and other payments to alleged harassers.

Implications For Employers:

These derivative actions raise significant issues concerning the legal duties of corporations and their boards to monitor potential sexual misconduct by senior executives and other employees. While a corporate board generally has no duty to monitor a corporate officer’s personal behavior, sexual misconduct by an executive in the workplace may trigger liability if the directors consciously allowed the unlawful conduct to occur or failed to establish a compliance system to facilitate employee reporting of sexual harassment and to ensure that the company appropriately investigates and addresses any such allegations. These types of claims are expected to increase in 2019, as the #MeToo movement continues to expand.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: As our 2019 Workplace Class Action Report describes, 2018 was quite an interesting year for employers in terms of class certification rulings. Plaintiffs achieved robust numbers of initial conditional certification rulings of wage & hour collective actions in 2018, while employers secured less defeats of conditional certification motions and decertification of § 216(b) collective actions. Check out the extensive analysis below!

Anecdotally, surveys of corporate counsel confirm that complex workplace litigation – and especially class actions and multi-plaintiff lawsuits – remains one of the chief exposures driving corporate legal budgetary expenditures, as well as the type of legal dispute that causes the most concern for companies. The prime component in that array of risks is indisputably complex wage & hour litigation.

The circuit-by-circuit analysis of 301 class certification decisions in all varieties of workplace class action litigation is detailed in the following map:

Wage & Hour Certification Trends

Plaintiffs achieved robust numbers of initial conditional certification rulings of wage & hour collective actions in 2018, while employers secured less defeats of conditional certification motions and decertification of § 216(b) collective actions. The percentage of successful motions for decertification brought by employers saw a significant dip in 2018 to 52%. This was fully 11% less than the figure of 63% in 2017.

Most significantly, for only the second time in over a decade, and for the second year in a row, wage & hour lawsuit filings in federal courts decreased. That being said, the volume of FLSA lawsuit filings for the preceding four years – during 2014, 2015, 2016, and 2017 – were at the highest levels in the last several decades.

As a result, an increase in FLSA filings over the past several years had caused the issuance of more FLSA certification rulings than in any other substantive area of complex employment litigation – 273 certification rulings in 2018, as compared to 257 certification rulings in 2017, 224 certification rulings in 2016, and 175 certification rulings in 2015.

The analysis of these rulings – discussed in Chapter V of this Report – shows that a high predominance of cases are brought against employers in “plaintiff-friendly” jurisdictions such as the judicial districts within the Second and Ninth Circuits. For the first time in a decade, however, rulings were equally voluminous out of the Fifth Circuit, which also tended to favor workers over employers in conditional certification rulings. This trend is shown in the following map:

The statistical underpinnings of this circuit-by-circuit analysis of FLSA certification rulings is telling in several respects.

First, it substantiates that the district courts within the Second, Fifth, and Ninth Circuits are the epi-centers of wage & hour class actions and collective actions. More cases were prosecuted and conditionally certified – 50 certification orders in the Ninth Circuit, 42 certification orders in the Fifth Circuit, and 32 certification orders in the Second Circuit – in the district courts in those circuits than in any other areas of the country. That being said, the district courts in the Third, Fourth, and Sixth Circuits were not far behind, with 22, 23, and 29 certification orders respectively in those jurisdictions.

Second, as the burdens of proof reflect under 29 U.S.C. § 216(b), plaintiffs won the overwhelming majority of “first stage” conditional certification motions (196 of 248 rulings, or approximately 79%). However, in terms of “second stage” decertification motions, employers prevailed in just over half of those cases (13 of 25 rulings, or approximately 52% of the time).

The “first stage” conditional certification statistics for plaintiffs at 79% for 2018 were even more favorable to workers than in 2017, when plaintiffs won 73% of “first stage” conditional certification motions. However, employers fared much worse in 2018 on “second stage” decertification motions. Employers won decertification motions at a rate of 52%, which was down from 63% in 2017 (but up slightly from 45% in 2016).

The following chart illustrates this trend for 2018:

Third, this reflects that there has been an on-going migration of skilled plaintiffs’ class action lawyers into the wage & hour litigation space for close to a decade. Experienced and able plaintiffs’ class action counsel typically secure better results. Further, securing initial “first stage” conditional certification – and foisting settlement pressure on an employer – can be done quickly (almost right after the case is filed), with a minimal monetary investment in the case (e.g., no expert is needed, unlike the situation when certification is sought in an employment discrimination class action or an ERISA class action), and without having to conduct significant discovery (per the case law that has developed under 29 U.S.C. § 216(b)).

As a result, to the extent litigation of class actions and collective actions by plaintiffs’ lawyers is viewed as an investment of time and money, prosecution of wage & hour lawsuits is a relatively low cost investment, without significant barriers to entry, and with the prospect of immediate returns as compared to other types of workplace class action litigation.

Hence, as compared to ERISA and employment discrimination class actions, FLSA litigation is less difficult or protracted for the plaintiffs’ bar, and more cost-effective and predictable. In terms of their “rate of return,” the plaintiffs’ bar can convert their case filings more readily into certification orders, and create the conditions for opportunistic settlements over shorter periods of time.

The certification statistics for 2018 confirm these factors.

The great unknown for workplace class action litigation is the impact of the Epic Systems ruling, and whether it reduces class action activity in the judicial system and depresses settlement values of workplace lawsuits.

At the same time, a future Congress may effectuate a legislative response to abrogate or limit the impact of workplace arbitration agreements with class action waivers, but that will be dependent upon ideological and political dynamics based on future elections.

As a result, Epic Systems may well impact case filing numbers in the near term, and as a result, class action settlement numbers are likely to decrease.

Employment Discrimination & ERISA Certification Trends

Against the backdrop of wage & hour litigation, the ruling in Wal-Mart also fueled more critical thinking and crafting of case theories in employment discrimination and ERISA class action filings in 2018.

The Supreme Court’s Rule 23 decisions have had the effect of forcing the plaintiffs’ bar to “re-boot” the architecture of their class action theories. At least one result was the decision two years ago in Tyson Foods v. Bouaphakeo, 136 S. Ct. 1036 (2016), in which the Supreme Court accepted the plaintiffs’ arguments that, in effect, appeared to soften the requirements previously imposed in Wal-Mart for maintaining and proving class claims, at least in wage & hour litigation.

Hence, it is clear that the playbook on Rule 23 strategies is undergoing a continuous process of evolution.

Filings of “smaller” employment discrimination class actions have increased due to a strategy whereby state or regional-type classes are asserted more often than the type of nationwide mega-cases that Wal-Mart discouraged.

In essence, at least in the employment discrimination area, the plaintiffs’ litigation playbook is more akin to a strategy of “aim small to secure certification, and if unsuccessful, then miss small.”

In turn, whereas employment-related class certification motions were a mixed bag or tantamount to a “jump ball” in 2017 – when 7 of 11 motions were granted and 4 of 11 were denied – employers were far more successful in 2018, where only 3 of 11 motions were granted for plaintiffs and 8 of 11 were denied.

The certification rate of 27% was the lowest on record over the last decade.

The following map demonstrates this array of certification rulings in Title VII and ADEA discrimination cases:

In terms of the ERISA class action litigation scene in 2018, the focus continued to rest on precedents of the U.S. Supreme Court as it shaped and refined the scope of potential liability and defenses in ERISA class actions.

The Wal-Mart decision also has changed the ERISA certification playing field by giving employers more grounds to oppose class certification.

The decisions in 2018 show that class certification motions have the best chance of denial in the context of ERISA welfare plans, and ERISA defined contribution pension plans, where individualized notions of liability and damages are prevalent.

While plaintiffs were more successful than employers in litigating certification motions in ERISA class actions, their success rate was less than in previous years. In 2018, plaintiffs won 11 of 17 certification rulings or 65%. By comparison, in 2017, plaintiffs won 17 of 22 certification motions, with a success rate of 77%.

A map illustrating these trends is shown below:

Overall Trends

So what conclusions overall can be drawn on class certification trends in 2018?

In the areas of wage & hour and ERISA claims, the plaintiffs’ bar is converting their case filings into certification of classes at a high rate. To the extent class certification aids the plaintiffs’ bar in monetizing their lawsuit filings and converting them into class action settlements, the conversion rate is robust. Conversely, plaintiffs’ success rate in the context of employment discrimination class actions is modest, as employers have a high success rate in blocking such certification motions.

Whereas class certification for employment discrimination cases (3 motions granted and 8 motions denied in 2018) was far less possible, class certification is relatively easier in ERISA cases 11 motions granted and 6 motions denied in 2018), but most prevalent in wage & hour litigation (with 196 conditional certification motions granted and 52 motions denied, as well as 13 decertification motions granted and 12 motions denied).

The following bar graph details the win/loss percentages in each of these substantive areas:

–          a 27% success rate for certification of employment discrimination class actions (both Title VII and age discrimination cases);

–          a 65% success rate for certification of ERISA class actions; and,

–          a 79% success rate for conditional certification of wage & hour collective actions.

Obviously, the most certification activity in workplace class action litigation is in the wage & hour space.

The trend over the last three years in the wage & hour space reflects a steady success rate that ranged from a low of 70% to a high of 79% (with 2018 representing the highest success rate ever) for the plaintiffs’ bar, which is tilted toward plaintiff-friendly “magnet” jurisdictions were the case law favors workers and presents challenges to employers seeking to block certification.

Yet, the key statistic in 2018 for employers was a significant decrease in the odds of successful decertification of wage & hour cases to 52%, as compared to 63% in 2017, a decrease of 11%.

Comparatively, the trend over the past five years for certification orders is illustrated in the following chart:

While each case is different and no two class actions or collective actions are identical, these statistics paint the all-too familiar picture that employers have experienced over the last several years. The new wrinkle to influence these factors in 2018 was the Supreme Court’s ruling in 2018 in Epic Systems and in 2016 in Tyson Foods. To the extent it assists plaintiffs in their certification theories, future certification decisions may well trend further upward for workers.

Lessons From 2018

There are multiple lessons to be drawn from these trends in 2018.

First, while the Wal-Mart ruling undoubtedly heightened commonality standards under Rule 23(a)(2) starting in 2011, and the Comcast decision tightened the predominance factors at least for damages under Rule 23(b) in 2013, the plaintiffs’ bar has crafted theories and “work arounds” to maintain or increase their chances of successfully securing certification orders in ERISA and wage & hour cases. This did not hold true in the context of employment discrimination lawsuits. In 2018, their certification numbers were up for ERISA and wage & hour case, and down for employment discrimination litigation.

Second, the defense-minded decisions in Wal-Mart and Comcast have not taken hold in any significant respect in the context of FLSA certification decisions for wage & hour cases. Efforts by the defense bar to use the commonality standards from Wal-Mart and the predominance analysis from Comcast have not impacted the ability of the plaintiffs’ bar to secure first-stage conditional certification orders under 29 U.S.C. § 216(b). If anything, the ruling two years ago in Tyson Foods has made certification prospects even easier for plaintiffs in the wage & hour space, insofar as conditional certification motions are concerned. The conversion rate of successful certification motions hit an all-time high of 79% in 2018.

Third, while monetary relief in a Rule 23(b)(2) context is severely limited, certification is the “holy grail” in class action litigation, and certification of any type of class – even a non-monetary injunctive relief class claim – often drives settlement decisions. This is especially true for employment discrimination and ERISA class actions, as plaintiffs’ lawyers can recover awards of attorneys’ fees under fee-shifting statutes in an employment litigation context. In this respect, the plaintiffs’ bar is nothing if not ingenuous, and targeted certification theories (e.g., issue certification on a limited discrete aspect of a case) are the new norm in federal and state courthouses.

Fourth, during the certification stage, courts are more willing than ever before to assess facts that overlap with both certification and merits issues, and to apply a more practical assessment of the Rule 23(b) requirement of predominance, which focuses on the utility and superiority of a preclusive class-wide trial of common issues. Courts are also more willing to apply a heightened degree of scrutiny to expert opinions offered to establish proof of the Rule 23 requirements.

Finally, employers now have a weapon to short-circuit the decision points for class action exposure through use of mandatory workplace arbitration agreements. Based on the Epic Systems ruling, a class waiver in an arbitration agreement is now an effective first-line defense to class-based litigation.

In sum, notwithstanding these shifts in proof standards and the contours of judicial decision-making, the likelihood of class certification rulings favoring plaintiffs are not only “alive and well” in the post-Wal-Mart and post-Comcast era, but also thriving. The battle ground may shift, however, as employers may create a bulwark against such class-based claims based on the Epic Systems ruling.

Seyfarth Exclusive! In Person Event & Live Webinar

You are invited to join Braden Campbell of Law360 and Seyfarth Partner Gerald Maatman for a panel discussion marking the release of Seyfarth’s 15th Annual Workplace Class Action Litigation Report. Please click here to register. For those of you in the Midwest, please join us in person, meet Braden and network with like-minded attendees.

As we move into a shifting policy landscape, employers are seeking insight to prepare for the challenges of the future workplace. At this important event, the presenters will provide insights into the significant class action litigation trends of 2018, and a look ahead to the agenda for 2019. Jerry will also discuss the top class action rulings in 2018 and hot topics for 2019, including key trends in class certification, government enforcement litigation, and the U.S. Supreme Court.

In Person Panel Discussion:

Wednesday, January 30, 2019

11 a.m. – Noon Program
Noon – 1 p.m. – Lunch

Seyfarth Shaw LLP
233 South Wacker Drive
Suite 8000
Chicago, Illinois 60606

Webinar:

Wednesday, January 30, 2019

Noon – 1 p.m. Eastern
11 a.m. – Noon Central
10 a.m. – 11 a.m. Mountain
9 a.m. – 10 a.m. Pacific

Speakers:

Braden Campbell
Gerald L. Maatman, Jr.

By: Gerald L. Maatman, Jr.

Seyfarth Synopsis: The first key trend from our 15th Annual Workplace Class Action Litigation Report involves rulings by the U.S. Supreme Court.  Over the past few years, the Supreme Court has issued a number of rulings that impacted the prosecution and defense of class actions in significant ways. Today, we provide readers with an outline of the most important workplace rulings issued by the Supreme Court in 2018, as well as which upcoming decisions employers should watch for in 2019.  Read the full breakdown below!

Over the past decade, the U.S. Supreme Court led by Chief Justice John Roberts increasingly has shaped the contours of complex litigation exposures through its rulings on class action and governmental enforcement litigation issues. Many of these decisions have elucidated the requirements for pursuing employment-related class actions under Rule 23 of the Federal Rules of Civil Procedure.

The 2011 decision in Wal-Mart Stores, Inc. v. Dukes and the 2013 decision in Comcast Corp. v. Behrend are the two most significant examples. Those rulings are at the core of class certification issues under Rule 23.

This year saw another signal ruling in Epic Systems Corp. v. Lewis, which marks a gateway device to block prosecution of class actions in the judicial system and forces adjudication of claims on an individual, bi-lateral basis in arbitration.

To that end, federal and state courts cited Wal-Mart in 608 rulings in 2018; they cited Comcast in 235 cases in 2018; and despite its issuance in May of 2018, they cited Epic Systems in 119 decisions by year’s end.

The past year also saw a change in the composition of the Supreme Court in April of 2018, with Justice Neil Gorsuch assuming the seat of Antonin Scalia after his passing in 2016, and Justice Brett Kavanaugh taking the seat of Anthony Kennedy in October 2018, after Kennedy’s retirement and a bruising Senate confirmation battle.

Given the age of some of the other sitting Justices, President Trump may have the opportunity to fill additional seats on the Supreme Court in 2019 and beyond, and thereby influence a shift in the ideology of the Supreme Court toward a more conservative and strict constructionist jurisprudence. In turn, this is apt to change legal precedents that shape and define the playing field for workplace class action litigation.

Rulings In 2018

In terms of decisions by the Supreme Court impacting workplace class actions, this past year was no exception. In 2018, the Supreme Court decided seven cases four employment-related cases and three class action cases that will influence complex employment-related litigation in the coming years.

The employment-related rulings included two wage & hour collective actions and two union cases, and in class actions that involved securities and human rights. A rough scorecard of the decisions reflects one distinct plaintiff/worker-side victory, and defense-oriented rulings in six cases.

Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) – Decided on May 21, 2018, this employment case involved the interpretation of mandatory workplace arbitration agreements between employers and employees and whether class action waivers within such agreements – which require workers to arbitrate any claims on an individual, bi-lateral basis (and waive the ability to bring or participate in a class action or collective action) – violate employees’ rights under the National Labor Relations Act to engage in “concerted activities” in pursuit. In a 5 to 4 ruling, the Supreme Court held that class action waivers in arbitration agreements are valid. The decision is likely to have far-reaching implications for litigation of class actions and collective actions.

Cyan, Inc., et al. v. Beaver County Employees Retirement Fund, 138 S. Ct. 1061 (2018) – Decided on March 20, 2018, this class action case posed the issue of whether federal law bars state courts from hearing certain securities class actions. The case turned on interpretation of the Private Securities Litigation Reform Act of 1995 (“SLUSA”) – which imposes tougher standards on securities class actions brought in federal courts – and whether it mandated that state courts can no longer hear class actions based on the Securities Act of 1933. In a 9 to 0 decision, the Supreme Court held that SLUSA did not strip state courts of jurisdiction over class actions alleging violations of securities laws and that defendants cannot remove such lawsuits from federal court to state court. In this regard, it did not spell the end of what many have viewed as a “cottage industry” of state court-based class action filings in states such as California where class action lawyers target public companies with securities claims over drops in stock process.

Encino Motors, LLC v. Navarro, et al., 138 S. Ct. 1134 (2018) – Decided on April 2, 2018, in this wage & hour case the Supreme Court examined whether service advisors at car dealerships are exempt under 29 U.S.C. § 213(b)(10)(A) from the overtime pay provisions of the Fair Labor Standards Act (“FLSA”). The Supreme Court held 5 to 4 that service advisors are exempt under the FLSA. The ruling is apt to have far-reaching implications on the legal tests for interpretation of statutory exemptions under the FLSA, as the broader reading of the exemption potentially could reduce the number of workers allowed to assert wage & hour claims against their employers.

CNH Industrial N.V. v. Reese, et al., 138 S. Ct. 761 (2018) – Decided on February 20, 2018, in this employment case the Supreme Court held in a per curium opinion that collective bargaining agreements are to be interpreted according to ordinary principles of contract law, including the rule that a contract is not ambiguous unless it is subject to more than one reasonable interpretation. The case involved a collective bargaining agreement, which provided health care benefits under a group benefit plan to certain employees who retired under the pension plan. The agreement expired by its terms in May 2004. At that time, a class of CNH retirees and surviving spouses filed a lawsuit seeking a declaration that their health care benefits vested for life. In reversing lower court rulings that determined that the collective bargaining agreement was ambiguous and they therefore could rely on extrinsic evidence in interpreting the contract to favor the claims of the union members, the Supreme Court held that the “only reasonable interpretation of the 1998 agreement was that the health care benefits expired when the collective bargaining agreement expired in 2004.

Janus, et al. v. AFSCME, 138 S. Ct. 2448 (2018) – Decided on June 27, 2018, in this employment case the Supreme Court considered whether Abood v. Detroit Board of Education, 431 U.S. 209 (1977), should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment so as to prevent public-sector unions from collecting mandatory fees from non-members. In ruling 5 to 4, the Supreme Court held that the application of a mandatory public sector union fee requirement is a violation of the First Amendment, thereby overruling Abood. This ruling had an immediate impact on millions of workers in 22 states that do not have right-to-work laws. Since many workers are apt to cease paying union dues with the abolishment of the fair share fee payments requirement, the decision will have a significant impact on the ability of public-sector unions to conduct their business.

China Agritech, Inc. v. Resh, et al., 138 S. Ct. 1800 (2018) – Decided on June 11, 2018, in this class action case the Supreme Court examined whether the tolling rule for class actions established in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), tolled the statute of limitations to permit a previously absent class member to bring a subsequent class action outside the applicable limitations period. American Pipe had held that the filing of a class action tolls the running of the statute of limitations for all putative members of the class who make timely motions to intervene after the lawsuit is deemed inappropriate for class action status. The Supreme Court interpreted American Pipe more narrowly, and held that it does not permit the maintenance of a follow-on class action past the expiration of the statute of limitations. In essence, the ruling limits the tolling rule in American Pipe to apply only to subsequent individual claims.

Jesner, et al. v. Arab Bank, PLC, 138 S. Ct. 1386 (2018) – Decided on April 24, 2018, this class action posed the issue of whether foreign-based corporations can be sued in U.S. courts for alleged violations of the Alien Tort Statute. The Supreme Court decided 5 to 4 that Plaintiffs may not do so. The end result will be to bring a halt to class actions brought to hold foreign-based corporations responsible in U.S. courts for alleged human rights violations committed overseas.

The decisions in Epic Systems, Beaver County, Navarro, Reese, Janus, China Agritech, and Jesner are sure to shape and influence workplace class action litigation in a profound manner.

These cases will impact rules on American Pipe tolling and application of statute of limitations in class actions; the ability of foreign-based claimants to prosecute class actions based on overseas labor and human rights abuses; the obligations of corporations to fund lifetime retiree benefits under collective bargaining agreements; the scope of exemptions in wage & hour litigation; union fee litigation and membership rights; securities fraud class action litigation in state courts; and defenses to workplace class actions based on class waivers in mandatory arbitration agreements.

In addition, Epic Systems may turn out to be one of the most important workplace class action decisions over the last several decades in terms of its ultimate impact on litigation dynamics.

Rulings Expected In 2019

Equally important for the coming year, the Supreme Court accepted five additional cases for review in 2018 that will be decided in 2019 that also will impact and shape class action litigation and government enforcement lawsuits faced by employers.

Those cases include two employment lawsuits and three class action cases.

The Supreme Court undertook oral arguments on four of these cases in 2018; the other case underwent oral argument in early 2019.

Frank, et al. v. Gaos, No. 17-961 – Argued on October 31, 2018, this case concerns whether and in what circumstances a cy pres award in a class action – that supplies no direct relief to class members – nonetheless comports with the Rule 23 requirement that a settlement binding class members must be fair, reasonable, and adequate. The ultimate ruling by the Supreme Court likely will determine the legality of cy pres awards, and if approved, create guidelines for the appropriateness of cy pres awards in class action settlements.

Home Depot U.S.A. v. Jackson, et al., No. 17-1471 – Argued on January 15, 2019, this case involves the Class Action Fairness Act and the circumstances under which Defendants may remove a class action to federal court where Defendants file a counter-claim. The ultimate decision likely will determine if the Supreme Court’s earlier ruling in Shamrock Oil & Gas Co. v. Sheets, 313 U.S. 100 (1941) – that a Plaintiff may not remove a counter-claim against it – extends to third-party Defendants bringing counter-claims.

Lamps Plus, Inc. v. Varela, et al., No. 17-988 – Argued on October 29, 2018, this case poses the issue of whether the Federal Arbitration Act (“FAA”) forecloses a broad interpretation of an arbitration agreement that allows prosecution of a class arbitration based solely on general language commonly used in arbitration agreements. Given the ruling in Epic Systems in 2018, the upcoming decision in this case will be of critical significance to employers involved in arbitration of workplace disputes.

New Prime Inc. v. Oliveria, et al., No. 17-340 – Argued on October 29, 2018, this case presents the issue of whether a court or an arbitrator must determine the applicability of § 1 of the FAA – which applies only to “contracts of employment” – to independent contractor agreements. The future decision in this case will be important to employers seeking to use class action waivers in workplace arbitration agreements used with independent contractors.

Mount Lemon Fire District v. Guido, No. 17-587 – Argued on October 1, 2018, this case raises the issue of whether the Age Discrimination in Employment Act (“ADEA”) applies to state and local governmental entities. A future decision will determine the coverage of the ADEA relative to the public sector employees.

The Supreme Court is expected to issue decisions in these five cases by the end of the 2018/2019 term in June of 2019.

Rulings in these cases will have significance for employers in complying with employment discrimination laws, structuring arbitration proceedings, and defending class action litigation.

Implications For Employers

Each decision outlined above may have significant implications for employers and for the defense of high-stakes class action litigation. As always, we will closely monitor all Supreme Court case developments and report them to our readers. Stay tuned!

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: At 852 pages, Seyfarth’s 15th Annual Workplace Class Action Litigation Report analyzes 1,453 rulings and is our most comprehensive Report ever.

Click here to access the microsite featuring all the Report highlights. You can read about the five major trends of the past year, order your copy of the eBook, and download Chapters 1 and 2 on the 2019 Executive Summary and key class action settlements.

The Report was featured today in an exclusive article in MarketWatch. Click here to read the coverage!

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. Anyone who practices in this area, whether as a corporate counsel, a private attorney, a business execu­tive, a risk manager, an underwriter, a consul­tant, or a broker, cannot afford to be without it. Importantly, the Report is the only publica­tion of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’” Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2019 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2018 for employment discrimination, wage & hour, ERISA class actions, and statutory workplace laws, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

We hope our loyal blog readers will enjoy it!

Executive Summary

The prosecution of workplace class action litigation by the plaintiffs’ bar has continued to escalate over the past decade. Class actions often pose unique “bet-the-company” risks for employers. As has become readily apparent in the #MeToo era, an adverse judgment in a class action has the potential to bankrupt a business and adverse publicity can eviscerate its market share. Likewise, the on-going defense of a class action can drain corporate resources long before the case even reaches a decision point. Companies that do business in multiple states are also susceptible to “copy-cat” class actions, whereby plaintiffs’ lawyers create a domino effect of litigation filings that challenge corporate policies and practices in numerous jurisdictions at the same time. Hence, workplace class actions can impair a corporation’s business operations, jeopardize or cut short the careers of senior management, and cost millions of dollars to defend. For these reasons, workplace class actions remain at the top of the list of challenges that keep business leaders up late at night with worries about compliance and litigation. Skilled plaintiffs’ class action lawyers and governmental enforcement litigators are not making this challenge any easier for companies. They are continuing to develop new theories and approaches to the successful prosecution of complex employment litigation and government-backed lawsuits.

New rulings by federal and state courts have added to this patchwork quilt of compliance problems and risk management issues. In turn, the events of the past year in the workplace class action world demonstrate that the array of litigation issues facing businesses are continuing to accelerate at a rapid pace while also undergoing significant change. Notwithstanding the transition to new leadership in the White House with the Trump Administration, governmental enforcement litigation pursued by the U.S. Equal Employment Commission (“EEOC”) and other federal agencies continued to manifest an aggressive agenda, with regulatory oversight of workplace issues continuing as a high priority. Conversely, litigation issues stemming from the U.S. Department of Labor (“DOL”) reflected a slight pull-back from previous efforts to push a pronounced pro-worker/anti-business agenda. The combination of these factors are challenging businesses to integrate their litigation and risk mitigation strategies to navigate these exposures. These challenges are especially acute for businesses in the context of complex workplace litigation. Adding to this mosaic of challenges in 2019 is the continuing evolution in federal policies emanating from the Trump White House, the recent appointments of new Supreme Court Justices, and mid-term elections placing the Senate in control of Republicans and the House in control of Democrats. Furthermore, while changes to government priorities started on the previous Inauguration Day and are on-going, others are being carried out by new leadership at the agency level who were appointed over this past year. As expected, many changes represent stark reversals in policy that are sure to have a cascading impact on private class action litigation.

While predictions about the future of workplace class action litigation may cover a wide array of potential outcomes, the one sure bet is that change is inevitable and corporate America will continue to face new litigation challenges.

Key Trends Of 2018

An overview of workplace class action litigation developments in 2018 reveals five key trends. First, class action litigation has been shaped and influenced to a large degree by recent rulings of the U.S. Supreme Court. Over the past several years, the U.S. Supreme Court has accepted more cases for review than in previous years – and as a result, has issued more rulings that have impacted the prosecution and defense of class actions and government enforcement litigation. The past year continued that trend, with several key decisions on complex employment litigation and class action issues that were arguably more pro-business than decisions in past terms. Among those rulings, Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) – which upheld the legality of class action waivers in mandatory arbitration agreements – is a transformative decision that is one of the most important workplace class action rulings in the last two decades. It is already having a profound impact on the prosecution and defense of workplace class action litigation, and in the long run, Epic Systems may well shift class action litigation dynamics in critical ways. Coupled with the appointments of Justices Neil Gorsuch and Brett Kavanaugh to the Supreme Court in 2018, litigation may well be reshaped in ways that change the playbook for prosecuting and defending class actions.

Second, the plaintiffs’ bar was successful in prosecuting class certification motions at the highest rates ever as compared to previous years in the areas of ERISA and wage & hour litigation, while suffering significant defeats in employment discrimination litigation. While evolving case law precedents and new defense approaches resulted in good outcomes for employers in opposing class certification requests, federal and state courts issued many favorable class certification rulings for the plaintiffs’ bar in 2018. Plaintiffs’ lawyers continued to craft refined class certification theories to counter the more stringent Rule 23 certification requirements established in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). As a result, in the areas of wage & hour and ERISA class actions, the plaintiffs’ bar scored exceedingly well in securing class certification rulings in federal courts in 2018 (over comparative figures for 2017). Class actions were certified in significantly higher numbers in “magnet” jurisdictions that continued to issue decisions that encourage or, in effect, force the resolution of large numbers of claims through class-wide mechanisms. Furthermore, the sheer volume of wage & hour certification decisions in 2018 increased as compared to last year, and plaintiffs fared better in litigating those class certification motions in federal court than in the prior year. Of the 273 wage & hour certification decisions in 2018, plaintiffs won 196 of 248 conditional certification rulings (approximately 79%), and lost only 13 of 25 decertification rulings (approximately 52%). By comparison, there were 257 wage & hour certification decisions in 2017, where plaintiffs won 170 of 233 conditional certification rulings (approximately 73%) and lost 15 of 24 decertification rulings (approximately 63%). In sum, employers lost more first stage conditional certification motions in 2018, and saw a reduction of their odds – a decrease of 11% – of fracturing cases with successful decertification motions.

Third, filings and settlements of government enforcement litigation in 2018 did not reflect a head-snapping pivot from the ideological pro-worker outlook of the Obama Administration to a pro-business, less regulation/litigation viewpoint of the Trump Administration. Instead, as compared to 2016 (the last year of the Obama Administration), government enforcement litigation actually increased in 2018. As an example, the EEOC alone brought 199 lawsuits in 2018 as compared to 184 lawsuits in 2017 and 86 lawsuits in 2016. However, the settlement value of the top ten settlements in government enforcement cases decreased dramatically – from $485.25 million in 2017 to $126.7 million in 2018. The explanations for this phenomenon are varied, and include the time-lag between Obama-appointed enforcement personnel vacating their offices and Trump-appointed personnel taking charge of agency decision-making power; the number of lawsuits “in the pipeline” that were filed during the Obama Administration that came to conclusion in the past year; and the “hold-over” effect whereby Obama-appointed policy-makers remained in their positions long enough to continue their enforcement efforts before being replaced in the last half of 2018. This is especially true at the EEOC, where the Trump nominations for the Commission’s Chair, two Commissioners, and its general counsel were stalled in the Senate waiting for votes of approval (or rejection), and one of the two nominees withdrew at year-end due to the delay. These factors are critical to employers, as both the DOL and the EEOC have had a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue. As 2019 opens, it appears that the content and scope of enforcement litigation undertaken by the DOL and the EEOC in the Trump Administration will continue to tilt away from the pro-employee/anti-big business mindset of the previous Administration. Trump appointees at the EEOC and the DOL are slowly but surely “peeling back” on positions previously advocated under the Obama Administration. As a result, it appears inevitable that the volume of government enforcement litigation and value of settlement numbers from those cases will decrease in 2019.

Fourth, the monetary value of the top workplace class action settlements decreased dramatically in 2018. These settlement numbers had been increasing on an annual basis over the past decade, and reached all-time highs in 2017. While the plaintiffs’ employment class action bar and governmental enforcement litigators were exceedingly successful in monetizing their case filings into large class-wide settlements this past year, they did so at decidedly lower values in 2018 than in previous years. The top ten settlements in various employment-related class action categories totaled $1.32 billion in 2018, a decrease of over $1.4 billion from $2.72 billion in 2017 and a decrease of $430 million from $1.75 billion in 2016. Furthermore, settlements of wage & hour class actions experienced over a 50% decrease in value (from $525 million in 2017 down to $253 million in 2018); ERISA class actions saw nearly a three-fold decrease (from $927 million in 2017 down to $313.4 million in 2018); and government enforcement litigation registered nearly a fourfold decrease (from $485.2 million in 2017 down to $126.7 million in 2018). Whether this is the beginning of a long-range trend or a short-term aberration remains to be seen as 2019 unfolds.

Fifth, as it continues to gain momentum on a worldwide basis, the #MeToo movement is fueling employment litigation issues in general and workplace class action litigation in particular. On account of new reports and social media, it has raised the level of awareness of workplace rights and emboldened many to utilize the judicial system to vindicate those rights. Several large sex harassment class-based settlements were effectuated in 2018 that stemmed at least in part from #MeToo initiatives. Likewise, the EEOC’s enforcement litigation activity in 2018 focused on the filing of #MeToo lawsuits while riding the wave of social media attention to such workplace issues; in fact, fully 74% of the EEOC’s Title VII filings this past year targeted sex-based discrimination (compared to 2017, where sex based-discrimination claims accounted for 65% of Title VII filings). Of the EEOC’s 2018 sex discrimination lawsuit filings, 41 filings included claims of sexual harassment. The total number of sexual harassment filings increased notably as compared to 2017, where sexual harassment claims accounted for 33 filings. Employers can expect more of the same in the coming year.

Implications For Employers

The one constant in workplace class action litigation is change. More than any other year in recent memory, 2018 was a year of great change in the landscape of Rule 23. As these issues play out in 2019, additional chapters in the class action playbook will be written.

The lesson to draw from 2018 is that the private plaintiffs’ bar and government enforcement attorneys at the state level are apt to be equally, if not more, aggressive in 2019 in bringing class action and collective action litigation against employers.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2019.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: In its recent article on leading content creators in the legal industry, Attorney at Work cited Seyfarth’s Annual Workplace Class Action Litigation Report, calling it a “best-in-show report that makes the firm synonymous with class action litigation.”

Attorney at Work, a popular legal blog named in the ABA Journal’s “Blawg 100 Hall of Fame,” provides commentary with the “inspiration and information” necessary to support outstanding leading work. In a recent article highlighting industry leaders in legal content creation, Attorney at Work said:

Seyfarth Shaw’s annual Workplace Class Action Litigation Report, now in its 14th year, is a best-in-show report that makes the firm synonymous with class action litigation. At 800 pages, it is a giant publication and is consistently referred to as the source for countless media stories. Not coincidently, this year Seyfarth Shaw was again named a Law360 top employment ‘Practice Group of the Year.’ It has won the accolade for seven consecutive years.”

We are humbled and honored by Attorney at Work’s commentary on our Annual Workplace Class Action Litigation Report. The full article can be found HERE.

The process to compile our Annual Workplace Class Action Litigation Report is a considerable undertaking, and we are grateful that the Report can be seen as a model in the legal industry.

We are particularly proud of Attorney at Work’s words regarding the Report’s reflection on Seyfarth Shaw. After all, our class action practitioners work relentlessly to track, collect, and analyze each and every ruling on class action issues and Rule 23 topics.

Through publishing the Report for 14 years, we have found that the process results in not only a unique compendium of class action decisions, but also in a distinct analytical ability among our team of attorneys. We are pleased that this knowledge is useful to employers and class action practitioners throughout the country.

Many thanks to Attorney at Work — we sincerely appreciate the kudos.

Now that we are getting closer to year’s end, we have tracked and analyzed over 1,500 rulings. At this pace, we predict that the 2019 Report will be our most comprehensive publication to date. Stay tuned for our full analysis of the year’s workplace class action activity in January of 2019.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: In its recent review of Seyfarth’s 2018 Annual Workplace Class Action Litigation Report, EPLiC called it the “bible” for class action legal practitioners, corporate counsel, employment practices liability insurers, and anyone who works in related areas.

We are humbled and honored by the recent review of our 2018 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. Anyone who practices in this area, whether as a corporate counsel, a private attorney, a business execu­tive, a risk manager, an underwriter, a consul­tant, or a broker, cannot afford to be without it. Importantly, the Report is the only publica­tion of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”

We are often asked – “How does it happen – how do you produce your Annual Workplace Class Action Litigation Report”?

The answer is pretty simple – we live, eat, and breathe workplace class action law 24/7.

Each and every morning we check the previous day’s filings of EEOC lawsuits and workplace class actions relative to employment discrimination, ERISA, and wage & hour claims. We do so on a national basis, both in federal courts and all 50 states. Then we check, log, and analyze every ruling on Rule 23 certification motions and subsidiary issues throughout federal and state trial and appellate courts. This is also done on a national basis.  We put this information in our customized database; we analyze and compare the rulings on class action issues and Rule 23 topics, and then we prepare an analysis of each and every decision.

Our class action practitioners – a group of over 175 Seyfarth lawyers – contribute to the process of building the database and analyzing decisional law on a daily basis.

We have been doing this on a 24/7 basis for over 14 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

The result is a compendium of workplace class action law that is unique in its analysis, scope, and comprehensiveness.

We are particularly proud that EPLiC recognized our Report as the “state-of-the-art report” on workplace class action litigation.

Thanks EPLiC. We sincerely appreciate the kudos.

Now, even less than half way through the year, we have tracked and analyzed more class action decisions to this point in 2018 than at the halfway point in past years. On this pace, our 2019 Report will cover more decisions than ever before.

By: Gerald L. Maatman, Jr. & Michael L. DeMarino

Seyfarth Synopsis:  In September 2017, our blog posted a video highlighting an emerging class action litigation risk for employers – the Illinois Biometric Information Privacy, commonly known as “BIPA.”  Since this time, class action filings under BIPA have exploded, including a potentially-landmark case against social media giant Facebook.  Today, Seyfarth Shaw Associate Mike DeMarino discusses the Facebook case, as well as its potential impact on employers, with Partner Jerry Maatman.

The BIPA statute was enacted by the Illinois legislature in 2008 in an effort to keep up with various industries’ use of employees’ biometric data.  In this context, biometric data refers to a number of measurements of individual biological patterns that can be used to identify individuals.  Examples we have seen cited in BIPA litigation include retina/iris scans, fingerprints, voiceprints, and scans of hand/face geometry.

Though the BIPA statute was enacted in Illinois ten years ago, employers and litigators are still waiting to see how certain aspects of the law will be interpreted.  A recent class action, entitled In Re Facebook Biometric Information Privacy Litigation, Case No. 15-CV-3747 (N.D. Cal.), may provide some important answers.  This matter, filed by three Facebook users in Illinois, involves allegations that Facebook violated users’ rights to privacy under BIPA through its automatic face-tagging feature.  On April 16, 2018, a federal judge in California certified (see order here) the class as all “Facebook users located in Illinois for whom Facebook created and stored a face template after June 7, 2011.”  The case is set for trial in June 2018.

As Jerry explains in the video, employers should keep a close eye on the outcome of this class action.  The key debate, centered around the concept of “standing” under Spokeo, Inc. v. Robins 136 S. Ct. 1540 (2016), has the potential to significantly impact future BIPA litigation.  For a full explanation of this case and employer class action litigation risk under BIPA, make sure to watch the video above!

Seyfarth Synopsis: At 878 pages, Seyfarth’s 14th Annual Workplace Class Action Litigation Report analyzes 1,408 rulings and is our biggest and most voluminous Report ever.

Click here to access the microsite featuring all the Report highlights. You can read about the four major trends of the past year, order your copy of the eBook, and download Chapters 1 and 2 on the 2018 Executive Summary and key class action settlements.

The Report was featured today in an exclusive article in the Wall Street Journal. Click here to read the coverage!

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”  Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation. You can read more about the review here.

The 2018 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2017 for employment discrimination, wage & hour, ERISA class actions, and statutory workplace laws, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

We hope our loyal blog readers will enjoy it!

Executive Summary

The prosecution of workplace class action litigation by the plaintiffs’ bar has increased exponentially over the past decade. More often than not, class actions pose unique “bet-the-company” risks for employers. An adverse judgment in a class action has the potential to bankrupt a business and adverse publicity can eviscerate its market share. Likewise, the on-going defense of a class action can drain corporate resources long before the case even reaches a decision point.

Companies that do business in multiple states are also susceptible to “copy-cat” class actions, whereby plaintiffs’ lawyers create a domino effect of litigation filings that challenge corporate policies and practices in numerous jurisdictions at the same time. Hence, workplace class actions can adversely impact a corporation’s business operations, jeopardize or cut short the careers of senior management, and cost millions of dollars to defend. For these reasons, risks from workplace class actions are at the top of the list of challenges that keep business leaders up late at night.

Skilled plaintiffs’ class action lawyers and governmental enforcement litigators are not making this challenge any easier for companies. They are continuing to develop new theories and approaches to the successful prosecution of complex employment litigation. New rulings by federal and state courts have added to this patchwork quilt of compliance problems and risk management issues.

In turn, the events of the past year in the workplace class action world demonstrate that the array of litigation issues facing businesses are continuing to accelerate at a rapid pace while also undergoing significant change. Notwithstanding the transition to new leadership in the White House in 2017, governmental enforcement litigation pursued by the EEOC and the U.S. Department of Labor (“DOL”) continued to manifest an aggressive “push-the-envelope” agenda by agencies, with regulatory oversight of workplace issues continuing as a high priority.

The combination of these factors are challenging businesses to integrate their litigation and risk mitigation strategies to navigate these exposures. These challenges are especially acute for businesses in the context of complex workplace litigation.

Adding to this mosaic of challenges in 2018 is the continuing evolution in federal policies based on a new political party occupying the White House for part of 2017. Furthermore, while changes to government priorities started on Inauguration Day and are on-going, others are being carried out by new leadership at the agency level who were appointed in the fourth quarter of this past year. As expected, many changes represent stark reversals in policy that are sure to have a cascading impact on private class action litigation. While predictions about the future of workplace class action litigation may cover a wide array of potential outcomes, the one sure bet is that change is inevitable and corporate America will continue to face new litigation challenges.

Key Trends Of 2017

An overview of workplace class action litigation developments in 2017 reveals four key trends.

First, the monetary value of the top workplace class action settlements rose dramatically in 2017. These numbers increased over past years, even after they had reached all-time highs in 2014 to 2016. The plaintiffs’ employment class action bar and governmental enforcement litigators were exceedingly successful in monetizing their case filings into large class-wide settlements, and they did so at decidedly higher values than in previous years. The top ten settlements in various employment-related class action categories totaled $2.72 billion in 2017, an increase of over $970 million from $1.75 billion in 2016. Furthermore, settlements of employment discrimination class actions experienced over a three-fold increase in value; statutory workplace class actions saw nearly a five-fold increase; and government enforcement litigation registered nearly a ten-fold increase. Whether this is the beginning of a long-range trend or a short-term aberration remains to be seen as 2018 unfolds, but the determinative markers suggest this upward trend will rise further in 2018, at least insofar as private plaintiff class actions are concerned.

Second, while federal and state courts issued many favorable class certification rulings for the plaintiffs’ bar in 2017, evolving case law precedents and new defense approaches resulted in better outcomes for employers in opposing class certification requests. Plaintiffs’ lawyers continued to craft refined class certification theories to counter the more stringent Rule 23 certification requirements established in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). As a result, in the areas of employment discrimination and ERISA class actions, the plaintiffs’ bar scored well in securing class certification rulings in federal courts in 2017 (over comparative figures for 2016). Class actions were certified in significant numbers in “magnet” jurisdictions that continued to issue decisions that encourage or, in effect, force the resolution of large numbers of claims through class-wide mechanisms. Yet, while the sheer volume of wage & hour certification decisions in 2017 increased as compared to last year, employers actually fared better in litigating those class certification motions in federal court than last year. Of the 257 wage & hour certification decisions in 2017, plaintiffs won 170 of 233 conditional certification rulings (approximately 73%), but lost 15 of 24 decertification rulings (approximately 63%). By way of comparison, there were 224 wage & hour certification decisions in 2016, where plaintiffs won 147 of 195 conditional certification rulings (approximately 76%) and lost 13 of 29 decertification rulings (approximately 45%). In sum, employers beat slightly more first stage conditional certification motions in 2017, and dramatically increased their odds – a jump of 18% – of fracturing cases with successful decertification motions.

Third, filings and settlements of government enforcement litigation in 2017 did not reflect a head-snapping pivot from the ideological pro-worker (or anti-big business) outlook of the Obama Administration to a pro-business, less regulation/litigation viewpoint of the Trump Administration. Instead, as compared to 2016, government enforcement litigation actually increased in 2017. As an example, the EEOC alone brought 184 lawsuits in 2017 as compared to 86 lawsuits in 2016. Further, the settlement value of the top ten settlements in government enforcement cases jumped dramatically – from $52.3 million in 2016 to $485.25 million in 2017. The explanations for this phenomenon are wide and varied, and include the time-lag between Obama-appointed enforcement personnel vacating their offices and Trump-appointed personnel taking charge of agency decision-making power; the number of lawsuits “in the pipeline” that were filed during the Obama Administration that came to conclusion in the past year; and the “hold-over” effect whereby Obama-appointed policy-makers remained in their positions long enough to continue their enforcement efforts before being replaced in the last half of 2017. This trend is critical to employers, as both the DOL and the EEOC have had a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue. As 2018 opens, it appears that the content and scope of enforcement litigation undertaken by the DOL and the EEOC in the Trump Administration will tilt away from the pro-employee/anti-big business mindset of the previous Administration. Trump appointees at the DOL and the EEOC are slowly but surely “peeling back” on positions previously advocated under the Obama Administration. As a result, it appears inevitable that the volume of government enforcement litigation and value of settlement numbers from those cases will decrease in 2018. The ultimate effect, however, may well prompt the private plaintiffs’ class action bar to “fill the void” and expand the volume of workplace litigation pursued against employers over the coming year as the DOL and the EEOC adjust their litigation enforcement activities.

Fourth and finally, class action litigation increasingly has been shaped and influenced by recent rulings of the U.S. Supreme Court. Over the past several years, the U.S. Supreme Court has accepted more cases for review – and issued more rulings that have impacted the prosecution and defense of class actions and government enforcement litigation. The past year continued that trend, with several key decisions on complex employment litigation and class action issues that were arguably more pro-business than decisions in past years. More cases also were accepted for review in 2017 that are positioned for rulings in 2018, including what may be the most high-stakes issue impacting employers since the Wal-Mart ruling in 2011 – the Epic Systems, Murphy Oil, and E & Y trilogy of cases on the legality of workplace arbitration agreements with class action waivers. The ruling expected in the Epic System, Murphy Oil, and E & Y cases in 2018 may well change the class action playing field in profound ways. Coupled with the appointment of Justice Neil Gorsuch in 2017 and potential additional appointments to the Supreme Court by President Trump in 2018 and beyond, litigation dynamics may well be re-shaped in ways that further change the playbook for prosecuting and defending class actions.

Implications For Employers

The one constant in workplace class action litigation is change. More than any other year in recent memory, 2017 was a year of great change in the landscape of Rule 23. As these issues play out in 2018, additional chapters in the class action playbook will be written.

The lesson to draw from 2017 is that the private plaintiffs’ bar and government enforcement attorneys at the state level are apt to be equally, if not more, aggressive in 2018 in bringing class action and collective action litigation against employers.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2018.

 

Seyfarth Synopsis: Vote today for Seyfarth’s Workplace Class Action blog for the ABA Journal Blawg 100 Award.

Voting is open for the American Bar Association’s annual 100 Best Legal Blogs competition, and we hope you will cast your vote today to help Seyfarth’s Workplace Class Action blog get on the ABA’s list for 2017.

As many of you may know, the Workplace Class Action blog was selected as one 2016’s ABA Journal Best 100 Legal Blogs!  The ABA Journal said the following: “This Seyfarth Shaw blog is worth reading for any employer-side labor law attorneys or in-house counsel. In addition to giving readers summaries of the outcomes of various lawsuits, the blog publishes Seyfarth’s Annual Workplace Class Action Litigation Report, which compiles vital information for corporate counsel about what companies can and should be doing to stay ahead of lawsuits.”

We were also honored this year again with a review of our Annual Workplace Class Action Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here.

EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”

Please help us gain some extra recognition by nominating us for the ABA’s annual 100 best legal blogs competition today! We want to keep the streak going for 2017!

Nominations are open now untill July 30, 2017.

Click the link here and provide a short explanation of why you like this blog.

Hurry over to the site and nominate!  Thank you for your consideration and support!