You had to let Pam go last Fall. Her performance had been slipping, and you had continually tried to coach her, but you could tell that she had just lost interest in the role. Her lack of focus meant that things weren’t getting done, and she was not coachable. You presented what you thought was a reasonable package.
Pam was quiet in the termination meeting, but days later, you received a letter from her lawyer demanding significantly more money. You turned it over to your lawyer and helped them prepare your response. Her allegations that you had not supported her at work were incorrect, and the amount of money she’s demanding is wildly inflated. Your lawyer told you they would attempt to resolve things through negotiation.
Naturally, you’re surprised when your lawyer calls to inform you that Pam is suing the company. They were optimistic that they could work with Pam’s lawyer to strike a reasonable deal, but they advised that Pam is adamant about having her day in court, and she’s now taken the next step.
So what happens next?
The Clock is Ticking
While you are negotiating with the other side in a dispute, there is no immediate timeline for resolving the issue. However, the statute of limitations places the burden on Pam, and if she wants to sue, she has two years from the date of her termination to do so. She has now, effectively, pulled that trigger, and now the clock starts running for you.
Your lawyer will explain to you that you have 20 days to file a defence to Pam’s claim. If you cannot get everything together in that short time, your lawyer can file a Notice of Intent to Defend, which will buy you an extra 10 days. These timelines are short! In some cases, your lawyer may have advanced notice that a claim is coming, and you should be prepared. However, some lawyers can be particularly aggressive with this.
When you work with an employment litigator, they will review all your evidence and ask you any questions that they need to prepare your defence. If you have any particular reason to sue Pam, they may even suggest pursuing a counterclaim along with your defence, but this is not always the case.
The contents of Pam’s claim can help determine what happens next. If she claims an amount under $35,000, the matter will go before the Small Claims Court. Small Claims Court has a simpler court procedure designed to welcome individuals who do not have a lawyer. It is still a courtroom with legal formalities, but you may have a quicker resolution.
Your lawyer may also recommend proceeding with what is called a motion for summary judgment. There may be no other issues up for debate besides what Pam believes she is owed. In that case, both lawyers can go before a judge in a short motion to argue their positions, and the judge will issue a ruling. That may not give Pam her ‘day in court,’ but it would save both sides significant time and legal expenses.
Mediation to the Rescue
Depending on where the business is located, you may be required to go to mediation before proceeding to a courtroom. However, even without that requirement, mediation can still be an inexpensive and effective way to solve these sorts of disputes.
In mediation, both parties and their lawyers agree to have their dispute facilitated by a mediator – a neutral third-party who is well-trained in helping settle these sorts of disputes. Some mediators may start with everyone in the same room, and with others you may never see the other side. Your lawyer will explain the process, but in most instances the mediator is going back and forth between the rooms (physical or virtual) to try to help bridge that gap.
There are tremendous benefits to settling a dispute at mediation. No, you rarely get exactly what you want, and you’ll likely agree to pay more than you wish. However, mediation brings about a quicker resolution on your own terms that you can agree to, not ones imposed by a judge. It also means that you can keep details private and out of the public record.
While you will need to pay your lawyer for their time to prepare for and attend mediation, it is ultimately less expensive than proceeding to court. You can also dictate the terms of a Release or conditions that Pam must agree to for any settlement. This usually includes a requirement not to disclose details, not to disparage the company, or not to proceed with any further legal action.
If the dispute settles at mediation, then the lawyers will agree to file the formal paperwork to halt any further court proceedings.
Negotiations Continue
Even if you are preparing for litigation, negotiations can still continue. Roughly 98% of all civil disputes are settled before trial. The matter may settle within days, within weeks, or even within months, but it will likely settle before trial. There is no restriction on your lawyers continuing to negotiate.
Even though Pam is determined to have that day in court, she will quickly realize that, in the face of mounting legal bills, it is simply not an efficient use of her time or money. Even if Pam has hired her lawyer on contingency, the money it would cost her to continue will significantly eat into anything she may win, if she wins at all.
There is also the threat of legal costs awarded by a judge. Our legal system is one where the losing party pays a significant amount of the winner’s legal costs, which can make going to court that much more expensive. There are no guarantees of the outcome in a courtroom, but there is practically a guarantee that it will be expensive.
Final Thoughts
If you are served with a claim, don’t panic, but also don’t delay. The worst thing you could do is to file it away in a drawer and pretend it has not happened. A judge could note you in default for failing to file a defence, and you can be legally required to pay the amount listed in the claim.
Instead, hire a litigator who has experience and knows your area of law. Find someone who takes an approach that’s right for you and who has handled these sorts of matters many times before. We are those litigators with a significant number of wrongful dismissal cases (and many other varieties as well) under our belts. Contact us today to set up a consultation.
