The Law Q&A | Class-action suits: Who gets protection?


On May 21, the U.S. Supreme Court ruled that employees who have agreed as a term of their employment to arbitrate all disputes with their employers cannot bring class-action lawsuits against those employers.

Jsut what is a “class-action” lawsuit, anyway? No, it’s not a lawsuit that is classy.

Federal and Illinois law allows lawsuits to be filed by claimants that are so numerous and with claims that are so similar that it is judicially economical and efficient to allow such group (“class”) to have a representative seek recovery of a remedy for all the similarly affected parties of the class in a single lawsuit rather than hundreds or thousands of such suits.

To maintain such a class-action suit, the number of claimants (or defendants) must be so large that joining all such parties into one suit is not practical; the questions of fact and law must be common to the claims; and the representative party must fairly and adequately represent the entire class.

It is up to the judge before whom such a request is made to create the class asked for.

For one to be in or out of a class depends on the notice the judge decides must be given to those people or companies that might make up the class. The judge may require mailings be made to the prospective members of the class.

For example, there are often class actions against a product seller where the claim is that the seller misrepresented something about their product. Everyone who was recorded as a buyer of the product would likely get a mailing asking they indicate whether they want to opt out of the class — if they don’t, they remain in.

Or conversely, the notice may require they indicate that to be in, they must elect as such or they will be excluded.

Being legally in or out of the class in a pending class-action suit is critical, because if you are officially part of the litigated class, you will be stuck with whatever judgment or settlement is rendered in the class-action lawsuit and cannot sue on your own for such similar injury.

On the other hand, it doesn’t cost you to be in the class. If you get a check in the mail for being part of the class that got the settlement or judgment, good for you. The next McDonald’s dinner for your family is covered.

The recent Supreme Court ruling involved a junior associate in an accounting firm wanting to bring a class action on behalf of all such employees over the issue of whether such employers violated federal and state labor law in the way they paid such associates without overtime.

The employment agreement in question required all disputes be handled in arbitration (a person who is paid by the parties to resolve all disputes between them). The justices ruled 5-4 that in signing such agreement, employees waive the right to be part of a class action against one’s employer.

The Illinois Supreme Court once noted that class actions are the last barricade of consumer protection.

Apparently, the conservative majority of the U.S. Supreme Court was more interested in erecting a barricade for employer protection.

Brett Kepley is a lawyer with Land of Lincoln Legal Assistance Foundation. You can send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820. Questions may be edited for space.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Conference Report: Launch Conference of the Oxford Handbook of Corporate Law and Governance

Corporate law scholarship has witnessed transformative growth in modern times, strongly influenced by globalization, a recognition of the importance of governance to corporate performance, and a greater acceptance of the…
View Post

Amnesty calls on Egypt lawmakers to reject online censorship laws

Amnesty International (AI) called [press release] Monday for the Egyptian parliament to vote down proposed laws [text, in Arabic] that would increase the government’s control over online content. Najia Bounaim [Twitter profile], Director of…
View Post