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The case started with a bang. In 2000 Willie Gary, the celebrated Florida plaintiffs attorney, sued Microsoft Corporation, claiming that the software company discriminated against African Americans in hiring and granting promotions. The suit filed in Washington, D.C., Jackson v. Microsoft Corp., sought more than $5 billion in damages on behalf of Microsoft’s African American employees, who then numbered about 550. Gary, the self proclaimed “Giant Killer,” with many million-dollar verdicts to his credit, didn’t wait long to go on the offensive. He hyped his case in the media, including an appearance on 60 Minutes and at a press conference at the National Press Club in Washington, and he accused Microsoft of a “plantation mentality.” Microsoft couldn’t help but take the case seriously. It was one of the first times the company was hit with an employment class action, let alone one with such incendiary claims. Plus, says Richard Sauer, a senior attorney with Microsoft, “Gary is someone to be very concerned about.” Even worse for Microsoft, it was named in another major suit, Donaldson v. Microsoft Corp., a gender and race discrimination class action filed in Seattle in 2000. Once the Jackson case was transferred from D.C. to Seattle in 2001, Microsoft wanted one firm to act as its lead counsel in both cases. The company conducted a national search. Cost was not an issue, says Sauer, nor did it matter if the firm had a Seattle office. “We were looking for a firm with a depth of experience in big class action cases,” he says. Microsoft eventually settled on Paul, Hastings, Janofsky & Walker. “I talked to a lot of people locally and across the country,” says Sauer, “and the Paul, Hastings firm came up again and again.” Indeed, when the stakes get large enough in employment litigation, Paul, Hastings shows up on many corporations’ shortlists. With 160 labor and employment lawyers spread out among the firm’s 13 offices (none of which is in Seattle), Paul, Hastings has built one of the largest labor and employment practice groups in the country. It is also one of the more expensive groups. Clients say that Paul, Hastings’s rates are on the high end � top labor and employment partners at the firm charge in the $500-per-hour range. But if performance is any measure, for the period The American Lawyer examined, Paul, Hastings was worth the money. Since 2002, the firm has successfully defended at least two dozen massive employment class actions. In July 2002, for example, the firm helped Bank of America Corporation win a summary judgment in a class action alleging that the bank had underpaid its California employees who repair the bank’s automated teller machines. The repair personnel argued that they should be paid for the time they were not working but were “on call” to handle repairs. But Paul, Hastings successfully argued that the bank’s employment rules � that employees, for example, not consume more than a certain amount of alcohol while on call � were not so onerous that Bank of America had to pay its employees a full salary while they were on call. In March 2003, Paul, Hastings won a denial of class certification for Cracker Barrel Old Country Store, Inc. In that case the plaintiffs accused the restaurant chain of race discrimination, and they sought to certify a class consisting of every African American employee who was paid an hourly rate as well as African Americans who applied for work but were rejected, a combined group that numbered in the tens of thousands. In its motion to deny class certification, Paul, Hastings produced reams of data that allegedly showed that Cracker Barrel had processes in place to promote black employees and to prevent discrimination. The data was cited favorably by the Alabama federal judge who denied class certification, according to Leslie Dent, the lead Paul, Hastings lawyer on the case. Paul, Hastings savored another major victory last year for Wal-Mart Stores, Inc. A former company employee filed suit in 2002, alleging that the retail giant owed overtime wages to about 7,000 employees who worked at Wal-Mart’s corporate headquarters. Paul, Hastings was able to demonstrate that the employees had sufficiently dissimilar job responsibilities and should not be allowed to proceed as a unified class. And in April 2003 a federal judge in Arkansas denied class certification in the case, defusing a potentially explosive suit. The case is one of about four dozen employment matters that Paul, Hastings is handling for Wal-Mart, including Dukes v. Wal-Mart, a gender discrimination suit believed to be one of the largest employment class actions ever. The plaintiffs in Dukes, which was filed in federal court in San Francisco in 2002, claim that Wal-Mart has denied equal pay and promotions to all of its current and former female employees since 1998; the potential plaintiffs class is more than 2 million strong. Wal-Mart first turned to Seyfarth Shaw and later to Jones, Day to defend the Dukes case before settling on Paul, Hastings. The company will not say why it switched firms. As for Jackson v. Microsoft, Willie Gary stopped having a reason to hype his case soon after it was moved to Seattle and Paul, Hastings entered the picture. During a deposition in 2001, Paul, Hastings partner Nancy Abell, the lead defense lawyer in the case, uncovered that Rahn Jackson, the named plaintiff, was in possession of stolen Microsoft documents. Abell learned this after seizing Jackson’s laptop at a deposition and having a computer expert make a copy of the hard drive. Jackson testified that he inherited the documents and did not know that they were stolen. Still, because Jackson possessed the documents, which included sensitive information about Microsoft’s evaluation and compensation of employees, a federal court in Seattle in 2002 determined Microsoft’s case had been prejudiced and dismissed Jackson from the case. Before Jackson was dismissed, his coplaintiffs were merged into the Donaldson case � the other class action against Microsoft in Seattle. In 2001, Paul, Hastings was able to defeat the Donaldson plaintiffs’ motion for class certification. Microsoft was duly impressed. “I can’t think of a more positive result that could have been achieved. It is far more than I would have hoped for,” says Sauer. “If another big case comes along, I will certainly be looking to [Paul, Hastings] to help us out.” (The plaintiffs say the Jackson case wasn’t a complete rout for them. Tricia Hoffler, a partner in Gary’s law firm, says that the firm reached settlements on behalf of some of Jackson’s original coplaintiffs. “I cannot disclose the [settlement] terms,” she says, “but I think our clients are satisfied.”) Behind the flashy, high-dollar litigation work at Paul, Hastings is a labor and employment practice that traces its beginnings to 1951, when the firm was cofounded by labor lawyer Leonard Janofsky. From the start, the firm has taken management’s side, representing corporate clients in negotiations with unions and in arbitrations before the National Labor Relations Board. In 1964 the firm expanded into employment law after Congress passed the Civil Rights Act of 1964, Title VII, which protects employees from discrimination on the basis of race and sex. Paul, Hastings distinguished itself as an expert in the nascent employment discrimination field in 1976, when Paul Grossman, a labor and employment partner at the firm, wrote the first edition of Employment Discrimination Law, which is still a widely read treatise. Grossman says the book helped put Paul, Hastings on the employment law map. “All things being equal,” he says, “people tend to send cases to the firms that wrote the book on the subject.” Over the years, as the federal government crafted more protections for employees, Paul, Hastings shifted more of its resources from labor to employment work. Today Paul, Hastings’s labor and employment group spends about 15 percent of its time on traditional labor work and the rest on a range of employment issues, including retirement and health plans for employers and counseling companies on Occupational Safety & Health Administration rules. A dozen lawyers in the labor group also devote their time to immigration work, mainly helping companies such as Nestl� S.A. and America Online, Inc., arrange the necessary work papers to transfer employees worldwide. Daryl Buffenstein, who heads the firm’s immigration practice, says that Paul, Hastings has more dedicated immigration lawyers than any other national defense firm. “You can’t be a global employment firm without a sophisticated immigration practice,” he says. But Paul, Hastings’s specialty, and the prime reason it is being named the labor and employment litigation firm of the year, is its defense of employment class actions. Throughout 2002 and 2003, Paul, Hastings snared more big-ticket class action assignments than its closest competitors, including Morgan, Lewis & Bockius and Seyfarth Shaw, according to the firms’ written submissions for this contest. or Paul, Hastings, it’s not a new niche. By the early seventies, Title VII gave rise to a wave of employment discrimination class actions, and the firm was one of the first to start handling those cases on a regular basis, says Abell, who heads Paul, Hastings’s employment practice. Employment class actions have continued to grow in scope, and Paul, Hastings has remained one of the elite defenders of these cases. Says one of the top employment plaintiffs lawyers, Joseph Sellers of D.C.’s Cohen, Milstein, Hausfeld & Toll: “I don’t agree with the positions that [Paul, Hastings] takes, but they are one of the best in the country at defending employment class actions.” It’s the kind of work that few big firms would shun. Employment lawyers are often subject to rate pressure from insurance companies, especially in smaller cases where a single plaintiff is suing a company. But class action litigation, which can be potentially lethal and massive in scope, is generally free from price chiseling. In fact, employment lawyers say that they can charge the sort of premium fees to defend class actions that intellectual property and product liability litigators routinely charge. To handle employment class actions, a firm needs superior resources and depth, says Paul, Hastings’s Abell. She touts the firm’s technological mettle, noting that it can store vast quantities of data on its servers and collate the information into databases that are accessible to firm lawyers wherever they are located. “When you have cases with millions of documents, you have to be efficient,” Abell says. What else distinguishes Paul, Hastings? Trial depth, Abell notes. She says that virtually all of the 35 partners in the 160-lawyer labor and employment group have first-chaired a trial. “All of our partners have very, very good big-case litigation experience,” says Abell. Paul, Hastings’s labor and employment group, in fact, does go to trial with some regularity, though it rarely tries class actions, since many get defeated at the class certification stage or settle. From 2002 through the middle of 2003, the group tried 18 cases, and arbitrated about 150 others. In 2002, for example, Paul, Hastings partner Robert Walker won a trial in California state court for United Parcel Service, Inc. The plaintiff in the case, Tracy Dugar, alleged that she was sexually harassed and later fired in retaliation for reporting the harassment. After three days of trial, Walker convinced the judge to declare a nonsuit. The same year, Paul, Hastings partner Patrick Shea won a trial for Prudential Connecticut Realty, which was alleged to have fired a company manager, Carol Grimes, because she insisted on recruiting minority real estate agents. After a five-day trial in federal court in New Haven, the jury concluded that Grimes was fired for nondiscriminatory reasons. Barry Goldstein, a top employment plaintiffs lawyer who has opposed Paul, Hastings in many large class actions, praises the firm’s bench strength. “One thing they have going for them is that they have experienced and able employment trial lawyers in a number of offices: Paul Grossman and Nancy Abell in Los Angeles; Paul Cane [Jr.] and Kirby Wilcox in San Francisco; Geoffrey Weirich in Atlanta; and Barbara Brown in Washington, D.C.,” says Goldstein, of counsel with Oakland’s Goldstein, Demchak, Baller, Borgen & Dardarian. “Paul, Hastings as a firm stands out as the top [employment] litigation defense firm in the country,” adds Robert Wiggins, a leading plaintiffs employment lawyer whose Birmingham firm, Wiggins, Childs, Quinn & Pantazis, represents the plaintiffs in the race discrimination case against the Cracker Barrel restaurant chain. Paul, Hastings’s labor and employment group has grown rapidly, doubling in size in the last decade. Today the group accounts for about 17 percent of the firm’s total head count, and it chips in a like share of the overall revenue. In 2002 the group generated $84 million in revenue. That figure should increase substantially when the group’s 2003 collections are tallied, according to Abell. Says Grossman: “Our group is the busiest at our firm. . . . All kinds of new work is coming to us.” Paul, Hastings will continue to add employment lawyers in the near future, says Grossman, because employment litigation is such a burgeoning market. One growth area: wage/hour class actions, in which plaintiffs allege that they were not paid time and a half for overtime work. These cases have exploded in recent years � especially in California, where plaintiffs can recover larger damages than in federal court � and Paul, Hastings has cashed in on the trend. Last year, for example, Target Corporation hired the firm to defend a wage/hour case brought on behalf of store managers in California. After a mere three months of litigation, Paul, Hastings was able to convince the plaintiffs to drop their class claims. Grossman sees more litigation on the horizon. “Courts and legislatures have come to recognize that the highest property value for most people is their career, not their house or car or TV set,” he says. “Courts and legislatures are increasingly molding protections for careers, and that leads to litigiousness.” If history is a guide � and the stakes are high enough � Paul, Hastings will be called on to try to kill many of these cases before they blossom.

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