Evaluating Employment Discrimination Claims From a Defense Counsel's Perspective
by Paul D. Seyferth1
This article provides a framework for analyzing employment discrimination claims from a defense counsel's perspective. Emphasizing early evaluations, the article provides steps for investigation of such claims, communications with clients regarding such claims, and analysis of recurring issues that bear on the strengths and weaknesses of typical employment discrimination lawsuits.
I. Introduction
The share of employment cases in state and federal trial dockets continues to grow each year. So too does the exposure companies face when confronted by such litigation. Accordingly, a premium must be placed on early and accurate evaluation of employment discrimination claims. The purpose of this article is to provide a framework for the evaluation of such claims.
Ideally, case evaluation begins the moment defense counsel receives the workplace discrimination claim. For several reasons, evaluation of the case is a critical task for defense counsel. First, early evaluation is an integral part of litigation management, including development of a budget. Second, because many workplace discrimination claims are brought in federal court, early evaluation is a necessary part of complying with many of the expedited pre-trial deadlines contemplated by the Federal Rules of Civil Procedure.2 Third, many times the process of early assessment and evaluation will provide a roadmap for the initial phases of the litigation. Fourth, early evaluation leads to the development of defense counsel's case strategy. Finally, early evaluation can lead to the possibility of an early settlement or resolution of the case.
In evaluating employment cases, defense counsel should strive to take the posture of solving problems, rather than put up roadblocks. At the evaluation stage of the case, this translates into exploring the possibility of settling the case, seeking an early dismissal on procedural grounds, and giving the company adequate information to assess the costs and benefits of litigation. This may also mean that, as a part of defense counsel's evaluation of the case, recommendations should be made to avoid future workplace discrimination claims of the kind being evaluated. Solving problems, however, does not mean settling the case at all costs. Some cases require discovery for an adequate assessment, and others require a trial for proper vindication of the company's position. A recommendation to take the case to trial can be part of a solution to the problem as well, since it provides the company with a clear path and objective in response to the employment discrimination claim.
II. Client Communications and the Early Evaluation
Clients deserve to have a candid assessment of the risks, rewards and responsibilities of defending the workplace discrimination claim. Factors in this analysis include: (1) the client's business objective(s); (2) the plaintiff's apparent objective; and (3) potential alternatives to litigation of the dispute, such as settlement, mediation, arbitration, alternative dispute resolution, and the like. Understanding these factors as they relate to individual cases will require an assessment of the following specific issues:
• the likely facts and evidence to support the defense of the claim (see Section II, infra.);
• remedies available to the plaintiff;
• expenses in the form of costs and attorney's fees;
• loss of employee time taken up in discovery, depositions, trial, and other dealings with defense counsel;
• potential costs of any adverse judgment;
• potential costs of any adverse publicity;
• the reputation and competence of plaintiff's counsel; and
• the history of jury verdicts regarding similar cases in the same or similar jurisdictions.
Once these factors have been assessed, defense counsel should communicate to the client the results of the evaluation. Ideally, this will be done orally and in writing because, as a practical matter, this communication can serve as the backdrop for the defense of the case, and can easily be updated as new facts and circumstances develop.
Strategy Tip Regarding Client Communications: Counsel should resist the temptation to "hedge" on the early evaluation. Clients generally do not appreciate evaluations that do not contain specific recommendations for action. Moreover, use specific timeframes to show when events will occur, when the client can expect to incur significant fees, and when significant involvement from client representatives is routinely necessary.
III. Factual Investigations Prior to the Evaluation
The initial phase in the evaluation process is a thorough investigation of the underlying claim. Many times defense counsel's evaluation of the case is directly dependent on the nature and quality of the investigation. This investigation should be done by defense counsel, and should be documented so that the client can assess the risks of litigating the workplace discrimination claim with its eyes open. Ideally, a privileged report of the investigation findings should be included in the evaluation.
Strategy Tip Regarding Investigations: Assess whether the investigation will be protected by an applicable privilege. If the investigation has been made in anticipation of litigation, it will normally be protected by either the work product or attorney client privileges.3
There are at least six steps in the investigation of a lawsuit alleging workplace discrimination. In a typical workplace discrimination case, defense counsel should be able to complete this investigation in no more than two to three full days. Ideally, this investigation should be conducted within two to three weeks of receiving the complaint/petition from the client.
A. Step One: Examine Procedural Elements of the Claim
First, as part of the initial evaluation of the claim, defense counsel should examine whether plaintiff has met all of the procedural prerequisites to bringing the action. If, for instance, plaintiff has missed her statute of limitations, this fact will, in effect, trump any investigative findings in the evaluation. Some of the most common procedural elements in early evaluations are the following:
• whether plaintiff filed a timely charge of discrimination;4
• whether the charge of discrimination fairly encompasses the allegations of the lawsuit;5
• whether jurisdiction and venue are proper;6
• all statute of limitations issues;7
• whether the company is a statutory employer as defined by the statute sued upon;
• whether the plaintiff named the proper party defendant;8
• all other issues that may serve as the basis for a Federal Rules of Civil Procedure 12 motion to dismiss and/or an affirmative defense (for example, plaintiffs sometimes name individual supervisors as party defendants, in direct contravention of a series of cases that deny the possibility of individual liability)..9
B. Step Two: Gather and Review the "Paper Trail" Involved in the Lawsuit
Defense counsel should gather and review the paper trail involved in the case. Hard documents are a critical component of the defense of the claim and, in some cases, can be the most critical piece(s) of evidence. Workplace discrimination cases usually involve categories of documents that courts and juries will expect to see in the employment setting. For example, in a sexual harassment case, the court and/or jury will expect to see some documentation of an investigation of the claim, disciplinary documentation to an alleged harasser, and the like.
Given such expectations, defense counsel must ensure that the paper trail is reviewed to determine: (1) that there is documentary support for the adverse employment decision; (2) that the adverse employment decision was the logical culmination of a series of events; (3) whether the documentation is internally consistent and comports with the anticipated testimony of the decisionmakers; and (4) that the plaintiff was treated the same as those in similar circumstances.
At a minimum, defense counsel should seek to review the following elements of the paper trail:
• plaintiff's personnel file;
• plaintiff's compensation records;
• plaintiff's medical file, if one exists;
• plaintiff's written job description;
• all other documents regarding plaintiff;
• the company's personnel policies in effect at the time of the adverse employment actions through the present;
•all notes, memoranda, correspondence, and other documents relating to the adverse employment action in question;
• personnel files of employees treated "comparably" to the plaintiff;
• personnel files of persons who retained the positions sought or lost by the plaintiff;
• all company EEOC and affirmative action plans;
• documents regarding the company's corporate structure;
• all company personnel handbooks and written policies;
• all company statements made or produced pursuant to the investigation of the charge of discrimination filed with either the local, state, or federal equal employment opportunity investigation agency;
• any recordings, statements, affidavits, or other documents produced pursuant to any investigations of the employee's conduct while employed with the company.
If defense counsel has reviewed the documents referenced above, there is little chance that a document will unexpectedly surface during discovery or trial.
Strategy Tip Regarding the Paper Trail: Be persistent in gathering the paper trail because the hard documents will have a determining impact on the defense counsel's initial interviews of witnesses.
C. Step Three: Interview the Decisionmakers
Workplace discrimination claims necessarily presume that an adverse decision has been made, causing damage to the plaintiff. Defense counsel must therefore seek out and interview the person(s) alleged to have made the adverse decision. For example, these persons typically are supervisors and human resources personnel. The goals of these interviews are to: (1) assess the credibility of the explanation for the adverse employment decision; (2) assess the jury appeal of the decisionmakers themselves; (3) educate the decisionmakers about the litigation process; and (4) develop facts to support the defense of the claim or require further investigation.
Defense counsel should focus on the following objectives when interviewing the decisionmakers:
• explain to the decisionmaker the seriousness of the investigation;
• gain a thorough understanding of how the company operates, especially in terms of human resources or labor relations;
• have the individual explain to you his understanding of the law, and the basis for his understanding;
• have the individual explain to you his understanding of the company's policy for investigating workplace claims, and his specific role in the investigation;
• ask the individual to explain how he complied with the policy in this instance;
• learn the channels of comm-unication(s) for complaints of wrongful workplace conduct such as "open door" policies, suggestion boxes, and procedures for complaints to human resources personnel;
• learn the background of the plaintiff's employment, including the names of her supervisors, co-workers, and job duties;
• emphasize to the decisionmaker that any form of retaliation against the plaintiff is illegal;10
• have the individual respond to each specific allegation of the lawsuit and/or charge of discrimination;
• discuss the extent of the decisionmaker's interaction(s) with the plaintiff;
• in a sexual harassment case, discuss with the decisionmaker the following: (1) dating, sexual, social or working relationships with the victim; (2) sexual discussions, jokes, gestures, and banter; (3) complaints by the victim; (4) protests by the victim; and (5) any possible motives of the alleged victim for the sexual harassment complaint;
• discuss with the decisionmaker anything he/she may have done to provoke the complaint or allegation of illegal actions(s);
• discuss any previous complaints of discrimination or harassment the company has had in the past, including how such claims were handled, resolved, or whether they led to litigation.
Strategy Tip Regarding Investigations: A mere allegation of harassment or sexual conduct or discrimination does not mean sexual harassment or discrimination has occurred. Do not assess blame or advise anybody regarding your conclusions until your investigation has been completed. Moreover, it is best not to "cross examine" the decisonmaker with potentially damaging facts until you have first learned the full extent of the decisionmaker's explanation for his actions. Once a rapport has developed between the decisionmaker and defense counsel, only then should troubling facts involved in the claim be addressed.
D. Step Four: Interview Plaintiff's Co-workers
Once defense counsel has completed interviews with the decisionmaker(s), plaintiff's co-workers should be interviewed as well. The objectives of these interviews are to: (1) obtain information regarding the plaintiff's claims, (2) assess the factual support for the adverse employment decision from non-supervisory personnel, and (3) press for any possible weaknesses in the case.
In general, the same kinds of questions applicable to the decisionmakers should be asked of plaintiff's co-workers. Obviously, the co-worker interviewees should also be asked about any admissions/statements made by the plaintiff regarding claims made in the lawsuit, and any conduct by the plaintiff, on the job, that would be relevant to those claims.
Strategy Tip Regarding Co-Workers: Obtain written and sworn statements from plaintiff's co-workers as early as possible. If this is not practical, management should be advised to apprise defense counsel if a co-worker/witness is leaving his or her employment, so a sworn statement can be procured.
E. Step Five: Contact and Interview Former Employees
As soon as possible, defense counsel should also find and interview former employees who may have relevant information to the case. The same objectives and questioning techniques used with decisionmakers and co-workers should be used with former employees.
Strategy Tip Regarding Former Employees: Former employees are sometimes the most important witnesses in a workplace discrimination claim, because juries perceive them to be less biased than the plaintiff or company witnesses. For instance, a former employee who is aware of the plaintiff's conduct that led to the adverse employment decision is an excellent witness upon whom to focus a case. High rates of employee turnover can lead to larger numbers of former employees being involved in the case. Accordingly, defense counsel may wish to retain a private investigator to locate as many former employees as possible, especially when a significant former employee is involved in the case.
F. Step Six: Review Comparable Examples
It is not unlikely that the workplace discrimination claim will require defense counsel to defend the company's actions in situations comparable to what is alleged by the plaintiff.11 For example, in a race discrimination claim, the actions of management toward persons of other races are almost always subject to discovery.12 Consequently, defense counsel should make a determination of comparable examples, and analyze those situations early in the case. This typically will require defense counsel to review all employees who have been subjected to discipline under the workplace policy at issue in the case. If the plaintiff was treated differently than those similarly situated, explore the explanation for that. If no explanation can be offered, this fact needs to be incorporated into defense counsel's evaluation of the case.
IV. Recurring Issues in the Evaluation of the Case
Defense counsel's investigation of the case is only the first part of the evaluation process: Next comes the actual evaluation of those facts. Defense counsel need not, however, reinvent the wheel when analyzing and evaluating the facts learned during the investigation. Most workplace discrimination claims have "red flags" that can be assessed to determine the likelihood of success on a motion or at trial. The facts developed during the investigation must be assessed against these recurring issues, issues that defense counsel should consider in order to properly assess the risks of the workplace discrimination claim. When the facts from the investigation are compared to these recurring issues, a candid evaluation of the case will naturally flow. Some of these recurring issues are described below.
A. The Role of Fairness and Common Sense In The Evaluation
This is perhaps the most important assessment that defense counsel must make during the evaluation phase of the case: Was the decision that was made fair, and does it comport with common sense?
Workplace discrimination claims uniquely implicate questions of fairness and common sense. Notwithstanding the statutory requirements of various laws, jurors expect the adverse employment decision to be fair, and what is fair tends to be simply a question of common sense. Most jurors have held jobs before. Most jurors have a good feel for whether the company's decision was fairly arrived at and fairly administered. In evaluating the facts surrounding the workplace discrimination claim, defense counsel must keep in mind the perspective of the potential jurors in the case, and whether those jurors will consider the decision fair or not. Do not be afraid to tell the client if the rationale for the adverse employment decision fails to comport with common sense or fairness.
Strategy Tip Regarding Fairness and Common Sense: Defense counsel will often gain an understanding of the fairness of the adverse decision when interviewing co-workers and former employees. Without attributing these comments to specific persons, defense counsel should advise the client of these persons' views on whether the plaintiff was treated fairly.
B. The Role of the "Paper Trail" In The Evaluation
The proper assessment and evaluation of the workplace discrimination claim requires an evaluation and assessment of the paper trail. As was set out in Section II, the paper trail in the workplace discrimination claim consists of every document that pertains to every aspect of the plaintiff's employment. The paper trail has a dramatic effect on counsel's actions in defending the case. If the paper trail contradicts or does not support the adverse employment decision, defense counsel will have a difficult time explaining that the employment decision was fair, logical, or that it comports with common sense. In evaluating the case, defense counsel should point out to the client specific parts of the paper trail that are supportive, problematic, incomplete, or inconsistent.
Strategy Tip Regarding the Paper Trail: One of the most significant elements of the paper trail will be the company's responsive documentation to the administrative agency investigating the underlying charge of discrimination. If that documentation contains admissions or is otherwise problematic, defense counsel must closely scrutinize the effect of the documentation.
C. The Role of Direct Evidence In The Evaluation
In evaluating the case, defense counsel should also be mindful of the presence of "direct evidence" of discrimination.13 This consists of such things as racial slurs, inflammatory documents, or the like.14 Direct evidence is obviously significant because of its probative value at trial, but also because of its effect on defense counsel's ability to obtain summary judgment or an early dismissal of the case. Not many cases have direct evidence or "smoking guns" but, if such evidence is present, the client needs to be advised of that evidence and its effect on the case. When direct evidence is present, there is very little chance that the case will be dismissed on a motion.15
D. The Role of Former Employees In the Evaluation
Turnover is a major element of uncertainty in defending workplace discrimination claims. Former employees are much less likely to cooperate in the defense of the claim and, if a former employee left employment with the company under adverse circumstances, securing truthful information from such a witness can be even more difficult. When evaluating the case, defense counsel should make every reasonable effort to evaluate the potential testimony of former employees and, if such testimony would be adverse to the company's position, evaluate the case accordingly.
To the extent that the decisionmakers are no longer employed by the company, be sure to analyze the specific, proposed testimony that such persons will give as the reasons for their actions. Additionally, if there is potentially adverse testimony from a formerly employed decisionmaker or witness, defense counsel must assess the potential avenues to discredit such witnesses, such as bias, inconsistent statements, and the like.
E. The Role of Manager Misconduct In The Evaluation
If the allegations of the lawsuit involve manager misconduct, counsel must evaluate the case to determine whether there is a realistic possibility of summary judgment or a defense verdict. Juries increasingly are impatient with managers who do not treat their employees fairly, or who have not been trained to respond to issues involving equal opportunity. Moreover, in this area defense counsel should be equally mindful of the potential for allegations of retaliation by one or more of the client's managers.
In evaluating the case, specific attention should be paid to whether there is any corroboration of manager misconduct and, if so, what the effect of that corroboration will be at trial.
F. The Role of "Comparable" Employees in the Evaluation
Comparable employees have a direct bearing on defense counsel's evaluation of the workplace discrimination claim, because plaintiff's counsel will undoubtedly attempt to point to any examples in which the plaintiff was treated differently than employees in the same or similar circumstances. Early in the evaluation process, defense counsel must examine whether: (1) any truly comparable employees exist; and (2) how those employees were treated in comparison to the plaintiff.
Make sure to review all examples that plaintiff will seek to exploit during the discovery process or at trial, and explain to the client how the company will respond to unflattering comparisons between any such examples and the investment afforded to the plaintiff.
G. The Role of Plaintiff's Potential Damages in the Evaluation
The evaluation of plaintiff's case must include some assessment of plaintiff's potential damages. At a minimum, this includes assessment of:
• plaintiff's potential lost wages;16
• plaintiff's interim employment (if any);
• plaintiff's lost benefits;17
• the potential for front pay or reinstatement;18
• any potential for compensatory damages, including pain and suffering, emotional distress, or inconvenience;19 and
• potential punitive damages.20
Although these categories of damages need not be addressed with mathematical certainty, an evaluation of the case must address the monetary exposure of the claim brought by the plaintiff.
V. Evaluation and Settlement
An early evaluation of the workplace discrimination claim necessarily requires the consideration of whether settlement is a possibility. Many clients take the view that settlement of these claims is a business decision, i.e., that the workplace is so fraught with the perils of litigation that the fees, expenses, damages, and the like are simply a cost of doing business. For these clients, a candid assessment of the exposure in the case, combined with the litigation budget, will normally favor addressing settlement as early as possible. Other clients will want to at least fight through the summary judgment stage of the case, either because it does not want to set the precedent of settling cases or because it does not believe the plaintiff's claim has any merit. In either event, broach settlement early in the case, if only to determine when the best timing for negotiations might be, if at all.
VI. Conclusion
Clients deserve an early assessment of their case from defense counsel. The above areas should be addressed in such evaluations, and can serve as a roadmap for effective assessments of employment claims.
Footnotes
1 Mr. Seyferth is a 1987 graduate of the University of Michigan Law School. He is a member of Husch & Eppenberger, LLC, where he represents employers in labor and employment matters throughout the United States.
2 See e.g., Fed. R. Civ. P. 26(a)(1)(E) (requiring initial disclosures of witnesses and documents within 14 days of parties' planning meeting).
3 Fed. R. Civ. P. 26(b)(3); Equal Employment Opportunity Comm'n v. Lutheran Soc. Servs., 186 F.3d 959, 968 (D.C. Cir. 1999); Carter v. Cornell Univ., 976 F. Supp. 224 (S.D. N.Y. 1997).
4 42 U.S.C. §2000e-5(e).
5 Chambers v. American Trans Air, Inc., 17 F.3d 998, 1003 (7th Cir. 1994; Stewart v. United States I.N.S., 762 F.2d 193, 198 (2d Cir. 1985); Waiters v. Parsons, 729 F.2d 233, 237 (3d Cir. 1984).
6 28 U.S.C. §1331 – federal question jurisdiction; 28 U.S.C. §1332 – diversity jurisdiction; 28 U.S.C. §1391 – venue) (if filed in state court, consider removal options (28 U.S.C. §1446).
7 42 U.S.C. §2000e-5(e) and (f)(1).
8 Fed. R. Civ. P. 17(b).
9 Wathen v. General Electric, 115 F.3d 400, 404-05 (6th Cir. 1997) (Title VII and ADA); Butler v. City of Prairie Village, Kansas, 172 F.3d 736, 744 (10th Cir. 1999) (Title VII, ADEA, and ADA); Williams v. Banning, 72 F.3d 552, 555 (7th Cir. 1995) (Title VII); Smith v. Lomax, 45 F.3d 402, 403 (11th Cir. 1995) (Title VII).
10 This is especially critical when the plaintiff is still employed by the client. 42 U.S.C. §2000e-3(a).
11 Carman v. McDonnell Douglas Corp., 114 F.3d 790, 793 (8th Cir. 1997); James v. Newspaper Agency Corp., 591 F.2d 579, 582 (10th Cir. 1979); Thornton v. Mercantile Stores Co., 13 F. Supp.1282 (M.D. Ala. 1998).
12 Joslin Dry Goods Co. v. Equal Employment Opportunity Comm'n, 483 F.2d 178, 181 (10th Cir. 1973); Thornton, 13 F. Supp. 1282 (M.D. Ala. 1998).
13 Price Waterhouse v. Hopkins, 490 U.S. 228, 277 (1989); Fernandes v. Costa Bros. Masonry, Inc., 199 F.3d 572, 580 (1st Cir. 1999); Deneen v. Northwest Airlines, Inc., 132 F.3d 431, 436 (8th Cir. 1998).
14 Brown v. East Mississippi Electric Power Ass'n, 989 F.2d 858, 861 (5th Cir. 1993); Browning v. President Riverboat Casino – Mo., 139 F.3d 631, 635 (8th Cir. 1998); Harris v. Shelby County Bd. of Educ., 99 F.3d 1078, 1083-84 (11th Cir. 1996).
15 Talley v. Bravo Pitino Restaurant, Ltd., 61 F.3d 1241, 1249 (6th Cir. 1995); Cowan v. Glenbrook Sec. Servs., Inc., 123 F.3d 438, 443 (7th Cir. 1997); Carter v. Three Springs Residential Treatment, 132 F.3d 635, 641 (11th Cir. 1998).
16 42 U.S.C. §2000e-5(g).
17 42 U.S.C. §2000e-5(g).
18 42 U.S.C. §2000e-5(g).
19 42 U.S.C. §1981a(a) and (b).
20 42 U.S.C. §1981a(b).
JOURNAL OF THE MISSOURI BAR
Volume 58 - No. 5 - September-October 2002