The Law Office of Richard Vaznaugh

Class Actions

An employment class action occurs when an employer has wronged a large group of employees or applicants. To simplify and speedup the case, all the lawsuits are joined together into a class action. Though class actions are faster than having a trial for each individual lawsuit, a class action on averages takes longer and costs more than a typical lawsuit. There are also many class action specific rules to follow. To learn more about class actions and your rights related to class actions, read below:

What is an employment class action?

It is a lawsuit by a small group of people (called Plaintiffs/Class Representatives) on behalf of a larger group of people. In an employment class action, you are trying to prove that the actions of the employer in discriminating against the smaller group is typical of the discrimination faced by the larger group of people, due to a common factor such as their race, age, sex, national origin, ethnicity, etc.

Class actions are essential to the enforcement of our nation’s civil rights laws, since they are often the only way that individual employees can challenge discrimination. With a class action, one lawsuit can vindicate the rights of a larger group of people where no individuals or their attorneys will otherwise have enough of an economic incentive to bring suit on their own. This ensures that anti-discrimination and civil rights laws are adequately enforced.

Because class action lawsuits have been so successful at protecting the interests of employees and consumers, businesses and employers have been fighting back to restrict the ways in which class actions have been brought, resulting in the 2005 passage of the so-called “Class Action Fairness Act.” This law moved many class actions from state to federal court, where it has historically been more difficult for workers to prevail.

How is a class action different than an individual discrimination case?

A class action will take longer to get to trial than an individual case because it requires a decision “as early as possible” of whether a class can be maintained. This means in most instances that the investigation regarding the class claims must be conducted first (generally from four to eight months). Only after a decision on the class claims will an investigation and a trial occur regarding your individual claims.

What do the courts require in order for a case to be brought as a class action?

Rule 23 of the Federal Rules of Civil Procedure, which is the set of rules governing federal class actions, requires:

  1. That the class be so numerous that joinder of all members is impracticable (discussed in question 7);
  2. That there be questions of laws and fact that are common to the claims of the class representatives and the class (discussed in question 7);
  3. That theclaims or defenses of the class representatives be typical of the claims or defenses available to the class members (discussed in question 8); and,
  4. That the class representatives will fairly and adequately protect the interests of the class (discussed in question 9);

Are there any other special requirements in employment class actions?

Yes. In employment cases, the plaintiffs must prove that they meet one of two additional rules under Federal Rule 23(b), either that:

  1. The party opposing the certification of a class action has acted or refused to act on grounds generally applicable to the class, making final injunctive or corresponding declaratory relief appropriate for the class as a whole (discussed in question 10); or,
  2. The questions of law or fact common to the members of the class predominate over any questions affecting only individual members (discussed in question 11); and,
  3. That it be found that a class action is superior to other available methods for the fair and efficient determination of the controversy (discussed in question 12).

How many people are necessary to meet the legal requirements for a class action?

The law requires that the class “be so numerous that joinder of all members is impracticable,” which means the employer’s illegal conduct must have affected enough employees or applicants for hire that joining all of them together, and then presenting before the court evidence of each of their separate factual and legal claims, is not practical.

How many is that?

There is no exact number of individuals that you must have before you can file a class action. However, as a general rule, less than 20 individuals is not enough for a class action and more than 50 individuals is almost always enough. Between 20 and 50 individuals can be a gray area, depending on such factors as:

  1. Where the affected individuals are geographically located; and,
  2. How easy it is to identify all the individuals who potentially were affected in the past or might be affected in the future by the employer’s discriminatory employment actions.

What does the law mean when it says that “the questions of law and fact must be common to the claims of the class representative and the class?

This means that both the class representatives and the larger class proposed to the court must present substantially the same legal and factual questions as each other, so that one court determination could resolve all or most of the legal and factual issues in the case.

What does the law mean when it says that “the claims or defenses of the class representatives must be typical of the claims or defenses available to the class members?

This means that the type of lawsuit and its defense that the class representatives would bring against the employer is similar to the lawsuit that other members of the larger class could also bring, so that a decision regarding the class representatives will be binding on and applicable to the claims of the class members.

What does the law mean when it says that the class representatives must fairly and adequately protect the interests of the class?

This means that a determination in the class representatives’ favor will also be beneficial to the interests of the larger class involved, and covers such issues as:

  1. There can be no “actual” conflicts of interest between the class representatives and the class members. (However, the employer must prove the actual existence of a conflict of interest, as it is not enough for the employer to merely allege a potential conflict of interest.);
  2. The class representatives must fight to be sure that the proper relief is provided for them and the rest of the class members;
  3. Class representatives must hire competent legal counsel familiar with class actions to represent their interests and those of the class.

What does the law mean when it says that the party opposing the certification of a class action has acted or refused to act on grounds generally applicable to the class, thereby making final injunctive or corresponding declaratory relief appropriate for the class as a whole?

This means that the employer has done or refused to do something in violation of the law which generally affects the larger group of class members, so that a class action lawsuit would allow the court in a single trial to fix the problem for everyone if the plaintiffs prove their case. In terms of fixing the problem, the court must be able to issue an injunction, which is an order directing the employer to stop its illegal conduct, that solves the problem, rather than only being able to remedy the problem by giving each class member money damages.

What does the law mean when it says that the questions of law or fact common to the members of the class must predominate over any questions affecting only individual class members?

This means that the legal and factual questions that affect everybody are more common than the legal and factual questions affecting only a few people, so a mass determination of the legal and factual issues would be preferable to many individual cases. It is similar to the requirement discussed in question 5 in requiring that a common claim be shared by all class members, but it goes further to require that the common claims predominate over any individual issues. The rule does not require that every issue in the claim be common; rather, it requires that there be substantial common issues which predominate over individual ones.

What does the law mean when it says that a class action should be superior to other available methods for the fair and efficient adjudication of the controversy?

It means that if you can decide in one class action the same issues that would have to be tried in hundreds of repetitive individual trials, the class action will result in a valuable savings of judicial time and resources (also known as judicial economy) and will prevent inconsistent judgments, so is therefore a method superior to the other methods available to decide the cases. Moreover, where you have many class members who have suffered small losses, reducing the likelihood that they could afford to go to court individually against the defendant employer, a class action is a fair way to ensure the laws against discrimination can be enforced.

What are the various stages of a class action case?

The first stage of a class action is the investigation, which is called discovery. This generally involves requests by the individuals listed as named plaintiffs/class representatives to get computer data from the defendant. The data must then be analyzed by a statistical expert for disparate impact (in other words, to see if the actions of the defendant discriminate against the plaintiffs and the class). There will also normally be depositions (interviews that are recorded by a court reporter, but not involving a judge) of company officials regarding the procedures being challenged by the plaintiffs, and sometimes, an Industrial and Organizational Psychologist is used if a written test is involved.

After discovery is completed, including the filing of all appropriate expert reports and motions for and against class certification, the Court then ordinarily has either a hearing or just oral arguments regarding class certification. After ruling on class certification, the Court sets another scheduling conference to determine the time to be allowed for discovery regarding the merits of the class and individual claims (if the Court has granted class certification) or the merits of the individual claims only (if class certification has been denied).

Once this discovery is completed, the defendant will have the opportunity to move for summary judgment, which is a process where the defendant can request that the Court dismiss the case instead of having it tried before a jury. If summary judgment is denied, then a trial on the merits will follow.

How long do class actions last as compared to cases for individual plaintiffs?

Class actions normally last longer than individual cases because there is discovery related to the class claims, motions that a court must rule upon for or against class certification, and sometimes a class certification hearing or oral argument that all must occur before you get to discovery and a trial on your individual claims. Typically, class cases will last a year or two longer than an individual case.

What are the remedies available to me in an employment class action?

Under the present law, it is very hard for plaintiffs to receive compensatory and punitive damages because the court will not normally certify a class if there are going to be individualized determinations of damages for each class representative and class member. As a result, most class actions now seek only back pay and interest and injunctive relief. For more information about the various types of damages available, see our site’s damages page.

I have been asked if I would be willing to be a “class representative” in a class action case. If I agree, what are my duties and responsibilities?

Class representatives in a class action not only represent themselves, but must also adequately and properly represent the interests of the other members of the class in both the money to be paid out and the changes that are to be made by the employer in the way it does business (called “injunctive relief”). Class representatives can not use their position to pay themselves more money or to obtain more rewards for themselves at the expense of the class.

Class Representatives are generally required to help with the discovery conducted in the case, including answering written questions asked by the defendant (called interrogatories) and providing answers to questions under oath before a court reporter (called a deposition). Additionally, although many law firms now pay the actual litigation costs, a class representative must be prepared to pay his or her percentage of the costs of the litigation if called on to do so.

As a result, even if your case is being handled on a contingency basis, you generally will be required to pay some amount of money to be held in trust toward the costs of the case. This money will be refunded to you if you win or settle the case. Class representatives may also be required to travel at their expense to the place where the lawsuit was filed, the corporate headquarters, or some other mutually convenient location to have their deposition taken, and if the lawsuit is lost, could be held liable for their percentage of the costs of litigation.

There are several of my co-workers who would be willing to join me in bringing a class action case against our employer. How do we get started if we think we might have a good case?

The first, and most important, step in this process is to find a law firm that has handled this kind of work before so they can advise you and your co-workers of the strength of your case.

I have just received a notice that I am a member of a class in a lawsuit against my employer. What do I do?

Read the Notice carefully as it will tell you what to do. Then, talk with a law firm that has handled class actions so you will know the strength of your position and what your rights are.

I do not wish to participate in a class action lawsuit that has been filed. What do I do to exclude myself from the case?

Notify the Court or the Class Administrator, as set forth in the Notice, that you do not want to be a part of the case and do not want any of the money that may be owed to you.

I do not wish to participate in a class action that has been filed against my employer, because I was planning to file my own lawsuit against the company. Am I required to be a member of the class?

The answer to this question depends on how your case is certified, as a B-2 class or a B-3 class.

A B-2 class is appropriate where an employer has acted against a class of people and thus, changes at the company (injunctive relief) are necessary. If a B-2 class is certified and the Court approves the settlement proposal, you cannot pursue your own case.

A B-3 class is appropriate where there are employment issues affecting a class that dominate over issues that affect individual members of the class, and in addition, a class action is the most effective means to address the issues. If a B-3 class is certified, then you can opt-out of the case and pursue your own case.

A law firm familiar with class action cases can inform you about how the case has been certified.

I have been a member of a class that has been certified by the court. I received notice of the proposed settlement, and I do not think it is a very good deal. Can I object to the settlement?

Yes. For your objections to be effective, however, you should talk with a law firm that works in this area of the law to help you frame your objection for the court.

As a practical matter, if you are just upset with the amount of money you are to receive according to the class settlement, you will find it difficult to get the settlement overturned unless there is some major problem with the overall settlement.

I have heard a lot about class action lawyers making lots of money in class action settlements. How do I find out what the lawyers are getting paid?

The amount of money that the attorneys are to receive will be set forth in the Class Action Notice sent to you.

As indicated in question 14, most class actions take two to five years, thousands of man hours, and often from $500,000 to $1,000,000 in cash to bring to court, all of which are generally funded by the law firm representing the plaintiffs and class.

Since most plaintiffs in employment class actions are not wealthy and cannot afford to pay their attorneys by the hour, these cases are often handled on a contingency fee basis, meaning that the attorneys pay these large costs over many years and only get paid if they win or settle your case. Finally, the probability of success on any employment class case is generally no better than fifty percent.

For all of these reasons, fees and expenses for the law firm handling a class action can often be quite large, but are in most cases deserved.

I heard that the court has approved the settlement in the class action case of which I am a part. How long will it take me to receive my settlement payment?

The Class Action Notice will tell you when the Fairness Hearing, when the Court will finally approve or disapprove the proposed settlement, will occur. After the Fairness Hearing, the Court will issue a Final Order approving or disapproving the settlement of the class action (either the day of the hearing or generally within thirty days of the hearing date). If there are no appeals of the Court’s final order, the payments to class members will be made within 30 to 60 days after the time to appeal the final order of the Court has passed.