A study by Lex Machina on employment lawsuits filed in the Southeast and Midwest between 2016 and 2018 found employers almost always win the lawsuits.   In the Southeast employers won their cases by summary judgment 1,547 times between 2016 and 2018 compared with just 60 such wins for employee plaintiffs.  In the Midwest employers won 850 lawsuits by summary judgement versus 31 for employee plaintiffs.  Statistically speaking, employer defendants won 96% of the time in both regions.

Of the lawsuits that continue in each region, Lex Machina estimates that 75% settle. It is unclear as to why the cases are dismissed, but it is presumed to be due to settlements. Of the 8,151 employment cases to be resolved in the Midwest between 2016 and 2018, the firm found a little over 6,000 (74%) settle, whereas in the Southeast 14,764 of about 19,677 (75%) case resolutions appear to settle.

“[T]he best cases [for plaintiffs] are being resolved earlier on settlement and not going to summary judgment," said Michele Fisher, a managing partner for leading Midwestern plaintiffs' employment firm Nichols Kaster PLLP.  "That number doesn't surprise me," Fisher said, referring to plaintiffs' and defendants' relative win rates. "More cases are resolved in settlement. The ones that go to summary judgment are the more difficult ones for plaintiffs."

Why do employers settle if they think they have a winning case?  It’s most likely because the cost of litigation exceeds settlement costs.  Per Gerald Maatman, a Chicago-based employment attorney with management-side firm Seyfarth Shaw LLP, it is better to settle a case for $200 if it costs $50 to get there than it is to spend $800 in fees and court costs to strike a $100 deal, he said.  Another reason is that employers in certain situations, even if right in their actions, come up with a jury that may have implicit bias against them.  In other words, a jury trial can be risky.

In the 1980s, the Supreme Court ruled on a trio of cases called Celotex cases.  In these cases, it pushed trial judges to use summary judgement and settlement hearings to close cases and reduce backlog.

The great majority of reasons employees sue is because of discrimination of some sort. This accounts for approximately 87% of all cases.  Approximately 22,000 sexual harassment EEOC charges are filed every year.  Retaliation is the second largest source for a lawsuit.

Dennis Duffy, a veteran employment litigator with management-side firm BakerHostetler, attributed these summary judgment and settlement trends to a few things, notably employers' greater awareness of the law.  In other words, HR is more sophisticated and knowledgeable, especially when using their HR resources such as ASE’s hotline, roundtables, conferences, and more to identify best practices for compliance.   Training managers and executives is likely the number one way to reduce risk of trials.

"Employers have become more proactive in educating their executives and employees," said Duffy. "You don't necessarily reduce the incidence of claims, but you reduce the likelihood those claims would proceed to trial."

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Source:  Law.com 8/21/19, FastCompany 7/31/17