Any manager with an Internet connection can pull up hundreds of articles about how to avoid employee lawsuits. All of them preach essentially the same practices. Yes, you should know and understand federal, state and local laws against discrimination. Yes, you should be proactive in setting clear expectations. Yes, you should have documentation to support an adverse employment action. And no, you should not tolerate harassment or retaliation.
To that list, allow me to add one more. Before you take an adverse employment action, pick up the phone. The simple expedient of running it by your outside or in-house counsel can save you thousands, if not hundreds of thousands of dollars.
The fact is that it costs a recently terminated employee absolutely nothing to file a charge of discrimination with the EEOC or a state or local agency, or to lodge a complaint with the Department of Labor, based on, for instance, interference with his or her FMLA rights. It can cost an employer anywhere from $5,000 to $20,000 to respond to such complaints, even if the agency ultimately determines that no further action is warranted. If the case heads to court, which it can regardless of the agency’s decision, it can cost anywhere from $75,000 to $150,000 or more, depending on the jurisdiction. And that’s if you win.
A brief but thorough (no, those things are not mutually exclusive) investigation and evaluation can help to avoid those costs by alerting the employer to those indefensible actions before you take them. It can also lay the groundwork for the defense of claims that might be brought by the terminated employee.
It is important at this stage to identify and preserve the relevant documents before they disappear and to obtain statements from crucial witnesses before they do likewise. An objective examination can also identify facts that may undermine the employer’s position. One of the biggest mistakes an employer can make at an early stage is to take an inappropriate position that it can’t back away from as the facts roll out.
Considering the amount of money at stake even in a defensible employment case, the question shouldn’t be why you would talk to counsel before pulling the trigger, but why you wouldn’t? Yes, it will cost time, money and effort to engage in objective examination and reflection, but if it prevents even one employee from making even one meritorious complaint, or strengthens the employer’s defense of a questionable one, will be well worth it.