ASSESSING RISK IN FLSA COLLECTIVE ACTIONS
Corporate Counsel Section
Continued from page 38
costs of collective litigation
accurately, in-house counsel must
get an assessment of several key
questions from their outside
litigation counsel:
• What is the potential liability
of the claim?
• Is there an important
underlying principle at stake
(e.g., the company’s ability to
treat a class of employees as
exempt)? Or does the litigation
involve a decision or set of
facts that are unlikely to recur?
• What impact will claims have
on the business, both in the
media and with your employees?
• What is the potential scope of
discovery and how costly will
that be? Can the company
1<2;?3?.>;??8697??,??4>5=?0=+/<-
meet the preservation or
production burdens that will
be expected of it? If not, is
there an outside expert that
could assist?
• What is the total expected cost
of defense at each stage?
• What is the rate that employees
will opt-in (both current and
former) and what is the
potential recovery for each
employee that does opt in?
• If a settlement is desirable,
should it be negotiated pre-
suit? Before conditional
certification? Or after the
notice period has closed?
What will the cost of
administration be? How will
unclaimed funds be handled?
Also, counsel will need to work
with their accountants to quantify
the risks and adjust their accruals
throughout the litigation.
When analyzed together, this
information will provide the
company with
a foundation for
valuing the case
and assessing its
risks, which will
help the company
make strategy
choices with
outside counsel
about how to
defend the case.
Authors:
Christopher C.
Johnson &
Kevin D. Johnson
– Johnson Jackson
LLC