Workplace Litigation Report Offers Mixed Bag

Seyfarth Shaw’s 14th annual Workplace Class Action Litigation Report, released last week, includes both bad news and good news for employers in 2017.

First the good news. Legal precedents and new defense approaches resulted in better statistical outcomes for employers in opposing class-certification requests for the second straight year. For instance, in wage-and-hour litigation–one of the more active categories of employment law–employers won 63 percent of decertification rulings, a success rate of nearly 20 percent from the year before.

The bad news? The monetary value of the top workplace class-action settlements skyrocketed, shooting up more than $1 billion to a record high of $2.72 billion.

Nor was that the only bad news for employers. The report also found that Equal Employment Opportunity Commission filings more than doubled, rising to 184 lawsuits in 2017 from 86 the previous year.

With the Trump administration now at the helm, many experts predicted EEOC filings would decline in 2017. But as Gerald L. Maatman, a partner in Seyfarth Shaw’s Chicago office, points out, the transition from the Obama to Trump administration was slow to happen.

“I think many people assumed … government-enforcement litigation would go down in 2017,” Maatman says. “But in two principal ways in which it’s measured–the volume of cases being filed and the top settlements–the number of cases being filed was double what it was in the last year of the Obama administration [and] settlement numbers were up tenfold.”

Maatman points out that appointments to the Department of Labor, the National Labor Relations Board and the EEOC didn’t begin to occur until around the end of the third quarter.

As a result, he says, the “cases in the pipeline came to fruition in 2017, and they were significantly higher than in past years. A lot of lawsuits continued to be filed by the old appointees … .”

In 2018, Maatman predicts, employers should see a precipitous drop both in the number of filings and in the settlement amounts with respect to those cases.

President Trump has nominated two EEOC commissioners, including a new chairman, but the Senate has yet to confirm them. Once that happens, Maatman says, “you’re going to see less litigation, and the lawsuits that are filed won’t be on behalf of big groups of employees. They’ll be on behalf of one or two employees at a time.”

What finding from the research was the biggest surprise to Maatman?

What “screamed out at me” the most, Maatman says, was the rise in the number of employers that were successful in fracturing wage-and-hour class actions and getting them decertified, jumping from 45 percent in 2016 to 63 percent in 2017.

Enhanced compliance strategies, he says, are leading to a much higher success rate, which is a very positive development for employers.

Maatman also predicts that the Supreme Court could profoundly change the class-action playing field in 2018 with its highly anticipated ruling on the legality of workplace arbitration agreements with class-action waivers.

Along with other employment attorneys, Maatman believes that three consolidated cases before the high court–Epic Systems Corp. v. Lewis; Ernst & Young LLP v. Morris; and NLRB v. Murphy Oil USA Inc.–could have a huge impact on employment-related litigation.

“The decision in that case to either green light the use of these arbitration agreements with class-action waivers, or a ruling that red lights them and says they’re not allowed and are unlawful, would have a massive influence on almost 50 percent of employers throughout the United States,” he says.

The cases were argued before the Supreme Court on Oct. 2, 2017.

David Shadovitz
David Shadovitzhttp://
David Shadovitz is editor emeritus and former editor and co-publisher for HRE.