No matter how diligent a business is about complying with employment laws, lawsuits can still happen. Facing a lawsuit can be a stressful and disruptive experience, but how an employer responds can significantly impact the outcome. For New York businesses, here’s a practical guide on what to do if your company finds itself facing legal action.
Stay Calm and Avoid Immediate Actions
The first step when facing a lawsuit is to remain calm and avoid taking hasty actions. This includes refraining from contacting the individual bringing the lawsuit directly, discussing the case with others, or making statements that could later be used against the business. Reacting emotionally could lead to mistakes that could complicate the case. Instead, focus on gathering information and preparing to respond professionally.
Consult an Employment Attorney Right Away
When an employer receives notice of a lawsuit, consulting with an employment attorney should be the next step. Employment law is complex, and New York has some of the country’s most employee-friendly regulations. An experienced employment attorney can provide valuable insight into the case, explain what to expect, and help develop a response strategy.
Choose an attorney familiar with New York employment laws and the specifics of your industry. The attorney will help assess the merits of the case, outline possible defenses, and ensure the company’s rights are protected throughout the process.
Notify Your Insurance Provider
Many businesses carry employment practices liability insurance (EPLI), which provides coverage for certain employment-related claims, such as discrimination, harassment, wrongful termination, and wage disputes. If your business has EPLI, notify your insurer immediately upon receiving notice of the lawsuit. Delaying this step could risk forfeiting coverage or benefits, leaving the business to bear all legal costs.
Gather and Maintain Thorough Documentation
Documentation is a vital component of any legal defense. Collect all relevant documents, records, and communication related to the case, such as:
- Employee files, including performance reviews, disciplinary actions, and termination notices
- Copies of the employee handbook and any company policies cited in the lawsuit
- Email communication between the plaintiff and company representatives
- Attendance records, pay stubs, and timekeeping records if the lawsuit involves wage disputes
It’s also essential to preserve electronic communications and avoid any document destruction, as this could lead to allegations of evidence tampering, which can severely damage the case. Your attorney can guide you on what to collect and how to keep it organized for easy access.
Conduct an Internal Review of the Allegations
Understanding the basis of the allegations is crucial for mounting a successful defense. Work with your employment lawyer to review the details of the complaint and assess whether there’s any merit to the claims. This internal investigation can involve speaking with supervisors, reviewing any witness statements, and assessing whether company policies were followed.
Limit Internal Discussions
While it may be tempting to discuss the lawsuit with other employees, keeping internal discussions to a minimum is strongly encouraged. Sharing too much information about the case can lead to misinformation, rumors, and even potential claims of retaliation if the individual who brought the lawsuit is still employed by the company. Avoid discussing the case at work, and instruct managers and supervisors to refrain from discussing the situation with others.
If there’s a need to communicate with employees about the case, work with your attorney to craft a carefully worded message that protects the company’s position without disclosing sensitive information.
Take Steps to Prevent Retaliation
Under New York law, retaliation against employees for filing complaints is illegal and can lead to additional legal action. Ensure that the party who brought the lawsuit and any other employees involved in the claim are treated fairly and consistently. Avoid any actions that could be construed as retaliatory, such as altering work hours, reducing pay, or reassigning duties.
It’s also essential to remind supervisors and managers of the company’s anti-retaliation policies and emphasize the importance of professionalism, even under these challenging circumstances.
Consider All Settlement Options
Many employment cases settle before going to trial, as settlement can often save time, reduce legal expenses, and prevent negative publicity. If your attorney believes settlement may be a viable option, explore the potential terms with them. Settling a lawsuit doesn’t mean admitting wrongdoing; it’s often a strategic decision to resolve a case quickly and move forward.
During settlement negotiations, be open to creative solutions that could address the plaintiff’s concerns without a full trial. A well-negotiated settlement can allow both parties to reach a mutually acceptable resolution while protecting the company’s reputation.
Prepare for Mediation or Trial
If a settlement isn’t reached, the next steps may involve mediation or preparing for trial. Mediation is an alternative dispute resolution process where a neutral third party helps both sides negotiate a solution. Mediation can be less adversarial and may result in a quicker resolution.
If the case proceeds to trial, your attorney will guide you through the preparation process. This includes reviewing all collected evidence, preparing witnesses, and rehearsing testimony if you or other employees are called to the stand. Trials can be lengthy, costly, and public, so maintaining open communication with your attorney is essential to ensure you are prepared for each stage.
Consider Implementing Policy Changes
Regardless of the lawsuit’s outcome, use it as an opportunity to evaluate and improve company policies. If the lawsuit highlighted areas of vulnerability, such as inadequate harassment prevention training, outdated policies, or insufficient recordkeeping, take corrective action. Updating policies, enhancing training programs, and ensuring compliance with New York’s employment laws can help prevent future issues.
Focus on Rebuilding Trust and Morale
A lawsuit can impact employee morale, especially if the case is contentious or becomes widely known. That said, after the resolution of the case, employers should begin to focus on restoring trust with employees by reaffirming the company’s commitment to fairness, respect, and compliance with all employment laws.
Consider holding a meeting to address employee concerns, update them on any policy changes, and invite their input on creating a supportive work environment. Reassuring your team that the company is committed to their well-being can help restore morale and strengthen the company culture moving forward.
Need an Employer Defense Attorney in New York? We Can Help
Facing a lawsuit is challenging for any business, but how employers respond can shape the outcome and prevent future issues. By consulting a qualified employer defense attorney, gathering documentation, exploring settlement options, and implementing necessary changes, New York employers can manage the legal process effectively and protect the organization. Contact us today to discuss the specifics of your case.
