On September 15, 2021, a divided panel of the Ninth Circuit Court of Appeals decided…
THE “HIDDEN” IMPORTANCE OF CAREFULLY-DRAFTED EMPLOYEE HANDBOOKS
Lawsuit Prevention for Employers
Who said lawyers aren’t romantic? It should come as no surprise that, when labor law experts draft employee handbooks, they include certain “hidden” messages for the benefit of the plaintiffs’ lawyers who will later scrutinize the handbook to decide whether or not to accept a case against the drafter’s client.
It may seem axiomatic, but employees normally need a lawyer in order to successfully sue their employer. The lawyers handling these cases are not paid by the hour, but by a percentage of a jury award or pre-trial settlement, if any, that is received.
What does this have to do with employee handbooks? Everything. It’s simple economics.
As in any commercial enterprise, plaintiffs’ lawyers seek maximum return on their investment of time and risk. Before accepting a case, they must be convinced that the employer’s liability is easily proven (with minimal time) to prospective jurors, who are normally employees themselves and often eager to awarding substantial damages against the “villain” employer.
Due to the central importance of handbooks in all employment litigation,they are often the most important factor in determining an employer’s vulnerability to a lawsuit and, consequently, whether a lawyer will accept a case.
To illustrate: if the handbook under review eliminates the jury bias problem referenced above by including an enforceable arbitration policy, for example, the lawyer will immediately recognize that the employer, if sued, will move to compel that the case be decided by an impartial arbitrator instead of a jury.
The very presence of this one policy, therefore, attacks the lawyers’ financial incentive by making a case both more difficult to prove and (due to the arduous task of resisting a motion to compel) time consuming.
The fact that an enforceable policy requires the expertise of an expert in California labor litigation explains why arbitration policies are omitted from commercially-available handbook software, and the services of human resource consultants.
This is just one of numerous “firewall” policies that will not only vastly improve the employer’s chances of winning a lawsuit, but of actually preventing it from being filed in the first place, through messages audible only to the trained ears of plaintiffs’ lawyers which proclaim: “You will lose a fortune if you accept this case!”
It is the author’s experience that employers attuned to this secret language consider the benefits a bargain at almost any price.
Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.
While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.
For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well.
You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/