A lawyer letter is exactly what it sounds like – a letter from a lawyer indicating the lawyer represents one of your former (or potentially current) employees who is asserting certain claims against the company. The letter usually claims that before filing a formal lawsuit, the lawyer would like to see if the matter can be resolved. Some letters are written like full legal briefs, setting out all the lawyer’s arguments as to why the employee has a claim. Others provide only minimal detail and invite a conversation. Yes, the lawyer is looking for money for their client. No, you should not ignore the letter.
It is unlikely that the lawyer is going to be rejected by the company’s failure to respond to a lawyer letter. Most likely, the company will either get a second letter – or a formal law suit. Depending on the nature of the situation, it may be better for the company to attempt to resolve the asserted claims in response to a letter. Certain advantages (such as keeping the matter confidential) are lost once a formal and public litigation are filed. Most employment laws have a “fee shifting” provision that requires employers to pay the legal fees of successful employee/plaintiffs. With only a letter drafted, and no formal complaint compiled or filed with the court, the former employee’s lawyer has spent less money and time on the matter and if the situation is one that should be resolved, the price tag will be potentially less at that point in time.
Many factors go into making the decision as to whether to respond to the letter or to ignore it. They would best be evaluated in conjunction with your employment counsel who can review the situation and provide you with advice regarding the strength of the employee’s claims. Where the company may not think that the former employee has a leg to stand on, your employment counsel may see serious exposure for the company based on certain laws that may not have been being applied.
The letter may also request that the company maintain all documents and records related to the employee and his or her claims. Without regard to whether the letter expressly makes this request, the fact that the company is now aware that an employee is asserting legal claims against it triggers the company’s obligations to retain both hard-copy and electronic records that could become relevant in the case. Automatic document destruction procedures may need to be suspended. Hard drives may need to be preserved. You employment counsel can advise as to the actions the company is legally required to take.
If the company has Employment Practices Liability Insurance, your carrier should be put on notice of the claims. Coordinate with your employment counsel regarding these steps as well.
Bottom line – should your company receive such a letter, call your employment lawyer. If the company does not have one on retainer, or does not have an established relationship, be sure to associate with an attorney who regularly represents companies and management with regard to employment claims.