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Business Costs & Regulation

Say No to This Lawyer's Shakedown

Resist the temptation to sue just to win a quick settlement.

Q: I am a 50-year-old white male who was recently laid off in a large downsizing after a long period of unprofitable operations at my company. I’ve been contacted by an employment attorney who is apparently approaching many other riffed employees, suggesting that we all file discrimination actions on various grounds. I told him I’m not inclined to do so. In my long experience, the company seems to be very progressive about hiring and promoting minorities, women and older workers. As best I can tell, the layoffs fell similarly on people of different backgrounds and levels of seniority. Our severance payments seem pretty generous, too.

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The lawyer said that all of this may be true, but he can still get me at least a $10,000 settlement (after his contingency cut) just by rattling the saber of age discrimination. He says I would be a fool not to go for it, as many of my former colleagues are doing. I could sure use the extra money, but I’m uneasy about this.

Your uneasiness is both understandable and ethical. This would be a classic lawyer’s shakedown of a distressed company that has apparently done nothing wrong. The lawyer is betting that your former employer would rather give you a quick $10,000 than have to incur the costs -- in staff time and legal bills -- of defending itself against a baseless lawsuit.

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It’s too bad that many companies choose not to defend themselves, simply viewing such settlements as a cost of doing business. If more blameless companies fought back, there might be fewer such suits. The Equal Employment Opportunity Commission and the court system have enough cases of genuine discrimination without being clogged by bogus claims like this one. I understand that it’s difficult to turn your back on this possible payoff, but I hope you will take the high road and not be a party to it.

Send your own money-and-ethics question to editor in chief Knight Kiplinger.

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