Litigation: a Cost/Benefit Analysis Part 1

In 1968, an amendment to the Civil Rights Act of 1964 made discrimination on the basis of sex illegal, opening the way for women who feel they have been discriminated against to take their case to court. But twenty-five years and thousands of lawsuits later, the costs of litigating remain extraordinarily high. And the question of whether the individuals or companies involved, or the public at large, benefit from this pursuit of rights and remedies through civil lawsuits remains open.

The most obvious cost for women who file discrimination or harassment lawsuits is their job. Although the Fair Employment and Housing Act makes it illegal to fire someone in retaliation for suing or lodging a complaint, the level of hostility at a workplace is often so high that it is impossible for a current or former plaintiff to continue working there. Common forms of retaliation Ä being excluded from key meetings, not being considered for choice assignments or promotions, or even outright sabotage Ä can be difficult to prove in court. "There are lots of jobs where the criteria for advancement and promotion are subjective," points out lawyer Patty Roberts. "You can be tagged very informally." Essentially, agree most plaintiff's lawyers, there is not much point in suing unless the potential litigant feels the situation has become intolerable.

Filing a lawsuit can also jeopardize future employment. Individuals who file "glass ceiling" lawsuits in particular often find themselves in a double bind: They cannot reach the heights of their profession because of their sex or race, but if they file a lawsuit to make that point they will certainly never reach those heights. Particularly in upper management, say lawyers who represent plaintiffs, word gets around quickly, and a woman who has sued may find herself blacklisted at other companies. Some attorneys have been known to subpoena the records of every search firm in the state that a plaintiff has ever contacted, effectively eliminating an important channel for executives engaged in a job change. The sad truth for many women is that the decision to sue an employer is also a decision to end a career.

"Many women who have strong glass ceiling cases may choose not to sue for career-related reasons," says lawyer Jody Lewitter. "They might prevail and win a lot of money, but they walk away because of a legitimate fear of being blackballed." Furthermore, criteria for upper-level promotions are often not made explicit, so that discrimination is particularly difficult to prove at these levels. As a result of these factors, very few glass ceiling discrimination cases have been brought.

San Francisco plaintiff's lawyer Amy Oppenheimer, who specializes in employment discrimination, says very few of her clients are able to stay in their jobs, or even their professions, after they have filed a lawsuit. "It's worse now because of the recession," she adds. "People have no faith that they will get another job, so they stay in bad jobs."

A good lawyer will make sure a client is aware of the risks before she pursues litigation. Attorney Laura Stevens, who has represented both plaintiffs and defendants in discrimination lawsuits, describes a marine biologist who came to her with an extremely strong discrimination case. However, her profession was so insular that the woman became convinced that if she sued she would never work in her field again. She decided against litigation, and kept her job. In many cases, Stevens says, she will offer clients advice on how to settle employment issues without resorting to litigation Ä including keeping private the fact that they have consulted a lawyer.

Settlements do often include some protection against blacklisting. They generally include a confidentiality agreement that is binding to both parties, and sometimes even specify that the plaintiff will receive positive letters of recommendation from her employer. Such agreements, however, are difficult to enforce, and those who are not direct parties to the suit Ä co-workers, for example Ä are not bound by confidentiality agreements. And for those looking for new jobs while litigation is in progress, there is no promise of confidentiality.

Another cost of pursuing litigation as a remedy for discrimination is emotional. The premise of many of these lawsuits is that the employee was held back because of gender, not performance; hence, the employer's lawyers may do everything they can to impugn the plaintiff's job performance. Co-workers are often drawn into the process, which can make things even worse for those still on the job. "Sometimes these cases are fought in a way where everything you've ever done is on trial," Lewitter warns. "If it's a small harm, it may not be worth pursuing.'

Aside from the emotional and professional costs of filing a lawsuit, there are also financial considerations. Most plaintiff's lawyers work on contingency, but clients are frequently expected to front costs, such as depositions and filing costs, that can run into tens of thousands of dollars. Even if a monetary settlement is awarded, it can take years to come through, putting many plaintiffs in a difficult financial position.

The new Civil Rights Bill of 1991, however, shifts the financial balance somewhat, although the full extent remains a very open issue. For the first time, federal courts may award punitive and compensatory damages, with ceilings from $100,000 to $300,000. For the thousands of women with pending discrimination cases, however, this change is irrelevant: The EEOC recently ruled that the new stipulations apply only to discriminatory acts committed after the bill's passage. In some state courts, however, compensatory and punitive damages are already being awarded. Lawyers agree that punitive damages will be difficult to recover under the new law, but that when they are won a stronger statement will be made.

In weighing the costs and benefits of filing a lawsuit, plaintiff's lawyers advise clients to think about whether their goal is to win financial compensation or make a moral point. Plaintiff's attorney Barbara Bryant says that most of the women who contact her are interested in changing company policy, not in winning money for themselves, but many lawyers warn that trying to change the world by filing a lawsuit is a dubious proposition. "I strongly discourage people from litigating for the principle," says Laura Stevens, "because they can't afford it." Furthermore, over 90% of discrimination lawsuits are settled, many with a confidentiality agreement, which means that any larger message is often lost.

The impact of a lawsuit varies greatly from company to company. Some corporations fight discrimination lawsuits vigorously, and then promptly forget about the issues they raise until the next one comes along. In other cases, however, a lawsuit can be an effective way of persuading a company to take equal opportunity more seriously. Class action suits often result in consent decrees that bind the company to change its hiring and promotion policies. And an individual who files and wins a lawsuit may remind her employer that discrimination doesn't pay.

"I have seen corporations really review and revamp personnel policies in response to allegations made formally or informally," says Laura Stevens. "I would not go so far as to say anybody actually sees the light, but they do see the light on the balance sheet. They see how costly it is to resist equal employment, and as a result of that change their ways."

Stevens describes one client she had, a food processing plant that operated canneries in the Northwest, that was successfully sued by the EEOC for its sex-based job classifications. While the lawsuit was in progress, the company opened a new cannery in southern California, with the same discriminatory policies. "I showed them the legal bills they had already incurred in the North, and told them you can have the same thing in the South. I said 'You can make me rich, but it won't do you any good.'" Her client took her advice and changed its policy.

No matter what effect it has on their employers, women who choose to sue often say they have no other choice. A woman rarely turns to litigation until she feels her employment situation has become absolutely intolerable, and the need to make some kind of statement has become overwhelming. Luette Columbano, a former San Francisco police officer who filed and won a much-publicized harassment suit, was unable to continue working as a police officer, and believes that her reputation would follow her to any police department in the country. All the same, she says now, five years after her lawsuit was settled, "Suing definitely worked for me. The only way to recover my self esteem was to fight for myself. When the settlement was over I felt whole again -- this happened to me and it was wrong and I did something about it."

Note: Next month, DataLine will continue this discussion of the costs and benefits of litigation, from the perspective of companies and defense attorneys.