How Much Does It Cost to Defend an Employment Lawsuit?
Defending an employment lawsuit from answering the complain, conducting discovery discovery to prepare for trial can cost an employer between $64,000 and $120,000.
Defending an employment lawsuit from answering the complain, conducting discovery discovery to prepare for trial can cost an employer between $64,000 and $120,000.
Protecting against an employment lawsuit, which involves responding to the complaint and undergoing the discovery process in preparation for a trial, can result in expenses ranging from $64,000 to $120,000 for an employer.
California businesses commonly inquire: what is the expense associated with defending against an employment lawsuit? Given California’s strong employee protection measures, the prevalence of employee-initiated lawsuits is significant. The process of safeguarding against such lawsuits in California comes at a substantial cost. These lawsuits delve deeply into factual details and often entail attorneys scrutinizing the complete work history of multiple employees.
The expenditures involved in defending an employment lawsuit, including the intricate process of discovery and potential motions for summary judgment or summary adjudication, can surpass $150,000 for employers. Should a summary judgment not be obtained, the costs can escalate further, requiring an additional $150,000 (totaling $300,000 or more) to proceed to a trial.
Opting for lawyers who charge a lower hourly rate, like $300, might not equate to cost savings. Frequently, attorneys with lower hourly rates possess less experience and compensate for this by extending the duration of tasks compared to more seasoned counterparts. This practice ultimately results in higher expenses for employers. Entrusting a novice attorney with a lawsuit involving your company is not advisable; the experience of an attorney holds utmost importance. For instance, Douglas Wade, our attorney, boasts a quarter-century of employer defense, yielding a broad expertise that eliminates the need for extensive legal research that other attorneys bill clients for.
The prudent approach often involves seeking early resolution of lawsuits to curtail legal fees associated with defense. It is worth noting that if the employee prevails, the employer is responsible for covering the employee’s attorney fees.
In many instances, employers opt to pay an employee rather than face the prospect of a legal tab that could amount to $300,000. Furthermore, a history of settling employment claims might lead to the perception that you are susceptible to future claims.
Savvy employers contemplate extending a severance package upon employee separation, contingent upon the relinquishment of claims and legal action. This strategy should be evaluated for each employee departure and extended to all terminated employees except those discharged due to deliberate and flagrant misconduct. By offering severance in exchange for claim waivers, the exposure to lawsuits concerning wrongful termination can be mitigated.
The majority of employment attorneys in California bill employers on an hourly basis. Employment litigation attorney fees in California typically range from $200 to $650 per hour. The primary determinants of an employment lawyer’s hourly rate are their level of expertise and years of experience. The hourly rate tends to increase with higher levels of knowledge and experience.
Nevertheless, employers must also take into account the potential costs of the employee’s attorney. If the employee’s employment lawyer prevails in the case, you will be held responsible for covering your employee’s legal costs. In addition to settling, you might find yourself obligated to pay supplementary legal expenses, potentially reaching around $250,000, for the privilege of facing a lawsuit.
Your employee’s legal fees are classified into two main categories: attorney fees and costs.
Attorney fees encompass the charges for the services provided by the attorney on behalf of their client. This cost can vary from $400 to as much as $750 per hour, contingent on the specific attorney. Given that litigation proceedings can extend over several months, the associated expenses can accumulate significantly.
Costs refer to the supplementary expenditures that arise throughout a legal case. These expenses encompass filing fees, postage and shipping expenses, photocopying charges, expenses related to depositions and court hearing transcripts, as well as fees for expert witnesses. These costs can quickly accumulate, particularly if the case drags on for an extended period.
An effective strategy for evading employee lawsuits involves the establishment of sound company policies and procedures, typically outlined in an employment handbook. Paradoxically, the greater the success of your business, the more susceptible you become to legal actions. Statistical data indicates that forty-one percent of employment lawsuits stem from employer retaliation.
Even in situations where no wrongdoing has occurred and substantial evidence of innocence exists, opting to settle rather than incurring escalating legal expenses often proves advantageous. Choosing to settle and paying a sum like $10,000 yields a considerably better outcome than facing potential costs of up to $100,000 in the event of a loss. Such costs encompass settlement amounts, legal fees for both parties, and the employee’s legal expenses.
Imposing stringent company policies can effectively curtail legitimate instances of discrimination. Equally crucial is the establishment of clear termination protocols and considering the merits of offering a substantial severance package as a means of obtaining a release from potential legal claims.
Engaging a proficient employment attorney stands as one of the foremost methods of safeguarding your business against employment-related lawsuits. Their expertise proves invaluable in developing employee handbooks, policies, and documents that reduce the likelihood of infringing upon employment laws and, consequently, minimize the risk of litigation. In cases involving employment law, meticulous documentation serves as your primary, and at times solitary, defense. Additionally, your attorney will provide guidance when situations have the potential to escalate into lawsuits or when employees issue threats of legal action. Armed with comprehensive knowledge of federal and California employment law, we possess the capability to shield your business from legal onslaughts. Our track record highlights our success in reducing the lawsuit risk for companies. However, if your business does become embroiled in a lawsuit, we are unwavering in our commitment to robustly litigate and secure a favorable outcome.
Have a quick question? We answered nearly 2000 FAQs.
See all blogs: Business | Corporate | Employment
Most recent blogs: