Most Employment Discrimination Lawsuits Don’t Net Much Money

Every once in a while, you’ll hear about a lawsuit against a huge employer for some form of employment discrimination. These sensational cases typically allege a long pattern of discrimination, mandated (or at least tacitly endorsed) by top management, all the way down the chain of command. They might involve hundreds, if not thousands, of plaintiffs. Sometimes, you even hear about multimillion dollar settlements or jury awards.

However, these types of cases are extremely rare, considering the number of employment discrimination suits filed across the country every year. The vast majority of job-discrimination complaints are brought by individuals who cannot afford high-powered class-action attorneys.

Indeed, only a miniscule fraction of job-discrimination lawsuits ever make the news, and a similarly small proportion of them ever go to trial. In general, employers will do almost anything to avoid taking an employment discrimination case to trial, not only to avoid the time and money that it costs, but also to avoid the negative publicity, and to take the factor of unpredictable jury awards out of the equation.

Accordingly, employers typically do everything they can to have these cases dismissed as soon as possible. Failing that, they typically offer modest settlements, most of which are accepted by the plaintiffs. However, according to a recent article in the ABA Journal, these settlements tend to be smaller than most people might expect.

That article refers to a study conducted by the American Bar Foundation, looking at federal employment discrimination filings from 1987 to 2003. In addition to the small settlements, the study found that only 6 percent of these cases ever go to trial. Of the cases that make it to trial, only 1/3 of plaintiffs are successful.

Therefore, it makes sense that most plaintiffs, especially if they’re represented by a competent employment litigation attorney (who would be aware of their chances of success at trial), would advise them of the likely outcomes.

So Why Do Workplace Discrimination Lawsuits Rarely Get Off the Ground?

But why do employment-discrimination lawsuits have such a low success rate? Well, there are a lot of reasons. First, and perhaps most obviously, employers can usually afford better lawyers than employees, who may not be able to afford lawyers at all, and will therefore have to represent themselves, rely on scarce legal aid resources, or find a lawyer willing to represent them on a contingency basis (taking as payment a portion of the settlement or jury award).

Also, in job discrimination cases, the odds are generally stacked against the employee from the start. This is not necessarily a bad thing. After all, in every other civil action, the burden of proof is on the plaintiff, and so it should be in employment cases.

Furthermore, the simple nature of the employer/employee relationship makes proving discrimination difficult. In the absence of a contract to the contrary, employees and employers are governed by the principle of “at-will” employment. This means that the employee can quit at any time, for any reason (or no reason at all). Conversely, the employer can fire the employee at any time for any reason, or no reason.

Of course, laws against discrimination serve as exceptions to this general rule: under federal law you can fire an employee for any reason, as long as your reason isn’t solely the employee’s race, color, religion, national origin, or sex. In addition, many states have additional protected classifications, such as sexual orientation, gender identity, and political views.

What Do You Need to Show to Prove Employment Discrimination?

So, if you’re fired and believe that it was for a prohibited reason, you essentially have to prove what your employer was thinking when he or she fired you. Obviously, this is no easy task.

Because there isn’t a mind-reading machine in every courtroom (if any scientists are reading, get to work on this right away; cancer will be here when you get back), courts have come up with certain sets of facts that an employee must prove to create the inference that employment discrimination occurred.

First, they have to show that they were not hired for, or were fired from, a certain job. Second, they have to show that they were objectively qualified for the job (they had the necessary skills, education, and experience to perform the tasks in the job description). Third, they must show that the position remained open after they were terminated, or not hired, and was eventually filled by someone of a different race, religion, national origin, or whatever other category the alleged discrimination is based on, and that the replacement was not more qualified than the plaintiff.

However, if the plaintiff proves all of these facts, they have not won the case. All they’ve done is raised a “prima facie” case of employment discrimination – these facts, on their face, create a presumption that discrimination has occurred.

At this point, the burden of proof shifts to the employer. To prevail at this stage, they have to prove that they had a legitimate, non-discriminatory reason for their hiring or firing decision. This reason can be just about anything, but they do have to prove that it existed.

If the employer proves those facts, the burden once again shifts to the employee, who has to prove that the employer’s “legitimate” reason for terminating them is merely a pretext for discrimination.

Finally, if the employee proves all of those facts, he or she wins the case. However, if they fail to prove a single one of those facts, they will lose. Obviously, given the number of moving parts involved in making an employment discrimination case, there are many possible points of failure.

Furthermore, the fact that only 1/3 of discrimination suits that go to trial are successful may simply illustrate that most job discrimination suits are without merit. Or, at the very least, that employers who want to discriminate based on race have gotten very savvy at keeping business records which give them plausible deniability.

Obviously, one should hope that the former is true, and not the latter. If very few employment discrimination suits have merit, that would mean that employment discrimination is not terribly widespread. Obviously, that would be a good thing.

On the other hand, the possibility of the second explanation, that employers who want to discriminate based on race have gotten good at hiding it, is quite disturbing. If true, this might mean that employment discrimination is far more widespread than most people suspect.

What Does This Mean for Those with Bona Fide Discrimination Claims?

There’s no way to know for sure what explanation is the correct one, and it could be a combination of the two (actual employment discrimination is rare, and employers that do discriminate are good at hiding it).

Whatever the cause of this low success rate, it’s no wonder why so many of these cases settle before they get anywhere near the trial stage. If a competent employment attorney advises his or her client on the chances of success at trial, most will not be willing to roll the dice.

It’s true that a jury might award the victim of employment discrimination a huge sum of money, much greater than any settlement that any defendant would ever offer. However, the chances are much greater that the jury will rule against them, or award them a small sum. Therefore, many plaintiffs might jump at a relatively small settlement, simply to get some compensation for the wrong (or perceived wrong) they have suffered, and move on with their lives.

It’s possible that this state of affairs leads to many people with legitimate discrimination claims settling for small amounts of money. However, under the current at-will employment system, not much can be done to change that. Some have suggested doing away with at-will employment altogether, especially considering the fact that the rule has been chipped away to the point that it largely serves as a preamble to its exceptions.

However, most people agree that it’s wrong for employers to discriminate, and even in an at-will system, there are certain grounds for termination which are simply unacceptable. Racial, religious, and gender discrimination are among them. At-will employment, which necessarily creates a system where the firing of an employee is presumed to be justified, means that discrimination is extremely difficult to prove, even when it takes place.

Unfortunately for the legitimate victims of discrimination, this is the system we’ve chosen, and, as always, there are tradeoffs.

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