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Shaky job market leads to rise in lawsuits
By MATT CHANDLER
mchandler@bizjournals.com | 716-541-1654
When the going gets tough ... people sue. At least that appears to be a trend in the area of employment-discrimination lawsuits.
As the economy struggles to recover from the recession, employers have been forced to lay off workers and, in some cases, shutter their doors entirely. Now more workers are fighting back.
Area labor and employment attorneys say they're seeing an increase in the number of discrimination lawsuits being filed. The suits fall under two general categories: employees who have been let go and, unable to find work, file a discrimination claim; and employees who fear they are going to be let go and file a lawsuit as a preventive measure to keep their job.
Kimberly Georger of Rupp Baase Pfalzgraf Cunningham and Coppola says the rise in discrimination claims can be traced to 2007 at the height of the economic meltdown.
"The EEOC reported a jump from 2007 to 2008 of more than 13,000 discrimination claims filed with their agency," Georger says. "And that doesn't factor in any complaints filed with any state agencies, including the New York State Division of Human Rights."
She attributes the increase to people feeling trapped, without many options.
"What we've been seeing is that employees who are frustrated with their employer, frustrated with the economy, when they get laid off or they get demoted, they look for a reason why this is happening," Georger says. "And they turn invariably to the discrimination laws."
The irony, she adds, is that a costly lawsuit by someone who was laid off may lead to additional layoffs.
"Now the employer, who has had to lay off the employee because of the bad economy, has to expend all of this money in legal fees to fight a lawsuit. It is a horrible catch-22," she says. "The more people you lay off, the more problems you have, the more money you have to spend and the more people you can't hire or potentially have to lay off."
Asked whether workers might use the laws to fabricate a claim out of fear of losing their job, Georger says, "The laws are there to protect people with legitimate complaints. It's not there to use as some sort of preventative measure when there is no unlawful discrimination."
While that may not be the intent of the law, attorney Ann Evanko says it absolutely happens. She is president of Hurwitz and Fine PC and represents employers in cases such as these. Like Georger, she has seen a rise in in recent years.
"Employers are getting frustrated because they think they are doing everything right, and yet when it comes time to make an employment decision that they believe is in the best interest of the company, there is this push back from the employees," she says.
"Employees certainly know their rights and they know the buzzwords, and they immediately challenge the employer, I believe, either to preserve their job or to secure a favorable compensation arrangement to keep them from suing."
At the very least, Evanko says, filing a suit may buy time for an employee who is on the bubble.
"If you plan to let somebody go who has already made a protected complaint, they (the employee) at least know that's going to put the brakes on the employer," she says. "The employer is now going to have to look very closely at whether or not they have a non-discriminatory reason in order to pursue that termination or whether they should hold off on it."
Though the number of claims is on the rise, Kevin Wicka, partner in the Buffalo law firm Brown and Tarantino, says he turns away the majority of calls he receives from people looking to pursue a discrimination claim against an employer or former employer.
"These cases are very difficult to prove. And in many cases, people may think they have cause but they just don't understand the laws and rules. And once we hear the background of their story, they just don't have solid grounds to sue," he says.
Wicka estimates he rejects more than 90 percent of the calls, saying, "Just because I am getting more calls doesn't mean I am going to file more claims. We still have to use a large degree of scrutiny in selecting cases."
He cites New York's status as an "at will" employment state. Outside of the protected classes, employers do not have to show cause for termination, and that's one reason why it is difficult for employees to win discrimination claims.
"There is a misconception people have that they think there has to be cause for them to be fired," he says. "Now, I've heard some management-side lawyers say the at will doctrine exists in name only, because generally the employer is going to have to come up with some sort of reason to justify what they did. But ultimately, the burden is on the employee who has brought the claim to prove unlawful intent on the part of the employer."
With employers under increasing pressure to defend themselves against discrimination claims related to age, gender, race and sexual harassment, what can they do to protect themselves?
Robert Weissflach, a partner in the Buffalo office of Harter Secrest and Emery, offers some advice.
"If a company's economic performance is poor or they are forecasting tough times, they may be more willing to get rid of a case quickly," he says. "But I can tell you from my experience in recent years, while it is definitely a consideration, it isn't resulting in more settlements."
Though it may be seen as a means of protecting the company from costly litigation and potential PR issues, do employers view a settlement as a sign to other employees that the company is an easy mark?
"That is an issue often raised by our clients," he says. "But in my almost 20 years of doing this, I've never seen that fear come to fruition."
In terms of guarding against discrimination lawsuits, Weissflach advises clients to make sure their internal policies and procedures are updated and consistently applied.
"Part of doing that is not letting multiple people operate in a vacuum," he says. "There has to be some consistency among the decision makers, and that goes a long way toward avoiding these types of claims."
His second piece of advice to employers is this: Document, document, document.
"If you can adequately show through documentation of different actions that you were acting in a non-discriminatory manner, that will hopefully avoid a claim coming up," he says. "But if one is filed, you will at least have the raw materials for a defense."


