Tips On Litigation

Mike Dillon, a General Counsel and Corporate Secretary for Sun Microsystems, Inc. has some great thoughts about litigation posted on his blog, The Legal Thing.  He notes:

No. 1 - You only litigate when you have an important interest to protect. Litigation is costly. Incredibly costly. But it is not the expense that is the real issue, it's the diversion of resources. Time employees spend reviewing e-mails and documents, educating lawyers and preparing for depositions is time away from the business. That's the real cost of litigation.

No. 2 - A non-judicial resolution is almost always preferable. When you file a complaint, you are turning over resolution of an issue to a third party - be it a judge, arbitrator or jury. To a great degree you lose control of the outcome.

No. 3 - You litigate when you have a high degree of confidence that you will prevail. Bluffing is for weekend games of Texas Hold'em . When you file suit, you need to have fully evaluated all aspects of the case to ensure that the outcome will be favorable.

No. 4 - You litigate to win. This means that your employees, board and management team fully understand and support the commitment (both financial and time) required to prevail. It also means having seasoned litigation counsel who understand your business and objectives.
While his perspective is towards enforcing a company's intellectual property rights, his analysis can easily be applied to defending employment litigation.  Most notably different is that employers do not chose when to be sued for wrongful termination or wage and hour claims.  However, the company should be completely prepared to defend itself in litigation - in California it is only a matter of when.  In order to develop a strong defense, the company should work with experienced employment attorneys to establish policies that (1) comply with the law and (2) assist the company when a lawsuit is filed.  I mention the second point because while companies have policies that comply with the law, when litigation starts the fact that you have complied with the law is good, but the company needs PROOF that it complied with the law.  An experienced employment litigator can help companies set up policies to document the areas that will most likely be areas of contention during litigation.  For example, California companies should have a clear "at-will" policy signed by the employee, should have a system (preferably computer based) for recording when employees take their meal breaks, and have a clear policy on rest breaks that is in some way acknowledged by employees.

Also, this process of working with an attorney in establishing solid policies is a great period to see if the company likes working with the attorney and (hopefully) develops a good relationship that is critical in any attorney-client relationship.  This also allows the attorney to become familiar with the company and its business and objectives as Mike mentions in No. 4 above.

Finally, companies need to understand Mike's point No. 4 - You litigate to win.  Once a case is filed against a company, the message communicated throughout the company should be that it is extremely important to spend the time necessary to assist the outside counsel in defending the case.  Owners, executives and employees must give their undivided attention to the litigation.  To do otherwise is a costly mistake.
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