Increase In Value Of Employment Discrimination Settlements

In 2004, Amy Velez was the lead plaintiff in a class action suit filed against Novartis AG, claiming the company discriminated against female employees on the basis of gender, pay and pregnancy. Attorneys for the women claimed that Novartis engaged in "systemic discrimination" against female employees since 2002. Last May, a jury awarded the twelve named plaintiffs $3.4 million in back pay and other damages.

The same jury also awarded $250 million in punitive damages to the 5,600 women that work for the company. According to a Bloomberg report, this was the largest employment discrimination verdict ever awarded. Novartis appealed the ruling and the two sides eventually agreed to a $175 million settlement. Of the settlement funds, $152.5 million will go directly to the class members and $22.5 will be used to address companywide complaint processes, oversight and performance assessment, according to a Reuters report.

Dramatic Rise from 2009 Levels

The Velez settlement is a large reason that private plaintiff employment discrimination class-action suits have seen a dramatic rise in value this year. According to Annual Workplace Class Action Litigation Report, the total value of the top ten settlements and awards for class actions lawsuits was over $346 million for 2010, nearly four times the 2009 total of $84.4 million.

The report also found that wage and hour claims were the most common type of employment law class action. The top ten wage and hour settlements for 2010 fell 7.4 percent from 2009 levels, totaling $336.5 million last year.

Major Supreme Court Cases to be Decided This Term

The push for settlements may be related to the United States Supreme Court docket for 2011. The Society for Human Resource Management notes that the Supreme Court is scheduled to decide three cases related to class actions this term which will decide when and how class actions can be brought.

In Dukes v. Wal-Mart, the Court will decide the extent of commonality that the class must have in order to be certified. The issues in AT&T Mobility v. Concepcion revolve around whether service agreements can prevent consumers from bringing class-wide arbitration. Finally, in Smith v. Bayer, the Court is asked to decide if the federal courts, after denying class certification, can prevent a state court from certifying a class.