ROI of addressing ER Cases
Posted: 08 October 2008 11:05 AM   [ Ignore ]
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Hello all,

I’m trying to put together and ROI analysis of the hours we spend addressing ER issues. We’re mainly concerned on the major issues (Sexual Harassment, Title VII, ADEA, etc). While the consequences of not addressing a case can vary, I’d like to consider with the worst case scenario. Ideally, I’d like to find average settlements of such cases; if I can do so for specific states, even better. I’ve found some information on EEOC’s website, but am wondering if anyone out there has any suggestions for places to search, or any information to provide. Any information surrounding this topic is welcome.

Thank you!

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Posted: 14 October 2008 09:11 AM   [ Ignore ]   [ # 1 ]
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you might be able to find some statistics from BNA, but anything you use will be unreliable.  These cases fall into different categories: (1) cases that get resolved in-house and never result in a charge, but could have resulted in a charge if not handled properly; (2) cases that result in a charge, but the Company’s response to the charge results in a dismissal and no further litigation, where the case could have resulted in a “cause” finding or further litigation if it had not been handled well in-house; (3) cases that result in a charge and get settled; (4) cases that result in post-charge litigation that ends up settling; (5)  cases that result in post-charge litigation that go to trial; (6) cases that go to litigation without a charge first; (7) cases that get settled after receipt of a laywer’s letter before a charge or litigation.  There are more variations, but the point is that any organic ER issue could result in any one of these outcomes.  Sometimes no matter what you do in-house—no matter how carefully and properly you handle something, you still end up in litigation because of the particular plaintiff and/or the particular lawyer.  Any ROI analysis will necessarily have so many assumptions in it that it’s useless.

In a worst case scenario, any internal ER issue could blow up into a litigation that could cost $100,000 just to defend to a successful conclusion, or could cost even more if you lose the case and have to pay damages and the other side’s attorney’s fees as well as your own.  $250,000 for a single-plaintiff case that goes to trial is a conservative number.  On the other hand, very few cases, even if not handled well, end up costing that much. 

Perhaps the simplest way to conceptualize it is that the relative cost of hiring one more internal Human Resources professional for a year is probably less than the cost of one lawsuit that could have been avoided by proper internal handling.

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