18th Annual Workplace Class Action Report - 2022 Edition

2 Annual Workplace Class Action Litigation Report: 2022 Edition First, the aggregate monetary value of workplace class action settlements exploded in 2021 to an all-time high, as plaintiffs’ lawyers and government enforcement agencies monetarized their claims at the highest values we have ever tracked. Many employers and commentators alike expected the pandemic to depress the size and pace of settlements. Instead, the numbers show that the plaintiffs’ bar was successful in converting case filings into significant settlement numbers at higher levels during the pandemic than in any of the preceding years. After settlement numbers reached a high point in 2017, they plummeted to their lowest level ever in 2018 before experiencing a mild recovery in 2019. In 2020, settlement numbers continued their upward trend in several areas, signaling a return to prominence of these bet-the-company cases. This momentum continued in 2021, as class action settlement recoveries reached a new threshold. The top 10 settlements in various employment- related class action categories exceeded $3.19 billion in 2021, compared to $1.58 billion in 2020, $1.34 billion in 2019, and $1.32 billion in 2018. For wage & hour class actions, the monetary value of the top 10 private plaintiff settlements entered into or paid in 2021 reached $641.3 million. This amount represents a monumental increase from the 2020 total of $294.6 million, as well as the 2019 total of $449.05 million. For ERISA class actions, the monetary value of the top 10 private plaintiff settlements entered into or paid in 2021 totaled $411.05 million, exceeding the 2020 total of $380.10 million and the 2019 total of $376.35 million. The only areas of decline were private-plaintiff employment discrimination and government enforcement action settlements. The top 10 employment discrimination settlements garnered $323.45 million in 2021, as compared to settlement figures of $422.68 in 2020 and $137.35 million in 2019, and the top 10 government enforcement action settlements garnered $146.38 million, a sharp decline from the 2020 total of $241 million, but a significant jump from the 2019 total of $57.52 million. Second, wage & hour litigation remained a sweet spot for the plaintiffs’ class action bar as it achieved high rates of success at both the certification and decertification stages. Based on sheer volume and statistical numbers, workers certified more class and collective actions in the wage & hour space in 2021 as compared to any other area of workplace law. While evolving case law precedents and new defense approaches resulted in many good outcomes for employers opposing class and collective action certification requests in 2021, the plaintiffs’ bar sustained its high rate of success on first-stage conditional certification motions in 2021 and markedly improved its rate of success on second-stage decertification motions. Perhaps due to the backlog resulting from pandemic-related court closures, the overall number of rulings increased in 2021, and plaintiffs prevailed on those first-stage motions at a rate exceeded only by the rate at which they prevailed in 2020. Of the 298 FLSA wage & hour certification decisions in 2021, plaintiffs won 226 of 279 conditional certification rulings (approximately 81%). As to second-stage decertification motions, plaintiffs prevailed at a similar rate in 2021 than in other years of the past decade. Plaintiffs lost 10 of 19 decertification motions (approximately 53%). By comparison, employers saw 286 wage & hour certification decisions in 2020, and plaintiffs won 231 of 274 conditional certification motions (approximately 84%) and lost six out of 12 decertification rulings (approximately 50%). By further comparison, of the 267 wage & hour certification decisions in 2019, plaintiffs won 198 of 243 conditional certification rulings (approximately 81%), and lost 14 of 24 decertification rulings (approximately 42%). By further comparison, there were 273 wage & hour certification decisions in 2018, where plaintiffs won 196 of 248 conditional certification rulings (approximately 79%) and lost 13 of 25 decertification rulings (approximately 48%). In sum, the plaintiffs’ bar successfully secured certification of wage & hour actions at an astounding rate in 2021, while their odds of clearing the decertification hurdle decreased slightly to 47%. We expect these numbers to rise ever further in 2022 with a more employee-friendly U.S. Department of Labor actively working to eliminate pro-business rules and shifting its regulatory focus toward a plaintiff-friendly agenda. Third, the change of leadership in the White House translated directly to reversals in administrative agendas, as the Biden Administration’s enforcement authorities took steps to eliminate pro-business rules of the Trump Administration, thereby fueling skepticism regarding the continued weight of agency determinations. Voters elected to turn the White House from red to blue in November 2020 and, as a result, changes in numerous areas rolled out over 2021 that reversed Trump-era pro-business policies and sought to expand worker rights. The Department of Labor (“DOL”), in particular, withdrew or rescinded Trump-era rules, including the tip credit, joint employer, and independent contractor rules promulgated by the DOL during the Trump Administration. For example, after amending the DOL’s Field Operations Handbook in February 2019, the Trump DOL undertook formal rulemaking and, in late 2020, issued a final rule that would have allowed employers to take the tip credit