Labor and Employment Law

Exploding OT Claims for Many Employers

Wage-and-hour class action claims brought over unpaid overtime are a hot practice area—and, as today’s $62 million judgment against Wal-Mart illustrates, one that can be extremely costly to employers.

“Multiplaintiff wage-and-hour lawsuits pose the greatest employment litigation threat to American businesses today,” says Seyfarth Shaw, a law firm known for its defense of employers, on its Web site. “Since 2003, federal court filings of wage and hour collective actions have surpassed employment discrimination class actions, and settlements have reached into the tens of millions of dollars.”

As discussed in another post, Wal-Mart is now facing a combined judgment of about $141 million in a single Pennsylvania case. Meanwhile, unpaid-overtime class action litigation is being brought against the world’s largest retailer in other states, too.

But Wal-Mart is far from the only such defendant.

“Since the beginning of this decade, this litigation has exploded nationwide. Because wage-and-hour laws have been so widely violated, undetonated legal mines remain buried in countless companies, according to defense and plaintiffs lawyers alike,” reports a Business Week cover story.

“This is the biggest problem for companies out there in the employment area by far,” attorney J. Nelson Thomas, a Rochester, N.Y., plaintiffs’ lawyer tells the magazine. “I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage-and-hour suit] will.”

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