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The cost of doing business includes the risk of getting sued by a former employee, whether it be for wrongful termination, discrimination, breach of contract, or unpaid wages, and employers must be prepared.<\/p>\n\n\n\n
An employer may first become aware of a lawsuit filed by a former employee when the company receives a demand letter, which is typically from the former employee\u2019s attorney and asserts legal claims that it believes the former employee has against the company and outlines certain demands that the former employee has before they actually proceed to filing a lawsuit. Or, a former employee may decide to go straight to litigation, and the company may therefore be served with a formal legal complaint. In either case, employers must ensure that they do not delay their response.<\/p>\n\n\n\n
First and foremost, legal counsel should be contacted as soon as possible to discuss what immediate action is required and to ensure that no key deadlines are missed. For instance, demand letters often indicate a timeline in which they are seeking a response, and if no response is provided, then the former employee will file a formal lawsuit. In this case, the employer who fails to respond timely misses the opportunity to negotiate a settlement with the former employee and therefore faces the risk of incurring expensive litigation costs that may have been avoided. Formal lawsuits filed, regardless of the court, operate on strict timelines. For examples, employers who are served with a lawsuit filed by a former employee in a United States federal court must file a response to the complaint within 21 days. If this deadline is missed, there may be a judgment against the company for failure to respond timely.<\/p>\n\n\n\n
Other immediate action that will likely be required of the employer is a review of any relevant insurance policies, agreements that the former employee entered into with the company, and document retention. For instance, many businesses carry insurance policies for former employee claims, such as a employment practices liability insurance (EPLI) coverage that can provide payment or reimbursement of legal fees, judgments and settlements. It is imperative that employers contact their insurance broker or carriers immediately to ensure they are aware and knowledgeable of their coverage ranging from which attorneys can represent the business, what claims are covered, what the deductibles are and the coverage levels.<\/p>\n\n\n\n
Employers should also check all agreements, specifically, any arbitration agreements, that the former employee signed with the company that requires employment claims to be handled through arbitration instead of through the court system. Arbitration differs from litigation in significant respects, so it is imperative to determine whether the dispute should be arbitrated. Employers should ensure that all agreements are forwarded to their legal counsel for review and to discuss the legal implications and next steps to be taken. Keep in mind that sometimes, arbitration agreements, or agreements that have arbitration clause, are signed as part of employee\u2019s onboarding paperwork. <\/p>\n\n\n\n
Employers must also ensure that they and their organization have an obligation to preserve all evidence, whether physical or electronic (including evidence on messaging apps like Zoom, Teams, Slack, etc.) and that they do not delete any evidence that may be relevant to a former employee\u2019s claim. This obligation exists if the business has received a demand letter or has been served with a formal complaint. The obligation to preserve evidence includes taking care not to wipe out an ex-employee\u2019s returned company property, such as their laptop and mobile phone, and employers may need to immediately suspend automatic document destruction or deletion procedures to ensure that any potentially responsive documents are not deleted. Employers must consider all places where relevant documents may reside, including with particular people and on any relevant company systems. Contacting legal counsel immediately will allow a business to develop a plan for document preservation.<\/p>\n\n\n\n
Finally, to prepare for initial conversations with attorneys and insurance carriers, employers should ensure that they have compiled the former employee\u2019s personnel file, including the employee\u2019s offer letter, job description, payroll records, any disciplinary records, performance evaluations and supporting documentation, and any agreements signed by the employee. Employers should also have their employee handbook that was in effect during the former employee\u2019s employment period readily accessible as well as any other relevant policies or procedures. Employers should also assess who within the company have information relating to the allegations, whether it be the former employee\u2019s supervisor or any other decision-makers that may have been involved in any adverse employment action alleged by the former employee.<\/p>\n\n\n\n
Getting sued by a former employee can be stressful, but legal counsel is always there to assist you through the process. If you have any questions about the subject of this article and its implications for your business, please contact your Forework HR representative.<\/p>\n","protected":false},"excerpt":{"rendered":"
The cost of doing business includes the risk of getting sued by a former employee, whether it be for wrongful termination, discrimination, breach of contract, or unpaid wages, and employers must be prepared. An employer may first become aware of a lawsuit filed by a former employee when the company receives a demand letter, which …<\/p>\n","protected":false},"author":1,"featured_media":2348,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","content-type":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2347","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment-articles"],"yoast_head":"\n