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New law aims to stem the tide of mega class-action lawsuits

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in Human Resources

Employers won a big victory when President Bush signed legislation Feb. 18 that aims to inject more fairness in the class-action lawsuit arena. The Class Action Fairness Act of 2005 will funnel large, national class-action cases to the federal court system, not state courts. This will prevent plaintiffs' lawyers from shopping class-action cases to state courts and juries that are notoriously sympathetic to plaintiffs.

Case in point: In the first two months of 2005, at least 23 class-action suits were filed in small Madison County, Ill., a magnet for dubious class-action cases. Not surprisingly, 19 of those cases were filed in the final week before Bush signed the bill. The law is not retroactive.

While the law is aimed mainly at product-liability and other injury claims, it's expected to also have a big impact on discrimination, overtime and other employment-law claims.

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