In yesterday’s post, I talked about some of the reasons why an employee’s lawsuit against his or her employer was destined for failure.
But employers, I’m afraid you’re not off the hook that easily. This post is for any employer that just got sued or threatened with suit.
Maybe that lawsuit isn’t so frivolous after all.
Wait a second! You said yesterday that ‘Odds are, you probably weren’t discriminated against’!”
Ah, but isn’t that rub? Odds. Statistics. Yes, some (many?) lawsuits brought by employees are losing propositions. But some are not.
Here are some things I tell clients or prospective clients when I see a lawsuit filed or threatened as to why they should take the lawsuit seriously.
1. That frivolous lawsuit is still going to cost you thousands (if not tens of thousands) to defend. But I thought you said this post was about non-frivolous lawsuits? True. But for my first point, that’s beside the point entirely. Whether a lawsuit is frivolous or not, the system of justice through our courts and administrative agencies moves slowly and with some cautiousness. Even the frivolous ones need to be defended. Court filings need to be, well, filed. And court conferences need to be attended. So your first point always is to recognize that all employment law cases have a cost associated with them.
And as such, all cases have what we call a “nuisance” value as well. That is — you are going to spend X amount of dollars defending the lawsuit. It may be cheaper to just pay a certain amount to avoid the cost of defense. Now, there are business reasons why you won’t want to do so in all or even many cases, but the employer who fails to recognize the nuisance value of the case is destined to be disappointed in the long run.
It’s a bit of hyperbole to say that any person can sue anyone at any time for any reason. But not that much. Lawsuits are a part of doing business. Frivolous or not, you will still have spend money to defend your decision. Be prepared for this eventuality when making your employment decisions and deciding whether or not to offer severance in exchange for a release.
2. “At Will” Employment Is a Misnomer. In Connecticut, the default employment relationship between an employer and employee is “at-will”. As many offer letters suggest, that means either the employer or employee can terminate the employment relationship at any time for any reason or no reason at all. And so, I sometimes hear employers exclaiming “Connecticut is at-will! We should be able to just fire them for any reason! How can they still sue?”
Frankly, I would have most employers just forget about that phrase “at-will employment.” Yes, it’s needed for offer letters and contracts.
But relying on it for your decision-making process is going to lead to disappointment. Employment law in Connecticut prohibits all sorts of reasons for terminating an employee. Some are well-known (race, gender, age, etc.) and some are not (pay secrecy law).
Here’s a secret — in any employment discrimination suit, courts are still going to require employers to provide a legitimate, nondiscriminatory reason for the decision. It may not be the employer’s burden to prove discrimination did not occur, but it’s still imperative to have a reason for your decision.
And no, you cannot simply say “We don’t need a reason.” It won’t work.
3. Employment law isn’t rocket science, but it isn’t intuitive in places either. Some lawsuits that get filed appear frivolous at the outset but aren’t. And they arise because of another misconception by some employers — particularly small to midsize ones — that they do not need anyone dedicated full time to compliance with employment laws, like a Human Resources Director.
Unfortunately, there are a whole host of items employers need to comply with under both state and federal law. The intersection of ADA, FMLA, Paid Sick Leave, and Workers Compensation is just a disaster waiting to happen. And don’t even get me started on trying to figure out intermittent FMLA leave.
Employers that have dedicated HR staff aren’t perfect. And relying on your payroll service isn’t enough either. Sometimes cases arise on judgment calls. And judgment calls can be called into question. Have you done enough to accommodate an employee? Is a 25 year employee suddenly a poor performer? Or is the new supervisor being overly harsh on the older employees — perhaps because it’s the first time the person has had to supervise former co-workers?
Thus, when you get a lawsuit, you should take a critical eye to it. Was there a failure of staff to understand the law? Or even simpler — did you just mess up? Or was it based on a judgment call? Sometimes that lawsuit that seemed frivolous on the face is not. Sometimes, the employer just hasn’t followed the law.
4. Do not believe everything you have been told. People lie. Not very often in my experience, but it happens. I talked about it just last week where an employee lied during an investigation into sexual harassment allegations. Thus, when a lawsuit is brought, consider having outside counsel take a fresh look at the allegations and the employment decision. Sometimes, managers will open up to a third-party and you’ll discover that the rock-solid case you had for an employee’s firing, isn’t so clearcut after all.
5. You weren’t “fair”. Longtime readers of the blog will have heard this before, but it bears repeating time and again. I often tell clients that even if a decision to fire an employee was rendered legally, it may be difficult to prove because of either lack of evidence or because the decision seems “unfair”.
How does this arise? Well, suppose you have a longtime employee. They’ve been a good performer for most of his or her career, but in the last year, the employee is tardy to work and his or her production has suffered. Can you just fire the employee? Sure. Connecticut is at-will.
But. (Have you noticed there’s always a “but” from lawyers?)
We live in a world where it is expected that an employee will be warned about his or her performance and given an opportunity to improve. After all, isn’t that what we would expect for ourselves? Again, to be clear — it’s not required under the law. However, employers that have taken steps to show that the employment decision was fair and carefully thought out will have an easier time proving that a lawsuit challenging the termination is frivolous.
Bonus tip: Sometimes statistics can be used against you. Suppose you are conducting a reduction in force. You’ve reviewed the decisions and they all seem like they have ample support. But months later, you get a lawsuit challenging the termination. The evidence? The reduction in force had a disparate impact on female workers — that is, statistically, more female workers were fired than should be expected. Had you conducted a statistical analysis before the termination, you may have discovered this.
Thus, lawsuits that can seem frivolous on their face might not be so frivolous when you get down to the nitty-gritty. Sometimes, you only discover things by digging deep.
Not all lawsuits are created equal. And certainly, if you’ve just been sued, it may be that the lawsuit brought by your former worker is frivolous. But in most instances, having your trusted outside counsel review the situation just to be sure is a necessary step in that process. Better yet, take steps before the lawsuit ever arises to ensure that your policies and practices reduce your liability exposure as much as possible.
Because the last thing you want to discover when a lawsuit has been filed is that you’re going to lose.