Business: Think Twice Before Going To Court

One of the most difficult challenges I face can be helping managers, directors and owners resist an urge to “fight it out” in court.

There are times when it’s absolutely necessary to take legal action or aggressively defend action against your organization. But in nearly every case, it should be your last resort. Here’s why.

Going to court is a roll of the dice. You may feel certain of your position.  You may even feel it will be easy to overpower your opponent with your company’s resources.

Don’t bet on it.

Going to court is always a gamble. No lawyer on earth can guarantee a winning verdict or outcome. The court system has countless rules and many are vague. I have found that judgments are not so much about fairness or the validity or even about the law.

Judgments are often about the lawyer. What decides the outcome of many cases is who has the slyest, most convincing attorney and who has better rapport with the judge or jury.

You may remember the case last year in which a woman was fired because she was “too irresistible” to her employer, an Iowa dentist. Because the employer could not work around her due to her looks and his sexual attraction to her, she had to go. Not surprisingly, she sued.

As the case unfolded, many observers thought it was ridiculous that someone could legally terminate an employee because he or she was too alluring. This, in fact, was my opinion. But the Iowa Supreme Court sided with the employer. Many saw this as a blanket endorsement of owners and managers. I think it mainly illustrates how unpredictable the courts can be.

If you had asked me to guess the outcome of the case, I would have bet on the employee winning. I would have essentially guaranteed that an attractive woman being terminated because her boss can’t control his urges, or his wife is afraid he won’t, would never have lost her case. But that’s not what happened.

To me, the business lesson is that you are nearly always better off avoiding court in the first place. I nearly always recommend that clients do whatever they can to avoid getting into a legal trap, and if they are confronted with a lawsuit, I stress that negotiation is nearly always better than rolling the dice in court.

I strongly recommend that you have systems and experts in place to protect yourself. If you do find yourself in a legal issue, your first priority should be using HR experts and labor attorneys, not trial lawyers.

Shortly before the Iowa case, I dealt with an organization facing a major personnel issue, including a possible lawsuit. The losses easily could have reached 6 figures. As in most cases of this nature, there was also the possibility of action—and fines—by the Department of Justice or the Department of Labor.

Instead, we worked with the employee to structure a separation that included $30,000 in payments to help retrain him to start another career. Yes, that was $30,000 the organization had to pay, but that was far less than other possibilities.

Or remember our Iowa dentist. While he won the legal case, I believe he still lost. He spent more than two years worrying, and probably in excess of $150,000 defending himself. Who really won that case?

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