Federal judicial statistics confirm the continuing trend involving wage and hour lawsuits that many businesses are experiencing—the number of Fair Labor Standards Act (FLSA) lawsuits continues to grow and set new records each year. Based upon the recently released Federal Judicial Caseload Statistics for the period ending on March 31, 2012, the number of FLSA cases filed reached a new high of 7,064. This number of wage and hour cases exceeds the 7,008 cases that were filed in the period ending on March 31, 2011; the 6,081 cases filed as of March 31, 2010; and the 5,644 cases filed as of March 31, 2009. This growing trend of wage and hour cases has resulted in an increase of 1,762 FLSA cases filed over the five-year period from March 31, 2008, when 5,302 FLSA cases were filed, to the 7,064 cases filed as of March 31, 2012.
The data for March 31, 2011 and prior years is available at the United States Federal Courts website, while the 2012 data is available upon request but has not been posted as of this writing.
These statistics reveal several lessons. First, FLSA litigation continues to be on the rise. One obvious reason for the increase is that plaintiffs’ lawyers are still finding FLSA violations to litigate. Also, the recovery of liquidated damages and attorneys’ fees, especially in cases brought as collective or class actions, makes FLSA cases lucrative and attractive for the plaintiffs’ bar. Economic uncertainties contribute to this growing trend of more wage and hour litigation by employees; and plaintiffs’ lawyers are able to take advantage of these uncertainties, especially by bringing lawsuits as collective or class actions.
Another lesson for employers is to continue to be proactive in their compliance with the FLSA. While employers have taken greater initiatives to comply with the requirements of the FLSA, they should also redouble their efforts to audit and monitor their payroll and work time practices to comply with the FLSA. A business investment in prevention can avoid a potentially larger financial risk to a business that is found to be in violation of the wage and hour mandates of the FLSA.
Finally, as in most other areas of law, employers should continue to monitor developments in the area of wage and hour law. An excellent example can be found in the U.S. Supreme Court’s June 2012 decision in a case involving the pharmaceutical industry. In a 5 to 4 decision, the Court ruled that pharmaceutical sales representatives could qualify as exempt outside sales employees for obtaining non-binding commitments from physicians to prescribe certain drugs, even though federal law precluded the sales representatives from making a sale. This increased FLSA litigation will serve as a source of guidance for attentive employers to avoid wage and hour pitfalls.