How much is a wrongful dismissal case really worth? Howard Levitt has had cases where clients have been paid literally millions of dollars more than their legal entitlement just to maintain confidentiality.
While sitting at a restaurant in Halifax, a day after a trial, Howard Levitt was approached by a lawyer who had recently been terminated from his national law firm.
He had already received a legal opinion from a local employment lawyer as to the value of his case, but that advice was fundamentally misguided.
To be clear, the advice reflected what a lawyer with his age, length of service and remuneration would normally be entitled to. But it totally missed the mark.
The reality is that this gentleman’s law firm had behaved so poorly that it could never risk the publicity, neither within the legal community nor in the pages of a newspaper, of a public Statement of Claim, let alone a multi-day public trial.
Howard’s inquiries to this lawyers were not regarding his age and length of service, but what was it worth to this law firm to place the facts of the case in a vault and bury them in the depths of the Atlantic Ocean, never to be heard of again. That wass the value of his dismissal claim, a much higher number than the opinion he had received. This lawyer had some inkling of that insofar as the firm had made it clear, when making its settlement offer, that non-disparagement and confidentiality clauses were absolute requisites.
Some years ago, at the height of the subprime mortgage crisis, a bank executive client was fired. He had warned the bank, in writing, of the risks of its practice but it went ahead regardless. Class-action lawyers were prowling about looking to sue banks for their clients’ losses. The case settled for many millions of dollars, an amount which was close to four times what the case was most likely worth if it had appeared before a judge. However, since potentially billions were at stake for that bank if the client’s early warning to it was publicized, so the settlement was far more than legal entitlement.
Any case with reputational or branding risk, or even embarrassment to those in a position to write the settlement cheque, provides an opportunity to use such “hidden persuaders“ to resolve a case quickly and lucratively.
Sometimes employers foolishly fight such cases and refuse to make offers beyond only the value based on length of service etc., without calculating the losses they will suffer in customer relations, goodwill, regulatory approvals or even potential lawsuits when perfidy, stupidity or negligence at the top is exposed.
Now, on the other hand, Howard sometimes advise employer clients, when faced with such allegations to “get a grip” and consider whether the public realistically has any interest in their case and its allegations. There are only so many cases with sufficient public interest to land their stories in the news. Too many companies believe that they are of greater public interest than they actually are.
And many employees exaggerate in their own minds the potency of the information that they have. Good judgment in evaluating that and knowing how to maximize the impact of the information should be essential legal skills.
Employees and employers alike will be interested as to their legal entitlements in wrongful dismissal claims. However, sometimes, the quantum of damages the employee is legally entitled to may pale in comparison to the amount a company is willing to pay the employee for their silence.
Sometimes employees have warned companies of potential issues long before those issues ever come to light, and sometime the employers bad faith conduct is so egregious, the last thing the employer ever will want is for the claim to be heard in a public forum for the whole nation to hear.
There are also cases of sexual harassment and abuse which have taken place at companies and neither the employer nor the employee feel comfortable having the specifics of the matter displayed for all to hear or read about.
This webinar will help both the employer and employee realize their rights upon termination and determine the best long-term course of action going forward.
Employers need to understand when a public stand is in their best interests, and employees need to determine whether the power they think they may have over a company is really as valuable as they believe it to be and whether a settlement or a trial is the best road to take.