Employment law class action and collective action litigation is becoming more sophisticated and will continue to be a source of significant financial exposure to employers well into the future, a new study finds.

Employers can also expect that class action and collective action lawsuits will increasingly combine claims under multiple statutes, said Gerald L. Maatman Jr., general editor of the Fourth Annual Workplace Class Action Litigation Report and co-chair of the Complex Discrimination Litigation Practice Group of Seyfarth Shaw.

Mr. Maatman, a columnist for National Underwriter noted: “The class action cases decided in 2007 foreshadow the direction of complex litigation against employers in the coming year.”

He said the lesson to draw from workplace class action litigation is that private plaintiffs' lawyers and government enforcement attorneys are apt to be equally if not more aggressive in 2008 in bringing class action and collective action litigation against employers.

Identifying, addressing and remediating companies' class action vulnerabilities, “therefore, deserve a place at the top of corporate counsels' priorities list for 2008,” according to Mr. Maatman.

He said the report highlights four key developments in 2007:

o The volume of wage-and-hour litigation continues to increase exponentially. Collective actions pursued in federal court under the Fair Labor Standards Act produced more rulings in 2007 than did class actions for employment discrimination or under ERISA.

While the U.S. District Courts for the Southern and Middle Districts of Florida experienced more wage-and-hour filings than any other federal jurisdiction, the most significant growth in wage-and-hour litigation was centered at the state court level, especially in California, Florida, Illinois, New Jersey, New York, Pennsylvania and Texas. This trend is seen likely to continue in 2008.

o The Class Action Fairness Act of 2005 (CAFA) continued to have significant effects on workplace litigation, primarily wage-and-hour class actions filed in state court.

The past 12 months saw evolving case law developments on jurisdictional issues under CAFA. As the plaintiffs' bar continues to devise techniques to adapt to CAFA, rulings on the scope, meaning and application of the law are already numerous for a statute of such recent vintage. It also results in fights over whether an employer in a workplace class action must defend itself in state court or in federal court.

o The financial stakes in workplace class action litigation increased yet again in 2007. Plaintiffs' lawyers have continued to push the envelope in crafting damages theories to expand the size of classes and the scope of recoveries. These strategies resulted in a series of massive settlements in nationwide class actions. This trend is also unlikely to abate in 2008.

o Plaintiffs' lawyers have resorted to state court forums on a more frequent basis to pursue employment-related class action litigation. The civil justice system in each state is obviously different, and the resulting impact on businesses often varies from county to county within certain jurisdictions.

Some states and certain counties within those states are viewed by litigants as safe havens for opportunistic class action lawsuits, which position those jurisdictions as launching platforms for dubious claims or novel theories of recovery.

A variety of factors, including forum shopping, discovery abuse, consolidation and joinder practices, lax evidentiary standards for experts, the absence of limitations on damages, and class certification precedents, tend to spawn more class action litigation in these jurisdictions, which include California, Florida, Illinois, New Jersey, New York and Texas.

The report noted that the other significant trend from 2007 is that while shareholder and securities class action filings experienced a slight uptick in the last 12 months, employment-related class action filings increased significantly.

Anecdotally, he said, surveys of corporate counsel confirmed that workplace litigation–and especially class action and multiplaintiff lawsuits–continue as the chief exposure driving corporate legal budget expenditures.

A free copy of the 468-page report on CD-ROM is available by sending contact information to gmaatman@seyfarth.com.

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