What steps to take when a former employee threatens to sue you

May 2, 2017

Terminating an employee will come with the risk that the former employee will threaten to sue for a variety of reasons.

Employers need know ahead of time what to expect in these situations.

The employer should understand what law the employee claims was violated. Employees often will claim they have been discriminated against due a variety of characteristics – age, race, gender, national origin, disability, color, religion, pregnancy and the like.

In these cases, the employee cannot go immediately to federal or state court and sue the employer. In Virginia, claims of discrimination against employers who employ more than 15 employees must go through the Equal Employment Opportunity Commission first before a suit is filed in federal court.

Employees have 300 days from the last date of discrimination to file a Charge of Discrimination. Thereafter, the employer receives notice of the charge and must file a response, which can be done in-house since it is simply an explanation of the legitimate non-discriminatory reasons for termination.

The EEOC has 180 days or more to investigate the allegations. Only after the commission has completed the investigation can the employee then file a claim in federal court. By the time all this happens, typically the employee has moved on.

Virginia doesn’t recognize a generic claim for wrongful discharge absent very rare circumstances where the employer violates the public policy of Virginia, a claim extremely difficult to prove. Thus, employees rarely have a claim in state court for wrongful discharge.

The most concerning threat that an employer can receive is a claim for compensation under the Fair Labor Standards Act.

Employees frequently will speak with a lawyer after being terminating, complaining of bad treatment, harassment, bullying and the like.

Lawyers familiar with employment law often will divert the discussion to how the employee was compensated, either hourly or salaried, and then determine if the employer’s pay practices violated the FLSA.

If so, the lawyer need only file a two-page complaint in federal court. If the employee was not paid properly under the law, the employer will be required to pay two times what is owed, and attorney fees.

There are some state laws – such as intentional infliction of emotional distress, assault and battery and defamation – that employees might claim were violated. In these instances, the employee has two years to file a complaint in state court.

Employers who receive a letter from a former employee threatening to sue should begin preserving documents, including electronic information.

In addition, if the employee presents new information unknown to the employer, the employer should consider conducting an investigation into the new allegations. It may be that the employee has information that was not known to the employer at the time of termination.

Employers also need to get their house in order prior to terminating an employee.

Employers should not assume that because an employee is “at will” that it can do whatever it wants without documentation. The EEOC is going to require a legitimate reason for the termination.

Employers frequently think a young white male has no rights to sue for discrimination. That isn’t true. White is a race and male is a gender. Every employee has protected characteristics.

Employers should internally document the reason for termination, and maintain the documentation that supports the termination.

If the employer has engaged in proper pay practices, and treated employees fairly and consistently, then it has nothing to fear from a letter threatening to sue.

Most cases with the EEOC are dismissed with a finding of no cause for discrimination.