Laid-off workers increasingly turn to lawsuits

Eric Oliver was on vacation last summer when he learned that he and seven other white co-workers, all over the age of 40, had lost their jobs at a software company from India.

Attorney Sidney Holderness’ expertise in underwriting title insurance wasn’t enough to keep the 60-year-old from losing his job.

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Brant Sanderlin/bsanderlin@ajc.com

Eric Oliver is suing his former employer, a software firm from India, for age and race bias. The 53-year-old Dunwoody resident does some independent consulting. He’s making the most of his time as a stay-at-home dad. He also coaches his 9-year-old son Jake’s baseball team.

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Hiwot Mekonnen and hundreds of other workers at a mortgage lender say they lost their jobs without the required advance warning.

All three metro Atlanta workers are suing their former employers.

Increasingly, workers aren’t going quietly into this recession. As the economic downturn deepens, workers are suing or filing charges — especially discrimination complaints — against employers in record numbers.

American workers filed 95,402 charges of discrimination last year with the U.S. Equal Employment Opportunity Commission. That’s the highest level of discrimination charges in EEOC history, spokesman David Grinberg said.

Early indications show first-quarter charges are outpacing the same year-earlier period. In Georgia, EEOC filings are up as well, with nearly half of the cases involving racial bias.

“The volume of charges and complaints [nationally] is unprecedented in the 20 years I’ve been practicing,” said Fritz Smith, who heads the labor and employment department in the Seyfarth Shaw law firm’s Atlanta office.

In past downturns, most workers moved on to other jobs rather than take their employer to court. Given the slim job prospects now, experts said, many workers feel their best hope is in court.

“Desperate workers who’ve been laid off or feel like they’ve suffered some discrimination are going to stop off at the lawyer’s office on the way from getting their pink slip,” said John Wilcox, senior editor for employment law newsletters at the National Institute of Business Management in Falls Church, Va. “A lot of attorneys who represent employees feel like it’s worth a shot. The awards are potentially huge.”

So is the economic squeeze.

“This is a very deep recession,” said Heather Boushey, senior economist with the Center for American Progress. “Folks are under extreme pressure.”

That pressure extends to corporations, as well.

“Companies are trying to save money and, therefore, laying off people, and the problem is in the decision — who’s going to be let go?” said Larry Pankey, a Dunwoody attorney who represents workers. “That’s infected with discrimination and bias.”

Still, legal experts say most employers are trying to do the right thing when it comes to layoffs and other employment decisions.

“I think companies are being extremely careful with respect to making decisions that are logical and structured,” said Atlanta attorney and veteran employment-law mediator Hunter Hughes. “Companies are doing a better job of trying to match up the person they keep to the job as it’s restructured. They’re learning how to better run their business.”

Attorney Lawrence Ashe agrees. His Atlanta firm defends companies against employment lawsuits.

“Most companies are trying to conduct layoffs in a way that will minimize the likelihood of future disputes,” Ashe said.

That said, companies can expect “their personnel decisions will be under the microscope both at the state and federal government level,” said Gerald Maatman, partner and co-chairman of Seyfarth Shaw’s class-action defense group and editor of the firm’s litigation report.

That report found that the top 10 class-action settlements in four key employment areas totaled $18.2 billion last year, up from

$2.5 billion in 2007. Much of last year’s money, Maatman said, went to workers who sued employers over losses incurred in their retirement plans during this recession.

The wide array of charges, suits and settlements is expected to increase.

“If 2008 was a big deal, expect 2009 to be an even bigger deal,” said Wilcox, from the National Institute of Business Management. “As the economy worsens, more people are going to be talking to attorneys, and more attorneys are going to be willing to take those cases.”

A check of about a dozen employment-law attorneys found an assortment of cases:

• Attorney Lee Parks’ firm currently has more than 100 discrimination cases, most of which were filed in the past year. That doesn’t include the consultations he’s had with top executives seeking help negotiating severance packages from their employers.

“People who used to be the sacred cows of the corporation are now getting slaughtered,” Parks said. “I’ve never seen it like this.”

• Mekonnen and two other HomeBanc employees brought a class-action suit against the Atlanta-based mortgage lender for not giving them ample notice of their dismissal. Local attorneys are seeing more of these kinds of cases. By law, companies involved in big layoffs must give workers 60 days’ notice. The group is suing for back pay, bonuses, holiday pay and other benefits.

The company stands by its decision, saying it was warranted due to rapidly deteriorating business conditions. The case is still being litigated in court.

• In Holderness’ suit against Fidelity National Title Insurance Co., the veteran underwriter claims he was laid off five months after he returned to work from recovering from a serious heart condition. Soon after he returned, the suit alleges, his hours and pay were cut, followed by the layoff. Holderness also contends he was replaced by a younger worker.

The company has said, among other things, that Holderness’ age and disability claims lack merit.

• As for Oliver, the sales executive suing VSoft Corp. for race and age bias, the company let him go from his six-figure job with only two weeks’ severance. He refused the money.

“You don’t spend 7 1/2 years with someone and just walk way for only two weeks’ pay,” he said.

Neither VSoft nor its attorney returned calls seeking comment, but the company has denied Oliver’s allegations in court filings.

Unable to find a permanent job, the 53-year-old Dunwoody resident does a little independent consulting and collects about $330 a week in unemployment. He’s making the most of his time as a stay-at-home dad.

“I’m kinda being a Mr. Mom,” he said.