General Guidelines for Employment Discrimination Class Actions

The Manual for Complex Litigation, Fourth, is a compilation of effective techniques developed by judges and lawyers who have dealt extensively with complex litigation. Chapter 32 of the Manual focuses on employment discrimination, and presents a detailed discussion of the requirements for an employment discrimination cause of action, a guideline to determine whether to pursue a class action, and guidance on how to decide on the type of class action.

With respect to establishing a prima facie case of employment discrimination, the Manual explains that a claimant may use direct or circumstantial evidence of discriminatory intent. Plaintiffs must satisfy the McDonnell four-factor test: (1) be a member of the protected class, (2) have applied for a job for which he or she was qualified for and which the employer was seeking to fill, (3) have been rejected from the position for which he or she applied, and (4) the position for which plaintiff applied remains open and the employer continues seeking an individual with the same qualifications as claimant.

To pursue a class action for employment discrimination, the named representative of the class must first file a timely charge with the Equal Employment and Opportunity Commission. Furthermore, the representative must exhaust all administrative remedies available with respect to any claim that was the subject of, or could have reasonably arisen from the investigation. The scope of rights granted to class members depends on the statute under which the claim was filed. For example, claims under the Age Discrimination in Employment Act (“ADEA”) or the Fair Labor Standards Act (“FLSA”) do not allow plaintiffs the option to opt-out of the claim. Class actions under the ADEA are subject to the opt-in class mechanisms of Section 216 of the FLSA, which establish that individuals must affirmatively opt into collective actions before being considered as class members.

To decide whether to file under Rule 23(b)(2) or 23(b)(3), the manual advices attorneys to determine what type of relief the plaintiffs desire, whether the defendant acted on grounds which are generally applicable to the class, and whether individual concerns outweigh class actions. Where plaintiffs seek monetary relief, counsel should seek certification under Rule 23(b)(3). For class actions where plaintiffs seek affirmative relief or incidental damages, Rule 23(b)(2) certification should be sought. This class requires a tailored definition excluding members who do not wish to be part of the class.

In light of the enhanced damages available under the Civil Rights Act (“CRA”), courts may look favorably upon certification under Rule 23(b)(2) with respect to injunctive relief, and under Rule 23(b)(3) for damage claims. Also, classes should be clearly defined in objective terms to secure certification.

Additionally, the Manual advises that neutral employment policies or practices are more likely to support the typicality and commonality requirement established by Rule 23. Cases focusing on disparate discriminatory treatment are more challenging to meet this requirement because the plaintiff has the burden to demonstrate that the claims are sufficiently similar as to be decided collectively.

With respect to settlements for class employment discrimination suits, the Manual recommends postponing negotiations until the court has issued a certification ruling. Moreover, plaintiffs should be encouraged to express any objections to settlement agreements because the CRA precludes subsequent objections by individuals who had actual notice of the potential adverse effect of the claim, were adequately represented, and had the opportunity to object. Title VII provides an additional protection for plaintiffs through the appointment of a special master to ensure compliance with a court mandate.

Finally, before considering a class employment discrimination action, the appropriateness of class-wide relief must be evaluated. As a result, it is essential to analyze the class size, the ambiguousness of the employer’s promotion or hiring practices, and the length of time the employer has been engaged in the challenged practices.

If you believe you may have a class employment discrimination action against your employer, please contact The Harman Firm, LLP.