Employment Discrimination Settlements Surge

The monetary value of settlements of the top 10 private plaintiff employment discrimination class-action lawsuits paid or entered into in 2010 totaled $346.4 million, which is more than four times the amount in 2009, according to an analysis released Jan. 5.

The largest was the $175 million settlement in Velez et al. vs. Novartis Pharmaceuticals Corp., according to the Annual Workplace Class Action Litigation Report by Chicago-based law firm Seyfarth Shaw.

The 664-page report analyzes 848 decisions rendered against employers in state and federal courts, including private plaintiff and government enforcement actions. The $346.4 million total for the top 10 in 2010 compares with $84.4 million for the top 10 during 2009.

Velez, which received final approval Nov. 30, 2010, involved allegations that Basel, Switzerland-based Novartis discriminated against 5,600 current and former female sales representatives in pay and promotions.

Seyfarth Shaw Partner Gerald Maatman Jr., who authored the report, said employment discrimination lawsuits “were in the headlines more than any other type of workplace challenge for a company” during 2010, unlike previous years when wage and hour settlements broke records.

The issue is on employees’ minds, “and so the manner with which you comply with the law, your internal systems and the way in which you react in the workplace to complaints of discrimination are very important,” he said.

Meanwhile, wage and hour class actions were the most frequently filed type of workplace class action, according to the report. “This trend also was manifest in more wage and hour class action and collective action decisions by federal and state court judges than any other area of workplace litigation,” according to the report.

“That’s the No. 1 exposure area in corporate America as far as the plaintiffs class action bar is concerned,” Maatman said. Employees who visit plaintiff lawyers are “more likely than not” to be asked what they are paid and probed for potential wage and hour claims, he said.

The top 10 private wage and hour settlements during 2010 totaled $336.5 million, a 7.4 percent decline from 2009.  

Filed by Judy Greenwald of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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