What To Do If You Receive a Demand Letter
During the COVID-19 pandemic, many employers have been faced with challenging business decisions. While some business leaders have made angst-filled choices about furloughing and laying off employees, others have used the economic downturn as an opportunity to lay off underperformers. Either way, a number of organizations are now finding that they have become targets for plaintiffs’ attorneys making claims that employment decisions were improperly based on a protected characteristic – such as age, race, gender or disability – or on protected activity – such as requesting time off to care for school-aged children or a request for reasonable accommodation based on an employee’s medical condition.
What should you do if you receive notice of a potential employment discrimination, retaliation or harassment claim against your organization?
Most lawsuits do not start as lawsuits. They start as demand letters from an attorney representing the other side. If you receive a demand letter from an attorney on behalf of a former employee threatening a lawsuit, take the following steps.
Don’t Ignore It
While it might be tempting to ignore the demand as frivolous, doing so is not likely to make the matter go away. It may actually make matters worse. Think of the demand letter as an opportunity to resolve the situation before it goes to court and before the organization expends significant time, energy and money defending a lawsuit. Seize the opportunity.
Decide Who Within the Organization Needs to Know
At this stage, a limited number of people within the organization need to know about the demand letter, most notably those who will play a role in deciding how to respond. Particularly before counsel has been retained, consider having all substantive conversations about the demand letter in person or by phone/Zoom/Teams. Limit any communications in writing that could come back to haunt you.
Call Your Insurance Broker
Figure out early on if you have insurance coverage. Many organizations now have employers’ practices liability insurance (EPLI) that may cover the claim. But you must put the carrier on notice as soon as possible.
Call a Lawyer
An experienced employment attorney has responded to dozens (or more) demand letters. He or she understands the underlying law and the unwritten rules that frame any negotiation. Bring a lawyer into the process early to guide you and avoid missteps. MEA members can reach out to a Member Legal Services attorney to discuss. Our attorneys can work with you to determine the most appropriate response to any demand letter and assist you in trying to resolve the matter as favorably as possible.
Amy G. McAndrew, Esquire
Director of Legal and Compliance Services
MidAtlantic Employers’ Association
*This Alert is provided for general informational purposes only and does not constitute legal advice.