Wednesday, April 20, 2011

Survey of wage and hour settlement highlights risk to employers

Most companies cannot afford the risk of a big judgment in a wage and hour class action. Indeed, the real risk in defending these cases is the leverage plaintiffs gain from the threat of big judgments, and the seven figure settlements that often result.

Proof? NERA Economic Consulting published the results of a study of wage and hour settlements over the last four years:

  Mean Settlement (rounded to the nearest million) Median Settlement
(rounded to the nearest million)
2010 $9 million $3 million
2009 $11 million $3 million
2008 $22 million $12 million
2007 $23 million $14 million

While the overall settlement values have decreased over the last four years, the numbers are still dramatic. Few companies can afford to write a check for even $3 million to fund a class action settlement.

With these numbers in mind, consider whether it is worth your time and resources to understand whether your company meets its wage and hour compliance responsibilities. A wage and hour audit, which will likely cost less than 1% of what one of these settlements would cost, will go a long way toward eliminating the risk of having to fund one of these seven-figure settlements.

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