Did Workplace Class Action Lawsuits Really Reach Record Heights in 2021?

• Author: Monica Jackson
• Posted: 2024-01-09

In the past few months, there has been a huge increase in worker dissatisfaction. It seems like you hear about new strikes and workplace lawsuits every day. Are these sorts of disputes really on the rise or are you just hearing more about them? An analysis of 2021 lawsuits shows some surprising trends.

Workplace Class Action Settlements Set New Records in 2021

At the end of 2021, analysts carefully considered all the class action lawsuits that were settled throughout the year. They found that $3.62 billion worth of settlements were made in 2021. This is a new record that completely blows all previous records out of the water.

In 2020, just $1.58 billion was spent for workplace class action lawsuits. Even before the pandemic, class action lawsuit settlements were much lower. In 2019, the total amount spent was $1.34. This means that ultimately, in 2021 the amount of money spent in workplace class action lawsuit settlements was doubled.

What Were the Most Common Reasons for Class Action Workplace Lawsuits?

There are a few key issues that tend to lead to class action workplace lawsuits. Overall, one of the most common reasons for lawsuits is allegations that the company violated government regulations. This can occur in many ways, ranging from discriminating against certain classes to failing to train employees in using dangerous equipment.

Many workplace class action lawsuits also involve disputes over wages and hours. Some cases had employees alleging they were required to work dangerous amounts of overtime, while other cases involved employees who were not being paid for prep work or cleanup at their workplace.

It is worth noting that the pandemic might be contributing to the rise in lawsuits as well. There are all sorts of ways for the pandemic to cause stress in a workplace, and this can lead to lawsuits. Common COVID-19 class action lawsuits among workers were about things like unsafe work environments or inadequate healthcare policies in the workplace.

The Types of Workplace Class Action Lawsuits That Led to the Biggest Payouts

Of course, not all class action lawsuits result in a big payout. In some cases, employees might just get a small amount of money to compensate them for things like a doctor's bill. However, there is one specific type of lawsuit that tends to result in big settlements. According to 2021 records, the type of lawsuit that most regularly leads to a solid payout were wage and hour lawsuits.

Certification of wage and hour lawsuits are lawsuits that allege an employer failed to pay the employee the right amount of money. These sorts of class action lawsuits result in larger settlements for multiple reasons. First of all, the amount of money that the employer owes employees can quickly add up, especially once you start to consider interest. Furthermore, the court tends to frown upon employers who are purposefully underpaying employees, so they tend to require companies to pay extra fines as a punishment.

A Surprising Reason Settlement Amounts Might Have Skyrocketed

Looking at the common types of workplace lawsuits definitely tells us a lot about issues in the modern workplace. However, even the challenges of the pandemic and the growing awareness of worker misuse aren't enough to explain why settlement amounts doubled in the last year. It turns out that the reason behind that might be somewhat political.

Since the shift to a more liberal White House, there has been a lot of expansion of workers' rights. One especially notable change is the overturning of arbitration class action waivers. Previously, many workplace class action lawsuits were required to go through arbitration instead of settling the case in court.

However, more and more judges are beginning to find that these sorts of mandatory arbitration clauses violate workers' rights. Employers often require employees to agree to arbitration in exchange for receiving certain benefits, so it can end up putting undue pressure on a financially insecure worker. As legal precedents start to let more workers waive these rules, employees are able to bring their cases before a judge. This allows them the option to ask for full legal compensation instead of just settling for a small amount.