In a trend that continues this year, class actions over wages and other labor standards increased during 2006, outpacing employment discrimination as a cause for such law suits, a study has found.

The analysis of class action litigation by Seyfarth Shaw law firm in Chicago reported that collective law suits continue as a source of significant financial exposure for employers for this year and well into the future.

The analysis also found that federal and state courts faced many new theories and defenses as lawyers bringing employment class actions and collective action litigation in general have become more sophisticated in their methods.

The report analyzes all federal and state court substantive and procedural rulings in class actions over the past 12 months.

Gerald L. Maatman Jr., general editor of the report and co-chair of the Complex Discrimination Litigation Practice Group of Seyfarth Shaw, said the 302-page analysis provides a guide for corporate counsel “to navigate through the increasingly litigious environment of workplace law.”

Mr. Maatman, a partner with Seyfarth Shaw and a National Underwriter columnist, said corporate decision-makers can use the analysis to understand “key trends and leading rulings of the past year to strategically plan ahead.”

According to the report, settlements of class actions in 2006 reflected a continuing trend from past years where significant monetary payments were made in mega-class actions.

Settlements in Fair Labor Standards Act (FLSA) collective actions and Employee Retirement Income Security Act (ERISA) class actions outpaced employment discrimination class action settlements in terms of overall settlement values. Of particular note, the report said, were a series of ERISA settlements stemming from the meltdown of Enron.

FLSA collective action litigation increased again in 2006 and far outpaced employment discrimination class action filings.

While plaintiffs continued to achieve certification of wage and hour claims, employers also secured several significant victories in defeating conditional certification and obtaining decertification of collective actions, the study found.

Of particular significance, Seyfarth Shaw said, were a series of FLSA collective actions in the financial services industry, and big impact FLSA collective actions are expected to continue this trend in 2007.

The report said there were no class action rulings in 2006 comparable with the certification order in Dukes, et al. v. Wal-Mart Stores Inc., which certified a Title VII gender discrimination claim challenging pay and promotions involving 1.5 million class members.

The U.S. Court of Appeals for the Ninth Circuit heard argument on the appeal of the Dukes certification order on Aug. 8, 2005 but still has not ruled.

According to the study, the Ninth Circuit's future ruling in Dukes–and further appellate proceedings thereafter–will likely be one of the top class action developments in 2007 and beyond.

The report examines 407 class action rulings on a circuit-by-circuit and state-by-state basis.

Substantive areas examined include Title VII, Equal Employment Opportunity Commission (EEOC) pattern or practice cases, the Age Discrimination in Employment Act, the Fair Labor Standards Act and the Employment Retirement Income Security Act.

It includes state law rulings in employment law, wage and hour, and breach of contract cases and analyzes the leading cases, interpreting the Class Action Fairness Act of 2005, Mr. Maatman said.

A CD-ROM of the report is available by e-mailing contact information to seyfarthshaw@seyfarth.com, the firm said.

Another report on litigation trends, issued by Fulbright & Jaworski LLP, found that more companies are facing a growing number of lawsuits and that arbitration numbers also are growing. Companies with $1 billion or more in annual revenues spent an average of $31.5 million on their legal matters in the past year, according to the report.

It also concluded that one of the biggest areas for litigation activity now is the United Kingdom. The percentage of U.S. companies with more than 50 lawsuits was more than double that of last year. Among U.K. respondents, however, the number tripled, the study found.

Special Reports /

'07 Class Action Trends To Mirror 2006

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