The Wage and Hour Litigation Epidemic Continues

Today, the Federal Judicial Center released the number of wage and hour lawsuits filed in federal courts throughout the country during the 12-month period preceding March 31, 2014 (the FJC’s reporting period). Once again this year, the number of wage and hour lawsuits increased significantly to 8,126, up another 4.7% over the prior 12-month period. See Seyfarth Shaw’s bar graph of wage and hour federal court filings since 1990.

This is the seventh straight year of increases in federal court wage and hour lawsuits and ups the continuing explosion in these cases over the past decade to 237% and since 2000 to 438%. Although anecdotal, we believe that those numbers would be substantially greater if wage and hour lawsuits filed in state courts under state pay practices, tip laws, meal and rest break requirements, independent contractor rules, and the like, were added.

The reasons for this phenomenal trend that shows no letup are many and have been discussed on this blog in the past.  In brief, they include the fact that:

  • The Fair Labor Standards Act is an old statute created for a very different type of economy (think, smoke stack industries in 1938, when the work shift began and ended with the sounding of a whistle) than the 21st Century workplace, where application of the statute’s mandates are often confusing and difficult;
  • Many of the terms essential to the FLSA were ill-defined when the law was enacted and the Department of Labor’s regulations were adopted, and those terms remain no less ambiguous today spawning litigation involving many different industries;
  • State laws have provided additional sources of litigation, often regarding pay practices not covered by federal law but often combined with FLSA claims;
  • Employees have become increasingly aware of the possibility of suing for perceived mis-steps by management in exempt status classifications, overtime pay calculations, and off-the-clock allegations; and
  • Plaintiffs’ lawyers, influenced by large settlements and court awards in collective and class actions, have found wage and hour claims to be fertile ground for large fee recoveries.

This past year, additional factors have fueled the filing of new claims:

  • The tightening of the federal standards for class certification has driven plaintiffs’ attorneys to file many single and multi-plaintiff lawsuits if and when class certification is denied or a class is decertified.
  • Talk of raising the minimum wage has increased focus on wage and hour laws and the availability of overtime pay.
  • And, most recently, the President’s directive to the Secretary of Labor to revise the regulations on “white collar” exemptions has, as it did the last time the regulations were amended in 2004, caused employees to pay more attention to wage and hour policies and practices.

Because of increasing publicity that wage and hour issues are likely to receive from DOL’s expected proposed revisions to the exempt status regulations, and the other causes of the explosion in wage and hour litigation discussed previously, we expect this trend to continue and even expand. For this reason, we urge employers to review their exempt classifications and pay practices with experienced wage and hour counsel to make adjustments that may be appropriate.

By Richard Alfred

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