Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 8, 1990 TAG: 9007060638
SECTION: BUSINESS PAGE: E1 EDITION: METRO
SOURCE: DEBORAH L. JACOBS THE NEW YORK TIMES
DATELINE: LENGTH: Medium
Statistics are scarce, but the number of such lawsuits is increasing counselors say, as companies impose layoffs and executives hear reports of large court verdicts.
Jeffrey Liddle, a partner in the New York law firm of Liddle, O'Connor, Finkelstein & Robinson, said two to three employment cases concerning high-level executives come into his firm each week.
Before the October 1987 market crash, Wall Street firms "were making a lot of promises they could never keep," said Andrew O'Connor, another partner in the firm.
And after heavy layoffs on Wall Street late last year, his firm was getting one new employment case a day in the first quarter of this year.
One client, Andrew Selden, a former E.F. Hutton executive, won $2.9 million in March, based on a claim that Shearson Lehman Brothers Inc. had failed to honor his contract after it acquired Hutton in 1987.
Money is a big issue in the Wall Street cases, where a lost bonus might amount to $1 million or more.
And lawyers say suits are filed because employees worry less about hurting future job options. Many are leaving Wall Street altogether.
They want to hold companies accountable, establish a precedent and gain money or power they believe is theirs.
"I sued because I wanted to become a partner," said Ann Hopkins, who brought suit seven years ago against her former employer, Price Waterhouse.
After her sex-discrimination case went to the United States Supreme Court and back into federal district court, Price Waterhouse was ordered to make Hopkins a partner and to pay her more than $370,000 in damages. The company is appealing.
One of the highest-level executives suing is Robert A. Schoellhorn, the chief executive officer of Abbott Laboratories, who was ousted last December. He is seeking an unspecified sum for the company's "deceitful and unauthorized activities."
Nationwide, the average age-discrimination verdict is $722,294, according to a 1989 study conducted for the Bureau of National Affairs, a private Washington-based information service. In sex-discrimination cases, the average verdict is $475,181.
But the numbers tell only one side of the story.
"Corporations will hesitate to hire someone who's initiated an action," said John Poynton, an outplacement counselor with the Executive Assets Corp. in Chicago.
Time and energy spent on a lawsuit, rather than on job-hunting, "directly lengthens the job search," he said.
To lessen the risk of litigation, companies are becoming more vigilant in personnel practices, educating managers about how to avoid lawsuits.
John Artise, a vice president at the outplacement firm Drake Beam Morin Inc., New York, said the most common mistakes that lead to litigation include replacing an older worker with a younger or less-qualified one, and performance reviews that worsen drastically just before a termination, which suggests that an employer is fabricating grounds for dismissal.
Company lawyers are stressing the growing need for documentation, especially in cases where employees are told of a performance problem and then given an opportunity to improve.
Many companies are also asking employees to sign waivers of their right to sue in exchange for sweetened retirement or severance benefits.
At the Atlantic Richfield Co., for example, more than 8,000 employees have signed such waivers in the past six years.
In exchange, Arco makes a lump sum payment - typically three weeks' pay per year of service in addition to the normal severance payment, said Lloyd Loomis, senior counsel at Arco.
by CNB