Bringing Sense to Incentives: Harmonizing Courts' Chaotic Caselaw on Class Action Incentive Payments

Abstract:     
Employment discrimination class actions (EDCA) are complex creatures for many reasons. One complexity involves the resolution of EDCAs, which typically includes a provision for an incentive award or "bonus" for named plaintiffs. This Article describes five models under which courts struggle with awarding incentive awards to named plaintiffs in EDCAs. It examines how (under which model) and why (upon what justification) courts award or refuse to award incentive payments. This examination illustrates that courts have failed to differentiate between incentive payments that further Title VII's statutory goal of workplace fairness and other litigation matters, such as securities litigation or consumer credit actions. In short, courts too often restrict incentives in EDCAs based on rationales better suited to less public-minded consumer or other class actions. By conflating the different models, instead of recognizing the difference between distinct and varied areas of substantive law, courts have severely limited the incentive for plaintiffs to bring meritorious and worthwhile discrimination claims on a class basis. This article aims to refocus the inquiry of Title VII incentive payments back on the statutory goals of the civil rights initiative and argues that courts must stop applying rationales from other class claims to EDCAs.

Number of Pages in PDF File: 31

Keywords: employment discrimination, class actions, incentive payments, named plaintiffs

JEL Classification: J7

Accepted Paper Series