2003 - more employment litigation ahead

2003

Continued workforce cuts will be the hottest workplace legal issue in the United States and around the world during 2003, according to a survey conducted by the Employment Law Alliance.

Layoffs will be accompanied by a flood of wrongful practice allegations, claims of age discrimination and whistle-blower retaliation, says the ELA’s "America At Work" survey of 500 leading labour and employment lawyers in the United States and 28 other countries in South America, Europe, Asia and the Middle East.

Looking back over 2002, 45 per cent of the ELA lawyers polled said there was a modest increase in workplace-related litigation. However, nearly 80 per cent of that litigation increase involved workforce reductions. The second biggest reason for litigation growth this year over 2001 was the fact that unemployed workers were having a harder time finding work after their termination.

"When times get tough, for both troubled companies and terminated workers, litigation often becomes an attractive option to generate revenue," said ELA founder and CEO Stephen Hirschfeld.

"For the second year in a row, we're looking at the prospect of increased labour reductions," says Hirschfeld. "There's no question that 2003 is going to be another very busy year for employment lawyers, which is not necessarily good news for employers or employees", he added.

But the survey found that only 31 per cent of those questioned said they expect their clients to actively increase employment and labour law training for managers.

"What is most troubling, based on the survey results, is that even though the reductions in force appear inevitable, employers are planning on doing relatively little in the way of training and education to minimize their legal and financial exposure," said Hirschfeld.

“Our advice is for companies in the U.S., and around the world, to think twice and not be pennywise and pound foolish when it comes to setting their priorities for managing reductions."

But there are some hopeful signs in the forecast. For example, 42 per cent of ELA members think employers will be spending more time addressing ethics issues at the board and executive levels. Increased workplace compliance is expected to produce fewer claims involving safety and health disputes, sexual harassment claims, and disputes over disability accommodations.

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