The Five Stages of Grief Over an Employment Class-Action Suit

by Ervin Cohen & Jessup LLP
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EmpBlog-6.3.2013-HeadinSandHaving worked with a number of companies who have been named as defendants in employment class-action lawsuits, I was repeatedly reminded of the “five stages of grief” model first penned by Elisabeth Kübler-Ross in her 1969 book On Death and Dying.  The analogy is apt, I find, for class action lawsuits, individual lawsuits, and really most employee complaints where you the employer ultimately know you are in the wrong…

See if this sounds familiar…

1. Denial – “But we did everything right.”  “The employee agreed to skip the meal periods in exchange for a longer break/shorter work day.”  “They are lying and any jury will see through them.”

Yes, this is probably the most persistent fallacy employers linger and wallow in.  Employers tell themselves that they were the good guys, they did nothing wrong, they tried to give the employees what they wanted, what was most convenient for them, what benefitted everyone.  Employers deny to themselves, and their attorneys, that the law is not flexible enough to fully customize an employment relationship, that they actually did something (well-intended or not) that they were technically not legally permitted to do, that there is one (or more) employee who they angered enough (or whom they didn’t get rid of soon enough) that is now willing to burn all bridges, cost potential jobs and benefits to remaining employees, in the interest of recovering typically $800 for himself and $350,000 for his class counsel.  But there is no denying it.  You have been served.

2.  Anger – “Why us?”  “It’s not fair!”  “It’s impossible to be an employer in California!  We’re relocating to Alaska!”

Once the employer stops denying to itself that it is a target, and it could actually lose the case (or at the very least a substantial amount of money sorting the case out), there is typically anger.  Anger at the vulnerability, at the tremendous disruption, at the looming costs of litigation and potential loss.  There is also anger at the plaintiff employees, for the betrayal, for the disloyalty, for the money grubbing… And occasionally, employers are angry at themselves, for not having looked at a looming internal issue, for not having brought in employment counsel to handle it, or for not having taken employment counsel’s advice and wallowing in the earlier phases of denial for much too long.

3.  Bargaining – “What if we just pay everyone off a little and have them sign waivers?”  “What if we tell the plaintiff we will shut our doors and fire everyone if they proceed with their lawsuit?”

After the anger subsides (for it never fully disappears), employers snap into problem-solving mode.  This means trying to bargain with the plaintiff employees, with the attorneys, with their own boards of directors, with their CFO… Bargaining is the first positive step to recovery and damage control.  It is a sign that the employer has accepted that financial exposure is inevitable and that it is planning for some type of financial outlay.  Bargaining does not always work on its own, but it is a good start.  It is the nascent planning stage for unraveling the litigation mess and partnering with hopefully supportive and experienced employment counsel to forge a path out of the lawsuit and toward the future.  Bargaining is good.  Bargaining sometimes resolves the lawsuit.

4.  Depression – “This is so miserable.  Why should we bother trying to succeed anyway?”  “What’s the use of being a good guy employer if you’re going to get sued anyway?”

If the bargaining strategy was unsuccessful, and the litigation must go on, employers face the next unfortunate reality: they must devote more time, energy and money to the lawsuit.  It is understandable that an employer gets “depressed” and weary of setbacks, it is understandable that no company wants to admit that it may have contributed to its own unfortunate position as a defendant in a lawsuit, and it is understandable that sometimes this feeling is accompanied with the desire to throw your hands up, stop responding to your lawyer’s calls and emails, and just shut the doors.  It is understandable, but rarely is it actually the right decision.  It is a temporary stop on a business continuum, and after pausing there for a little bit, it is almost always good to move on toward acceptance.

5.  Acceptance – “We will be fine.”  “We have good employees who support us and will stand by us.”  “We have to learn from our mistakes so we don’t repeat them.”

Finally, after brushing off the cobwebs of the temporary litigation depression, the successful and visionary employer accepts that something was done wrong to have caused this and that being in business comes with consequences one can’t always control.  This employer will weather this litigation, a little bruised, a little banged up and cynical, but also a little smarter and more cautious.  This employer accepts that, like most lawsuits, this one probably could have been prevented or quite a bit more contained if the employer had acted proactively.  This employer begins to see the way out of the lawsuit, begins to accept responsibility for changing the company for the better, begins to accept that the lawsuit represents the past and it is time to look to the future.  This employer will be fine.

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2013.  All rights reserved; yep, all of them.

If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it.  If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department, at (310) 281-6348 or kscott@ecjlaw.com.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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