Defending Against Class Actions to Get Tougher, Law Firm Says

By Lisa Nagele

Federal and state courts addressed new theories and defenses in ruling on employment class action litigation issues in 2014, in the wake of recent Supreme Court decisions, and continued to debate Rule 23, which governs such actions, the law firm Seyfarth Shaw LLP said Jan. 6 in a report.

The “11th Annual Workplace Class Action Litigation Report,” which analyzed 1,219 class action decisions, said 2014 was a year of evolving changes for workplace cases as courts interpreted and applied recent Supreme Court rulings.

A Rule Transformed

“In response to recent Supreme Court decisions on class action issues, Rule 23 law is undergoing a major transformation, and as a result, employers litigated an increased number of novel defenses in 2014,” Gerald L. Maatman Jr., author of the report and co-chairman of Seyfarth Shaw's Class Action Defense Group, said in a statement.

“At the same time, wage and hour class actions and collective actions also continued their meteoric rise to new record levels, while the U.S. Department of Labor and U.S. Equal Employment Opportunity Commission advanced their litigation agendas in an aggressive fashion,” Maatman said.

“All told, employers face a much more challenging landscape for defending workplace class action litigation in 2015,” Maatman said.

According to the report, the Supreme Court's ruling in Wal-Mart Stores Inc. v. Dukes (131 S. Ct. 2541, 2011), continues to have a wide-ranging affect on class actions that are pending in federal and state courts.

The Wal-Mart case “continued to foster a tidal wave of Rule 23 decisions in 2014, as litigants and courts grappled with the ruling’s implications in a wide variety of workplace class action litigation contexts,” the Seyfarth Shaw report said.

Additionally, the Supreme Court's 2013 decision in Comcast Corp. v. Behrend (133 S. Ct. 1426, 2013)), interpreting Rule 23(b)(3) to require that a claimant's damages model show that damages can be measured on a classwide basis, “added a new weapon to employers’ arsenals in challenging class certification,” the report said.

Wage and hour case filings increased in 2014 and represent the prime workplace litigation risk, a report says.

Supreme Court rulings in 2014, such as Fifth Third Bancorp v. Dudenhoeffer (134 S. Ct. 2459, 2014); Halliburton Co. v. Erica P. John Fund Inc. (134 S. Ct. 2398, 2014); Integrity Staffing Solutions Inc. v. Busk (190 L. Ed. 2d 410, 2014); and Dart Cherokee Basin Operating Co. v. Owens (83 U.S.L.W. 4029, 2014 BL 350806, U.S., 2014), “had an immediate impact on workplace class action issues, and are sure to shape litigation issues and strategies in 2015 and beyond,” the report said.

The report identified additional key developments that were expected to affect employers in 2015:

• Settlement strategies: In light of the Wal-Mart and Comcast decisions, employers were settling fewer employment discrimination class actions than at any time over the past decade.

Wage and hour settlements were “relatively flat” and government enforcement litigation settlements were significantly lower than in recent years, the report said. However, Employee Retirement Income Security Act class action settlements increased to nearly 10 times the amount in 2013, it said.

• Wage and hour litigation: Wage and hour class actions “dwarfed all other types of filings” in 2014, the report said, and now represent the leading workplace litigation risk. Federal and state courts issued more decisions in Fair Labor Standards Act collective actions and state-law wage and hour class actions than any other area of complex employment litigation, it said.

• Federal agencies: According to the report, the Labor Department and the Equal Employment Opportunity Commission “continued their aggressive litigation approaches” with “mixed success.”

The agencies suffered several losses in federal courts in 2014, and their settlement recoveries were at their lowest since 2006. However, the EEOC expanded its systemic investigation program.

“This development is of critical importance to employers, for it evidences an agency with a laser-focus on high-impact, big stakes litigation,” the report said.

• Class Action Fairness Act: Last year brought change for employers regarding Class Action Fairness Act case law developments because the Supreme Court’s Dart Cherokee Basin Operating Co. decision solidified “defense strategies to secure removal of class actions to federal court,” the report said.

Sophisticated Legal Actions

“One certain conclusion is that employment law class action and collective action litigation is becoming ever more sophisticated and will continue to be a source of significant financial exposure to employers well into the future,” Maatman said in the author's note to the report.

“FLSA collective actions and state law wage and hour class actions produced more decisions than any other area of complex employment litigation in 2014,” Maatman said in the report's statement.

“Wage and hour litigation represents the ‘prime' litigation risk in the workplace, as case filings increased yet again in 2014,” Maatman said.

To contact the reporter on this story: Lisa Nagele in Washington at

To contact the editor on this story: Michael Trimarchi at