Wednesday, September 23, 2009

Is the sky falling? The reality of wage and hour lawsuits

chicken little

There is no doubt that wage and hour litigation is “the” hot topic in employment law. Dan Schwartz at the Connecticut Employment Law Blog has taken an empirical look at the number of wage and hour lawsuits filed and thinks that all of the hoopla might be a tad overblown. The numbers, however, only tell part of the story.

Federal courts classify their civil filings by type of case. Wage and hour lawsuits fall under the umbrella of “Labor” filings. The following breaks down “Labor” filings for the past five years, both in all federal courts and in Ohio’s two federal districts (courtesy of the Federal Court Management Statistics):

All Federal Districts

  Labor Cases Total Filings %
2008 16,788 349,969 4.80%
2007 18,674 335,655 5.56%
2006 16,659 335,868 4.96%
2005 18,322 330,721 5.54%
2004 18,330 358,983 5.11%

Ohio’s Federal Courts

  Labor Cases Total Filings %
2008 566 8,225 6.88%
2007 583 8,910 6.54%
2006 614 8,285 7.41%
2005 946 12,077 7.83%
2004 765 13,908 5.50%

As you can see, the total number of cases and percentage of overall cases was was down nationwide in 2008, but steady in Ohio. Moreover, Ohio’s federal courts have a higher percentage of wage and hour cases than the national average.

The danger posed by wage and hour lawsuits, however, isn’t in the number of cases filed. The danger is that most wage and hour cases are filed as class or collective actions, which prove to be very costly and carry with them enormous exposure for employers. You are naive if you don’t think that every plaintiffs attorney asks about wage and hour practices as part of their client intake. Additionally, the Department of Labor just announced the hiring of 250 new wage and hour investigators. Every employer is a target because no employer does wage and hour perfectly. And, even the tiniest slip can lead to a multi-million dollar claim. Do you need a better reason to get a handle on your wage and hour practices sooner rather than later?

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or