Who Says Nice Guys [Employers] Finish Last?

Lisa Sherman
California Labor & Employment Attorney

The Benevolent Employer Reaps the Rewards for its Kindness

While we all intrinsically know that anyone can file a lawsuit — even if it is entirely meritless — in the employment world in which I work, often times, what I uncover when I am called in, is a wounded workplace.  It is filled with unhappy, unproductive employees who are counting the hours until the end of the workday and their next vacation, which they hope will become permanent after they win the lottery.  With a fire extinguisher in hand, the employer not only must react to the current employee situation, anticipate the ones that will likely follow, but also regain the trust of its employees, a tall order for any employer.  But what about the benevolent employer all the employees truly adore, love, and respect?  Do they not get sued?  I am here to tell you that they, too, get sued although less frequently, but when they do, their employees’ devotion to the Company becomes a critical component in ending these lawsuits quickly.  

In mid-March 2014, I was retained by a small California-based employer to represent a small Company who had just celebrated its tenth anniversary.  All of the employees described the President of the Company to be one of the nicest, kindest, most generous bosses that they have ever worked for, which I can attest to myself.

Despite the fact that he was an extremely powerful businessman whose business is to deliver the undeliverable to Hollywood’s high-powered elite clientele, he lamented with disbelief as to how the Company he built with sweat and tears from the ground up had left him at the mercy of the overburdened California court system and the employee-friendly laws for, what he believed to be, a frivolous lawsuit.  

The former employee was terminated in the President’s absence by one of his partner companies, who was not even named in the lawsuits.  At our first meeting, the President sat in front of me pensively reflecting on what he could have done differently.  Despite the President’s position in the Company, he had personally bent over backwards to help this employee, despite the employee’s inexcusable, costly mistakes which repeatedly put the Company’s relationships at risk, and the employee’s unprofessional, threatening conduct towards its vendors.  While the President was 3000 miles away on business, his staff called shaking and crying in fear for their safety after the employee erupted, berating his supervisor and engaging in threatening behavior in front of his colleagues who were conducting business with clients.  Immediately after the termination, the employee was chased by building security to the parking garage after he refused to return Company and building property, almost running over the security guards with his car as the former employee exited the parking complex. 

Not only had the Company never been sued before by an employee, they were defending not one, but two lawsuits filed in Los Angeles Superior Court, without even as much as a demand letter preceding service of the lawsuits.  The first lawsuit was a ten cause of action “kitchen-sink” wrongful termination complaint by the former employee.  The former employee even raised claims against the Company for assault, battery and false imprisonment arising from the post-termination “OJ Simpson” chase by building security, who were not even employed by the Company!  A few weeks later, the Company was hit with a second lawsuit, a wage and hour Class Action Complaint claiming that its employees were non-exempt and owed overtime, meal and rest break premiums, and all the other wage and hour violations that follow.  Again, these claims arose from the former employee’s previous employment with an independent contractor, who no longer did business with the Company, and who also was not named in the lawsuits. The former employee was represented in both lawsuits by the same law firm, who described themselves as experienced employment lawyers.

Unlike any other employer I have ever had the privilege of representing, all the employees truly loved the Company, its President, and were extremely upset by the lawsuits, and the prospect that the former employee could recover one cent.  Because these employees were committed to the Company, its President, and were truly affronted by these lawsuits, despite the interruption at work, the employees declared to me at the outset that they wanted to be given the opportunity to inform the Court that there was no basis for either of his lawsuits, and that they opted out of any purported class, which never existed anyway.  I can tell you that you do not get this type of assistance, unless the employees truly love their employer!  

Approximately four months after the lawsuits were served, on the eve of filing several motions to dismiss both lawsuits, as well as, a motion seeking the Company’s attorneys’ fees as sanctions against the former employee and his counsel, jointly and severally, for pursuing these frivolous lawsuits, I shared with opposing counsel over 30 declarations (signed statements under penalty of perjury) by former and current Company employees.  Almost immediately, the former employee and his counsel agreed to dismiss their lawsuits, with the Company paying no money to either of them.

Believe me when I tell you that I have never convinced an attorney to dismiss one lawsuit, let alone, two, without a single motion ruled upon by a Court.  So why did this happen? Because when the “nice guy” President who has always supported each and every employee was being unjustly accused, they did not wait to participate in the drawn out discovery process. So, yes, even kind employers get sued for frivolous lawsuits, but because of their employees’ allegiance, what could have destroyed the very existence of this small Company if the former employee prevailed, resulted in an expedient resolution to two lawsuits, with no money paid to the former employed and his counsel.

While I have successfully prevailed in obtaining judgments for many employers’ of a portion of their attorneys’ fees that they spent defending the frivolous lawsuit against plaintiff’s counsel, my clients have never collected.  The judgment has always been used as leverage to settle the frivolous cases because when sanctions are awarded against an attorney, they have no choice but to appeal it, because it must be reported to the California state bar.  

So, what’s the lesson here?  Nice employers don’t finish last! 

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