Legal industry

The new workplace revolution: Wage and hour lawsuits

May 29, 2012: 1:34 PM ET

More than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations, an approximately 400% increase since 2000.  What's driving the spike?

By Jonathan A. Segal

FORTUNE -- Starting with the civil rights legislation of the 1960s, including Title VII of the 1964 Civil Rights Act, to Roe v. Wade, and Title IX, the second half of the 20th century was in many ways devoted to social change. These efforts reverberated throughout the workplace. And the core of employment-related lawsuits unsurprisingly involved these issues.

During those decades, we saw a dramatic increase in legal challenges to unlawful discrimination, harassment, and retaliation at work. Employees appropriately fought against not only animosity based on gender, race, and national origin, for example, but also stereotypes based on them. Stereotyping is often a form of impermissible discrimination.

However, in recent years, something has changed. While we still see a strong and steady stream of discrimination claims, another type of employment suit has become the darling of plaintiffs' lawyers: wage and hour suits. In the employment arena, the civil rights revolution has morphed into a kind of wage and hour revolution.

More than 7,000 collective actions were filed in federal court in 2011 alleging wage and hour violations under the Fair Labor Standards Act, an approximately 400% increase since 2000.

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Some legal clarification: a collective action is a special type of class action suit that applies only to claims brought by a group of employees under the federal Fair Labor Standards Act, claiming they were not paid what they were owed because either they were misclassified as exempt from overtime or they were properly classified as non-exempt but they were not paid for some of the time they worked (for example, by being required to work off the clock without being paid.).

It's not just small employers that are getting hit. It's the big guys too. The deeper the company's pockets, the more attractive the target.

Take one common claim: employees claiming that they were required to work off the clock. There has been a salvo of such claims, from employees at companies like Wal-Mart (WMT) and Merrill Lynch. And the U.S. Supreme Court is currently considering whether outside sales representatives for GlaxoSmithKline (GSK) were properly classified as exempt from overtime pay. Claims don't mean the employer did anything wrong, but they do involve considerable time and money to defend. More

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