TRENDS IN EMPLOYMENT LAW FOR 2007
According to industry analysts, 2006 was the year of the employment law class action. That trend is expected to continue in 2007 with an anticipated increase in class actions for (1) wage-and-hour law claims under the Fair Labor Standards Act (FLSA) and (2) traditional discrimination claims under Title VII of the Civil Rights Act and the American with Disabilities Act brought by the Equal Employment Opportunity. Commission (EEOC).
Since 2000, the number of class actions brought under the FLSA has increased by 70%. Similarly, the EEOC continues to actively pursue class actions which represent approximately a third of all direct suits and interventions filed by the EEOC between 2004 and 2006. Moreover, the Class Action Fairness Act of 2005 (CAFA) has had little impact on reducing such class actions. These types of claims are driven by federal statute thus obviating the primary purpose of CAFA which is to shift product liability and tort class actions from state to federal courts.
One reason for continued interest in class action lawsuits by the plaintiffs' bar is that such suits bring them the possibility of attorneys' fee awards even if each class member recovers very little. The efforts of plaintiffs' attorneys to expand the boundaries of traditional employment class actions into new areas of employment law threaten the operation and economic survival of unwary employers. In fact, two of largest jury verdicts in 2006 came from employment class actions: a $91 million award for a class action brought by the EEOC and a $488 million award for a class action brought under the FLSA.
This growing trend in employment class actions mandate that employers take steps and effective preventive measures in order to minimize the potential for costly class action litigation. Keep in mind that once the Department of Labor or any related state/local agency is made aware of possible FLSA violations they may be entitled to request an audit of a company's payroll records and even speak to its employees. This could create a host of issues to any employer that has not taken the appropriate steps to ensure compliance with the FLSA's wage-and-hour laws.
Jackson & Campbell 's Employment Law Practice Group can assist companies in taking that proactive approach needed to help minimize the risk of costly class action litigation. We can assit companies with a self-audit of labor and employment policies to identify potential problems before claims are filed. Such an audit can help prevent many types of employment claims by identifying potential issues that are currently found in many companies' policies, procedures and practices.
The contents of this Employment Law Alert are intended for general informational purposes only and should not be considered legal advice. Moreover, the mailing of this Employment Law Alert is not intended to create nor does it constitute an attorney-client relationship.
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