Employers are facing more lawsuits and federal agency enforcement actions over alleged labor law violations, and responding to them is becoming more expensive than ever, according to new research from law firms Duane Morris and Norton Rose Fulbright.
“More class actions are being filed and are being settled at higher numbers than before,” said Gerald Maatman, an attorney with Duane Morris in Chicago. “Companies are entering a new era of higher risks and higher stakes.”
Employers “are trying to stay in front of [the trend] the best they can and readjust resources when needed in terms of managing that [legal] risk,” said Jamila Mensah, an attorney with Norton Rose Fulbright in Houston.
On average, companies surveyed by Norton Rose Fulbright spent $2.3 million on litigation in 2023, compared with $2 million in 2021.
Courts issued rulings on 451 motions for class certification in 2023, up from 335 in 2022, Duane Morris reported. Plaintiffs succeeded in their requests to get class certification 72 percent of the time in 2023, compared with 74 percent in 2022. The top area for class certifications was alleged violations of the Fair Labor Standards Act (FLSA).
Wage and hour violations remain the top employment-related claim, so “there’s a real corporate imperative to get pay policies and practices right,” Maatman said.
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