USDOL + ABA = Trouble?

by Michael Haberman on November 30, 2010 · 0 comments


If you have spent any time at home during a weekday recently, or have noticed the billboards along the highway, you know that plaintiff attorneys (the ones who sue you) are increasingly advertizing to capture the business of unhappy ex-employees or unhappy employees who feel that they have been incorrectly compensated. Wage and hour lawsuits are on the rise. The ability to turn one complaint into a class action suit makes it even more attractive to these attorneys. The US Department of Labor has made it easier for attorneys by publishing on their website the names of companies that have been investigated by the USDOL, detailing the findings against them. (See US Department of Labor: It’s War! And Employers Are The Enemy)

Yesterday I read (thanks to fellow blogger Stephanie Thomas) about a program between the USDOL and the American Bar Association that will provide referrals to attorneys when someone files a complaint. According to Patrick Smith “…the purpose the collaboration is to ‘help workers resolve complaints received by DOL’s wage and hour division.'” According to his post in the Iowa Employment Law Blog:

Beginning December 13, 2010, people with unresolved complaints under the Fair Labor Standards Act (FLSA) or Family and Medical Leave Act (FMLA) will be sent a letter explaining their rights, and providing a toll-fee number that will connect them with an ABA approved lawyer referral service in their area. These are complaints that the Department of Labor is otherwise charged with investigating but apparently cannot because of what the Secretary of Labor described as the Department’s “limited capacity.”

Writing in The DOL’s Lawyer Referral Arrangement with ABA Not Likely to Help Employers or Employees  Smith opines that this arrangement will not be good for employers or employees in the long run. He states that “Contrary to the assumptions underlying this program, in my experience and that of other employer side lawyers I know, the lion’s share of companies are conscientious about complying with the employment laws. The high cost of defending employee claims and the risk of an adverse outcome, regardless of the merits of the suit, give employers an economic incentive to comply with the law.” He feels it will increase the cost of litgation and take money away from rewarding the employees in the company. His opinion is that are more effective ways to deal with non-compliant companies than increasing their litigation risks.

Attorney Daniel Schwartz, writing in the Connecticutt Employment Law Blog, has a diffferent opinion of the program. In his post, US Department of Labor Teams with ABA For Lawyer Referral Service, Schwartz says “This seems to be a win-win type partnership not only for the USDOL and the ABA, but also a win for employers and employees alike. Any employer that has dealt with a pro se litigant (i.e. someone representing his or her self) can understand how expensive it is to litigate such cases. Having a competent and qualified counsel to represent individuals should, in the long run, help employers solve any thorny issues that arise.”

In a comment to Smith’s article he also states “People who are going to sue are going to do so regardless of whether they have an attorney. And in such cases, employers are better off with an attorney representing that individual than a pro se plaintiff. All this program provides is something that local bar associations have done — refer people to speak to an attorney.” In this particular case Schwartz maybe right. This could be a good thing if the people suing you may have a better class of lawyer than you may find off a TV ad. Perhaps a good attorney may actually discourage them from pursuing a frivolous suit.

So “the jury is out on this one” (yes, pun intended). It remains to be seen what kind of activity this alliance aka “referral program” may bring. What do you think? Good thing or bad thing?

By the way, the best lawsuit preventative is a good, compliant Human Resources system with well trained supervisor and managers. If you are not sure you have one, let me know. I can help you.

If you wish to read Patrick Smith’s post it can be found here. Likewise the different point of view by Daniel Schwartz can be found here.

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{ 2 comments… read them below or add one }

christine November 30, 2010 at 10:07 am

Great information! Trolling for class actions is a sport in Florida.

You have to appreciate the irony that to the right of your blog are ads from attorneys looking for clients.

I will definitely be reading your blog more often.

Reply

Michael D. Haberman, SPHR November 30, 2010 at 10:11 am

Thanks Christine. Unfortunately I did not see the ads, but they change. But that was funny.

Reply

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