Thursday, October 16, 2008

Old news is bad news for businesses: Labor & Employment cases remain most popular targets

Fulbright & Jaworski has published its annual report on litigation trends, and the news is scary for American businesses. Labor and employment cases remain the most numerous type of case pending in 2008. 47% of U.S. companies surveyed reported being sued in a labor or employment case. When you focus just on the Midwest, the number jumps to 54%.

Other highlights of interest to employers:

  • Wage-and-hour lawsuits spiked 19%.
  • After wage-and-hour, companies saw big increases in five other areas of workplace litigation: discrimination, employee privacy, ERISA, disability claims, and age discrimination.
  • Of all of the different types of employment litigation, U.S. companies singled out race discrimination cases as creating the highest financial exposure, followed by sex discrimination, wage-and-hour violations, age claims, harassment, retaliation, disability, non-compete cases, and FMLA violations.

There are a lot of lessons that businesses can draw from these findings. I'd like to focus on two. First, especially in a down economy, it is naive for employers to think that claims brought by employees will decrease or even flat-line in 2009. If anything, these claims will increase even more.

There is no way to prevent yourself from being sued. But, there is one surefire way to limit the risk, which brings me to my second lesson -- training and preventative measures are key. Has your handbook recently been reviewed and updated? Have you done harassment and EEO training in the past two years? Are you supervisors and managers up to date on how to effectively discipline employees? Will your myriad wage and hour practices pass legal muster? If you answer "no" to even one of these questions, your company is at risk in becoming a stat in Fulbright's 2009 survey.