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Spike in Employment Discrimination Settlement Amounts

Tuesday, January 18, 2011

California employment lawyers found themselves busier than ever with employment discrimination lawsuits in 2010. The recession saw more numbers of discrimination claims, alleging age and gender bias in the workplace. In fact, according to a new report, the year 2010 saw a spike in the monetary value of settlements in employment discrimination lawsuits.

Overall, the top 10 employment discrimination class action lawsuits in 2010 ended with settlements of $346.4 million. That is approximately 4 times the settlement amount in 2009.  The statistics come from a report, Annual Workplace Class Action Litigation Report, which analyzes 848 decisions against employers in federal and state courts, including private plaintiff and government enforcement actions. The largest discrimination lawsuit settlement last year was a $135 million settlement by Novartis Pharmaceutical Corporation. The case, Velez et. al. v. Novartis Pharmaceutical Corporation alleged that the pharmaceutical company discriminated against 5,600 current and former female employees. These employees were mainly sales representatives who were denied promotions, and were discriminated against on pay.

In fact, 2010 broke new ground in that employment discrimination lawsuits were the number one workplace challenge mounted against employers, compared to past years which have seen more substantial wage and hour settlements. However, more numbers of wage and hour settlement class-action suits were filed last year. In terms of sheer numbers, wage and hour settlements were predominant in employment litigation last year. In 2010, private wage and hour settlements totaled $336.5 million, a drop of 7% over the previous year.

The results indicate that employers need to be more alert about compliance with the law. Besides, these results show that employers also need to react quicker and more appropriately when there are allegations of workplace discrimination against the company.

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