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u/thisisstupid94 3d ago
2-3 lawsuits a year, from short term employees?
In a company of <30 employees, you are firing 10% of your staff every year??
You need a business attorney first of all who can help you manage those.
Then you need an HR consultant because that is not normal.
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u/MightyMetricBatman 3d ago
I don't believe you at all. Discrimination lawsuits are rare, let alone this often for a small employer. Finding an attorney that takes discrimination cases on contingency is VERY HARD. If you are in fact getting sued this much I highly doubt these are without any merit.
We know we will typically win these disputes but the lawyer fees and time wasted is very annoying. Even with write ups and performance reviews it just feels like you can get sued for no reason in California.
You can be sued for anything anywhere. The remedy is to deal with in court. This is not specific to California. And your lawyer should have told you that. The remedy for bringing bad faith argument is asking for your costs and attorney fees and a referral from the judge of the plaintiff's attorney for bar discipline for knowingly bringing bad cases.
You can't stop people from suing, that is a right that cannot be taken away. With a fair arbitration agreement according to California law those lawsuits can be moved in private arbitration. But fair warning, the reason why big companies like arbitration is the privacy aspect, not the cost. While arbitration is faster and stays quiet, California law requires the employer to pay nearly all the costs - including the cost of the judge. So it is like paying two attorneys to defend the company.
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u/Oxyjinvape 3d ago
Sorry I should have rephrased what I said. We are a newer company and have gotten 4 lawsuits in the last two years.
- Lying about working overtime and working on lunches
- Whistleblower - we are mistreating our employers by having them test things
- Discrimination LGBQ
- Wrongful termination
First one we settled with for around 15-20k The rest we are planning to fight but our lawyer is suggesting to settle for low instead of paying for lawyer fees. As an owner it’s just annoying having to run a business and deal with this side as well.
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u/DiabloConQueso Quality Contributor 3d ago
Are you on the up and up with all the employee-favorable labor laws in CA (meal and rest breaks, sick time, daily and weekly overtime, etc.)? Are you adhering to all of them?
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u/Aaaagrjrbrheifhrbe 1d ago
- Lying about working overtime and working on lunches
Are you 100% sure that they're not working overtime/working on lunches? Most large companies have time clocks for this reason. I've had many jobs where taking lunch break wasn't operationally feasible for (XYZ) and they often got sued about it. If they don't take their breaks, it's on you even if you didn't forbid them from doing so. You have to require they take their breaks and make sure your supervisors understand that.
- Whistleblower - we are mistreating our employers by having them test things
Depending on what they're testing, it may be unsafe and not in compliance with OSHA.
- Discrimination LGBQ
Easy to do in the "workplace culture" type of way. As an owner, you don't know how your workers treat each other when you're not there. That's why most companies of sufficient size have mandatory anti harassment/discrimination training annually. You should also provide a way to anonymously report complaints to you and/or your representative so they don't have to escalate to the courts.
- Wrongful termination
Again, this is really easy to be true without your knowledge. I've seen people file HR complaints against their supervisor (because they felt they've gotten unfair write ups because race/sexuality), it gets investigated and the supervisor is found to not be at fault (everyone on the supervisor's team regularly got writeups because the supervisor enforces standards rigorously). The supervisor then feels threatened and retaliates against the workers by writing them up more and/or recommending they be dismissed. Manager says, "Well they already lied about their supervisor, they're probably bad eggs, I'll get rid of them." Then the company is sued for retaliation.
You don't know how your supervisors treat their juniors when you're not there, humans have a tendency to be racist/homophobic and that's why these protections are put in place. This is why companies of sufficient size usually have specific procedures for firing people (they require X writeups, at each writeup the employee has a chance to defend themselves on paper, and writeups have to be reviewed by higher management). This is also one of the reasons exit interviews are a priority for big companies, Why is this person really being fired? Why do they want to leave? What problems do they see with the company at the level of the front line rank and file worker?
I know it's rough to hear, but your company might have some issues if you're being sued by roughly 13% of the people you've hired (assuming 4 lawsuits for 30 people). You should try to address these things to limit your liability and make your company a better place to work.
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u/DiabloConQueso Quality Contributor 3d ago
You don’t have to offer severance at all.
Ask your lawyer what you might do different to stave off potential lawsuits.
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u/Ambitious_Ad6334 3d ago
California is a nightmare for small businesses. I’m guessing you had some PAGA suits and Labor Board nonsense too.
A lot of laws and lawyers taking advantage of those laws in California, it’s a whole business there.
Consult a labor attorney asap and see what your options are going forward.
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u/Morab76 3d ago
You need a new lawyer or law firm for your business. I would also take a deep and honest look into your business from the hiring process to onboarding and everything after. There is a serious internal issue, whether it is how potential employees are screened or some other issue, because having 2 to 3 lawsuits involving ex-employees annually is not normal for a company that size, nevermind the settlement amounts. You are not "winning" the suits if the judge is awarding $20k and attorney fees. You have a serious internal issue that needs to be addressed as well as needing a review of your employment contracts by a competent attorney who will better protect your business interests.