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February 20, 2006
Wage & Hour Lawsuits on the Rise

The volume of litigation initiated by groups of employees alleging violations of the Fair Labor Standards Act continued to rise in 2005, according to a report by the law firm Seyfarth Shaw LLP.

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The firm's Annual Workplace Class Action Litigation Report concludes that collective-action FLSA litigation in federal court outnumbered employment discrimination class-action filings in 2005.

While FLSA lawsuits are on the rise in federal court, the most significant growth in wage & hour litigation is in state courts, especially in California, according to the report.

The researchers found that four of the top ten settlements of class-action lawsuits on workplace issues involved wage & hour disputes.

In January 2005, State Farm Mutual Automobile Insurance Co. agreed to pay $135 million to settle a lawsuit in which claims adjusters alleged the company misclassified them as exempt from overtime and violated California wage & hour law. The settlement was the second largest among workplace class actions, according to the report. In August 2005, Allstate Insurance Co. agreed to pay $120 million to settle a similar lawsuit in California.

The report also discusses the top settlements of lawsuits that the Department of Labor initiated. One of the largest settlements is one with Cingular Wireless. In January 2005, the company agreed to pay $5.1 million to settle claims that it required customer service representatives to work off-the-clock.

One of the rare class-action lawsuits that went to trial in 2005 involved Wal-Mart, the report notes. In December, a jury in Alameda, California, awarded $57 million in general damages and $115 million in punitive damages to a class of California-based employees who said the company violated state law on meal breaks.

More information on the report is available at .

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