Class Action Update: Stifling the Best Tool for Workers to Recover Unpaid Wages

Why do some employers choose to “nickel and dime” their employees? Its not uncommon. The simple fact is that for most employers, their single greatest expense is their labor – meaning the employee. Unscrupulous employers have a strong incentive to cut labor costs, even by violating wage laws. They hope that they don’t get caught violating Washington employment laws, and even if they do, they might have to only pay one or two employees their back pay instead of all the back pay owed to their entire labor force. This is where class actions can help the employee in taking on the powerful employer.

Class actions have been the best tool for many workers to recover their unpaid wages. By their very existence, these lawsuits help keep certain employers honest. But now Congress wants to pass a bill that would radically diminish the effectiveness of class actions nationwide.

As a back pay lawyer working to recover unpaid wages for Washington workers, I have seen many schemes by employers to steal wages from their employees. Recently, we settled four class action lawsuits where Class members recovered significant wages. These class actions allowed the workers to work together to get their unpaid wages instead of bringing numerous expensive and time-consuming individual suits.

Indeed, if the unscrupulous employer is smart, they will only try to steal a modest amount of wages at a time. This creates a problem for workers trying to get their illegally withheld back pay under Washington employment laws. For a employment lawyer, initiating a lawsuit for a single worker who is “only” owed $1000 to $2000 is inefficient. It is hard to fight against employers that often have more money to pay for lawyers than the employee. Instead, by using class actions as a vehicle to represent all affected workers and by filing one lawsuit to benefit an entire group of workers is a better use of the Court’s time, the lawyers time and helps make the cost of fighting a lawsuit affordable. It just makes more sense to bring one lawsuit to fix the employers unlawful pay policies than hundreds of individual lawsuits.

Some critics of class actions point to the contrast in fees that back pay lawyers earn in comparison to the relatively small amounts recovered by the individual workers. But back pay lawyers, including us, generally earn a smaller percentage of our fees on class actions than we do on other cases. Plus, class actions are very time consuming and risky. Moreover, judges review each back pay lawyer’s fee application and only approve their fees after careful scrutiny. Class members and the employers are also free to object to the back pay lawyer’s request for fees. We have never had our request for fees challenged. In fact, our clients have always been thrilled with the results.

But Congress is working to pass HR-985 that will make employers far less accountable for their wage theft. The bill aims to eliminate most class actions by creating unnecessary hurdles that protect employers, but does nothing to protect the workers. For example, in an unpaid wage case, it means that all the class members have to have the same amount of unpaid wages. We know that most employees do not get paid the same rate or work the same hours. They are not likely to have the exact same damages as all other employees. It also adds an automatic appeal in the middle of every case, which causes needless delay and expense, often in excess of a year. These draconian measures go on and on.

For more information on this bill, simply google “H.R. 985” or the Orwellian named “Fairness in Class Action Litigation Act.”

By rekhiwolk

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