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Meet the Enemy

In the spirit of "to know them is to avoid them," HRE invites you to meet some of the most highly regarded and successful employment-law plaintiffs' attorneys.

Wednesday, August 1, 2007
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When it comes to plaintiffs' attorneys and the way they operate, HR has a lot to learn.

At least that's the opinion of some of the nation's top plaintiffs' attorneys. And what you don't know about them could hurt you.

Such as:

* Those e-mails you're getting from a disgruntled manager? They may very well have been written by a lawyer lurking in the background, a lawyer you have no idea has even been hired.

* That investigation you're doing of alleged discrimination by your boss -- the person who decides your bonus? You can bet that if the case goes to trial, the plaintiffs' attorney is going to focus on that angle, and tear your credibility to ribbons.

* Those proposed layoffs you've been making recommendations about? If your recommendations don't get followed, a plaintiffs' attorney could jump on that. And if you're not making any recommendations at all? The attorney is going to ask, "Where was HR?"

Following the premise that to understand a threat is the best way to avoid it, we asked a number of prominent plaintiffs' attorneys to reveal some of their strategies and tactics to our readers.

Surprisingly, they didn't mind giving away a few of their secrets because -- and this may come as an additional surprise -- they say they want to avoid lawsuits as much as you do.

Their clients have a wide range of complaints against companies, including alleged discrimination, wrongful termination and pay violations. But if you ask these attorneys what the primary thing HR executives don't understand is, they'll all say the same thing:

"A call from a lawyer does not mean World War III," as Boston attorney Nancy Shilepsky puts it. "Sometimes it means, 'Let's get this back on track.' "

Says Joseph M. Sellers, who heads the civil rights and employment practice of the Washington-based law firm Cohen Milstein Hausfeld & Toll, "there's a perception of plaintiffs' lawyers that all they care about is litigation, they're venal and you shouldn't trust them for a minute."

"I have not found the HR folks to be terribly enthused about talking to me," adds Sellers, who is ranked as one of the nation's top 10 employment-law plaintiffs' attorneys in an exclusive list prepared for Human Resource Executive® by Lawdragon, a Los Angeles-based networking site for lawyers and clients.

Wayne N. Outten, managing partner of the New York firm Outten and Golden, occasionally speaks to groups of HR executives, including at conferences hosted by the Society for Human Resource Management, and presents his "Top 10 Ways to Avoid Getting Sued." (Outten's entire "Top 10" list is on www.HREOnline.com.)

No. 1? "Be nice to plaintiffs' lawyers," says Outten, who is also on Lawdragon's top 10 list.

"I'm serious," he says. "When you get a call or a letter from a plaintiffs' lawyer, consider it an opportunity for communication and problem-solving."

But, he adds, "too many HR people don't do that. They get very defensive and they stonewall. They say, 'We're right, you're wrong, there's nothing to talk about, go away -- and anyway, your client's a terrible employee, and it's surprising he didn't get fired before this,' " he says.

Outten's high-profile cases include winning $12 million for a female executive who sued Morgan Stanley for sex bias, and $18 million for two Wall Street bankers who claim they were denied compensation by Deutsche Bank.

But he says most HR executives don't realize how rarely employee complaints become lawsuits. He says his firm is one of the largest in the country that exclusively represents employees, and fewer than 5 percent of its clients actually go to court.

Says Cliff Palefsky, another member of the Lawdragon top 10, "It's in my client's interest to avoid a lawsuit."

Such suits can be far more harmful to employees than HR managers might think, he adds. Employers doing reference checks can tap into databases of court cases and quickly discover whether a job applicant has ever sued his or her company.

"Just being in a lawsuit can keep you from getting a job," he says. "It happens every day."

Palefsky, a partner in the San Francisco law firm of McGuinn, Hillsman & Palefsky, is co-founder of the National Employment Lawyers Association. In the 1980s, he and his partner won the first major wrongful-termination verdict against a U.S. corporation, representing an IBM employee who was fired for refusing to give up a dating relationship.

Palefsky says that getting into an all-out war with an employer "is like a divorce -- it leaves an emotional scar. Say you've worked at a company for 20 years. The moment you go to war with them you've just devalued the last 20 years of your life."

A lawsuit can mean an employee will have to testify, which no one really likes to do, and to put his or her friends in the middle of a nasty dispute, which can be even worse.

This all takes a heavy toll, which his clients will take pains to avoid. "On a psychological level," says Palefsky, "if you're fighting over the past, you can't enjoy the present."

Many HR people, the attorneys say, simply don't believe this. Perhaps they've received too many outrageous, overreaching demands. Perhaps they've had a particularly bad experience with a hostile plaintiffs' attorney.

But what HR may not realize, say attorneys interviewed for this story, is that the better plaintiffs' attorneys go to great lengths to avoid lawsuits, including doing much of their work behind the scenes. "With 50 percent of the clients I represent," says Outten, "the company never knows I'm there."

Coaching the Employee

Outten, staying out of sight, coaches clients on how to resolve their disputes. He helps draft responses to performance evaluations and helps craft e-mail exchanges with HR managers.

"It's not more effective for a manager to know that an employee has a lawyer behind him," he says. "Once I appear, it changes the dynamics. Things get stilted. My client can talk to people I couldn't."

He'll also coach his clients on how to find allies. "We look for the combination of the best two attributes -- the power to help you and the disposition to help you, regardless of title," Outten says.

The person may like my client, they may be friends," he says. "We figure out how to get those people to help."

Outten and his clients will also psychoanalyze the politics and personalities of the bosses and others involved in the case. They'll ask, for example, "Does the person perceive himself as fair, and does he want other people to perceive him as fair?"

Then, he says, they'll figure out how to push the person's 'fairness button' -- how to persuade him or her to do the right thing. Sometimes, the legal issues will never even be mentioned.

Last year, for example, Outten represented a woman who was the head of HR at a major company -- someone who had been on the opposite side of the table from him in previous cases. During a major reorganization, the woman had been asked by the CEO and top management to fire a number of people. Now, she was being forced out of the company herself, with very little in the way of severance.

Outten kept out of sight, but coached her to appeal to her bosses' sense of fairness. She reminded them that she did what they told her to do, says Outten. "It was a tough and unpleasant job, and they owed her."

It worked. The woman left the company with "a very attractive severance package," says Outten.

The plaintiffs' attorneys are aware that, in recent years, HR has sought to be more closely aligned with top management -- to actually be a part of it. And the attorneys are divided over whether that leads to more employee lawsuits.

"The best-run companies have an empowered HR function," says Palefsky. If an HR person has the authority to resolve a problem before it becomes a lawsuit, that's good for the company, he says.

Shilepsky agrees: "The HR folks who have been part of the organization over time, and understand things in a broader business sense, even if they're 'aligned with management,' they may be better able to understand what's best both for my client and the company," she says.

But being seen as part of top management can be a "double-edged sword" for HR, says Sellers. As those in HR become more aligned with management, he says, "they're viewed as less accessible, less receptive to the point of view of workers, less likely to pick up on discontent in the workplace."

And that, he says, "makes it more tempting for our clients to discount what HR has to say."

"It breeds a degree of cynicism in HR," Sellers says. "It makes people more inclined to come to us and say, 'We think there's discrimination, but the HR people we talk to don't believe what we say.' "

And if employees say to HR, "I don't trust you," then it makes it harder to settle cases, he says.

Sellers has handled a number of major class-action lawsuits alleging discrimination and illegal employment practices, including those involving all African-American FBI agents, 1.5 million female Wal-Mart employees and 28,000 women working at Boeing.

Says Sellers: "If there's some way that the human resources folks, if they're going to move into a managerial role, could demonstrate they're independent thinkers, they could regain their credibility.

"You want human resources to be empowered to say to the line manager, 'Folks, this is a mistake, don't go down this path.' " he says. "You want them to have the confidence so they can speak up like this and not worry that they've thoroughly damaged their careers."

The Power of Perception

But lawyers are, after all, lawyers. And while they have nothing but praise for scrupulously fair HR managers who can help resolve their clients' problems, they don't want them anywhere near a jury.

"In litigation, there's nothing I hate more than one of those HR people," Shilepsky says with a laugh. "If someone comes across to a jury as fair and ethical -- and looks good -- that makes my job a whole lot harder."

It's in front of a jury that attorneys can use HR's ties with management to attack its credibility. "We want to show that the person is getting [his or her] bonus by keeping the boss happy," she says.

In one case, for example, she represented a woman who had been turned down for a top position in a large organization, allegedly because of her gender. The woman complained to an HR professional, a woman who sided with the boss.

When the organization put the HR professional on the witness stand, Shilepsky tried to impeach her credibility by noting that the boss had given the HR person her job, had helped her early in her career and had been responsible for her getting a high level of compensation.

"What we tried to do, and what I thought we did, was show that she was not a neutral person," says Shilepsky.

Shilepsky believes juries hold HR people to higher standards than others in a company.

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"They expect that the HR person knows the law and abides by the law," she says. "It's [HR's] job to know if the CEO did something he shouldn't have done" and to take whatever action is necessary.

Nathan Goldberg, a partner in the Los Angeles firm of Allred, Maroko & Goldberg, also believes "juries expect human resources to do the right thing."

And so plaintiffs' attorneys can score a lot of points with a jury when they show that a company had a chance to fix a problem, but didn't. "Those are the best facts to bring before a jury," says Goldberg.

At the same time, he says, companies can have problems when jurors perceive HR as "just a shield for employers."

From a plaintiffs' attorney's perspective, says Shilepsky, it's all about fairness -- whether people in similar situations are treated the same way.

Shilepsky is perhaps best known for fighting off a constitutional challenge to laws on workplace harassment. And in a race-discrimination case, she helped a Massachusetts college professor recover 20 years of back pay. She was named first among "Boston's Best Employment Lawyers" by Boston magazine.

Shilepsky describes her job this way: "It's like the plaintiffs' attorneys are sitting in a dark room," she says. "We don't have the information; the company has the information.

"Our client shouts out, 'Something has happened to me.' The spotlight goes on our client, exposing all our client's warts."

Says Shilepsky: "This is where the company makes the mistake of thinking that showing the warts is going to make any difference to me. What matters to me is getting over to the wall to turn on the overhead light, because I'm looking at the comparative issues. The company says my client didn't complete a project in a timely manner or sent an inappropriate e-mail. In a vacuum, you can make anyone look bad. But it's how the company treated other people who didn't get their work done on time, or who sent an inappropriate e-mail. The CEO sent that bad joke; he still has his job."

She adds: "I make my living by being able to show my client was treated more harshly than similarly situated people."

Another mistake HR people make, says Shilepsky, is that "they think that throwing everything against the wall and seeing what sticks is an effective tactic. It's an incredibly ineffective tactic."

As an example, Shilepsky cites the case of a client at a large organization, a person of color, who complained of being paid less than others doing similar work. The organization came up with one reason after another for the pay difference, and each time, Shilepsky showed how the reason made no sense or had not been applied even-handedly.

The administrative law judge hearing the case ruled in favor of Shilepsky's client, saying the company's many explanations "collapsed under their own weight," she says.

A scattershot approach, she says, "makes it looks like a company is lying. It makes it look like a company will say anything."

Still another HR mistake: building a paper trail on one employee, but not on any others.

"It looks like a set-up, and there's nothing jurors hate more than a set-up," says Shilepsky. "It looks unfair."

Other Pointers

The plaintiffs' attorneys have other advice for HR. They know, for example, that employees occasionally do come to them with frivolous cases that can't be won. A contingency-fee lawyer is not going to be interested in that kind of case, and can actually be talked out of it at the outset if he or she is presented with enough evidence, says Palefsky.

Sometimes, he says, the best way to head off a frivolous lawsuit is to get on the phone with a contingency-fee lawyer when he or she calls, and make your case.

"Show the plaintiff's lawyer the documentation," he says. "Show the reason for the termination and be convincing. Some people say, don't give out information. But that's a bad idea. You can talk contingency-fee lawyers out of taking bad cases. Talking is your best defense."

Naturally, the plaintiffs' attorneys consider themselves skilled in the art of talking as well. They say they'll start off with as low-key an approach as possible, then work their way up the scale of intensity, depending on the results at each level. "I rise to the level of resistance," says Palefsky. "I'll call you up; I'll work with you."

The plaintiffs' attorneys we interviewed all felt that they and HR executives should be doing more to work together, rather than in opposition.

What the executives often don't understand, says Sellers, is that "in representing workers, we often seek to achieve goals in the workplace that they might welcome, that we might be allies -- though not formally -- to shake up the workplace."

As an example, he cites a current case he's handling in which the HR executives had already been raising concerns that women and minorities weren't getting enough first-level management jobs.

In memos to top management, the HR executives said things such as, "These numbers show we're way behind; there must be something we should do," according to Sellers.

But when a class-action suit on behalf of the women and minorities was filed, HR took the company's side, says Sellers. The HR executives are now saying things such as, "I exaggerated a little in my memos," he says.

Sellers, who like Outten has spoken at SHRM conferences and has talked to HR executives at large companies at the request of management attorneys, says he'd like to see more opportunities for plaintiffs' attorneys and HR to share their ideas about improving the workplace.

He'd like to see a meeting of the minds, outside the context of litigation and adversarial roles. Plaintiffs' attorneys and HR both want "what's good for the workers, what's good for the workplace," and should find a way to work together, says Sellers.

"I think these kinds of discussions are valuable," he says. "Anytime a lawsuit is filed against a company, the company has already lost something. Let's talk together about what we can do."

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