Advisen Loss Insight: Class-action labor violation cases

This week Cate Chapman, editor of the Executive Risk Network, decided to take a look at a trend among employers to include arbitration clauses in employment contracts. Basically, an employee signs away his or her right to file a class-action lawsuit against the employer.

So we decided to take a look at class-action cases in Advisen’s Loss Insight database to determine if there was some noticeable correlation between the reported use of these clauses and a drop in class-action lawsuits. According to one survey, the use of arbitration clauses has increased sharply since a 2011 Supreme Court ruling upheld these types of clauses in a mobile wireless contract in a case involving telecommunications giant AT&T.

Looking at class-action cases by type, nothing appears to have affected the frequency of Wage & Hour claims, which make up more than 80 percent of labor violations cases in the database.

But there seems to be some downturn in other types of cases since 2011, including discrimination and harassment types of cases.

Still, other types of cases such as those involve hiring practices or the Worker Adjustment and Retraining Notification (WARN) Act, have grown to make up a larger proportion of class-action cases.

Looking at class-action cases by industries, the wholesale & retail and services sectors look to account for the majority of cases throughout the years.

However, the light orange to dark orange section–manufacturing; finance, insurance & real estate; and maybe transportation & public utilities–have arguably made up less of a proportion of cases.

The inconsistencies in both graphs appear to corroborate the opinion that the impact of arbitration clauses on class-action filings has yet to be seen, at least consistently.