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Class Action Lawsuits in Employment: When and How to Pursue Collective Action

Class Action Lawsuits in Employment

When and How to Pursue Collective Action

Workers often have the right to band together to pursue their rights against their employer, or a joint employer like a franchise and the national brand, or a store and its cleaning staff. The cost of taking an individual case to trial in the United States can be well over $100,000.00. Attorneys’ fees in discrimination cases can be similarly high. Recognizing that many workers cannot afford this, the law makes class actions possible.

Workplace class action litigation resulted in about $3.2 billion in settlement amounts in 2021 alone. That is an increase from about $1.3 million in 2019, just two years earlier.

Overtime and Minimum Wage Cases

Many cases involving a failure to pay the correct hours, hourly rate, or overtime pay are filed as class actions or collective actions. This includes many so-called “wage theft” cases, the popular term for wage and hour actions.

New York state allows these actions to be filed as opt-out class actions. The New York wage theft laws have been reformed to give workers more rights and to create new penalties for employers. Starting in March 2024, a New York employee who makes less than $1300 a week (approximately $67,000 a year) can bring wage theft claims in court or before the New York Department of Labor (NYDOL). New York Labor Law claims may include illegal deductions from wages, hours worked, or tips; unpaid wages or delays in weekly or biweekly paychecks; or misclassification of workers as exempt from overtime pay or exempt from the minimum wage.

The laws of the United States of America allow collective actions for unpaid federal overtime or minimum wage. An individual lawsuit for losing $500 or $1000 in overtime might not be worth pursuing for many workers, even if they understood how to do it. The filing fee alone would eat up a lot of this amount, and a book of legal forms to get the words right can cost hundreds of dollars. So when more than one worker is similarly situated as to their wages or hours, they can band together in a collective action. Workers can opt in to be included in what one or a few workers argue in federal court as to unpaid wages, overtime, or hours/tips. A class action often involves common questions of law or fact, and a collective action similar positions or jobs.

A collective action or class action notice is sent by the court to qualifying workers when appropriate. It will be written in plain, easily read language to inform class or collective action members of what the lawsuit is about and how they can be included or opt out. There are standard forms that attorneys use for such notices.

An attorney for employees is allowed to communicate with potential class or collective action plaintiffs before they are recognized by the court as representatives of the class or collective. The employer may also communicate with potential class members, often to offer settlement terms through the employer’s law firm or in-house attorneys. The court may regulate communications with class members, to ensure accurate information and prevent threats or intimidation of potential class member or class representatives being sent by employers.

Employment Discrimination, Disability, and Hostile Work Environment Cases

Class actions are well established in the area of employment discrimination, sexual harassment, and disability discrimination under the Americans with Disabilities Act or New York State Human Rights Law/New York City Human Rights Law. Employment discrimination covers protected groups such as the sexes, the LGBT community, racial and ethnic groups, immigrants and persons not born in the United States, veterans and reservists, persons over age 40, persons who are pregnant or planning to become pregnant, and under state law, groups defined by marital or family status including parents, and domestic violence victims.

Although current law may not be as clear, one court stated: lawsuits about “racial or ethnic discrimination are often by their very nature class suits, involving classwide wrongs.” Another court said that some employment discrimination claims in particular may “necessarily [be] a class action as the evil sought to be ended is discrimination on the basis of a class characteristic.” Disparate impact discrimination, or claims that an apparently neutral policy adversely affects a racial or ethnic group, a sex, or a sexual minority, is often resolved in a class action or through reforms to employer policies that go beyond the individual employee who first brings the case.

Many employment class actions are filed every year. A large class action in the employment discrimination area may settle for $100 million or more, according to recent news reports. According to another recent report from Lex Machina, there were 1,931 hostile work environment sexual harassment complaints litigated between 2020 and 2022. Other reports expect an increase in these class actions as the Biden administration issues guidance that employees are protected from harassment on the basis of sexual orientation or gender identity, and protected from stereotyping and use of insults or wrong pronouns (and not just traditional forms like hostile quid-pro-quos or sexually explicit communications or materials).

While disability discrimination law can be complex, in general the law entitles employees to a reasonable accommodation of their disabilities to enable them to perform jobs for which they are otherwise qualified once physical facilities, shifts, duties, and leave times are altered. Employers and employees are supposed to engage in an interactive process in which employees articulate their disabilities and needed accommodations, perhaps with the aid of a physician or counselor, and employers propose accommodations that are reasonable and not too burdensome. A disability may not include a temporary condition that has zero longer-term impacts, however. Disability access cases may be filed by current employees, persons screened out of employment by a vision or hearing test, or even customers who cannot access facilities or a website.

Leeds Brown Law P.C. is experienced in employment class actions. In cases involving racial and ethnic minorities in the financial sector, the firm has obtained settlements benefiting various classes of employees. In age discrimination case involving a class of older workers at an insurance company, it won praise for its professionalism during the federal court proceedings. In a case involving the grocery chain Aldi, it worked with other law firms to obtain a judge’s approval of $9.8 million settlement on behalf of store managers across the nation. A New York appeals court granted its motion to file a class action involving employees at Jenny Craig’s branches and locations in New York. A federal court in Long Island granted its motion to allow 2,000 financial service workers to opt into a settlement of their wage and hour claims. It has also been appointed to serve on a class action executive committee in a matter involving Walmart Inc. and consumer claims.

Next steps

Workers who have been discriminated against, suffered a hostile or abusive environment at work, asked to work off the clock, or see missing hours or wrongful deductions on their paychecks may particularly benefit from pursuing collective action with the aid of an experienced lawyer.

It is important to know your rights when it comes to pay and overtime, discrimination, leave time, and working conditions. A free consultation can help you understand your rights and take action to protect them.

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