Global Class Actions

There is no formal mechanism for bringing forward a class action in an employment context in the UK. However, it is common for large numbers of individual employees to bring employment tribunal claims relating to a similar issue, often equal pay challenges or claims that an employer has not calculated holiday pay entitlements properly. Some law firms specialize in bringing such claims, often working on a no-win, no-fee basis. Employees lodged around 59,000 such multiple claims in 2023/24, according to the most recent official statistics.

An employment tribunal will normally treat some of the multiple claims as lead cases and stay other claims raising the same issue while it considers the lead claims. The tribunal’s decision in the lead cases will then normally be binding on the stayed cases.  

Although equal pay claims were historically more common in the public sector and resulted in significant liabilities at a local government level, they are increasingly frequent in the private sector, notably in retail. Predominantly female store-based workers have relied on predominantly male distribution center workers as comparators, claiming that they are employed on work of equal value. Equal pay issues are complex and often take years of litigation to resolve. 

Claims against most major UK supermarkets involving tens of thousands of employees continued to progress through the tribunal system during 2024. If the claims are successful, it is estimated that the bill for compensation could run to billions of pounds. Tribunals can award employees who win their claim up to six years’ back pay, reflecting the higher rate they should have received. In 2024, a tribunal decided one of the first cases to get to a full hearing in the employees’ favor.

In 2025, existing equal pay litigation will continue to make its way through the court system, including an appeal by the employer of last year’s successful decision. Employers outside the retail sector should monitor the litigation’s progress, especially if they have roles that tend to be performed predominantly by workers of one sex, as that will increase the risk of multiple equal pay claims. It’s anticipated that claimant law firms will work to identify other sectors in which equal pay claims might be viable.

The government is also proposing to extend the current equal pay legislation beyond the protected characteristic of sex to include race and disability, and to allow employees of an outsourcing provider to compare themselves with a client’s employees for equal pay purposes. If those proposals go ahead, they will increase the scope for multiple equal pay claims substantially. As of yet, it’s not clear whether the government intends the client or the outsourcing provider to be liable for compensation in a successful cross-employer equal pay claim.

Employers should engage with the government about these proposals to ensure that it understands the business and economic ramifications before it decides how to proceed. That may help minimize the risk of future claims. Any changes are unlikely to take effect until 2026 or 2027 at the earliest.

Employment class action activity in the United States remained robust in 2024, with California continuing to set the pace. The most significant development was California’s sweeping reforms to the Private Attorneys General Act (PAGA) on July 1, 2024. The law took immediate effect and is expected to substantially reshape the landscape for representative actions in California.

In response to greater enforcement of arbitration agreements, the plaintiffs’ bar increasingly filed PAGA-only actions in an effort to sidestep arbitration. These filings often rely on dicta from recent appellate decisions to argue that representative-only PAGA claims may proceed without an individual component. However, these decisions interpret pre-reform PAGA and do not definitively resolve the issue. In contrast, Leeper v. Shipt, Inc., 107 Cal. App. 5th 1001 (2024) directly held that every PAGA action necessarily includes an individual claim that must be arbitrated if covered by a valid agreement.  

Nationally, employers continue to rely on arbitration agreements to mitigate class and representative exposure. Courts, however, are scrutinizing both the procedural fairness and rollout of these agreements, prompting employers to revisit their arbitration strategies.

Wage-and-hour issues remain the dominant basis for class and representative actions, particularly claims involving meal and rest periods, off-the-clock work, time rounding, and misclassification. Even where defenses are strong, the cost of litigation — combined with uncertainty around how to reduce penalties under New PAGA — reinforces the need for experienced counsel.

The implementation of New PAGA presents both opportunity and risk. The law introduces new procedures — including “early evaluation,” “cure,” and “reasonable step” mechanisms — designed to promote compliance and resolve disputes before litigation. However, these provisions are untested, and no case law or court guidance currently exists. Litigation and motion practice in 2025 will be critical in shaping how these mechanisms are applied in practice.

Separately, the California Supreme Court’s upcoming review of Leeper v. Shipt could significantly alter the representative action landscape. If overturned, plaintiffs may be permitted to bring representative-only PAGA claims covering all employees within the one-year statute of limitations — even where arbitration agreements exist — potentially weakening arbitration as a defense tool.

Outside California, class actions tied to pay equity, transparency, and promotion practices are gaining momentum, driven by new disclosure obligations. Multinational employers also face growing exposure from coordinated litigation across jurisdictions, underscoring the need for globally aligned compliance strategies.

To stay ahead, employers should proactively review arbitration agreements, update wage-and-hour policies, and conduct wage-and-hour audits. As enforcement and litigation trends continue to evolve, preparation and adaptability will be key to minimizing exposure and maintaining compliance.