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Anatomy of a Lawsuit Not ‘As Seen on TV’

Some of you have been sued, and some of you have not. For employers new to the litigation arena, one of the most common questions I’m asked is, “What happens next?”

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Some of you have been sued, and some of you have not. For employers new to the litigation arena, one of the most common questions I’m asked is, “What happens next?” However, by the time you are sued, the battle has already been partially fought.  So let’s talk about best practices leading up to being served with a suit that may help you avoid costly litigation or limit its impact, as well as what to expect when you’re expecting a claim.

Pre-Litigation Strategies

It may be cliché, but the best offense often is a good defense. The first step in avoiding a Charge of Discrimination (Charge) or lawsuit is ensuring you have lawful practices and policies in place. As we have discussed in previous articles, a good employee handbook records the company’s rules and communicates them to your employees in an easy, understandable way. If a handbook is well drafted, it provides helpful information on what’s expected from employees and what they can expect from their employer. It can also provide the foundation for any employment decisions you need to make and – if the situation arises – forms the backbone for the defense of many lawsuits brought against you by employees. However, if it’s drafted poorly, it can be the foundation for an action against you.

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Similarly, a good hiring process is beneficial in several ways. Ensure that you create and maintain an accurate job description and job application. During the interview, be mindful of the questions you ask and the information you are trying to obtain. Well-designed interview questions are an effective tool in evaluating an applicant’s qualifications, experience and personality, but bad interview questions can set a company up for civil liability. Finally, keep the documents related to not only the applicant you hired, but also the applicant pool in case a failure-to-hire claim is made. 

While a current employee will sometimes file a Charge or suit, typically it is employees who have been or are about to be terminated who bring claims. In most situations, progressive discipline is the best path. While some incidents do warrant immediate termination (things like threatening a co-worker with a weapon or sexual assault), many issues are not that severe. In those situations, you may want to start with a verbal warning (which you write down). The next step is a written warning, and then a final written warning that may be coupled with a short suspension without pay.

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Finally, management training is priceless in avoiding or preempting employment claims. However, even if you do everything right, chances are good that you will still face a disgruntled employee at some point.

The Charge of Discrimination

Many claims an employee can bring against an employer require administrative exhaustion, which is a fancy way of saying an employee must first file a “Charge of Discrimination” before filing a lawsuit. The Equal Employment Opportunity Commission (EEOC) launched a pilot program in March that allows individuals near select metropolitan areas to file an inquiry and schedule an appointment with the EEOC online. Since employees can now get the ball rolling without having to wait on hold, we may see an upturn in the number of charges filed.

And that brings us to a pressing question: What should you do if you receive a Charge of Discrimination?

First, don’t ignore it. A Charge will often be sent to the location where the employee worked instead of to a registered agent. Thus, your designated mail sorter at every location needs to understand that a Charge must be forward to you immediately so that you can respond in a timely manner.

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Second, call your insurance company promptly. If your company has Employment Practices Liability Insurance (EPLI), the expenses incurred in responding to the Charge may be covered or counted toward your deductible. Keep in mind you have a limited amount of time to notify the insurer of a claim, and a Charge is definitely a claim.

Third, call your lawyer! If you do not have an employment attorney, seriously consider retaining one. You can represent yourself at the EEOC stage or you can be represented by an attorney who is not an employment lawyer; but it is best to have the help of someone who is familiar with the applicable law and the agency processes. Further, the strategic decisions you make at the Charge stage are key to the course of future litigation, so your response should be the result of thoughtful analysis of the allegations and the known facts.

Fourth, don’t throw anything away. The duty to preserve generally arises when litigation is reasonably anticipated, which certainly occurs when a lawsuit or Charge is served or a governmental investigation initiated. The failure to preserve potentially relevant information is called spoliation, and a court can order sanctions for this type of conduct. Plus, your attorney will want to review everything related to the employee who filed a Charge, so it doesn’t hurt to go ahead and get it together for her.

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Once you have taken these initial steps, you will then typically submit a Position Statement in which you can explain your response to the allegations. In rare cases the EEOC or state agency will file a claim on behalf of an employee. However, the agency will usually issue a Notice of Right to Sue to the employee, which allows the employee to file suit in court.

The Lawsuit

Any day that you learn you’ve been sued is a bad day.  As when you receive a Charge, notify your insurer and your attorney immediately when you are served with a Complaint (sometimes called a “Petition”) – you do not want to miss certain deadlines to Answer or challenge the Complaint. The Complaint sets forth the ways the employee thinks he or she was treated illegally, and your Answer sets forth whether you agree or disagree with each claim in the Complaint.

And then comes discovery. Discovery is often the most time-consuming part of litigation because the employee can ask you for documents and information in an attempt to support his or her claims. And you get to do the same. Both sides also get to depose witnesses, which means you may ask witnesses questions under oath to learn what information they may know.

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Once discovery is complete, often one or both parties will file a motion asking the court to find for them. If neither side succeeds on that motion, then the case will proceed to trial. And after the trial, one or both parties could appeal the verdict to a higher court. Thus, depending on the claims and the court you are before, the process could take one year or it could take five. It is rarely as clean and quick as depicted on some TV legal dramas.     

Option B: Settlement

Few cases proceed to trial. The costs associated with litigation are high for both sides, as is the time and energy expended in litigation. At any point in this series of events, the parties could decide to settle a case for monetary damages, reemployment or any other consideration.

Conclusion

While there is no way to guarantee that you will not receive a Charge or a lawsuit, knowing some best practices to avoid them and what to expect once they arrive may help you to navigate a challenging situation. TR

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This column is made available by the lawyer and publisher for educational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice or to establish an attorney-client relationship. This column should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Susan Bassford Wilson is an employment attorney in the Midwest with the nationwide firm of Constangy, Brooks, Smith & Prophete, LLP. She can be reached at [email protected] or on Twitter at @bassfordwilson.

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