Evaluation Of An Employment Case: Settlement vs. Trial.

We are all aware of the publicity that surrounds large verdicts in employment discrimination, harassment and wrongful termination cases. Many employers find themselves asking, what are the things that should be considered in evaluating a case and determining whether a case should be taken to trial? Here are some factors that should always be considered:

1. EXPOSURE

What are the damages that the plaintiff might recover if she wins? Possible damages include loss of earnings from termination through trial, future loss of earnings, emotional distress, physical injury, and general damages for discrimination. In evaluating loss of earnings the plaintiff's entire compensation package must be considered, including retirement and insurance packages, future earnings are dependent upon whether the plaintiff has a likelihood of becoming employed. In age discrimination cases this can be a significant problem.

2. ATTORNEY FEES

A plaintiff who prevails on a claim brought under a statute such as FEHA of Title VII is almost always awarded attorneys fees. This is often the biggest risk that the employer must consider. Courts have awarded fees to plaintiff's counsel at rates exceeding $400 an hour and fee awards on cases that go through trial can easily reach $300,00-$400,000. Even if a plaintiff receives a nominal damages courts can and will award large fee awards. Even on cases only alleging breach of contract there will be attorneys fees exposure if there is a clause in the contract providing for same.

3. PLAINTIFF AS A WITNESS

How will the jury view the plaintiff? Is she likeable or will she come across as a whiner?Is she credible or is there evidence that will impeach her at trial?

4. DEFENDANT'S DECISION MAKER

The person who made the termination decision is usually the most critical defense witness. How will a jury react to him? Are his reasons for termination credible or is he engaging in after the fact justification that make his reason for termination appear to be pre-textual?

5. COMPARATIVE EVIDENCE

Was the plaintiff treated similarly to other employees or is there a problem in comparing the way this plaintiff was treated with the way other employees were treated who engaged in similar or even less severe conduct and were not terminated. Statistical breakdowns of the workforce can be significant.

6. PLAINTIFF'S PERFORMANCE HISTORY

Did the plaintiff receive a raise along with a outstanding performance review just prior to termination? Was there progressive discipline? How long was the plaintiff employed?

7. FAIRNESS

Does the overall story that the defendant will present at trial give the jury the impression that the plaintiff was treated fairly or will the jury feel that they would not like to have been treated the way the plaintiff was? Was there an investigation? Did the plaintiff have a chance to give her side of the story before the termination decision was made?

8. PUNITIVE DAMAGES

Under most causes of action in employment case (except for contract claims) the plaintiff can recover punitive damages against a private employer and in cases of harassment and retaliation against individual supervisory employees. These awards can be huge. An employer should always assume that if a jury finds it engaged in discriminatory conduct or violated public policy that punitive damages are likely to follow.

9. THE DEFENDANT'S IMAGE

What is the employer's image and reputation in the community? Is the defendant a well respected institution

(i.e. a university) or is it in an industry that the public distrusts (i.e. HMO).

10. PRECEDENT

An employer must be aware that if it acquires a reputation of settling cases with no merit that it will be perceived as an easy target by disgruntled employees. If a case is truly without merit the employer should consider sending a message that it will fight baseless claims.

Lewis Brisbois Bisgaard & Smith LLP has prepared this article for informational purposes only and it is not legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship. Readers should not act upon this information without seeking professional counsel. If you want legal advice, you must consult a lawyer.

[c] Lewis Brisbois Bisgaard & Smith LLP 2002

Alan Zuckerman Esq

Lewis Brisbois Bisgaard & Smith LLP

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