Companies like to be in the black and if they can, they like to make history. For example, the first company ever to make a third party iPhone app or the first company to give all employees vacations to Bermuda is something to brag about.

One history setting item that’s probably not on the list for company executives, is boasting the largest class-action employment lawsuit in U.S. history.

That’s the case for embattled blue collar brand WalMart, who is in the middle of a lengthy dispute over alleged gender bias in pay and promotions.

A federal appeals court was divided 6-5, but  ultimately allowed the combined multiparty litigation to move ahead to trial. The end result of which could force a decision against the company that might equate to billions in damages. WalMart has the option of appealing the ruling to the U.S. Supreme Court for review.  Read more….

Employment-related class action suits get a lot of attention and fanfare by the news media, but their numbers have plummeted in the past two decades, from 1,174 in 1976 to just 68 in 1996 (the latest year for which figures are available). The reason is that the Equal Employment Opportunity Commission (EEOC) is short-staffed and is an underfunded agency, which needs to focus primary attention on high-profile cases, resulting in what once might have been considered a solid case that might have been resolved by the EEOC, but now being rejected, leaves the workers no choice but to file individual lawsuits or abandon their cases altogether.

In California, civil court between 1987 and 1994, a economist at Rand, found that 17% of the cases were dropped after an initial complaint, an additional 40% of class action lawsuits were settled before going to trial. A Philadelphia employment litigation lawyer, said most class action lawsuits are resolved or settled before they are filed in court.

There were 19 securities class action trials since 1996, but the numbers reported during the period during 2007 was at least 65 going to trial from 260 to 272 federal securities class action suits filed. This represents an increase of historical levels. The Securities Class Action Service (SCAS) report, list the the amount of settlements before going to trial from 2003 to 2006. The top ten firms in terms of number of settlements accounted for more than 60% of the securities class action settlements during this period.

Numerically, class actions make up a small portion of the average court’s docket. Of the approximately 280,000 civil lawsuits filed in all the federal district courts in the United States during 1997, only 1,500 or one-half of one percent were class actions.

A class action lawsuit was filed against UnumProvident, Unum, Paul Revere, First Unum, Provident, and other UnumProvident subsidiaries. The lawsuit aims to stop and correct their illegal disability claims practices and help for the thousands of people who obtained their disability coverage through their employers and have had claims denied or terminated.

A new class action has been filed against Chattanooga-based UnumProvident – this one in the United States District Court for the Southern District of New York.

It is brought on behalf of purchasers of UnumProvident Corporate-Backed Trust Securities (”CorTS”) Certificates (NYSE: KVN) pursuant to an initial public offering on or about April 18, 2001 and/or in the aftermarket for CorTS through and including March 24, 2003 (the “Class Period”).

The complaint charges CorTS Trust II for Provident Financial Trust I, UnumProvident, Salomon Smith Barney and certain UnumProvident officers with violations of the Securities Exchange Act of 1934 and with violations of the Securities Act of 1933.

According to the CorTS IPO prospectus, UnumProvident Corporation guaranteed the payment of distributions on the Underlying Capital Securities but only to the extent that the Underlying Issuer had funds legally and immediately available therefor, the suit says. On April 18, 2001, the first day of the class period, the CorTS were issued pursuant to the Prospectus and Registration Statement and began to publicly trade. The trust consisted of a single class of certificates, which represented interests in the trust and the certificates would only be paid through the trust. Therefore, the CorTS would only be paid if UnumProvident paid the original trust, it was claimed.

The class action lawsuit charges that during the Class Period, UnumProvident falsely reported financial results because it did not properly account for the long-term impairment of its investments. The suit says “the financial information was inflated due to UnumProvident’s overzealous denial of legitimate claims of its insureds through, what one federal judge deemed ‘a comprehensive system for targeting and terminating expensive claims.’ The financial statements and related press releases by UnumProvident identified above contained statements that were materially false and misleading when made.”

On March 24, 2003, UnumProvident issued a press release in which they stated their intentions to restate financial statements from previous years. This put the payments of the CorTS in jeopardy and caused the CorTS to lose almost 50% of their value, it was stated.

Several other class action lawsuits have been filed in recent months against UnumProvident, which ousted its CEO and has taken steps to shore up its financial position.