Class Actions in Canada Part 2: Developments in Employment Class Actions

In the second installment of our series on class actions in Canada, we examine recent developments in employment class actions.

Despite the fact some employment class actions have been certified, subsequent appeals and the settlement of some claims have meant that we have yet to see an employment class action in Ontario be litigated at trial. As a consequence, the jurisprudence in employment class actions has not yet evolved beyond the legal issues to be decided at the certification stage.

In this article, we delve into recent developments in employment class actions in the following areas:

• Types of claims and causes of actions
• Composition of certified classes
• Discovery and Aggregate damages
• Settlements

We conclude with an analysis of the key takeaways and advice for employers.

Types of Claims and Causes of Action

Overtime Class Actions

Much of the early activity in employment class actions in Ontario arose in the context of claims for unpaid overtime. As a general matter, Ontario courts exhibited a general receptiveness to certify “off-the-clock” overtime class actions, in which the representative plaintiff alleged that the proposed class was not compensated for overtime hours worked and denied certification in most “misclassification” cases, in which the allegation was that workers were wrongly classified as ineligible for overtime.

Class actions generally and employment class actions specifically attract significant media attention, posing serious reputational risk for employers.

The sphere of employment class actions has more recently expanded beyond the ubiquitous overtime pay cases to include claims related to employment status, mass termination, and gender and sexual orientation discrimination and harassment disputes.

Employment Status Class Actions

In August 2016, the Ontario Superior Court certified for the first time a class action brought on behalf of a group of door-to door sales agents who allege they were misclassified as independent contractors rather than employees. Similar class actions have been commenced on behalf of document reviewers and Uber drivers, as well as on behalf of Canadian Hockey League players who allege they have been wrongly classified as amateur athletes.

Discrimination and Harassment Class Actions

There have also been a number of notable developments in discrimination and harassment class actions. In May 2017, a settlement was approved by the Federal Court in class actions filed on behalf of female current and former regular members, civilian members and public service employees of the RCMP in which it was alleged that the class was subject to gender and sexual orientation based discrimination and harassment. In November 2017, it was announced an agreement in principle was reached in the “LGBT Purge” class action, which was brought on behalf of LGBT public servants and members of the military who allege they faced discrimination and harassment because of their sexual orientation.

Composition of Certified Class

Recently courts have certified more diverse classes of employees. Unlike the initial employment class action cases which typically certified classes of employees within a narrower set of job types, recent cases have certified classes as broad as all overtime-eligible employees which include a wide range of job classifications. This development can significantly increase the size of the class.

Discovery and Aggregate Damages

Ontario courts initially resisted certifying aggregate damages, class-wide monetary damages with individual entitlements determined later, as a common issue. However, in a number of recent cases, courts have certified aggregate damages.

Courts have also recently ordered that more expansive documentary discovery production be conducted, such as ordering the defendant in an overtime claim raising systemic allegations produce documents relating to individual class members’ overtime claims. More expansive discovery has leads to increased time and expense for defendants.

Settlements

A number of employment class actions have reached settlements incorporating various monetary and non-monetary terms. In some cases, the monetary settlements have been executed via individual assessments or claims adjudication processes, whereas in other cases, the settlement has been distributed in equal shares. Non-monetary terms have included the issuance of a public apology, institution of a scholarship and revisions to existing policies.

Though the settlements reached demonstrate the potentially large monetary liabilities at stake in employment class actions, the class actions generally settle for a fraction of the initial amount claimed.

Key Takeaways and Advice for Employers

Class actions generally and employment class actions specifically attract significant media attention, posing serious reputational risk for employers. Class actions of this kind also often trigger “copy-cat” litigation, in which the same or similar type of claim is brought by another group of employees. Finally, employment class actions create significant financial exposure for defendants.

In order to best protect themselves and ensure they are compliant with the law, employers should ensure they have thorough and up-to-date employment policies and practices that are enforced appropriately.