Workplace class action settlements reach all time high in 2021
They exceeded $3 billion for the first time.
Why You Should Care
2021 saw further disruptions to the world of work, particularly in the US.
As a result, workplace class actions reached an all time high in 2021.
What must businesses do to avoid a repeat in 2022?
2020 disrupted the world of work as millions of people across the world began working from home. In addition, people lost their jobs at levels not seen since the financial crisis, as many companies lost business or were forced to shut down for good.
However, 2021 has not been plain sailing for businesses and workplaces. “In 2021, as vaccines became widely available and state and local governments continued to manage the COVID19 threat, many employers attempted to move their employees to “return to work” or “hybrid” work arrangements,” noted US law firm Seyfarth.
Therefore, it is no surprise that 2021 saw the largest workplace class action settlements in the US since Seyfarth started collecting data 18 years ago.
Seyfarth’s report found that $3.62 billion in 2021 settlements, compared to $1.58 billion in 2020 and $1.34 billion in 2019. The previous record was $2.72 billion in 2017.
Credit: Seyfarth Workplace Class Action Litigation Report.
It is clear that the pandemic has not stopped the pace and size of settlements. In fact, Seyfarth argued in the report that the 2021 impact on the world of work, which included vaccine or test mandates from both the federal government and companies, had an impact.
“These steps…led to waves of controversy as workplace class actions brought by states, employee advocates, unions, and employer groups erupted over regulatory actions and employer policies”, according to Seyfarth.
Another reason for the higher number of settlements in the US is the change of President. President Joe Biden implemented pro-worker policies on his inauguration in January 2021, and he reversed many Trump-era pro-business policies.
In the report, Seyfarth wrote: “Workplace class action litigation in 2021 was fueled by the change from red to blue in the White House, expansion of workers’ rights, increased regulation of businesses, and aggressive enforcement of workplace laws.”
The report continued: “The transformation of risk for governmental enforcement litigation under the Biden Administration is markedly different for employers used to the hands-off, laid-back approach of the prior administration.”
2022 and workplace class action
Seyfarth states that “corporate America will continue to face new litigation challenges in the year to come”.
Avoiding class action suits is crucial because it can bankrupt companies or create bad publicity.
The latter is a particular concern at the moment given the ‘Great Resignation’ is raging on.
Employers need to be working hard to attract new candidates and retain existing employees, a class action suit that highlights a negative side of an employer’s culture or policies is precisely the opposite of what businesses need.
Therefore, in 2022, Seyfarth recommends that companies really focus on mitigating risk. Employee listening and engagement has a key role to play here – maybe you can resolve these problems internally without money being wasted on legal fees.
