Workplace Class Action Litigation Report Outlines a Post-Dukes World

Shannon Green

Corporate Counsel

01-14-2013

Any employer who wondered what effect the U.S. Supreme Court’s Wal-Mart Stores Inc. v. Dukes gender discrimination case would have on private class action cases needn’t look any further than the top 10 employment discrimination class action settlements of 2012. At roughly $49 million in settlements, that total came in at the lowest level since 2006 and was far shy of the pre-Dukes total of $346 million in 2010.

“That’s a pretty dramatic difference,” says Gerald Maatman Jr., who co-chairs the class action litigation group at Seyfarth Shaw and co-authored the 800-plus page “Annual Workplace Class Action Litigation Report,” which the firm published January 14.

Following the 2011 Dukes decision, Maatman says that employers are changing their approach to resolving workplace class actions. “When I’m defending these big cases, the approach now at the mediation table or the settlement table is: ‘Mr. Plaintiffs lawyer, if you thought your case was worth a dollar prior to [Dukes], we think it’s worth a dime now.’ ”

This latest edition of the workplace litigation report offers a circuit-by-circuit and state-by-state review of significant class action rulings rendered in 2012. It analyzes the most significant class and collective action settlements over the past 12 months and offers insights into what’s ahead in 2013.

As influential as the Dukes decision was, Maatman says the plaintiffs class action bar is hardly standing still. “We saw a lot of new sorts of theories and approaches being utilized to try to work around Dukes,” he says.  And although their opponents on the management side tried to extend the ruling to the wage-and-hour context, Maatman says that by and large, judges declined to buy into their argument.

The report cites six key trends in its overview of workplace class action developments last year:

1. The U.S. Supreme Court’s rulings in Wal-Mart Stores Inc. v. Dukes and AT&T Mobility v. Concepcion altered the course of class actions and litigation.

Both cases were widely cited throughout the lower courts last year. Concepcion fed significant litigation over workplace arbitration agreements. In those cases, like with real estate, says Maatman, “location, location, location is everything.” He says, “There are cases going both ways and judges going both ways, even within the same jurisdiction,” adding that “the final chapter hasn’t been written.”

2. Government enforcement litigation reached new “white-hot” levels in 2012.

The heightened activity was particularly apparent at the U.S. Equal Employment Opportunity Commission. According to the report, more discrimination charges were filed with the EEOC in 2012 than in all but one previous year since the founding of the commission: 99,412 charges against private sector employers. Although the EEOC filed half the number of lawsuits as in 2011, Maatman says the EEOC is focusing on its systemic investigation program. “Basically, the EEOC caught its breath” in 2012 says Maatman. He thinks the agency is gearing up to bring more, and higher-stakes, lawsuits in 2013. “If you’re involved in litigation with the EEOC in 2013, I think you’ve got a tiger by the tail. It’s very difficult to defend one of those cases.”

3. Dukes influenced settlement strategies in workplace class actions in a profound way.

The SCOTUS decision helped employers defeat and devalue discrimination class actions, and it resulted in fewer and lower-cost settlements.

4. The continued dislocations in the U.S. economy during 2012 fueled more class action and collective action litigation over wage-and-hourhour laws.

When the economy is such that it’s harder to find another job after an employee has been terminated, Maatman says, “there is no economic disincentive to sue.”

5. Wage-and-hour litigation continued to outpace all other types of workplace class actions.

“We saw an inability of employers to utilize the lessons of [Dukes] to defeat, fracture, or break up wage-and hour-class actions,” according to Maatman. “Everybody thinks the wave is going to crest,” he says, but the report’s authors predict the increasing trend will continue in 2013.

6. The plaintiffs class action bar is a tight-knit community, and developments in Rule 23 and § 216(b) case law in 2012 saw rapid strategic changes based on evolving decisions and developments.

“You’re seeing this shake-out period where plaintiffs lawyers are rebooting and retheorizing how they can still certify a case,” says Maatman. “So if you’re an employer, you’re basically saying, ‘Dukes is out there, and I can utilize it—rely upon it—but it’s not the last word.”