Interviews July 30, 2014

Jim Evans Discusses Trends in Employment Litigation

On the heels of being recognized as a “2014 Top Labor & Employment Lawyer” by the Los Angeles Daily Journal, we sat down with Jim Evans, partner in the firm’s Labor & Employment Group to discuss the trends in employment litigation, the use of arbitration agreements to defeat class actions and the changes to his practice as a result of an ever-changing appellate landscape.

What trends are you seeing in employment cases?

Individual employment actions and class actions continue to lead new filings in California state courts. Employees of large companies appear to have found favorable venues in California, particularly in Alameda and San Francisco counties. These counties have well-earned reputations as challenging venues for employers.

With the recent California Supreme Court decision in Iskanian v. CLS Transportation, collective actions brought under California’s Private Attorneys General Act of 2004 (PAGA) will continue to threaten employers with significant liabilities. Under PAGA, an employee can bring a representative action to collect penalties for Labor Code violations without meeting any class certification requirements.

With very few appellate cases interpreting PAGA and establishing standards for these claims, it really is the Wild West here in California—and the plaintiffs’ bar knows it. The potential exposure in a PAGA action can be staggering for employers with large number of employees. One of the bright spots for employers is PAGA’s one year limitations period. Employers faced with PAGA actions would be well advised to conduct early and thorough investigations to identify potential violations and correct them.

In addition to PAGA claims, the unfair competition laws continue to be used in wage and hour class actions. Because recent California cases endorse the use of class treatment in misclassification cases, class actions where workers allege that they were misclassified as independent contractors are also on the rise. The EEOC is also getting much more aggressive in scrutinizing independent contractor relationships.

I recently concluded a two week trial for a taxi cab company whose drivers alleged that they were misclassified as independent contractors. Despite the exposure under PAGA and the unfair competition laws, the client opted to go to trial and the court ruled in the employer’s favor on all issues. Sometimes, an employer faced with an unreasonable settlement demand and a claim with dubious merit has no choice but to go the distance.

What are the benefits of employment arbitration agreements? What is their potential?

Properly drafted, an arbitration agreement with a class action waiver can effectively end the threat of employment class actions. For more than a decade, we have successfully enforced the class action waivers we have drafted. We haven’t lost a motion to dismiss a class action—yet! We realize that there may be a first time, but the climate for enforcement of these waivers continues to improve.

Employment arbitration agreements—including those with class action waivers—can benefit both employers and employees by providing an efficient and cost-effective final step for resolving employment disputes. A recent report published by Cornell University argues that arbitration is good for both employers and employees.

Although the recent Iskanian decision authorizes the use of employment class action waivers in California (finally), employers still face representative actions under PAGA. I believe that at some point it is likely that the U.S. Supreme Court will take on Iskanian.

What has been the biggest change in your practice in the past five years?

I have seen two significant changes to my practice over the past few years. First, I am trying more cases than ever. The settlement expectations of adverse lawyers seem to be on the rise—often without regard to the facts. Unreasonable demands, questionable facts, and clients with the means of defending themselves (and a tolerance for risk) have led me to try more cases. Last year, I spent more than eight weeks in trial and arbitration.

Second, with the improving judicial landscape favoring class action waivers, I am defending fewer class actions through class certification. Although the number of class actions we are defending has not decreased, we are getting rid of class claims early and often. This is a huge change in my practice. We have enforced class action waivers in employment, consumer, antitrust, privacy and ADA litigation.

As judicial scrutiny of class action waivers recedes, we recently developed a flat-fee program to assist clients in adopting and rolling out employee arbitration agreements. I anticipate that more large companies will adopt arbitration agreements as a means of insulating themselves against class actions.

Final question – you’ve spearheaded several innovative tactics for clients and have recently been recognized as a “Top Labor & Employment Lawyer” by the Los Angeles Daily Journal – so what’s next for you?

I want to continue to improve as a trouble shooter and problem solver. With its maze of laws and regulations, and courts that can favor employees, consumers and government agencies, California can be a tough place for companies to do business. Apart from trying cases, the best part of my practice is assisting clients in figuring out how to guard against persistent and repetitive litigation threats.

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