Submit a Case Find a Neutral

As the Economy Stumbles, Employment Discrimination Claims Climb

As the Economy Stumbles, Employment Discrimination Claims Climb

Source: Law Journal Newsletters
Date: December 2008

Barbara A. Reeves, Esq., CEDS
By Barbara Reeves Neal Nationally, we are seeing a surge in em- ployment discrimination claims, includ- ing age, gender, pregnancy and disability claims. The U.S. Equal Employment Op- portunity Commission (EEOC) saw the highest increase in discrimination charge filings last fiscal year, the largest annual increase (9%) since the early 1990s. After several years of falling and/or nearly flat year-to-year comparisons, filings jumped from 75,768 in fiscal year 2006 to 82,792 in fiscal year 2007. According to the EEOC, nearly all major charge categories showed significant percentage increases from the prior year — a rare occurrence. Prospects for improvement in these numbers are dim. In early September 2008, the government released figures showing that the American economy lost 84,000 private non-farm jobs in August, the eighth straight month of job losses. The unemployment rate jumped to 6.1% in August, the highest in nearly five years. Both figures were worse than economists had forecast. Even employers with carefully struc- tured HR policies in place are find - ing themselves on the receiving end of more discrimination claims in this environment. Employers are finding it necessary to cut costs and jobs. Job cuts and the elimination or reduction of rais- es make for unhappy employees, and unhappy employees are more likely to consider their legal options in a chal- lenged economy than in times of eco- nomic strength. A C l o s e r l o o k A t t h e P r o b l e m How can an employer avoid becom- ing another defendant in this surge in employment discrimination claims? To understand how to deal with this prob- lem, employers first need to analyze the underlying factors that have contributed to this increase in employment discrimi- nation claims. Employees are unhappy, that much is clear. Tolstoy’s famous observation about families (“All happy families resemble one another, each unhappy family is unhappy in its own way”) applies to employees: The unhap- py older employee is unhappy for dif- ferent reasons and responds differently than the unhappy new entrant into the workplace or the unhappy middle man- ager who has been passed over for pro- motion repeatedly. For example, the falling stock market has caused many older employees to defer retirement plans in light of their shrunken 401K plans. At the same time, employers, worrying that an older work force means a more expensive work force (higher salaries and wages, higher health care costs, more frequent injuries and ill- ness) may be, consciously or not, looking for ways to speed their older (and more highly compensated) employees toward earlier retirement. At the other end of the age spectrum, complaints are on the rise from new em- ployees just entering the market. A Los Angeles employment attorney noted that the younger generation of employees ex- pects to be treated a certain way. They may not accept criticism or poor evalua- tions and may lack the patience to work toward improving their performance. The attorney sees an increase in lawsuits that seem to arise out of minor slights or in- sults, but which are clearly viewed as a major offense by the employee. Are these young employees too easily offended or is the workplace really becoming a more hostile place? l ooking f or g oldmines Across the board, employees who are concerned about shrinking pay checks and disappearing jobs tend to look for a goldmine in their lawsuits. With no signs of an early economic turnaround in sight, employers can expect that the surge in employment claims will continue. Unless you have a staff of full-time psychiatrists monitoring your employees for levels of and reasons for dissatisfaction, employ- ers are not likely to be able to identify potential discrimination claims before they surface. Assuming that they have already implemented the careful hiring and disciplinary practices recommended by their HR specialists and employment lawyers, what else can they do to pro- tect themselves from becoming a target of these expensive lawsuits? Wh At to d o One effective option is to open up the lines of communication as early as pos- sible with unhappy employees in order to identify the root cause of the problem and deal with it before it gets out of hand. Of course, the company should want to attack the problem before the relationship deteriorates and costly litigation ensues. An even bigger issue, however, may be dis- couraging ‘copycats’ among fired employ - ees who may not have legitimate claims, but think they have nothing to lose by fil - ing a discrimination claim. This is where a mediator is invaluable. Establishing a process that will allow a truly neutral mediator to meet with the As the Economy Stumbles, Employment Discrimination Claims Climb Volume 16, Number 8 • December 2008 Employment Law Strategist ® Barbara Reeves Neal is a full time me- diator and arbitrator with JAMS, the Res- olution Experts, in Los Angeles. She can be contacted at breeves@jamsadr.com, 213-620-1133 or 626-449-5809.parties very early on, to identify the root of the problem and to keep the proceed- ings as private as possible, cannot only save the costs of litigation, but can save reputations, relationships and emotional well-being. Structuring an Internal Resolution Process Internal resolution processes, includ- ing mediation and non-binding inter- nal arbitration, provide a forum for the employee to have his or her complaints heard without the need to go to court. The first requirement is a workable in - ternal ADR structure that has the respect of employees and the support of senior management. The key to success is hav- ing the right skilled professional media- tor to handle the most difficult cases. Develop an informal and progres- • sive internal grievance procedure. An employee who is having a prob- lem in the workplace wants to be lis- tened to, to be treated with respect and to find a solution. An employer mostly wants management to deter- mine if there is a problem, and how it can be fixed or overcome. Make it easy for an employee to raise a complaint and have a full discussion with the relevant supervisor and/ manager, with a trained HR pro- fessional or independent mediator involved to keep the process con- structive and under control. Provide for mediation or neutral • evaluation if internal resolution fails. A skilled mediator can keep the parties talking until they either find common ground for resolv - ing their dispute or at least fully understand each others’ position even if they are not yet ready to come to a settlement. Neutral eval- uation is an increasingly popular form of ADR in which the parties present their positions to a neutral who then provides them with an evaluation of the strengths and weaknesses of their positions. This is done in the presence of both parties by a neutral that has legal expertise in the type of matter in dispute. After hearing and consid- ering the neutral’s evaluation, the parties are in a better position to attempt to reach settlement them- selves or with the guidance of the neutral serving as mediator. Avoid the urge to conduct a con- • fidential adversarial investigation. So many employee complaints that could have been resolved by care- ful, considerate handling harden into litigation after a heavy-handed investigation is launched. The com- plaining employee feels compelled to put forward his or her strongest complaints and arguments, lining up fellow employees as witnesses and hardening everyone’s position. The accused supervisor feels just that: accused, and becomes defen- sive and bitter. Once an investiga- tor has blazed his way through the company, people become wedded to their adversarial positions and mediation and conciliation become impossible. If you must conduct an investigation, keep the concerned parties abreast of what is happen- ing. Too often, when the internal in- vestigation gets started, the people who are most concerned are cut off from communication. This leads to employee dissatisfaction, and sur- prise at the ultimate result — and that leads to litigation. If you decide to provide an arbitra- • tion option, pay careful attention to protect the employee’s rights. Specify an ADR provider that has a deep roster of experienced and trained mediators and arbitrators and has a set of clear employment arbitration rules that will withstand judicial scrutiny for procedural and substantive fairness. (See JAMS Employment Arbitration Rules and Procedures, www.jamsadr.com/ rules/employment-guide.asp.) Em- ployment arbitration must protect the employee from fees that he would not be paying in court, and must provide for the same rem- edies as available in court, includ- ing, in some jurisdictions, the class action option. Implement these changes carefully • and in accordance with relevant em- ployment and benefits law. An em - ployer cannot unilaterally change the terms of the employment rela- tionship by adding mandatory me- diation or arbitration requirements. Changes to plans and employment terms must be handled in accor- dance with appropriate notice and consideration. Communicate, communicate, com- • municate! Talk with all employees; the ones being adversely affected by changes; the ones known to have issues; talk with managers and supervisors about talking with employees. If there are sensitive is- sues, bring in a professional media- tor to talk with the people involved and to provide the employer and employee with a unbiased and ob- jective evaluation of the situation. Con Clusion There are no guarantees that an employ- er can avoid litigation in every case, but these procedures have helped reduce liti- gation in companies that have used them, and have fostered a better workplace en- vironment. Reprinted with permission from the December 2008 edition of the La w JouRnaL newsLetteRs . © 2009 Incisive us Properties, LLC. all rights reserved. Further duplication without permission is prohibited. For information, contact 877.257.3382 or reprintscustomerservice@incisivemedia.com. aLM is now In - cisive Media, www.incisivemedia.com #055081-01-09-12 LJn’s Employment Law Strategist December 2008 Resolution Centers Nationwide 1-800-352-5267 www.jamsadr.com