Tuesday, April 13, 2021

The top 11 things you need to know about being sued by an (ex) employee

Because of the impending changes to Ohio's workplace discrimination law that take effect in two days, the filing of employment discrimination lawsuits in my state is seeing record numbers.

Do you know what to do when an employee sues your company? 

Here are the top 4 issues you to think about ASAYS (as soon as you're sued).

1/ Relevant documents should be identified and preserved. Employment lawsuits are not as document-intensive and some other disputes in which businesses are involved. Nonetheless, the documents are crucial. They provide a roadmap to the justification for the termination or other employment action, and the reasonableness of the employer's actions. Key documents (personnel files, handbooks, other policies, investigative reports, emails, and other communications) should be gathered and set aside. Also, a litigation hold should be put in place to ensure that no relevant documents are accidentally destroyed.

2/ Fight the urge to take it personally. When an ex-employee claims discrimination, companies can lose sight of the fact that lawsuits are part of doing business. Employers often shift into attack mode because they are accused of being bigots. There is a huge difference between aggressively defending a case and attacking for the sake of attacking. The former is a smart strategy; the latter often leads to greater costs by losing focus. It also risks taking action that could be viewed as retaliatory and bring further claims. Extra care must be taken when the plaintiff is a current employee, as opposed to an ex-employee.

3/ If your company has Employment Practices Liability Insurance, timely file a claim with the insurer. If you wait, your might give the insurer a valid reason to deny coverage. If you have purchased a rider that permits you to select counsel, make sure you enforce that right. If you have not purchased that protection, consider having a candid conversation with the insurance company about the counsel they will choose for you.

4/ Hire experienced employment counsel (wink wink, nudge nudge) to defend the claim. Employment law is highly specialized. Retaining counsel that knows that ins and outs of this area of law is the best way to keep costs down as much as possible, while at the same time doing everything possible to aggressively defend the company.

And while I'm making lists, here are the top 7 unexpected things you should expect from any piece of employment litigation.

1/ It will cost, a lot. An employer should expect to spend between $50,000 and $150,000 dollars defending a lawsuit brought by an ex-employee. The more complex or combative the case, the more you should expect it to cost.

2/ It will be time-consuming. Lawsuits eat a lot of time. You will spend time gathering documents, meeting with your attorney to provide facts and background information, answering discovery requests, attending pretrials and settlement conferences, and making employees available for depositions (including the extensive pre-deposition preparation). In addition to the fees you pay your attorney, there is significant additional costs in lost productivity that goes into litigation.

3/ It will last longer than you think it should. Litigation is a marathon, not a sprint, and the finish line is often a moving target. Deadlines are usually far in the future and often extended through no fault of your own. And, the longer it takes, the more expensive it usually is. Covid has only made this worse.

4/ Your employees will not be perfect witnesses. No witness is perfect. In fact, most are far from it. All will make mistakes. Some will be small and insignificant (a date here or there), some larger (a key fact forgotten under the scrutiny of a deposition), and some will be devastating. (In an age case I once had a CEO admit age discrimination on the witness stand; case closed). You can prepare and over-prepare your witnesses (see numbers 1 and 2 above), but you cannot prepare for how someone will hold up under the pressure of a deposition or trial, and the pressure-filled scrutiny and cross-examination that come with them.

5/ You are not as good of a record keeper as you think you are. "I know I took notes during that meeting." "Where did that email go?" "That document must have been misfiled; I know it's here somewhere." You didn't. You probably deleted it. If it's lost or misfiled, good luck finding it.

6/ Decisions will not all go your way. You will win some motions, and you will lose some motions. Some will matter more than others. You need to understand that if your side was always right, there'd be nothing to litigate. Don't get mad at me. Don't get mad at the judge. Litigation is a process, and losing some issues is part of that process.

7/ Every case has risk. Every client always asks, "How strong is our case? What are our odds?" Look, I'm not a bookie, I'm an attorney. On your best day, with your strongest case, I only give you a 2 out of three chance of winning. We cannot control the judge or the jury, and they ultimately decide your case, sometimes on issues that have nothing to do with the facts or the law. If you can't stomach risk, settle.

What did I miss that you think would benefit other employers to know? Drop a notein the comments below.

* Image via Casper Johansson on Unsplash