What types of companies face the greatest risk of EPL charges and lawsuits?
Financially sound ones, according to Jack McCalmon, a partner with the law firm Titus, Hillis, Reynolds, Love, Dickman & McCalmon, PLC, giving a response that stood in contrast to insurance brokers and underwriters, who pointed to characteristics like industry class or prior claims experience.
"The company that is at its highest risk is the one that is financially solvent, but is laying off [employees] and not using severance agreements," he said.
Explaining why, he said simply, "They've got money." Plaintiffs' lawyers don't want to end up in bankruptcy court.
"Where I see the most dangerous risk is financially solvent companies who are using the economy as an excuse to get rid of employees they don't want," he added. Rather than firing John because he's late all the time or a bad employee, they're saying, "It's a bad economy and we're going to have to make some adjustments," he said. So "John gets picked, Susan in another dept gets picked, and there's just no continuity."
The problem with that is when a lawsuit eventually comes and the company defends itself by arguing that it's financially hurting, a good lawyer will pull out a balance sheet and demonstrate that it's a lie. Then the plaintiffs' lawyer might say, "The real reason is because John is over 40 and you wanted to get rid of him because he's paid too much."
"If it's bad work practice, if it's poor judgment, then terminate individually" for those reasons, Mr. McCalmon counsels. "Don't do this layoff of four or five individuals and say it's the economy."
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