Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Employers settle suits to limit legal costs

Reprints

Most wage-and-hour litigation is settled, many legal experts say.

Michael C. Schmidt, a member of law firm Cozen O'Connor P.C. in New York, said such suits tend to get resolved because “they're so costly” and because of the potential for significant legal costs.

Gerald L. Maatman Jr., a partner with law firm Seyfarth Shaw L.L.P. in Chicago, said it is important for employers to look at the facts right away, and determine what is at issue and whether the claim is viable. “Evaluate your exposure on an early basis; and if there is liability or problematic facts, then engage in a resolution exit strategy,” he said.

Brian T. McMillan, a shareholder with Littler Mendelson P.C. in San Jose, Calif., said employers sometimes “become vulnerable” because they have failed to comply with highly technical rules.

As a result, “it's often in the employer's interest to pursue a settlement, especially where the facts are simply not in their favor,” Mr. McMillan said.

Keeping such litigation from becoming a class action is an important consideration, Mr. Maatman said.

“If the case can be fractured and only involve a few people, it's generally easy to dispose of it quickly at a reasonable cost, as opposed to the exposure created” when there is a class of employees and “it turns into a very, very large problem,” Mr. Maatman said. “So getting your arms around the class aspects of the case early” is important, he said.

David L. Barron, a member of Epstein Becker & Green P.C. in Houston, said class certification is “where the fight is, oftentimes.”

“The employer is more than happy to resolve the individual employee's claim, but dealing with a potential class action is another matter,” he said.

Martha J. Zackin, of counsel at Boston-based law firm Mintz, Levin, Cohn, Ferris, Glovsky & Popeo P.C., said standing up for principles is “great, but they cost you, and you need to pick and choose what principles you want to pay to support.”

But if an employer is considering settling a wage-and-hour dispute, there's another question to ask: Is it “going to spawn more cases of a similar nature?” said Marc E. Bernstein, of counsel at Paul, Hastings, Janofsky & Walker L.L.P. in New York.

Using an experienced attorney also is important, experts say.

Ms. Zackin said in a case she is handling, the company initially used its regular attorney to handle a wage-and-hour case, which “got them in a lot more trouble than they needed to be in.”

“You've got to be willing to fight hard” to defend the company and take depositions of lots of employees, said Lawrence S. McGoldrick, of counsel at Fisher & Phillips L.L.P. in Atlanta.

“Make the other side work and also test their evidence.” If an employee claims he put in 50 hours a week, for instance, and the time record says it was only 40 or 42, question what the worker did during the unaccounted-for time, Mr. McGoldrick said.