Getting sued is a retailer’s worst nightmare. Litigation isn’t just a problem because it consumes a lot of time and adds to executive stress levels, it can also be extremely expensive, too. Billable hours for top litigants can exceed $500 per hour, and each lawsuit can cost hundreds of thousands of dollars, too.
But lawsuits happen, good or bad. And it’s important that shareholders, investment firms and those individuals investing in retail brands have proper visibility into each case so they can make wise decisions for their portfolios.
Retail litigation is common today
There are a handful of common reasons why retailers find themselves in litigation.
For example, employee discrimination lawsuits are common in the retail industry. In 2012, Costco was faced with a gender discrimination class action lawsuit after 700 of its female employees claimed that the company’s promotion practices discriminated against women.
More recently in 2019, Dollar General faced a racial discrimination lawsuit and had to pay $6 million dollars when it was found that the company denied employment to African Americans at a significantly higher rate.
Discrimination can also take place with customers as opposed to employees. In 2018 Lord & Taylor found itself in a lawsuit for disproportionately targeting black and Hispanic customers in its surveillance, apprehension, and other shoplifting prevention procedures. The company agreed to settle the case for $100,000.
Labor laws are another common reason for retail litigation. Dollar Tree found itself settling a class action employment lawsuit for $2.5 million in 2020 for violating wage and labor laws in California.
Lastly, keeping employees and customers safe on premise can also lead to major slip-and-fall lawsuits. Costco in 2012 found itself in litigation with a female customer who fell on a soapy floor at one of its stores. The investigation found that employees knew about puddles on the floor but failed to properly clean it up. A judge awarded the woman $90,000 for medical expenses and $325,000 for pain and suffering.
Retail litigation significantly impacts investors
Each of these cases stem from litigation that carries the potential to impact shareholders and investors who have a vested interest in firmly understanding a retailer’s financial bottom line and any litigation that may affect a company’s profit standing – not to mention public reputation, which also impacts the bottom line over time.
These shareholders and future investors today are taking the power of transparency into their own hands, leveraging the Internet to avail themselves to the ability to research court case filings on every company.
Better transparent access to lawsuits for transparency
Known as a lawsuit search engine, these resources are specifically designed to search words and/or phrases and find results based on a crowdsourced search algorithm. These platforms serve as a news source for journalists and a resource for stock investors, researchers, employees, and anyone else seeking an unaltered source of information without commentary or opinion, based on facts only. These platforms differ from standard search engines because they do not include outside commentary pieces which tend to opine on subjects from analysts, bloggers and other parties that may have a particular interest or point of view which may or may not serve harmful to the retailer.
This type of information-based platform is also proving beneficial for class action markets and group proceedings.
Class action asset recovery holds significant financial potential for investors. Advisers are often inquired about providing a solution to recoup fiscal losses associated with class action settlements. And, given today’s penchant for environmental, social and governance (ESG) issues more commonly litigated through the securities class action format, a bevy of today’s investors view participation in settlement opportunities as a means to execute on their ESG missions, in addition to recovery of significant monetary opportunities.
In addition to ESG and financial gains, investment advisers realize that the recovery of investment assets through the securities class action settlement process is necessary to any obligation for customer funds.
Furthermore, investors and interested parties who follow the retail sector, such as media and analysts, understand the need to have access to better transparency and raw files of information in any part of their due diligence matters, whether it be for investment purposes, news stories or analyst reports.
About The Author: Kaylee Zhu is the Co-Founder of laWow.org, the first lawsuit search engine for public and media information that works like Google to help journalists covering important lawsuits or investors research ongoing litigation against certain companies when researching potential investment opportunities. For more information, visit https://www.lawow.org/
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