Class action lawsuits on the rise


lies not in being strong, but in the right use of strength.” – Henry Ward

It’s workplace law’s newest, and biggest, phenomenon: lawyers specializing in
class action lawsuits, joining together groups of employees with similar legal
claims. But mass justice may come with a price: employees, excited by the
prospects of multi-million dollar settlements, unaware that their interests may
not be aligned.

Don’t misunderstand. If you are one of the thousands of Canadian employees with
claims for overtime, unpaid wages or pensions, joining a class action lawsuit
makes sense. Pursuing the matter on an individual basis is neither
cost-effective nor does it garner the same attention from your ex-employer as a
$600-million lawsuit on behalf of 10,000 employees would, such as the suit the
CIBC currently faces for unpaid overtime. With the potential of recovering
seven-figure damage awards and moving their case’s coverage from this column to
the front page of the news, the temptation to sue as a group is difficult to

However, with recent workplace class action lawsuits for overtime and unpaid
wages sharing national headlines with large scale downsizing and layoffs, class
action lawyers have been sharpening their pens, taking aim at mass wrongful
dismissal actions. But not so fast. In wrongful dismissal suits, where the
individual facts of each ex-employee’s claim determines its ultimate merit, a
class proceeding may be a mass mistake. Here are some of my concerns:


• Not all class action lawsuits actually proceed. Class action firms spend
great time and expense attempting to have the case certified by a judge. Some
linger uncertified for years. For overtime claims, such as the CIBC case, which
is still pending, most employees remain at their jobs or have found others. But
in wrongful dismissal cases where the plaintiffs are unemployed, there is a
need for speedy settlements or quick summary judgments.


• How will settlement monies in class action wrongful dismissal suits be
appropriately distributed? As the Supreme Court recently confirmed in the Keays
case, damages for wrongful dismissal should be adjusted upwards or downwards
based on the unique individual circumstances of each plaintiff, such as any
particular reason that would cause one person to take longer to find another


lawsuits for wrongful dismissal may also create conflicting interests within
the members of the class. There will be instances where some ex-employees
should settle their claims, such as where re-employment is certain, while
others should hold out for a better deal. 


• How
will legal fees be equitably distributed? Class action lawsuits pay lawyers
based on a percentage of recovery. However, in a class action setting, the work
performed for each claimant is, in part, a duplication of the work performed
for the group. Further, if the lawyers are paid based on a percentage of
recovery for the group, what incentive do they then have to really consider the
unique circumstances facing each plaintiff?

In a mediation that I did last week, I represented five employees who are suing
their ex-employer for wrongful dismissal. It is not a class action suit, but I
have advanced their claims as a group, though each employee has a separate
claim. The mediator, one of the best known in Ontario, remarked that my clients were smarter to fight as a group rather than to stand
alone. “There is strength in numbers”, he argued while attempting to assure us
that the employer could not ignore five simultaneous claims.  He was

Although the case did not settle, we made our point.  If we could sue
individually but proceed as a group, what incentive do we have to join a class

Daniel A. Lublin
is an employment lawyer focusing on the law of dismissal. He
can be reached at [email protected].