Retaliation Lawsuits Gather Steam, Crushing Some Employers

by Nils Wright, Risk Media Solutions

Along with extended periods of unemployment in recent years has come a major surge in employee litigation and claims of retaliation: employees alleging their firing resulted from complaining about a company wrongdoing or workplace condition.

In this risky environment, employers can protect themselves against retaliation claims by making sure they run a tight ship and have the necessary procedures in place to ensure that they respond quickly and fairly when an employee complains about a workplace matter.

And they also need to have in place a employment practices liability insurance, which can help defray the costs of any potential lawsuits.

But having in place an insurance policy is not enough. The best strategy is to try to avoid discrimination and retaliation lawsuits altogether.

If you fire complainers for making noise over a problem you don’t want to deal with, you could be hit with a retaliation lawsuit. And while federal laws such Sarbanes-Oxley and Dodd-Frank protect whistleblowers in specific industries, employment lawyers are now seeing workers in all types of industries claiming whistleblower status – and winning big jury awards.

A firefighter in New Jersey won a $3.5 million verdict after convincing a jury that he was passed over for a promotion to lieutenant because he had complained about being ordered to enter a hospital with low air levels and clean up hazardous material.

Fueling the increased filing of retaliation claims, say lawyers, is the extended time that people are without a job these days. When they have more free time on their hands, and think they have a legitimate retaliation case against the company that fired them, they’re more likely to take legal action.

Moreover, claiming whistleblower status is a legal strategy by plaintiffs, lawyers say, to win jury sympathy by cultivating the image of a crusader for workplace justice.

And the strategy is working. Unlike discrimination claims, in which jurors may not have had personal experience to draw from, almost everyone has experienced retaliation of some kind.

In addition, if a lot of authoritarians are picked for a jury hearing a retaliation claim, the job is made easier, say plaintiff lawyers. Authoritarians typically don’t tolerate rule-breaking. They’re more likely to get incensed over case allegations and rule in favor of the plaintiff.

Retaliation claims have fewer legal restrictions than other claims, like age discrimination, which only covers workers over 40, and sexual harassment, which requires severe or pervasive conduct.

But state laws vary in their support of employees claiming a retaliation firing.

In New York, it helps employers in whistleblower cases if they can produce a handbook or written policy stating that employees are encouraged to complain if they see something wrong and that the employer will not retaliate for complaints.

In Virginia, there is no statute for whistleblower retaliation, so claims by employees there are next to impossible to win.

In California, however, laws are employee-friendly. Employee attorneys here rely upon a state labor statute and common-law claims.

Claims in California can come under a catch-all retaliation statute, and can be combined with a common-law claim for wrongful termination in violation of public policy. Punitive damages are also an option.
Employer should run their shops within clearly stated rules and regulations, investigate employee problems when they come up and make any necessary corrective changes. And finally, keep records of it all.

And finally, the employer needs to have in place a proper EPLI policy, which protects the company against damages for events relating to their workforce, including but not limited to: wrongful termination, harassment, discrimination, defamation and unfair hiring/firing practices. Policies also provide defense costs associated with responding to employment-related allegations and lawsuits.

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