Most mornings, I start the day by opening an email from Courthouse News Service, or CNS. The CNS "hot sheet" tells me who is suing whom in Santa Barbara, Ventura, San Luis Obispo, Santa Cruz, San Benito and Monterey Counties, listing daily case filings with a summary of each new lawsuit. (In case you are wondering, by the way, I don't read this for fun - the CNS hot sheet helps me monitor filings for existing clients and help other businesses I care about know whether they are being sued.) The hot sheet email doesn't make great reading, especially if you are an employer: an unscientific and highly personal review of the sheets tells me that as the economy has gotten worse, more and more employees are treating their employers (or former employers) as "deep pockets." Disgruntled employees are filing wage and hour lawsuits, discrimination claims (age, gender, and increasingly, sexuality), and alleging retaliation against any employer who tries to terminate their employment.
So, what does my unscientific, purely observational survey of recent employment lawsuits tell me?
First, high unemployment means that employees are less likely to turn away from a job they don't like. If they can't find another job, they are more likely to file a complaint with the Labor Commissioner, or hire an employment law attorney. The alternative - work someplace else - is no longer an alternative.
Second, lower incomes and problems with mortgages, credit card debt and loans mean that employees are more likely to look for "compensation" for workplace ills like discrimination or unpaid overtime. If you are in business, you are a target.
Third, if you have terminated an employee, they are going to have problems finding alternative employment. The answer to some is to file a lawsuit for unfair dismissal, retaliation, discrimination, unpaid overtime or failure to give meal breaks.
Depressing reading? Only if you don't have an employment risk management plan in place! The best time to defend against an employment lawsuit is before you get sued. Make sure you have clear workplace policies and procedures, consider an employee handbook, and keep good records. Before terminating an employee, think about consulting an employment law attorney to run through the potential risks to your business. More to come on the process of terminating employees, but for now, the message is simple - with employment lawsuits on the increase, prevention is better than cure when it comes to protecting your company.