Class Action Settlement Value Falls in 2016, Law Firm Says

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By Michael Trimarchi

The value of employment-related class action settlements fell sharply in 2016, with the top 10 settlements across five core subject-matter areas totaling $1.75 billion, a law firm said Jan. 12.

When considering all types of workplace class actions, settlements in 2016 declined 29 percent from 2015 when such settlements reached a record high of $2.48 billion, Seyfarth Shaw said in its 13th annual “Workplace Class Action Litigation Report.” Settlement amounts in 2014 were $1.87 billion, the report said.

Among trends outlined in the report, wage and hour class and collective actions filed in federal courts under the Fair Labor Standards Act totaled 8,308, compared with 8,954 in 2015 and 8,066 in 2014. Filings for FLSA collective actions outpaced other types of employment-related class action filings, the report said.

“Up until 2015, lawsuit filings reflected year-after-year increases in the volume of wage and hour litigation pursued in federal courts since 2000,” the report said. Statistically, wage and hour filings increased by more than 450 percent in the past 15 years, it said.

While the first decrease in FLSA lawsuit filings in 15 years was noteworthy, 2016 was the second-highest year ever in the filing of such cases, surpassed only by 2015 filings, the report said.

The report outlined factors that may boost the number of filings in 2017, including new FLSA regulations on overtime threshold exemptions in 2016, which were delayed after a federal district court blocked implementation of the Labor Department rule that was to have taken effect Dec. 1. The department appealed the ruling with the Fifth U.S. Circuit Court of Appeals ( Nevada v. DOL, 5th Cir., No. 16-41606, 12/1/16 ).

Additionally, minimum wage increases in 22 states and 22 municipal jurisdictions that take effect in 2017 are likely to bring more FLSA court filings, as well as issues related to independent contractors and joint-employer status, especially regarding the relationship between franchisors and franchisees, the report said.

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