• Class Action Suits: Placing a Premium on Prevention
  • January 14, 2005 | Author: Michael W. Droke
  • Law Firm: Dorsey & Whitney LLP - Seattle Office
  • Martindale-Hubbell posed the following question to provide a variety of views on this important topic:
    Companies from Wal-Mart Stores, Inc. to Crayola crayon makers Binney & Smith, Inc. have faced class action suits. How does a company avoid this surprise?

    When reporting the return on investment for diversity, wage and hour, or other employment initiatives, focus on efforts, not outcomes. Documenting the initiatives' results may demonstrate that a problem exists, exposing the company to potential class action claims and providing evidence to support them. Plaintiffs can use the company's data to prove a common issue of fact. If management requires a report on outcome, protect the documentation through the use of attorney/client privilege. Don't allow well-intentioned human resources personnel or other individuals to inadvertently document metrics that can be used against the company.