PanziniJ@JacksonLewis.com New Jersey s Litigation Climate and Risk Management
LITIGATION HOTBEDS The Dirty Half-Dozen 12,000 2012-2013 Filings 1 10,000 8,000 6,000 9,814 9,180 8,525 6,683 5,895 5,167 4,000 2,000 0 Essex Bergen Middlesex Atlantic Hudson Camden 1 Court calendar year (July-June)). State courts statistics Available through may 2013. 2
Litigation Climate Trend 12 13 Approximately 10,000 fewer litigations filed from prior court calendar year. 11% decrease in filings from prior year Largest percentage decreases: Atlantic (-35%), Salem (-25%), and Hunterdon (-18%) Relatively stable in Essex (-4%), Camden (-5%) and Middlesex (-4%) 3
LITIGATION HOTBEDS The Dirty Half-Dozen 2011-2012 Filings 12,000 10,000 11,119 10,831 10,449 9,695 8,000 6,000 4,000 2,000 7,076 6,472 0 Essex Atlantic Bergen Middlesex Hudson Camden 4
Litigation Climate Trend 11-12 Approximately 10,000 fewer complaints filed as compared to 10-11 court year. Decreased in filings of 9% statewide. Litigation hotbeds such as Essex (-10%), Middlesex (- 8%), and Bergen (-15%) saw significant drops in the number of litigations filed. 5
LITIGATION HOTBEDS The Dirty Half-Dozen 14,000 12,000 10,000 12,332 12,298 2010-2011 Filings 10,182 9,695 8,000 6,000 4,000 2,000 7,667 6,930 0 Essex Bergen Atlantic Middlesex Hudson Camden 6
Litigation Climate Trend 10-11 Saw an overall increase of 3% of filings statewide. Driven largely by 72% spike of complaints filed in Atlantic County. Direct result of a 481% increase in mass tort filings in Atlantic County. Litigation hotbeds such as Bergen (-2%), Middlesex (-3%) and Essex (+2%) remained relatively stable. 7
700 600 500 400 300 200 100 611 SERENITY NOW The Fantastic Four 2012-2013 Filings 590 460 246 0 Cape May Hunderdon Warren Salem 8
SERENITY NOW The Fantastic Four 900 800 700 600 500 400 300 200 100 0 2011-2012 Filings 786 647 546 358 Hunderdon Cape May Warren Salem 9
SERENITY NOW The Fantastic Four 1,000 900 800 700 600 500 400 300 200 100 0 2010-2011 Filings 863 838 652 431 Cape May Hunterdon Warren Salem 10
EMPLOYMENT LITIGATION HOTBEDS 60 The Dirty Half-Dozen 2012-2013 Filings 50 51 40 41 35 34 30 20 10 22 20 0 Middlesex Essex Camden Bergen Monmouth Union 11
EMPLOYMENT LITIGATION HOTBEDS The Dirty Half-Dozen 90 80 70 60 50 40 30 20 10 0 2011-2012 Filings 82 47 43 32 32 30 Middlesex Essex Bergen Camden Hudson Monmouth 12
EMPLOYMENT LITIGATION HOTBEDS 70 60 50 61 The Dirty Half-Dozen 58 47 2010-2011 Filings 40 30 37 33 32 20 10 0 Middlesex Essex Bergen Hudson Camden Morris 13
What Happened To Atlantic County? Atlantic County s place in the top overall litigation filings is likely due to the number of mass tort cases. Insignificant number of employment cases filed in Atlantic County over the past three court calendar years. Heavy union presence (particularly in casinos) and seasonal workforce may also factor into the number of cases filed. 14
EMPLOYMENT FILINGS Rebound or Flatline? 700 600 500 400 610 529 423 451 422 353 300 200 100 0 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 15
Employment Litigation Trends 12-13 saw a -9% statewide decrease in the number of employment litigations filed from the prior year. 11-12 saw a -6% statewide decrease in the number of employment litigations filed from the prior year. 10-11 saw a +7% increase statewide in the number of employment litigations filed from the prior year. Significant decrease in the number of employment litigations since the peak in 07-08 (i.e., the start of the recession). The number of 12-13 employment filings is approximately -42% less than the number of employment litigations filed in 07-08. 16
Behind The Trends June 2013 Department of Labor Report: only 47% of adults have full-time employment. A majority of adult Americans do not have a full-time job. 7.6% remain unemployed (not accounting for those no longer in the workforce). Number of Americans receiving federal disability benefits almost 11,000,000. Fewer workers = fewer employment litigations. 17
A Closer Look? Companies completed right-sizing during the recession? As lean and mean as they can be? Use of severance and/or separation packages with a release? Resolution of disputes without the filing of a lawsuit (e.g., mediation, direct negotiations). Increased reliance on temporary agencies? Temporary placements have specific duration. Employment may be project-driven. Fewer terminations and more term expirations? 18
Where Do We Go Now? Disposition of Employment Cases 2012-2013 1 2% 38% 53% Dismissal Settlement Summary Judgment Trial 1 Based upon all cases resolved by dismissal, settlement, summary judgment, or trial. 19
Where Do We Go Now? Disposition of Employment Cases 2011-2012 1 2% 44% 51% Dismissal Settlement Summary Judgment Trial 1 Based upon all cases resolved by dismissal, settlement, summary judgment, or trial. 20
Where Do We Go Now? Disposition of Employment Cases 2010-2011 5% 2% 44% 51% Dismissal Settlement Summary Judgment Trial 21
Where Do We Go Now? Cumulative for Past Three Court-Calendar Years 5% 2% Disposition 2010-2011 42% 51% Dismissal Settlement Summary Judgment Trial 22
250 OVERALL EMPLOYMENT LITIGATION HOTBEDS (Cumulative for Past Three Years) The Dirty Half-Dozen (most employment filings) 200 194 150 146 124 100 100 88 81 50 0 Middlesex Essex Bergen Camden Hudson Monmouth 23
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 1% 1% Middlesex 30% 68% Dismissal Settlement Summary Judgment Trial 24
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 4% 1% Essex 34% 61% Dismissal Settlement Summary Judgment Trial 25
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 4% 1% Bergen 52% 43% Dismissal Settlement Summary Judgment Trial 26
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 3% 7% Camden 34% 56% Dismissal Settlement Summary Judgment Trial 27
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 11% 7% Hudson 34% Dismissal Settlement Summary Judgment Trial 49% 28
What Happens with the Dirty Half-Dozen for Employment Litigation (Cumulative Over Past 3 Court-Calendar Years) 10% Monmouth 28% Dismissal Settlement Summary Judgment Trial 62% 29
Cumulative for Dirty Half-Dozen Disposed of 617 Employment Claims by Trial, Summary Judgment, Settlement or Dismissal Over Past 3 Court- Calendar Years 5% 2% 41% 52% Dismissal Settlement Summary Judgment Trial 30
To Try Or Not To Try? Statistics vary from vicinage to vicinage but, overall, employers do not fare well at trial in New Jersey. Based upon available information on reported jury verdicts over the past five (5) years: 70% of juries return verdicts in favor of employees. The average statewide jury award (exclusive of interest, attorney s fees and costs) was $1,255,310.07 over the past five (5) years. 31
A Closer Look Excluding five (5) employment litigation hotbeds (Essex, Bergen, Middlesex, Camden and Hudson) the average jury award was only $730,493.41 (exclusive of interest, costs and attorney s fees). Likelihood of success at trial roughly similar when excluding five (5) employment litigation hotbeds: 69% of plaintiffs prevail at trial. 75% of all dollars awarded to plaintiffs were from the five (5) litigation hotbeds: Essex, Bergen, Middlesex, Camden and Hudson. Statistics swayed by a substantial verdict. 32
$22,672,500 Verdict On December 21, 2011, an Essex County jury awarded three plaintiffs $22,672,500 for hostile work environment discrimination. The plaintiffs were allegedly subjected to a hostile work environment (including physical assaults) on the basis of their sexual orientation. Harassers used anti-gay slurs, shoved, struck and wrote on one plaintiff with marker. The employer asserted that the plaintiffs never reported the incidents and, if they had reported the incidents, the claims would have been thoroughly investigated and resolved. 33
Excluding The Outlier Excluding this verdict, the average jury award was $970,743.90 in the five (5) employment litigation hotbeds and $865,907.32 statewide. In short, there appears to be approximately $100,000 in additional exposure for cases tried in employment litigation hotbeds. 34
Put The Information To Use Preventive training: Ensure managers and employees are trained on company antiharassment and discrimination policies; and Handbooks distributed (with acknowledgments signed for important policies); Are we insured? Employment litigation poses substantial financial risk; In addition to the awards discussed above, attorney s fees (for plaintiff and defense counsel) may add $200,000 to $800,000 to jury awards. Make sure appropriate coverage is in place. 35
Be A Leader Although cases must be analyzed individually, statistics suggest aggressive strategies (e.g., motions to dismiss) early in the litigation may result in more favorable outcomes than trial or summary judgment. Understand the risks associated with the vicinage in which your case is venued. What is the probability of complete resolution on summary judgment? What is the probability of success at trial? What is the potential exposure at trial? 36
Most Important: What Will This Cost The cost/benefit analysis should always be utilized (even when principle is driving the litigation) to fully explore all options. Request budgets from your counsel. Utilize the statistics provided to determine the appropriate strategy for litigation and/or resolution of employee complaints. 37
July 24, 2013 38