You’ve Been Sued – How to Get Out with Your Business Intact

Employee disputes and claims are landmines scattered throughout the business and employment world in California. It’s nearly impossible for any California employer in business for any length of time to avoid a land mine going off. This article outlines our experience in defending California employment law claims and how you can benefit from it, including: 

• How we assess the validity of wage-hour and other employment claims. 
• Our approach to negotiations and settlement discussions with opposing counsel. 
• What sets our firm apart in terms of resources and approach to employment law. 

What Experience Does Our Firm Have In Defending Business Owners Against California Wage And Hour Complaints?

Vision Law® lawyers have handled hundreds of employment and labor law claims. Each of our attorneys is highly experienced, with at least ten years of practice defending employers, and in most cases, our attorneys have been focused on doing so for over two decades.

This extensive experience has allowed us to develop a number of unique techniques and effective strategies to get you out of the lawsuit as soon as possible for the least overall cost (what you pay us and what you pay them, the employee and their attorney). 

What Strategies Do We Employ To Assess The Validity Of Wage And Hour Complaints And Build Strong Defenses?

Over the decades, we have been able to streamline the process into a relatively straightforward one.

We always start by evaluating the claims against the facts such as:

• How long the employee was employed, 
• How much they were paid, 
• Available documents such as time records, 
• Employee handbook policies, 
• Paystubs, 
• And more. 

This allows us to determine:

1. If there is indeed liability
2. The approximate maximum exposure. In other words, the wages and penalties that will be due in dollars.

Inevitably, the strength of your defense will entirely rest upon the quality of your documentation, i.e., daily time records, paystubs, and employer-written policies. Our ability and experience are considerable, but we cannot do anything without solid documentation. 

In fact, knowing when and where to pick our battles and when to settle to avoid much greater losses in the future is the value of our experience. Our goal is always to get you out of the case as soon as possible with the least overall cost. 

How Do You Approach Negotiations And Settlement Discussions With The Opposing Party To Achieve The Best Possible Outcome For Your Clients?

After performing the analysis of your liability and maximum exposure, our firm proceeds to evaluate the probability of loss on each claim. This is where our experience comes in handy. 

Then, we apply that probability against the maximum damages for each claim. That gives you an objective statistical estimate of the settlement value of the case. You then proceed to decide on our “authority” to settle the claim. This means the maximum dollar amount you authorize us to settle the case for.

We take the “authorized amount” (based on the objective and reasonable settlement value of the case) and start a conversation with your employee’s lawyer. If they are reasonable and understand wage and hour law, then we typically arrive at a settlement amount within the “authority” we are given.

This is because wage and hour claims are generally based on fairly straightforward math. So, as long as both sides agree on the facts and the probability of each outcome, then a reasonable agreement is likely.

Ultimately if forced to do so we make a final last best offer (LBO) of our authorized amount, after all that is the maximum we are willing to pay to settle the matter. If the LBO is rejected, we make a CCP 998 at the beginning of the case. More on CCP 998s below.

Attorney Scott Shibayama has been advocating for California businesses for nearly 30 years. Based in Sacramento, he helps small business employers avoid lawsuits and litigation.

Attorney Shibayama now wants to make sure every business owner and employer can protect themselves by sharing insights learned defending Fortune 500 companies.

Connect with his firm, Vision Law®, to stay updated on the latest developments in California Employment Law and gain valuable insights needed to prevent vulnerabilities or employee litigation.

Call For A Free Consultation - (855) 534-1490.

What Resources And Tools Do We Use To Gather Evidence And Support Your Defense Against Wage And Hour Complaints?

Your defense in a wage and hour case, including class actions and Private Attorneys General Act (PAGA) cases, rises or falls on objective data. This includes the number of employees, how long they have been employed, their wage rate, time records, paystubs, and employer-written policies concerning timekeeping, rest and meal periods.

We use a spreadsheet to calculate the amount of exposure you face, and we explain the analysis in plain English so that ultimately, with our help, you can make the best decision possible.

What Are The Risks And Consequences For Employers Found In Violation Of California Wage And Hour Laws?

Being found liable of violating California Wage and Hour Laws comes with heavy but predictable penalties. 

Typical damages include:

• Past due wages (minimum wages or overtime), 
• Additional penalties based on 
  • Rest/meal period violations, 
  • Pay stub violations, 
  • Late payment of wages, either on a pay period basis or final payment of wages
  • Interest on all of the above,
  • And, perhaps the most expensive of all, the employee’s attorney fees.

The attorneys’ fees can be a ridiculous number, far outstripping the actual damages to the plaintiff in many cases.

If the lawsuit is brought on a class action or Private Attorneys General Act (PAGA) basis, then the risk/exposure/damages are multiplied by the number of individuals involved. And the attorneys’ fees here can be truly astronomical.

What Sets Your Firm Apart When It Comes To Handling Wage And Hour Complaints In California?

Candidly, any reputable wage and hour defense attorney would do the same thing we do: evaluate the case upfront (liability and exposure in money terms), then try to reach a reasonable settlement based on that evaluation. We are very hesitant to litigate wage and hour claims where there is a genuine liability because even if the exposure is small, the attorneys’ fees can be life-threatening to the small or medium businesses that we serve. Nevertheless, we have developed some effective strategies and techniques to handle even such claims.

Once we determine a reasonable settlement value – and if the case does not settle at or below that number – we’ll issue what’s called a Civil Procedure Code section 998 (CCP 998) offer of compromise. This is the only way to have any hope of cutting off the plaintiff’s attorneys’ fees. CCP 998 offers, in the context of wage and hour claims, tend to get the plaintiff’s counsel’s attention. That is because they, of course, are in it for their fees, and if anything threatens their ability to get their fees, then they tend to get reasonable, fast.

A CCP 998 offer is complex, but the gist is we offer a fixed amount of money to settle the case. The offer can be made to include the attorneys’ fees to the date of the offer or not. Therefore, it is best to make a CCP 998 offer very early in the case. The plaintiff then has 30 days to accept. if they do not, the offer expires automatically. The plaintiff must then beat the amount offered at trial. If they do not, then the plaintiff’s attorneys’ fees after the date the CCP 998 offer was made are cut off. 

Thus, we force the plaintiff’s counsel to make a serious assessment of whether they can indeed beat the CCP 998 at trial. The validity of CCP 998 offers is tricky. You will need to check with a lawyer beforehand to see if you can even make one.

How Do You Approach Educating Employers About Wage And Hour Compliance To Prevent Future Legal Issues?

While we are clearly equipped to handle claims, our focus lies in helping you avoid them in the first place. We offer “cheat sheets” to our HR Infrastructure clients that cover the basics of wage and hour law, such as:

• Exempt versus non-exempt status, 
• Payment of wages, 
• Overtime/double time details, 
• Rest and meal periods for non-exempt employees,
• Timekeeping an itemized statement (paystubs) requirements, 
• Timing of final payment of wages.

We also remain available for regular calls, advice, and communication on issues or questions as they arise. Every call we have with you about wage and hour issues educates you on compliance and avoiding wage and hour claims. For more information on Our Experience Handling Wage & Overtime Disputes In California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (855) 534-1490 today.