Home > Regions > North America > How Should Employers Respond to Class Actions?

How Should Employers Respond to Class Actions?

Our colleague Michael S. Kun at Epstein Becker Green was recently quoted in SHRM, in “How to Respond to Class Actions,” by Allen Smith.

Following is an excerpt:

Frequently involving wage and hour issues, class actions against employers can result in lengthy litigation, but early response to them may reduce damages. This article, the first in a two-part series on class actions, examines strategies for responding to such actions, including how to interact with current employees who are seeking information on a lawsuit. The second part explains the differences among class, collective and representative actions. …

Do’s …

In addition to consulting with a lawyer, investigate the claim, recommended Mike Kun, an attorney with Epstein Becker Green in Los Angeles. …

Nonetheless, it’s not as unusual as it used to be for current employees to file class actions, Kun said.

Don’ts …

In responding to class actions, Kun said employers shouldn’t panic. “Panic leads to bad decisions,” he said. Class actions are common and don’t necessarily mean a business will have to pay millions or has done anything wrong, he noted.

Kun also said:

    • Don’t call the plaintiffs’ attorney right away to talk about the case. “Nothing good will come of that, and whatever you say not only will educate that lawyer, but they may try to use it against you later.”
    • Don’t rush to talk with your employees or the media.
    • Don’t try to talk with plaintiffs themselves about the case.
    • Don’t send e-mails or memoranda to others about the case. Such e-mails or memoranda “often will not be privileged, meaning that you will produce them to the plaintiffs in the lawsuit.” …

Current Employees Who Are Seeking Information on Lawsuit

Despite the risk of retaliation, employers that are being sued by current employees should be aware that those workers may be trying to gather information for use in their lawsuit and may have been instructed to do so by their attorneys, Kun said.

“Except in unique circumstances, it is wise to educate managers not to talk about the lawsuit or the issues in it with those employees, even when those employees initiate the conversation,” according to Kun. “Even if managers are careful about what they say, their statements could be misconstrued or worse, twisted,” he said. …

If employees involved in litigation want documentation for use in their lawsuit, their attorneys must request it as part of the litigation, Kun said. “The employees are not entitled to help themselves to the employer’s documents. This is particularly true of confidential information.”

If an employer discovers that an employee is taking documentation for use in the litigation, it should contact its attorneys to promptly address it, he added. “Such conduct not only could be grounds for termination of the employee, but for sanctions or disqualification of the employee’s attorney,” he said. “Generally speaking, attorneys are not permitted to accept stolen property, much less use it to their advantage in litigation.”

Employers should be particularly sensitive to employees who have access to confidential information and documents through the employer’s computer system, he emphasized. “Generally speaking, employees are not entitled to search through an employer’s computer system to look for information for their litigation,” he noted.

Employees also are not entitled to give their lawyers their ID and password information so that their attorneys can go searching through the employer’s computer system themselves to look for documents for their case, Kun added, saying he caught this in a class action several years ago.

“If you learn that has occurred, you should contact your attorneys promptly,” he recommended. Not only could it be grounds for termination of the employee, it also could be grounds for sanctions and disqualification of the attorney—perhaps even criminal charges or an ethics complaint.