U.S. employers are shelling out more money than ever to resolve legal fights over their treatment of workers.
Settlements from the 10 biggest class-action suits reached a record $2.72 billion last year, reports Seyfarth Shaw LLP. That is up sharply from $1.75 billion in 2016 and represents the highest amount since the Chicago law firm began tracking these workplace cases in 2003.
Many 2017 settlements involved wage-and-hour violations such as insufficient pay, alleged employment bias or underfunded pension plans, according to the firm’s 885-page report. Among the largest was a $227 million payment by FedEx Corp. following a fight over whether its delivery drivers were employees or independent contractors.
“Several longstanding private plaintiff class actions and government enforcement lawsuits initiated by the Obama administration coalesced into some blockbuster settlements in 2017,’’ said Gerald Maatman, Jr., co-chair of the class action defense group at Seyfarth Shaw.
“You will not see these numbers in 2018,” Mr. Maatman predicted. As Trump administration appointees deliver on promises of less government intervention and reduce federal enforcement efforts, those types of cases are likely to be reduced. Still, he expects plaintiffs’ attorneys and state attorneys general will become more aggressive about pursuing workplace class action cases.
“We already are very busy,’’ says Joseph M. Sellers, chair of the civil rights and employment practice group at Cohen Milstein, a Washington, D.C.-based law firm. Still, “it will be very hard to fill what I expect to be that (U.S. government) void.’’
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