After a boost in the early days of the pandemic, wage-and-hour and employment-discrimination lawsuits are currently taking the back burner, according to new data obtained by The Texas Lawbook.
New data from Androvett Legal Media shows that wage-and-hour suits filed under the Fair Labor Standards Act have been steadily declining since the first half of 2020, which had seen a 19% increase from pre-pandemic days. FLSA lawsuits filed in all four Texas federal court districts dropped nearly 38% between the first half of 2020 and the second and 36% from the last six months of 2021 to the same period the year before. For the full year, FLSA suits filed in 2021 were down 25% from 2020.
Federal employment-discrimination lawsuits filed in Texas under Title VII were also down, according to the Androvett data, with a 3.5% drop in 2021 from 2020 and a 14% drop from the 755 cases filed in 2018, the year most employment discrimination suits were filed in the last five years.
Legal experts attribute the activity drop to many factors, including the pandemic, recent U.S. Supreme Court decisions and the backlog of government agencies that oversee the litigation.
The nuanced factors within the pandemic, in particular, tell their own story with the numbers. FLSA lawsuits spiked in the early months of the pandemic as many companies were forced to undergo mass layoffs, but as the economy recovered and employee burnout lingered, the pendulum swung the other way into the Great Resignation.
“When employees have leverage and the freedom to move from employer to employer, it’s not an ideal environment for FLSA cases to be filed,” said Mark Shoffner, a labor and employment partner at Bell Nunnally & Martin in Dallas. “I do think companies are reluctant to terminate right now because they need the employees. Employees just have so much mobility and leverage because there are more job openings than job applicants and wages are rising.”
Meanwhile, experts say, the remote work environment is not conducive to employment-discrimination claims — age, race, gender and religion.
“People are working remotely and having less interaction with co-workers, managers and supervisors and the interaction they’re having is primarily virtual,” said Houston Akin Gump partner Brian Patterson. “That decreased amount of in-person interaction leads to a decrease in the amount of claims related to interpersonal interactions, which is the basis for discrimination claims.”
Like the trial courts, the pandemic is also imposing a backlog on discrimination complaints filed with the Equal Employment Opportunity Commission, the federal agency that administers right-to-sue letters. Experts say the backlog also contributes to the dip in employment-discrimination suit filings.
“The issue over the last two years is the EEOC is completely backed up,” said Amy M. Stewart of Stewart Law Group, a commercial litigation firm in Dallas that handles employment matters. “I’m not blaming them but it’s taking forever for them to investigate these claims — some of which people have submitted and [since] resigned.”
Of the 516 FLSA lawsuits that were filed in Texas federal courts in 2021, most were filed in the Southern District of Texas (187). The Western District was a close second (181). And of the 650 employment-discrimination lawsuits filed in Texas federal courts last year, the Northern District saw the most activity (232 cases).
“The activity may be explained by the fact that the plaintiffs’ wage-and-hour bar is robust in these federal districts, and those firms have targeted energy companies who have many employees in these areas,” said Kimberly Cheeseman, a labor and employment partner at Norton Rose Fulbright in Houston.
Conversely, Cheeseman said, “The Northern District may be more active” in employment-discrimination suits because “the plaintiff’s bar in the Southern District has focused more on wage-and-hour matters.”
Other trends
Overall, Lawyers say they expect employment-discrimination trends to pick up during the Biden administration because a Democratic leadership typically means more enforcement actions.
Beyond traditional employment discrimination, Michael McCabe, a labor and employment lawyer for Munck Wilson Mandala, said he has been seeing more claims under the Americans with Disabilities Act related to anxiety and other workplace mental-health conditions. Those claims, McCabe said, entail both discrimination and failure to accommodate an alleged disability.
“People are requesting to work from home or take additional time off because they are anxious about returning to work in a Covid environment. Or they are anxious in general,” McCabe said. “I don’t know if that is a function of employees being more willing to speak out in support of their mental health, stress related to Covid/lockdowns/isolation, or something else. But more employees are requesting accommodation under the ADAA and state law equivalent.”