Lawsuit Prevention for Employers

For employers, the uneven playing field just got steeper. 

Many employers are unaware that when companies lose work-related lawsuits, no matter how small the award, they often must pay all of the winner’s attorneys’ fees, in addition to their own.

• The California Supreme Court has recently ruled that unsuccessful employees are not only relieved of this obligation, they are now relieved of any responsibility for court costs as well.

• This is no minor matter, as this places the entire financial burden of lawsuits on the employer, while allowing employees to walk away unscathed from even groundless cases. Fees and costs in these cases often exceed $1 million, for each side.

• An award for fees and costs is in addition to the amount of the jury’s award.

Employer reliance on a “successful” defense is often unwarranted.

• Juries almost always consist of employees who are sympathetic to the claimant.

• This bias dynamic is entirely unique to employment law cases.
  • This explains why employers lose approximately 70 percent of wrongful termination cases tried before California juries.
  • In all other areas of law, success at trial is evenly divided between the parties.

Plaintiffs’ lawyers are celebrating the Supreme Court’s decision

• They contend it will remove the “chilling effect” that prevented many plaintiffs from filing lawsuits due to the fear that losing could require reimbursement of fees and costs.

• One plaintiffs’ lawyer stated that “[Employee] plaintiffs will no longer be discouraged from filing lawsuits against employers.”

• Another said, “This case breathes new life into the FEHA,” California’s primary workplace anti-discrimination law.

This should be of significant concern to employers, because it means more lawsuits are on the way.

What can be done? Employers can prevent at least 80 percent of lawsuits by taking seriously the powerful protections available under California law, including:

• Written policies and agreements prepared by legal experts in California employment law, to be certain all available legal protections are enforceable in court.

• Policies must comply with the same drafting rules as formal written contracts to be enforceable.

• This process must be completed before a lawsuit is filed.

Bottom Line: The protection offered by written employment policies is often the employer’s only protection from legal exposure in the millions. To ensure their legal enforceability, this function should be entrusted only to expert professionals who can back up their work in court.

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Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.

While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.

For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well. 

You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/