You’ve seen the headlines: Unemployment Remains High! Record Number of Discrimination Claims Filed! So what will you do if your business is served with a wage claim, wrongful discharge lawsuit,or discrimination charge?
As a practitioner of preventive law for employers, I have some suggestions that will help keep down your legal bills as well as help me make the best presentation of your case. Five are discussed here, and the remaining five will be discussed in a future post.
1: Be prepared.
Works for the Scouts, and it should be your motto, too. Do the employees who receive and distribute the mail know what to do with any legal papers that come in? How about the receptionist or front desk person? Be sure they all know to promptly give any such papers to you or the person you designate. I, and most lawyers, could tell you horror stories about clients calling in a panic because papers alerting them to a lawsuit were sitting on someone’s desk until the time to respond was about to expire—or had already expired.
2: Call your insurance company right away.
Some employment claims are covered by employment practices liability insurance, which is sometimes part of an employer’s liability policy. Under NJ law, workers’ compensation insurance might cover some allegations of sexual harassment. If you’re served with a lawsuit, call your insurance agent and notify him/her of the lawsuit. If the claims against the company are covered,and depending on the terms of the insurance policy, the insurance company may pay for—and therefore, choose–the lawyer to represent your company.
3: Next, call your lawyer.
If there is no insurance coverage for the claims against you, you’ll have to retain an employment law attorney to represent your business. Don’t delay! If you’re served with a lawsuit by a process server, you’ll likely have only 35 days to answer the complaint. If you receive a wage and hour complaint in the mail, you probably have only 10 days to respond. If you miss the deadline, the court could enter a default against your company, which means real trouble.
4: Then, get organized.
Defense lawyers, me included, charge by the hour. Since you don’t want to pay me to put your files in order, you should do that work before our first meeting. You should immediately gather and preserve all the files and documents—including emails and other electronic records–related to the employee or the case. Include everything you can find that is related to the employee and the allegations she/he has made. Please don’t make decisions about what is relevant—let your lawyer do that.
You should also notify employees that they shouldn’t change or discard any documents, e-mails, or electronically stored information related to the employee or the case, even if the records are scheduled to be destroyed under your normal document-retention policy.
I always ask my clients to give me a timeline of events. Start with the employee’s date of hire, unless the suit involves the hiring process. In that case, start with the advertising or posting of the job. Continue with salary history, and any promotions, demotions, grievances, and disciplinary actions, and include the date of termination if the plaintiff is a former employee. Make sure to include names, dates of hire, and titles of any supervisors or other employees who are involved in the case.
5: Start thinking about a settlement.
When you are served with legal papers, you’ll probably feel angry or defensive. That’s perfectly normal, especially if you think you haven’t done anything wrong. But, as time goes by and legal bills come in, you’ll realize that the case is taking up a lot of time, money, and energy that might be better spent on your business.
In New Jersey, almost every employment suit is sent to mandatory mediation by the court. The in-person session, in front of a court-appointed mediator, is scheduled early in the case, before either side has invested a lot in it. Bear in mind that more than 95% of civil lawsuits settle or are otherwise resolved before trial, and recognize that a settlement is a compromise. As the late Hon. John W. Devine, the federal judge for whom I clerked, used to say, “A good settlement leaves both sides equally unhappy.”
Next time: More ways to keep your legal bills low.
