Class Actions -- 2014

In re High-Tech Employee Antitrust Litigation   (9th Circuit)

Class action certification standards

To certify a group of people that can sue under federal class action rules, a judge must find questions of law or fact that are common to everyone in the group. Often judges have been lax in certifying large classes, and then sorting out the details during the course of the litigation. Unfortunately, the certification order imposes tremendous unfair settlement pressure on the defendants, because the stakes of the litigation are raised dramatically by the sheer number of plaintiffs allowed.

The Supreme Court has recently clamped down on overbroad certification orders, and this case involves an appeal by several companies who claim that a class was improperly certified. The class includes 60,000 employees in 2,400 diverse jobs at seven companies who claim that companies cause wage suppression that is alleged to violate antitrust laws when they agree not to cold call employees at other companies to recruit them away. The companies asked the Ninth Circuit to examine the judge's decision, arguing that each employee's compensation is determined by highly individualized factors that are inappropriate for classwide adjudication. There not only must be common questions among class members, but also commmon answers. Moreover, any injury that might have happened to one employee may not have happened to others, with some having no injury at all.

The NAM filed an amicus brief in support of this appeal, arguing that the judge should have undertaken a more rigorous analysis before certifying the class action. She should not have based her order on the average impact and a few anecdotal experiences regarding the alleged antitrust violations, but instead should have first confirmed that there were common damages among class members and that individual damages could be calculated using a class-wide formula.

On Jan. 14, 2014, the court denied the appeal, without significant explanation.

Related Documents:
NAM amicus brief  (November 14, 2013)


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