California Lawsuit Prevention 101

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Fox Rothschild LLP

It may be the season for a pumpkin latte and too much candy, or finally breaking out those soft sweaters and fuzzy slippers as the weather starts to chill (even in Los Angeles).  But it is also the season for new lawsuits.  In fact, after 25 years of practice, experience tells me that new lawsuits are often filed toward the end of the calendar year.  The stakes are even higher this year due Covid 19’s devastating impact on so many sectors of the economy.  Desperate times for workers mean more lawsuits.  And California has a robust plaintiff’s bar ready to take on new matters.  So now more than ever, employers must be vigilant and ready.

Luckily, there are proactive steps California employers can take, and many of them are relatively straight-forward.  Some of this advice isn’t new, but if everyone was following it, I wouldn’t feel compelled to re-post!

First, update your policies and practices each year (or at least every two years).  Too often I see employers with handbooks, postings, or policies that haven’t been updated in five years, or sometimes more.  Just because the arbitration agreement or policy was compliant in 2012 doesn’t mean it is compliant in 2020!  Especially in California, things change; the law evolves.

Second, when you make a termination or layoff decision, document your rationale at the time the decision is made.  Ask yourself:  If I were this employee would I think this is fair, and if not, why not?  Put yourself in the employee’s shoes.  And then make sure all contemporary documentation answers those questions.  For example, take the time to research others terminated for similar reasons to show that this employee was treated consistently.  If the employee complained about something a long time ago, and that issue was resolved, make sure that is all documented and have clear evidence that it was not a consideration for the separation decision.  I am not a fan of those ultra subjective stack rankings as justification for layoff; I prefer real evidence on performance, like evaluations or sales figures.  Oh, and if the employee contests the termination or layoff (even after the fact), investigate it, and document what you looked into and found.

Finally, when an employee requests their personnel file and pay records, please be thoughtful before you provide the information.  Too often I see HR sending random information, and forgetting to include what is really important (like the arbitration agreement or the termination documents).  Remember, the employee or their attorney, is looking for problems.  So don’t make it easy for them!   Provide a full picture of what happened and why.  You can even give some additional helpful documents, nothing prevents that.  Please don’t give time records with the pay records.  It isn’t required by statute!  And finally, make sure to retain a copy of what you sent.

I know many of us are ready for 2020 to end.  As employers, let’s limit any further damage from 2020 and be proactive and ready for 2021.

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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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