The End of The Employment Relationship May Be The Beginning of a Legal Claim: Ten Steps to Minimize Exposure of Employee Lawsuits

The End of The Employment Relationship May Be The Beginning of a Legal Claim: Ten Steps to Minimize Exposure of Employee Lawsuits

by Mark J. Swerdlin and Teresa D. Teare

Excerpt:

Employers small and large face legal claims arising out of employment decisions at an increasing rate. In fact, employee lawsuits rose 400% from 1987-2007. The Equal Employment Opportunity Commission (EEOC) reported that the highest number of employment discrimination charges in its history were filed in the fiscal year ending September 30, 2010. The cause of this increase has been attributed to a high unemployment rate coupled with the fact that employees have more information at their fingertips. An October 2011 search of Google for how to sue my employer resulted in about 1,670,000 hits, including hundreds of instructional web casts providing advice to employees on how to go about filing a claim. The same search on Bing retrieved 495,000,000 results.

Lawsuits are expensive, time-consuming and often emotionally draining for the company officials involved. Defending against a frivolous claim can cost tens of thousands of dollars in legal fees; defending against a legitimate claim can cost hundreds of thousands of dollars, not including a potential verdict against the employer. The median federal jury award for employment claims in 2009 was $221,250 compared to a median of $146,050 in 2008.

While there is no fool-proof method to avoid employee lawsuits, there are some ways to minimize claims and decrease liability. The following steps should start well before an employee is hired and continue after the termination.

1. Timely and Periodically Update Handbooks and Employment Forms.

The first exhibit in the courtroom in an employment lawsuit is often the Employee Handbook. If the employer's policies are up-to-date, then this is the first line of defense in showing that the employer had a rule or policy that the employee did not meet. On the other hand, if an employer's policies are out of date or do not give an employee notice of a rule, the employee will use the Handbook against the employer. Thus, Handbooks should be updated whenever there is a change in the law, as well as periodically (i.e., once per year) to ensure they are nondiscriminatory, compliant with the current federal and state law, and practically sound. Periodic reviews also provide the opportunity to analyze whether new policies should be implemented or, in some cases, whether existing policies should be eliminated.

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Mark J. Swerdlin is a graduate of the Georgetown University Law Center and a partner at Baltimore-based Shawe Rosenthal, which is a management side labor and employment law firm. Teresa D. Teare is a summa cum laude graduate of the University of Baltimore School of Law and an associate at Shawe Rosenthal. Both focus their practice on employment litigation. They can be reached at mjs@shawe.com or tdt@shawe.com, respectively.

Shawe Rosenthal LLP specializes in representing and advising management in employment and labor relations issues, representing employers throughout the United States in federal and state courts, before the EEOC, NLRB and other administrative agencies and in arbitrations. Attorneys form the firm have written and continue to update the Employment Law series of LexisNexis Matthew Bender's Business Law Monographs (Volume E1, Employee Discipline & Discharge Policies; Volume E2, Avoiding Employment Discrimination Charges; Volume E3, Responding to Employment Discrimation Charges and Volume E4, Employer Rights and Obligations Under the Occupational Safety and Health Act) and the Employment Law Deskbook.