Many employers wonder what the right course of action is when an employee brings a claim or lawsuit against them for an alleged violation of a state or federal employment or labor law. Should you settle and get rid of the claim as soon as possible, even if the claim lacks merit? Or should you ride it out and take it all the way to trial? Every situation and claim or lawsuit is different. The facts are different, the companies are different, and certainly the financial resources are different.
There is no yes or no answer that fits 100% of scenarios, which is why it’s crucial to speak with a knowledgeable West Palm Beach employment and labor law attorney first. The team at Pincus & Currier, LLP helps small and medium-sized businesses with all their employment and labor law-related needs, including recommendations on whether or not an employer should settle a particular lawsuit.
Why Settling May Not Be Your Best Option
When any company is faced with a lawsuit, it’s almost instinctual to want to settle early on and keep it out of court. The usual reasons are to save money and to potentially “save face,” so the case doesn’t garner any publicity. However, going to trial with the right case could mean no pay out required to the employee.
According to recent data compiled, less than a tenth of the charges that the EEOC gave the green light to proceed with litigation on actually entered the court system. Of those, it seems a very small percentage wind up victorious for the plaintiff. In fact, only about one percent of employee lawsuits were successful in trial over an eight-year period, while employers won about 14% of the time.
Another reason you may want to stop for a minute before breaking out the company checkbook—settling may be seen as admitting some fault. This could backfire in the event of another lawsuit, or it could set a bad precedent. Another employee who brings a case may assume you’ll give them some money just to go away, even if the claim has no merit. If you have a reputation of holding out and doing a thorough investigation before trial, it may cause some of them to think twice about potentially trying to falsify a claim.
If you are inclined to settle, consider adding a confidentiality clause to the settlement agreement. Confidentiality clauses typically state that the plaintiff cannot disclose, either directly or indirectly, any details about the existence of or any terms of the agreement, except with his or her attorney, professional advisor, and/or spouse. If the plaintiff tells anyone, he or she could forfeit the settlement. Having an attorney draw up the settlement documents and the confidentiality clause is important because you want a strong contract that will hold up in court in the event the plaintiff breaches the agreement.
Contact a Florida Labor Law and Employment Law Attorney Today
If your company is facing a claim or lawsuit from an existing or former employee, speak to a knowledgeable West Palm Beach labor & employment attorney before deciding how best to proceed. Contact the skilled team at Pincus & Currier, LLP today to schedule an initial consultation.