If your target employee files a claim for his or her damages at work, and if you do not carry out your contractual duty of maintaining the peace, you will be held legally liable. In these circumstances, you may have to decide whether or not to pursue the claim. To make this decision easier, you should consider the following questions:
Has the target employee filed any other suit against the company?
If so, you should consider if it is likely that he or she will file another suit for a similar claim. If so, will you be asked to file a counter-suit? You should ask the attorney handling your case if it is likely the other claim will be the same or be renewed.
Has the target employee settled the claims in the past? If so, there is a likelihood that the same settlement will be granted again. However, you should also consider that the employees may choose to file new claims for older claims. For example, they may wish to claim that you failed to properly compensate them for work-related injuries. If the claims are recent, and the target employee has not settled for a substantial amount, you may face a challenge in obtaining a new settlement because you may be legally liable for any claims.
What are the chances of winning your lawsuit?
A lawsuit is usually a long and expensive process. One lawsuit does not translate into a lot of savings. There are also chances that the other side will simply withdraw their claims from the case, reducing your exposure. Moreover, you may not be able to recover any damages if the other party suddenly decides to withdraw from the case. Many employers often assign an employment attorney to handle the litigation aspect of a lawsuit.
Will the settlement agreement protect your target employee from any claims for breach of contract or similar claims? Often, an agreement will contain a fiduciary clause. This clause requires the attorney to act in the best interests of the client, meaning the settlement agreement should benefit the target employee as much as possible. You need to understand whether any potential claim you might win would have a fiduciary duty. If so, you need to ensure that any settlement agreement you enter into protects you against such liability.
Is there anything you can do to protect yourself and your fellow employees from a spurious claim?
There are things you can do to reduce your liability exposure. If you know that an employee has filed a complaint, it is best to document the incident. You may need to consult with your workplace ombudsperson or an appropriate professional before taking steps to address the problem. You may also want to consult with an employment attorney before taking any action.