Enough is Enough

Over the past several years we have been contacted by many clients concerned with actions that have been taken regarding employee claims, threatened, or filed, concerning wage and hour claims. Many clients, or potential clients, find themselves in a dilemma based upon the fact that disgruntled employees are making claims that they have not been paid for all of the work they have performed, and are also seeking damages for various penalties. This past month I overheard several advertisements from various attorneys seeking to represent employees informing seeking to have such individuals take action against their employers for wrongful termination or not getting paid their full compensation.

When listening to the ads, I became upset listening to such plaintiffs’ attorneys encouraging, usually former employees, to try to get money out of their former employers. Most of these claims are baseless, and I believe many of the plaintiff’s firms are seeking to reach a quick settlement with employers by threatening class actions or PAGA actions. In most cases, there is no insurance that will cover any damages, and to the extent that there is insurance coverage for legal fees, there is usually a very large deductible of $25,000 to $50,000.

Enough is enough, and employers need to take action to stop these claims. One of the reasons that employers must take action to stop such claims, is based upon the fact that if they settle a claim, another employee will hear about such settlement, and then will bring their own action. There is of course an economic decision that needs to be made, to determine if a settlement can be reached, at an amount less then the cost of legal fees to defend it. There has to be an evaluation to determine whether or not to fight the claim in order to avoid future claims in the future, letting employees know that their employer will fight claims that are unfounded.

If there is a decision to settle a claim, employers must work with there are attorneys to make sure that there are full waivers, confidentiality agreements, and penalties if the sermon is preached by the plaintiff, former employee.