You Are Served : Litigation In The Workplace

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1 You Are Served : Litigation In The Workplace Presented by: Wendy J. Mellk, Esq. Jackson Lewis LLP 58 South Service Rd., Ste. 410 Melville, NY (631) Copyright 2008 Jackson Lewis LLP 1 THE MATERIALS CONTAINED IN THIS HANDOUT WERE PREPARED BY THE LAW FIRM OF JACKSON LEWIS LLP FOR THE ATTENDEES OWN REFERENCE IN CONNECTION WITH MANAGEMENT EDUCATION SEMINARS PRESENTED BY THE FIRM. SINCE THESE MATERIALS AND RELATED DISCUSSIONS ARE INFORMATIONAL AND EDUCATIONAL IN NATURE AND REPRESENT THE SPEAKER S OWN VIEWS, ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT CONSIDER THESE MATERIALS OR DISCUSSIONS THEREABOUT TO BE LEGAL OR OTHER ADVICE. PROFESSIONAL ADVICE SHOULD BE OBTAINED BEFORE ATTEMPTING TO ADDRESS ANY LEGAL SITUATION OR PROBLEM. 2 1

2 Potential Claims Discrimination (sex, race, religion, color, national origin, age, disability, marital status, sexual orientation) Wage and Hour (unpaid wages, failure to pay overtime) 3 Potential Post-Termination Claims FMLA Retaliation Other (wrongful discharge, whistleblower, breach of contract, defamation) 4 2

3 The First Step The Attorney Threat Letter Anthony Smith Noble Employer, Inc Universe Drive Levittown, NY Dear Mr. Smith: Bicker, Back & Forth P.C. 111 Fifth Avenue, Suite 123 New York, New York John Green, your former Vice President of Risk Management, has retained this firm to prosecute his claims of race and gender discrimination and retaliation arising from, and relating to, his employment with Noble Employer, Inc. Specifically, Mr. Green has related facts which indicate that Noble Employer, Inc., through the action and inaction of its various agents, has violated numerous laws against discrimination and retaliation. While we have consulted with our client regarding his available options and avenues of redress against Noble Employer, Inc. and its agents, he has authorized us to contact you to engage in confidential settlement negotiations.[1] If you have any interest in resolving this matter in such a way, please contact me directly, or through directly, or through counsel. Please note that we will be commencing formal proceedings relating to this matter on or about January 10, 2007, unless we hear from you or a representative. Very truly yours, Ima Back, Esq. [1] Please note that this letter constitutes a notice of intent to sue and any and all documents, including , correspondence, relating to Mr. Green, and any potential claims he may have, should be preserved at once. EPLI HAVE YOU CONTACTED YOUR INSURANCE CARRIER? 6 3

4 Pre-Lawsuit Process Discrimination = NYSDHR or EEOC Wage & Hour/FMLA = DOL or NY DOL Other = Court (3 years under NYHRL) 7 Pre-Lawsuit Process EVERYTHING YOU SAY CAN AND WILL BE USED AGAINST YOU 8 4

5 The NYSDHR Process Complaint One Year After Alleged Discriminatory Action Response to Complaint-- Position Statement Be Truthful and Accurate Investigation Dismissal or Fact-Finding (2 Party) Conference 9 The NYSDHR Process Finding of No Reasonable Cause Dismissal (Exhaustion of Remedies Under the NYHRL) or Finding of Reasonable Cause Public Trial (Administrative Before ALJ) 10 5

6 The EEOC Process EEOC Deferral To NYSDHR If Cross Filed If No Cross-filing, Investigation By EEOC If Probable Cause Finding, EEOC Has Duty To Conciliate If No Probable Cause, 90 Day Notice of Right to Sue Letter 11 Anatomy of A Lawsuit Complaint Answer Discovery Motions Trial Burden of Proof 12 6

7 Preponderance of the Evidence vs Beyond a Reasonable Doubt 13 How are Most Discrimination Cases Lost The Employer s Explanation Just Doesn t Hold Water 14 7

8 Pretext Even with No Direct Evidence of Discrimination A jury can infer discrimination from an articulated legitimate business reason which is found to be untrue or Pretextual 15 Pretext Saying person lacks skills which are not necessary for job Saying person is poor performer when evaluations show otherwise Saying someone is not qualified even though according to the job posting he/she is qualified 16 8

9 Other Evidence of Pretext Inconsistent treatment Inconsistent enforcement of policy Failure to investigate jumping to conclusions Lack of Documentation 17 How are Most Discrimination Cases Won The employer can show that it treated the employee fairly and with patience. 18 9

10 What Do the Fact-Finders Look For Fair and consistent treatment Fair and consistent enforcement of policies and standards Job actions based on legitimate business reasons Adhere to company policy NYSDHR/EEOC Investigators Juries Judges 19 What Do the Fact-Finders Really Look For Documentation 20 10

11 What Do the Fact-Finders Really Look For Reasonable Notice of Performance Problems Reasonable and Fair Opportunity to Improve Adhere to company policy 21 Documents Used In Lawsuits Statements Investigation notes Personnel files Managers files Training records Employer policies s Other electronic records 22 11

12 What To Do When You Receive A Lawsuit Contact insurance company to determine if you are covered Contact attorney Collect all relevant documents Trigger anti-spoliation procedure 23 What Can You Do To Reduce Exposure Teach your managers/supervisors to document performance issues. Truthful but fair performance evaluations. Train employees in diversity/ harassment issues

13 What Can You Do To Reduce Exposure Conduct terminations properly. Accurate termination letters. Consider severance/release agreements. 25 Evaluating Your Case - Factors Relating To The Plaintiff/Employee Long or short term employment Positive or negative past employment history Position with Defendant Positive or negative employment record with Defendant Past Claims History Good communication skills Likeable Stability (family, local, etc.) Competent and experienced counsel 26 13

14 Evaluating Your Case - Factors Relating To The Defendant/Employer Public image Key witnesses available and cooperative Key witnesses credible (demeanor, track record, internally and externally consistent with known facts and documents, interest and bias) 27 Evaluating Your Case - Factors Relating To The Defendant/Employer Sound human resources policies and procedures EEO/Harassment Discipline Performance evaluations Complaints and grievances Anti-retaliation Adequate training and compliance programs Similar allegations and claims 28 14

15 Evaluating Your Case Merits of Claims Discharge or Retaliation Written notice of rule or specific performance standards (i.e. attendance) Written progressive discipline clearly identifying expectations and consequences Consistent application and enforcement Action consistent with written performance reviews Suspect timing or unreasonable delay in acting Alterations on documents 29 Evaluating Your Case Merits of Claims Discharge or Retaliation Mitigating factors (clean work record, long term employment, remorse, lack of training or instruction, etc.) Misconduct: Thorough and objective investigation Objective investigator Investigation into employee s explanation Credibility issues reasonably resolved Consistent and complete documentation Termination conducted professionally Unemployment hearing testimony and findings 30 15

16 Evaluating Your Case - Merits of Claims - Harassment Severity and duration of conduct Status of harasser(s) Corroboration by credible witnesses Employer knowledge (pervasiveness or complaint) History of recurrence 31 Evaluating Your Case - Merits of Claims - Harassment Employer action upon knowledge Prompt, objective and thorough investigation (credibility issues reasonably resolved) Serious discipline of harasser(s) Remediate and protect the victim Consistent and complete documentation 32 16

17 Evaluating Your Case - Damages Back pay Lost benefits (health, retirement, etc.) Emotional injury Treatment by a qualified practitioner Credible serious impact on normal life activities Pre-existing condition and alternative stressors Punitive damages Attorney fees Other damages Mitigation efforts and subsequent employment 33 Evaluating Your Case - Damages Defense Costs Attorneys fees Expenses Expert fees Uncooperative or active plaintiff s counsel 34 17

18 Evaluating Your Case - Legal Defenses Failure to exhaust Untimeliness After acquired evidence Other 35 Evaluating Your Case - Settlement Demands and Offers Probability of Obtaining Summary Judgment: Prima facie case Complexity of defense Disputed issues of fact and materiality Receptive forum Receptive judge/magistrate 36 18

19 Evaluating Your Case - Settlement Demands and Offers Other factors: Other potential claims Management time/disruption Adverse publicity Retention of key witnesses 37 Alternative Dispute Resolution Increasingly, employment disputes are resolved in mediation or arbitration rather than trial. This trend toward settlement in mediation has been encouraged by the EEOC and its mediation program

20 Alternative Dispute Resolution Pros and Cons of Mediation DOWNSIDE Paying money Mediators sometimes not neutral Decisions made without all of the facts UPSIDE Often resolves claim Often cheap resolution Avoid discovery of unpleasant facts Gain insights early May be quick, easy and cheaper than litigation 39 The EEOC Mediation Program From 1999 to 2003 over 52,400 mediations were held with 35,100 charges or 69% successfully resolved in an average of only 85 days

21 The EEOC Mediation Program EEOC offers mediation soon after a charge is filed and before any investigation by the agency is undertaken. EEOC evaluates each charge and refers to mediation those charges the EEOC deems have merit and would warrant further investigation. 41 Settling The Case: Tax Settlement Considerations Three categories of tax treatment: Taxable as wages and subject to federal income tax withholdings and FICA taxes (W-2). Taxable income subject to reporting, but not subject to withholding (1099). Not taxable, not reportable

22 Tax Settlement Considerations Taxable Income Wages (W-2) Back pay. Front pay. IRS and several courts say front pay is wages. Dismissal pay, severance pay, etc. are wages absent evidence that the parties are settling an actual dispute involving specific claims of personal injury. 43 Tax Settlement Considerations Taxable Income Payments for emotional distress, even if there are physical symptoms such as insomnia, headaches, stomach disorders. Not all courts agree. Amounts specifically designated as interest. Amounts allocated as liquidated damages -- other than back pay or front pay

23 Tax Settlement Considerations Tax Free Treatment Limited To: Damages (other than punitive damages) received on account of personal physical injuries or physical sickness. Damages paid for actual medical expenses continue to be tax-free, e.g., expenses for psychiatric treatment of emotional distress, etc. 45 Tax Settlement Considerations Attorney s Fees Amounts specifically designated as attorney s fees and costs are not wages. Form 1099 to Plaintiff s counsel s firm

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