Volume 19, Number 7
October/November 2002

Employment Law

By Ellen Buckley

The best way to protect yourself in an employment law case is by being sure you understand the substantive law and time limits. The next step is screening cases properly. Unfortunately, given at-will employment, many individuals who have been fired or otherwise treated unfairly by an employer have no legal recourse. Basic considerations in screening such cases include the following questions:

o If the case involves discrimination, did the former employee receive a right to sue letter from the Equal Employment Opportunity Commission (EEOC) or your state antidiscrimination agency? A lawsuit must be filed within 90 days of receipt of the right to sue letter. If he is calling you only a month before the deadline, you may not have time to investigate fully.

o What claims do the documents support? Review the client's employee manuals, disciplinary warnings, performance reviews, termination letters, EEOC documents, unemployment paperwork, etc. Do the documents suggest breach of contract or other state law claims?

o Who is the employer? Possible causes of action, administrative exhaustion procedures, and remedies vary for different types of employers. Many federal employment statutes require a threshold number of employees before the employer is considered a covered entity; if the federal statutes do not apply, your state statute may have a lower threshold. The number of employees also determines the amount of compensatory and punitive damages under the federal civil rights statutes.

o Did the potential client quit? If so, can you make out a constructive discharge case? Did the individual sign a release in exchange for a severance package? Even this may not void all claims. Was the person fired? If he or she started a higher-paying job the next day, back pay will not apply and getting compensatory damages could be more difficult.

o Did your potential client falsify resume or application information or take company property, including documents? Under the after-acquired evidence doctrine, if the employer discovers such fraud or misconduct after terminating the employee for a different reason, damages may be totally cut off or stopped from the time the employer discovers the breach.

o Has the employer made an unconditional offer of reinstatement? This could also cut off damages. Explore how your client feels about possible reinstatement-often, the relationship has been too damaged for this to be viable.

o How realistic is the individual about available damages? Be sure to explain that damages are capped under civil rights statutes and that a million-dollar windfall will not be forthcoming.

Investigation/Settlement Issues
If it appears the client may have a claim, and if time permits, consider first entering into a fee agreement to investigate potential claims and attempt a settlement. If settlement does not occur, you and the client can decide at that time whether to enter into a litigation fee agreement. This approach is less overwhelming for the client and allows you time to assess the case and the client more fully before committing to litigation.
Before contacting potential witnesses, thoroughly research your jurisdiction's rules, ethics opinions, and case law on contacting represented persons. Some jurisdictions consider all former employees off limits; others say only those who can bind the company are. Rules regarding present employees may be different from those for former employees, and violating this rule could expose you to severe sanctions.
If you do settle the case, consider how damages are allocated. Although all nonphysical-injury damages are taxable as income, social security and other employment taxes should be withheld only from back pay, not from compensatory damages the employer may pay.

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