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Beware of hiring a “professional plaintiff”

On Behalf of | Sep 14, 2023 | BUSINESS & COMMERCIAL LAW - Business Litigation

If you are a business owner, you are always at risk of becoming a defendant in a court case. Some cases may be brought by customers or others who enter your place of business. However, some lawsuits are generated from those within your organization, i.e., an employee.

In some cases, your workers may have legitimate claims to litigate. But others may be what is known in legal circles as “professional plaintiffs.” These people make a living not by working at their jobs but by suing the companies that employ them.

How it could go down

One notorious professional plaintiff targeted employers over their use of information they obtained under the Fair Credit Reporting Act (FCRA). The rules regarding the use of such information and histories of potential hires are tightly regulated and misuse can jeopardize companies, leaving them vulnerable to litigation.

This particular professional plaintiff threatened multiple Fortune 500 companies with lawsuits related to FCRA violations. Because litigation is costly and damaging to a company’s carefully curated brand, many businesses decide to settle out of court for four- and five-figure sums to make these cases disappear.

The problem with that response, while understandable, is that it only encourages more of the same frivolous lawsuits to be filed by others.

What is the best strategy in these cases?

To begin with, all companies should operate on the up and up. Make sure that none of your managers make any shady moves when hiring, promoting or terminating staff and document all employee transgressions. Also, follow the standard operating procedures (SOP) as laid out in the company manual for all of the above.

Finally, realize that sometimes you can’t afford to back off from a fight when your principles are challenged. Learning all you can about your legal rights in the situation can help you determine the correct path to follow.