Commentary From Crisis Management Expert Edward Segal, Author Of The Award-Winning Crisis Ahead: 101 Ways to Prepare for and Bounce Back from Disasters, Scandals, and Other Emergencies (Nicholas Brealey)

If business leaders assumed Covid would slow the pace of class action lawsuits or the size of settlements, they were wrong.

In 2021, a new record was set for the amount of top class action settlements: $3.62 billion. That's compared to $1.58 billion in 2020 and $1.34 billion the year before that.

This is according to Seyfarth Shaw, an employment and labor law firm whose 844-page Workplace Class Action Litigation Report was released recently. Seyfarth said the annual report, which is now in its 18th year, analyzed 1,607 class action rulings (also a record) on a circuit-by-circuit and state-by-state basis.

Keeping Business Executives Awake At Night

Writing in the report's executive summary, Seyfarth chair and managing partner Peter C. Miller noted that, "The continuation of the Covid-19 pandemic has impacted everyone and everything, including class action litigation. The last few years have seen a transformation in class action and collective action litigation involving workplace issues.

"This came to a head from 2014 to 2021 with numerous major class action rulings from the U.S. Supreme Court. The stakes in these types of employment lawsuits can be extremely significant, as the financial risks of such cases are enormous. More often than not, class actions adversely affect the market share of a corporation and impact its reputation in the marketplace. It is a legal exposure which keeps corporate counsel and business executives awake at night."

'The Largest Settlement Totals Ever'

Gerald L. Maatman, Jr is a partner at Seyfarth and author of the report. He observed that, "Many thought the impact of the pandemic— with months of court closings and transition of legal proceedings to zoom hearings—would depress settlement numbers and allow corporate defendants to defer legal issues for months if not years.

"In point of fact, the plaintiffs' class action bar converted their lawsuit filings into the largest settlement totals ever in 2021," he said.

Where Workers Scored More Successes

Maatman noted that, "Based on sheer volume and statistical numbers, workers scored the most success in securing certification of wage and hour class and collective actions in 2021 as compared to other areas of workplace law."

Key Trends For 2022

Seyfarth's report identified key themes from 2021 and emerging litigation trends that face U.S. companies this year. They include the following:

Increased Government Enforcement Litigation

"Employers are well-served to focus on compliance with workplace laws and regulations to steer clear of government-initiated investigations and lawsuits. The transformation of risk for governmental enforcement litigation under the Biden administration is markedly different for employers used to the hands-off, laid back approach of the prior administration."

Wage And Hour Litigation Remains The Sweet Spot For Plaintiffs

"Based on sheer volume and statistical numbers, workers scored the most success in securing certification of wage and hour class and collective actions in 2021 as compared to other areas of workplace law. This state of affairs is expected to explode in 2022, with a more friendly DOL that makes wage theft its enforcement priority."

Covid-19 ' Continued Impact On Workplace Class Action Litigation

"The ongoing Covid-19 pandemic impacted all aspects of life, including the legal system in general and workplace class actions in particular. The pandemic spiked more class actions (of all varieties) and for all types of workplace issues. With the roll out of return-to-work programs and vaccine mandates in the fourth quarter of 2021, class actions by states, employee advocates, unions, and employer-groups were filed in record numbers."

Arbitration Class Action Waiver Defense Under Increasing Attack

"Workplace class action litigation in 2021 was fueled by the change from red to blue in the White House, expansion of workers' rights, increased regulation of businesses, and aggressive enforcement of workplace laws.

"With that platform, advocates for workers and labor are doubling-down on efforts to overturn the regime of workplace arbitration agreements with class/collective action waivers established by Epic Systems v. Lewis."

For more information about the Workplace Class Action Litigation Report, visit www.workplaceclassactionreport.com, where copies can be requested.

Advice For Business Leaders

Pay Workers Consistently

Seyfarth's Maatman said that, "Ensuring that workers are paid consistent with federal and state overtime and wage laws is key, given that wage and hour litigation remains a huge driver of legal risk and lawsuit activity."

More Activist Initiatives

"In 2022, these issues will be coupled with an increasingly activist set of pro-employee initiatives from the Biden administration's workplace agencies such as the Department of Labor and the Equal Employment Opportunity Commission," he predicted.

Social Media And Publicity Challenges

"Added to that calculus are the challenges for business leaders posed by social media and negative publicity that inevitably accompanies workplace class action litigation. In this environment, the fundamentals of legal compliance with employer workplace obligations have never been more important," Maatman concluded.

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