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Small Businesses Have Power to Fight Employee Lawsuits

In the course of our many years as business lawyers, we have represented clients from both sides of the aisle in employment disputes.Having this kind of unique perspective is of great benefit to those who trust us to handle their cases. We’re intimately familiar with negotiation tactics and bottom lines for both employers and embattled employees.

One thing we’ve noted in all these years is that when it comes to companies, especially smaller firms, there seems to be a tendency to simply settle an employment case rather than have it played out in a courtroom. Some simply view it as the cost of doing business, regardless of whether they’ve done anything wrong.

But it’s important to understand when this might be a mistake.

First, it bears mention that consulting with an experienced attorney at the outset of your business formation – and then periodically each year – may help you avoid many of the litigation catalysts that may arise in the first place.

In addition to that, your attorney should be involved in the process from the very moment it comes to your attention. In some cases, business are blindsided. Other times, there may have been some significant foreshadowing. When you can, get your attorney involved early.

The other thing to determine is whether there was in fact any wrongdoing.
You don’t have to necessarily break the law to get sued. However, if you are being sued, it’s a good idea to know – and to be able to prove – that you have done the right thing. In cases where there may have been misconduct – or at the very least the strong appearance of such – it may be worth engaging in a discussion over a settlement agreement. But that’s not a conclusion you should reach hastily. You should be apprised of all your options and the potential risks of each.

You may also want to consider out how much you can afford to pour into the case, the reputation of the plaintiff and the potential distraction of litigation.

Some reasons you might consider fighting it out:

  • The case is frivolous. You might need to do a fair amount of research and investigation to even determine whether that is the case, but if the case is frivolous, a settlement shouldn’t be your first chose.
  • Doing so would prove a point. Employees are well aware that many companies would rather settle. Fighting a case through to the end might send a powerful message that you are not willing to simply pay up on every claim. It may be a good deterrent for such cases in the future.
  • There is a fair amount of bad press. These situations must be handled delicately – and your attorney is usually the best person to speak to the media on your behalf. But settling in some cases could make the wrong impression, with the public presuming that you’re wrong. Even if the only reason you’re doing it is to be able to move on, the media might not see it that way.

To be sure, the decision of whether to “fight or flight” is not one you should take lightly. You should never assume that you have been pigeonholed into a single option.

The Law Offices of Ira S. Newman provides business litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.

Additional Resources:
Settling Is Not the Only Way to Resolve an Employee Lawsuit, Feb. 20, 2013, By Adriana Gardella, The New York Times
More Blog Entries:
New York Business Start-Ups Should Invest in Legal Advice, April 13, 2013, Great Neck Business Lawyer Blog