Employee lawsuits have been a nuisance for a long time. Lawsuits for discrimination, retaliation, and harassment are a common enough risk that insurers sell policies against to protect companies. More recent, however, is the trend of the alleged victim suing the business AND the people claimed to be responsible. Here’s what bosses need to know.
- I practice law in Oregon, and Oregon’s law is similar to the law in many states. It allows lawsuits against co-workers or bosses who “aid, abet, incite, compel or coerce” the unlawful employment practice. So, the simple lesson for management is to take seriously rumors and complaints of harassment or other discrimination. Make sure the company follows its procedures to investigate and address any issues as they arise. Document that you are not the “bad guy.”
- There are many dumb attorneys who represent employees. Some attorneys will sue their client’s former bosses or co-workers without giving the matter much thought. Somehow, they think that pissing off bosses and adding to plaintiff’s burden of proof will serve their plaintiff. Against this idiocy, there is not much you can do to protect yourself.
- A good reason to sue a boss plus the company is when the company is a closely held corporation that might simply close or go bankrupt to avoid liability. If the plaintiff’s attorney truly fears that the company is poor, then, perhaps, you can reason with the attorney. Point out that the cost of defense will drain any funds, and everyone is better off trying to settle fast.
- Another reason to sue an employee plus the company is to avoid federal court jurisdiction. “Diversity jurisdiction” gives the federal court power over cases when all defendants are citizens of states different from plaintiff’s state of citizenship. If the company is from out of state, some attorneys sue a boss or coworker who is a citizen of the same state as the plaintiff to keep the case in state court. I suppose a boss can avoid this reason for being sued either by being a citizen of (a) the same state as the employer or (b) different state from the plaintiff / rest of the workforce.
- If the employee’s attorney sues both the employer and the boss, then make the attorney pay for that choice. Fire back with two guns instead of one. File two sets of motions. Hire an extra attorney to ask those two zinger questions that the first attorney did not think to ask. If the case has no (or little) merit, then earn a reputation for being tough in court.
With all the costs and liabilities of being an employer, I sometimes wonder why anyone takes the risk. There is no way to avoid lawsuits. The best practice is to (a) make sure employees know how to voice their complaints of mistreatment and (b) address their complaints immediately and appropriately.