Being sued by a current or former employee generally does not trigger many positive reactions from employers. A common question which is often asked is: can we counter-sue? When pressed by counsel for the basis of a counterclaim, the answers range from those with a colorable basis to those based on emotion.
In Ambs v. Sir Home Improvement, a former employee filled suit under the FMLA based on the employer's denial of FMLA leave for the birth of a child and for terminating him. The employer answered and counterclaimed for the the over-payment of commissions. This claim was dismissed by stipulation. The former employee requested and was granted leave to file a claim of retaliatory counterclaim. The employer moved for summary judgment on this claim.
The employer argued that the retaliation claim based on its counterclaim was not supported by case law, the "litigation privilege," and by public policy. The court denied the motion. The court noted that while there is precedent for retaliation claims under many of the other discrimination statutes, there is none under the FMLA. The courts are divided in their recognition of such counterclaims, and there appears to be no settled analysis to determine whether a claim constitutes actionable retaliation. The court relied on the reasoning of the court in Rosania v. Taco Bell, 303 F. Supp. 2d 880 (N.D. Ohio 2004).
The court stated that for purposes of the summary judgement motion, there were certain issues a jury would have to decide. There was testimony that the company had allowed other employees to retain additional commissions as an inducement to continue working and that the audit was not accurate. In addition, the former employee had filed suit in state court with two other employees, and the employer had not filed a counterclaim in the action where the payment of commissions was directly at issue.
The first question to ask a client who wants to counterclaim is "why now?" If there is a legal claim to be pursued, why wasn't it pursued before? In Ambs, the employer apparently had the logical venue to pursue the claim and chose not to. While a counterclaim may provided an employer with some short term gratification, if improperly used, it will cause long term, for at least the length of the case, problems.
Lexis.com subscribers can access Lexis enhanced versions of the Ambs v. Sir Home Improvement, 2012 U.S. Dist. LEXIS 72826 (W.D. Mich. May 25, 2012) and Rosania v. Taco Bell of Am., Inc., 303 F. Supp. 2d 878 (N.D. Ohio 2004) decisions with summaries, headnotes, and Shepard's.
For additional Labor and Employment law insights from John Holmquist, visit the Michigan Employment Law Connection.
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