Employment discrimination claims on the rise in federal courts

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As the number of applications for unemployment in the country has doubled in the last year, closer to home the number of job discrimination claims coming to federal court in Wisconsin is also on the rise.

In the U.S. District Court for the Eastern District of Wisconsin, employment civil rights claims increased from 68 in 2007, to 74 in 2008. The district is on pace for almost 100 this year, with 33 filed through April 30.

Though there have only been three employment civil rights filings in the Western District so far this year, there were 23 in 2008, compared to 19 in 2007.

Unemployment applications nationwide increased from approximately 323,000 as of April 2008, to more than 663,000 as of this April, according to the U.S. Department of Labor statistics.

“Employees are pushing so hard on ‘I need my job back’, but employers are typically saying, there is no job because we’re trying to keep afloat here,” said employment attorney Pamela M. Ploor of Quarles & Brady LLP, in Milwaukee.

“Then you have a standstill,” she said.

Attractive Option

While the vast majority of discrimination claims are settled through the U.S. Equal Employment Opportunity Commission (EEOC), Ploor said, in her experience representing employers in federal court, the economy is driving more laid-off workers to explore the option of filing a discrimination claim.

“If they don’t have any other means of support or other options, suing their employer probably doesn’t look too bad,” Ploor said. “There’s a possibility of course that you will be successful and get some money.”

But attorney Alan C. Olson, who represents employees in federal claims, said that while he has fielded more calls from prospective clients, only a handful actually decide to pursue legal action.

He suggested that many unemployed workers are reluctant to “risk” investing the time and money to sue their employer, especially during a recession.

“Part of what drives litigation is the individual’s willingness to embark on the one- or two-year process of litigating against their employers,” Olson said. “Are they using resources they need to provide for their family right now?”

In Wisconsin, people intent on bringing a discrimination suit against their employer must first file a claim through the EEOC or another agency. The agency has 180 days to decide whether to bring a claim on behalf of the employee.

After a decision is made by the agency, the former employee has a 300-day filing window from the date of the incident to file a claim in federal court.

“There is definitely a lag time between the period when there is a large-scale layoff and where there is actual activity in federal court,” said attorney John D. Finerty Jr., who represents employers.

Both Ploor and Finerty spoke about the expected rise in federal filings at the Eastern District of Wisconsin Bar Association’s Annual Meeting on April 30.

“The effect [of layoffs] is really just beginning and I expect we’ll see more federal court cases being filed,” said Finerty of Michael Best & Friedrich LLP.

Chances of Success

But just because there has begun to be an increase in filings does not mean plaintiffs have a better chance of success, said Finerty.

“In fact, I actually think it will get more difficult when employers lay off large numbers of people and have the opportunity to plan for it,” he said.

Ploor noted that many companies are being more careful about offering severance packages or out-placement for employees in an effort to avoid the possibility of getting sued.

However, she has encountered situations where employers were more informal with their policies during a layoff.

“What happens is the company offers severance to employees without a quid pro quo of a release,” Ploor said. “Then you have a situation where the person files a charge and then the employer feels like, we gave this person ‘x’ in severance and now they are still suing me.”

Another scenario which is becoming more common, said Finerty, is supervisors who were responsible for administering mass layoffs getting fired as well in a future round of cuts.

He said he has had two cases in the last year where that occurred and it can be difficult to fight a discrimination case when the employer fired both the plaintiff and the defense’s primary witness.

“Once the plaintiff’s attorney figures that out, it’s a pretty lively phone call about 10 seconds after they uncover that information,” Finerty said.

In his experience, Olson said employers issuing mass layoffs are distancing the decision maker from the immediate supervisor. The goal is to reduce the likelihood that an employee could allege a discriminatory basis for the termination.

“They want to be able to present the defense that the decision maker did not know about the individual’s protected status and that it was strictly a business decision,” Olson said.