Class action lawsuits can be filed by groups of people who have been illegally taken advantage of by a company or organization. Usually, employees will file suits against employers who take advantage of them in regards to company polices involving wages and such. Of course in other instances, suits like these are also filed by people wishing to complain about a company's services or products too. An example is the ongoing Wal-Mart class action suit.

When someone takes part in a class action lawsuit, they usually have to sign away their right to file additional lawsuits individually. The group suing the firm known as plaintiffs earn damages if the suit is successful based on their degree of suffering, which means that everyone doesn't usually receive the same settlements. Usually lawyers receive nothing for suits like this until the case has been successfully closed, at which point they will normally take a percentage of what was settled for.

Class action suits like the Wal-Mart case can have serious side effects for employers everywhere. Firstly these types of suits can tarnish the often hard earned reputation of such establishments. Such firms thrive on their reputations and such suits could sway public opinion against them overnight. All sorts of things might happen such as company stock prices plunging or even their market share being lost. In some hardball cases, the general public has been know to even boycott products and services of companies in situations like this.

For employers, these suits can be especially harmful. Lawsuits like this can vary in dollar amount. Some have been known to rocket into the billions of dollars. This could create cash flow problems for such firms and could lead to huge financial losses or even bankruptcy. Such employers may also have difficulties with paying the wages of their employees and may be forced to close some stores and restructure their workforce, leading to thousands or even tens of thousands of job losses.

For more information, check out here: Wal-Mart class action lawsuit