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H.R. Alert

July 2009

Employee Lawsuits Explode as Lay Offs Rise

In the present economy layoffs are rising at an unprecedented rate. Just last week layoffs were announced by Starbucks, Pfizer, Caterpillar, ING Group, Home Depot, Texas Instruments, IBM, AOL, Eastman Kodak and many others. Financial firms, Goldman Sachs and Morgan Stanley which have already made significant reductions in their workforces announced they will make additional layoffs.

Prompted by these layoffs employee lawsuits by former employees are also on the rise. One indicator is the rise of complaints filed with government agencies such as the Equal Employment Opportunity Commission which realized a 15% increase last year and is expected to exceed that percent this year.

More and more so-called wrongful termination lawsuits are being tried by juries which tend to favor employees. Out of 120 cases surveyed by the Rand Corporation in 2007 66% were won by employees. The average award was over $650,000 per suit excluding legal fees which can often exceed the cost of the judgment. Employee lawsuits are even more expensive for California employers where a recent study found that plaintiffs were 75% to 80% of the time winning an average of more than $300,000. It’s become similar for employers to play the lottery.

So what can you do to protect yourself? Here are some tips and strategies:

As always, if you have questions please call.

Larry Levy

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