As the global economy spirals into a recession and employeelayoffs become more commonplace, business executives, humanresources professionals and risk managers face significantchallenges going into 2009. When you factor in the potential impactof a new worker-friendly administration, and with employeeconfidence in the job market at an all-time low, the big questionis whether we are facing a legal tsunami.

Reductions-in-force make the headlines on a daily basis, and areapt to continue, leaving employees who lose their jobs fearing fortheir financial security. What's more, those who are unable to landwith another employer often choose to sue.

In a tight job market damages in such lawsuits rise, asemployers are unable to argue that the awards should be off-set byinterim earnings at subsequent jobs. All these factors together arecreating ripe conditions for an increase in employment-relatedlitigation.

Risk management necessitates that employers batten down thehatches for the foreseeable future to avoid exacerbating theirworkplace exposures to litigation.

As if all this were not enough, the election of 2008 portends tobe a watershed moment in terms of potential changes to thelandscape of labor and employment law for corporate America.Several foreseeable legislative developments after Inauguration Daywill impact labor and employment law in a profound manner.

Equally as important, the gatekeepers of those laws, which isthe executive branch of the government–including administrativeagencies that interpret, adjudicate and enforce the laws, as wellas the expected changes within the civil justice system and thefederal judiciary–will influence both risk management and defensestrategies against liability exposures under new and existing laborand employment laws.

For example, the new year will usher in the Americans WithDisabilities Act Amendments Act of 2008, taking effect Jan. 1,2009. It changes the goal posts on the playing field for ADAlitigation and makes the statute more decidedly pro-plaintiff.

In fact, many believe the statute's acronym–ADAAA–should insteadstand for “Assume (the employee has a) Disability (and) Ask AboutAccommodating (it).”

The Obama administration also is expected to advance and expandnumerous pro-worker legislative proposals. Many believe theDemocratic-controlled Congress will pass several of these pieces oflegislation in the first 100 days of Mr. Obama's presidency.

These include:

o The Equal Remedies Act, which would abrogate the statutorycaps on liability for compensatory and punitive damages under TitleVII and the ADA.

This proposal would change employment discrimination litigationdramatically, as every case would become a “let's roll the dice fora big award” claim. Plaintiffs' trial lawyers will increasesettlement value expectations, and seven-figure verdicts mostlikely will become more prevalent.

o The Employee Free Choice Act is likely to be one of the firstbills signed into law in the new administration.

The EFCA will eliminate an employee's ability to vote on a unionthrough a secret ballot, require unions and employers to bindingarbitration if they cannot reach a collective bargaining agreementin a timely manner, and triple penalties on employers engaging inunfair labor practices.

o Expect expansion of protections to be pushed by the Obamaadministration for workers and more obligations to be imposed onemployers under the Family Medical & Leave Act, as well asaugmentation of whistleblower protections under the Sarbanes-OxleyAct.

o A series of paycheck fairness laws–the Ledbetter Fair Pay Act,the Paycheck Fairness Act and the Fair Pay Act–will negativelyimpact employer liability.

The Ledbetter legislation amends the statue of limitations forpay discrimination claims to make it easier for workers to assertlawsuits. This will negate the Supreme Court's ruling in 2007 inLedbetter v. Goodyear Tire & Rubber Co., in which the courtsaid a Title VII pay discrimination claim must be filed within 300days from the alleged discriminatory pay decision.

The ruling also said that pay set originally at the time ofhiring, which is perpetuated over time in terms of lower pay,cannot be challenged in a lawsuit.

Liability will also be expanded under the Equal Pay Act to allowfor compensatory and punitive damages, and to narrow an employer'sdefenses to such claims.

o The Employee Non-Discrimination Act, which would amend TitleVII to add sexual orientation as a protected class.

o The Arbitration Fairness Act, which would amend the FederalArbitration Act by invalidating most workplace arbitration programsthat require employees to arbitrate rather than litigate theiremployment discrimination claims in court before juries.

o The Employee Misclassification Prevention Act, which wouldamend the Fair Labor Standards Act to increase penalties andenforcement against employers that allegedly misclassify employeesas independent contractors.

Meanwhile, President-Elect Barack Obama will have theopportunity to appoint a significant number of federal judges inthe coming years. While generalizations are difficult, these newjudges are expected to be more inclined to:

o Expand the rights of employees in the workplace.

o Render more lenient interpretations of existing law andproposed legislation.

o Interpret worker rights under the U.S. Constitution in a moreliberal and progressive fashion.

The president-elect's own words on the campaign trail underscorehis intention to appoint judges who will engender pro-employeedecisions. During the final presidential debate, he pledged toappoint judges who are more understanding of employee concerns.

Key administrative agencies that will enforce the newadministration's employment law agenda–the Equal EmploymentOpportunity Commission, the Department of Labor and the NationalLabor Relations Board–will be emboldened to pursue more progressiveinvestigations against employers for wage-and-hour violations (seerelated story on page 12), unfair labor practice charges, andclaims of unlawful employment discrimination.

Each of these agencies operate as miniature versions of thetripartite federal government, with the authority to “legislate”(by issuing regulations), “adjudicate” (through administrativehearings) and “prosecute” (through agency enforcementlitigation).

While each of these agencies are staffed with careerinvestigators and attorneys, the new political appointments in thenext administration to lead these agencies are certain to shape adecidedly pro-employee agenda.