Category Archives: Litigation

White House Fails Basic “Firing 101”

Note: This is not a political post. President Donald Trump had the right and the authority to fire Acting Attorney General Sally Q. Yates last night.

From an employment lawyer’s perspective, the White House’s written statement about Sally Yates’ firing is a textbook example of how I advise my employer clients not to behave. https://www.whitehouse.gov/…/statement-appointment-dana-boe…

“The acting Attorney General, Sally Yates, has betrayed the Department of Justice by refusing to enforce a legal order designed to protect the citizens of the United States. . . . Ms. Yates is an Obama Administration appointee who is weak on borders and very weak on illegal immigration.”

We employment lawyers encourage our business clients to leave a fired employee with his/her dignity. I would never suggest an employer use loaded words like “betrayed” and “weak” or to impugn a long-term, high-ranking employee’s integrity during a job termination meeting. It is ill-advised in most industries to burn bridges like this or to set your business up for a lawsuit by a scorned ex-employee.

Sometimes terminating an employee’s job is necessary. For advice on how to fire in a more beneficial way, read my blog post on firing without fear.

Employers Need Solid Reasons for Firing

Discrimination cases filed by former employees against their companies are usually won or lost on one concept—pretext—meaning that the reason given by the employer for the firing appears to the jury as a cover-up or excuse for the real reason, which the plaintiff will strongly suggest is discrimination. If the employer’s reason for firing the employee doesn’t perfectly line up with the facts developed in discovery and at trial, the business has a good chance of losing the case to the disgruntled employee.

Let me give you an example. If you fired Mary for being tardy on five specific occasions, but your security camera tapes, your time clock records, her emails and the testimony of other employees show she was not late on all of the dates that you specified, Mary’s discrimination case just got a big boost because your reasons look like pretext for terminating Mary. Then the door is wide open to say that her termination from employment occurred because she is black, a woman, disabled or born in another country.

When presented with this contrary hard evidence about Mary’s tardiness, it is not going to convince the jury when you say, “Oops, I got the dates of her tardies wrong” even if that is what actually happened. There is little a defense attorney can do to help you with the jury at that point because your reasons for the termination just look like an excuse for something more sinister.

Juries are pretty savvy in sifting through an employer’s reasons. As the employer, you must assure that the reasons you fire an employee are specific, provable, clearly-stated, well-documented and stay consistent from the time you first discipline the employee to the time of trial. Any variation in your reasons will come off looking like pretext.

Here are some other things that employers do that usually will be perceived as pretext in front of a jury: Continue reading Employers Need Solid Reasons for Firing

Follow Your Lawyer’s Advice

The case every lawyer has been waiting for was decided last month in the United States 10th Circuit Court of Appeals. A company trying to get out of an overtime violations case defended itself by saying it relied on the advice of its lawyer. But the court pointed out that the company had only selectively followed the attorney’s advice. The company ignored the second part of the legal advice it received and made no real changes in its compensation policy in response to the lawyer’s opinions. So the company’s defense failed. Mumby v. Pure Energy Services (USA), Inc., (10th Cir.)(Feb. 22, 2011).

Why is the case so meaningful to employment lawyers like me? Because too often, clients who pay me for my legal opinion decide to dismiss some or all of my advice if it means they will have to change the way they do business. So many companies are slow or unwilling to adapt and change, even when new employment laws or regulations require employers to rewrite their policies or update their procedures. They resist change even when it means they will be penalized or sued when they get caught. But they never believe they will get caught, despite statistics that show even small companies face an adverse claim by an employee or former employee at least once every five years.

Teenagers often use similar risky thinking when making bad decisions, such as “I won’t get caught if I drive home, even though I’ve been drinking beer all night. It was only a six-pack, after all!”  Continue reading Follow Your Lawyer’s Advice

Risks of Going to Trial

You’ve heard it before. Ninety-five percent of lawsuits settle before they are tried. Knowing this, doesn’t it make sense to study settlement and trial outcomes to see if settlement is usually a good idea? Some new research did just that and found that plaintiffs in lawsuits, such as the employee in a discrimination claim, who turn down a settlement offer often do much worse at trial than if they had taken amount the defendant was offering.

A new study in the September 2008 issue of the Journal of Empirical Legal Studies found that 61% of plaintiffs who gambled on going to trial were disappointed with the outcome because they received a smaller award than the amount they had been offered to settle before trial. The average settlement offer was $48,700 and the average award at trial was only $43,000 in the more than 2000 cases decided in California between 2002 and 2005 that were included in the research.

It was an error for defendants to go to trial instead of paying a settlement demand in 24% of the cases reviewed. Unfortunately for those defendants that chose to go to trial, the price of that mistake was high. In those cases, the plaintiff’s average settlement demand was $770,900 but the average verdict was $1.9 million, meaning that $1.1 million could have been saved in those cases if the defendant had settled. Don’t forget that these verdicts occurred in California, so they don’t reflect conservative Panhandle jury awards, but the percentages are worth thinking about if your company is defending a lawsuit.

The study also looked specifically at employment law cases. Continue reading Risks of Going to Trial