Yesterday, Insurance Business
reported on the greatest risk for workplace lawsuits
. While class-action lawsuit expert Gerald Maatman stressed that all companies are potentially at risk for wage and hour suits, however, businesses in some states carry greater liability than others.
Thanks to data compiled by Seyfarth Shaw, Insurance Business can reveal the top five “judicial hellholes” of 2013, where 72% of the 141 class-action lawsuits heard in state court took place.
The bottom line? Producers in California, New York, Florida, New Jersey and Texas need to ensure clients are armed to the teeth with the best EPLI and D&O policies available.
According to Maatman, individual law systems have turned these states into “judicial hellholes,” where legislation is more favorable toward class-action suits and, therefore, towards potential employment practices or directors and officers lawsuits.
“In these states, the rules are broader and it’s easier to win a suit with collective action. The laws are employee-friendly and have the most generous remedies, particularly for wage and hour,” Maatman said. “Anecdotally, it makes sense that those states experience more lawsuits. It’s like bees to honey.”
In California, where 56 individual lawsuits were filed in 2013, the state system is especially conducive to workplace litigiousness. The American Tort Reform Association even went so far as to call the Golden State “something of a last-stand for a stubborn nuisance of a liability theory.”
“California has lawsuit filings every day,” Maatman said. “It is a very anti-employer jurisdiction, which makes insurance coverage almost a necessity.”
Maatman also identified Florida, New York, New Jersey, Massachusetts and Pennsylvania as potential growth areas for wage and hour lawsuits in 2014.
Massachusetts and Pennsylvania didn’t make the top five list, but relaxed class certification standards allow for more plaintiff-friendly approaches to the wage and hour issues, the Seyfarth report said.