Employers often avoid making significant, compliance-oriented
changes for fear that employees will discover their rights have
been violated for years before the change. The recent settlement of
this overtime class action lawsuit, and the complexity and scope of
retroactive liability, highlights the folly in the head in the
We have been actively keeping watch on the rising prevalence of
class actions in employment law (see a video of the presentation of
Landon Young of our firm on this phenomenon
In one of those cases, Bank of Nova Scotia v Fulawka,
concerning a claim of unpaid overtime, a settlement was reportedly
reached to end the litigation.
Although the structure of agreements in such cases is usually
complex and can lead to difficulty in determining the final value
of the settlement in terms of actual dollars, counsel for the
plaintiffs has made statements suggesting that the eventual payout
was roughly $95 million. Legal fees for the plaintiffs, to be paid
directly by the defendant, have been assessed at $10.45 million.
While the plaintiffs had originally claimed $350 million, $100
million of the claim consisted of punitive damages, which are
notoriously difficult to recover in Canada. If plaintiffs'
counsel's comments are accurate, this represents a significant
recovery for the employees.
The cost to the Bank is not limited to the settlement amount,
however. The plaintiff class could include up to 15,000 employees,
and each of those employees may be entitled to up to 13 years of
overtime. The logistics of determining entitlement will be complex
and resource intensive. In fact, the settlement even contains
provisions for binding arbitration if there is a dispute over an
individual employee's entitlement. The Bank will likely be
intimately involved in the distribution of the settlement beyond
simply the cutting of a (very large) cheque, a process which will
undoubtedly require significant resources and administrative
Obviously, some of the complexity of this case relates to the
sheer size of the employer and its workforce. However, even much
smaller employers could face extreme logistical and financial
consequences if they find themselves on the wrong end of a class
action. As mentioned, class actions have become more common in
employment law (see our update on a privacy class action against an
here.) It is, therefore, critical that employers planning to
make changes, or actively ignoring compliance-oriented changes,
consult legal advice to determine their potential exposure to class
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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