Overlawyered: Chronicling The High Cost Of Our Legal System

More managers being sued personally

It’s not just organizations and enterprises who have to worry about these things, as the National Law Journal takes note in a trend story: An increasing number of executives, managers and other company leaders are being sued personally for their work-related decisions…. “State laws are constantly being broadened and liberally construed by the courts to […]

It’s not just organizations and enterprises who have to worry about these things, as the National Law Journal takes note in a trend story:

An increasing number of executives, managers and other company leaders are being sued personally for their work-related decisions….

“State laws are constantly being broadened and liberally construed by the courts to allow for potential lawsuits against individuals,” said Thomas Lewis, chairman of the employment litigation group at Stark & Stark in Lawrenceville, N.J. In the last five years, Lewis has seen a 50 percent increase in his own practice defending executives in personal lawsuits.

“[Plaintiffs’ attorneys’] desire is to strike fear into the executive to try and force a settlement,” he said.

Plaintiffs attorneys don’t see it that way. “Sometimes you’ve got to hit the executive between the eyes with a lawsuit,” said S. David Worhatch, an employee rights attorney in Stow, Ohio, who is currently handling a half-dozen employment-related lawsuits targeting individuals directly….

“Individuals will think twice before engaging in such conduct if they realize they can be personally exposed to liability.” he said….

Ginger McRae, an employment law expert who testifies in employment lawsuits and consults businesses on employment practices… noted that “[i]n the past few years, I’ve definitely seen more of a trend to this, and definitely in the state cases where there are state tort claims. That is where the plaintiffs lawyers really have the most freedom to name who they want.”

Plaintiffs attorneys note that state courts are easier venues in which to try personal lawsuits, largely because state discrimination and employment laws are looser than federal ones and allow for individuals to be held personally liable for various workplace violations.

Query: where the story reads “Plaintiffs attorneys don’t see it that way,” wouldn’t it make more sense for it to have read “Plaintiffs attorneys see it exactly the same way”? (Tresa Baldas, “Employment Litigation Gets Personal for Company Managers”, National Law Journal, Aug. 16).

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5 Comments

  • Walter, Walter –

    What the reporter means to say is that only sneaky, evil and unreasonable defendants would characterize this new trend as “striking fear” into the executives. Righteous plaintiff’s attorneys are simply boldly and creatively finding new ways to achieve justice. It is an important difference.

  • Someone please educate me.
    If one goes to great lengths to ensure that personal matters are kept distinctly separate from corporate-related matters, how does this “jive” with the long held common law traditions of corporate law? I know, you can sue anyone. But, if corporations are structured properly and officers adhere to the laws/rules, won’t the veil remain in place, and thus warrant summary dismissal of such cases? I’m no genius, but marginally well read. What triggers the exception?

  • Not to be too pedantic, but I think the word you’re looking for is “jibe.” (Good grief. I’ve been reading Volokh too long.)

    • By gino

  • You mean they don’t offer French Benefits/>?

  • Stamford, Ct. attorney Charles W. Grinnell writes to say:

    One significant aspect to the growth in executives and managers of defendants also being sued in employment cases is plaintiff’s counsel’s objective to invoke the By-Law indemnity provisions under which such executives are protected by the Company. If the level of proof or the indicia of liability are such as to non-suit the corporate defendant but to hold the individual liable, then the Company provides the deep pocket anyway, at least in cases where the indemnity reaches to the level of the individual in the enterprise.