Prevention is the Best Cure:  Stop Lawsuits Before They Happen

Posted: August 2, 2019 |

            Being an employer is California in 2019 is darn hard.  Engage any employer on this topic and they will effortlessly rattle off several things that California does to punish business owners.  In most cases, an employment-related issue will be at, or near the top of this list.  There are so many laws with which to comply, and instincts aren’t enough.  Legislation continues to evolve and case decisions are handed down by the courts daily.  And neither can keep up with today’s workforce and the way in which workers and companies want to engage.  Employers must continue to find ways to keep away from trouble.  And trouble is out there. 

 

            According to the U.S. Equal Employment Opportunity Commission (EEOC), the agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or employee, there were 4,344 charges filed with the EEOC in 2018 in California alone.  Compare that to our neighbor to the north, Oregon, which had just 180 charges filed in the same year.  The only states exceeding California were Texas, Florida, Georgia, Illinois, and Pennsylvania.

 

            Last year’s statistics from the Department of Fair Employment and Housing (DFEH), the California state agency responsible for enforcement against unlawful discrimination in employment, will be out later this summer.  But we do know that in 2017, there were 12,872 “right-to-sue” letters requested of the DFEH.  These are automated letters issued in response to a request the employee makes, that does not ask the DFEH to investigate the claim.  Receiving a “right-to-sue” letter from the DFEH is a prerequisite to bringing a lawsuit against an employer for discrimination.  An additional 4,346 employment matters were investigated by the DFEH, triggered by the DFEH’s determination that it had jurisdiction over the matter and that the employee had a potential claim.

 

            It is incredibly easy for employees to file a claim today, even without leaving their homes.  Virtually all government agencies, the DFEH, EEOC, and California Labor Commissioner, allow employees to submit claims online.  Each agency has its own jurisdiction, and in most cases will try to assist the employee in reaching a resolution with the employer.  But often more dangerous to a business than facing the government’s involvement in an employee claim, is when an employee stumbles into an attorney’s office.  Why?  Among other things, the California Labor Code shifts the responsibility so that the employer must pay the employee’s attorney’s fees if the employee wins a claim.  Under rare circumstance is this reciprocal, meaning that an employer generally cannot make the employee pay for its attorney’s fees if the employee loses the claim.  Frequently, an employee’s underlying damages are manageable.  But when interest, penalties, and attorney’s fees are added to the mix, the business may have limited options.  The attorney’s fees that may be awarded from the fee-shifting statutes often drive the litigation.    

 

            I have had many conversations with employee-side attorneys who tell me that the reason their client first picked up the phone to call them, had no legal basis.  The call is commonly initiated by an employee who feels she has been treated poorly and wants to get back at the employer.  While the phone call may start out with a legally unsupportable claim, when asked the right questions by the attorney, the employee soon realizes that she could have a different, and even better claim against her employer. 

 

            The conversation goes something like this, “Well…employment in California is at-will which means you can be fired for attendance problems because you were taking care of your sick cat.  I’m sorry that they walked you out in front of everyone in the middle of your shift while you were crying.  But I’ve looked at your paystubs and I see a few issues in the way that you were paid.  Can you come to my office at 2:00 tomorrow?  Let’s make them pay for what they did to you.”

 

            While keeping up with the ever-changing employment laws is important, it’s not enough.  No one is perfect and businesses have so many distractions pulling their attention and resources in different directions.  It’s important to hire smart and make the effort to find the right person for the position, including conducting background checks and thorough reference checks.  As soon as a concern arises, speak with your employee about it.  Confrontation is difficult for some managers, and a problem employee may have no idea that a manager is sitting in the Human Resources office demanding that the employee be terminated immediately.  Work with your team to exercise those management muscles.  Teach managers to be firm, but not to demean or be disrespectful.  You may start with providing verbal warnings that are documented in manager’s notes.  Elevate the verbal warnings to written warnings when necessary – and not just a string of emails.  There is something to be said for a formal, written warning in a proper format that the employee knows will be placed in his employee file.  Schedule a meeting with the employee in the upcoming weeks or months, depending on the severity of the concerns, to discuss his improvement (hopefully).  If not, the employee has been warned and understands the process.  He may not agree, but it might be enough to keep him out of an attorney’s office. 

Colleen M. McCarthy

Colleen M. McCarthy, Esq. is a Partner and chairs the Firm’s Employment Practices Group. She has dedicated her practice to representing and protecting employers, with a particular emphasis on risk mitigation through preventative counseling and sound practical advice. For 15 years, Ms. McCarthy has counseled employers about the complicated employment laws that impact their businesses to ensure that they are in compliance, and to reduce the chance of costly litigation. Ms. McCarthy may be reached by phone at (949) 608-6900 or email cmccarthy@ferruzzo.com