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Forbid reinstatement when settling lawsuits

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in Discrimination and Harassment,Human Resources

Be sure to consider all the ramifications of settling an employee’s discrimination lawsuit, especially if the settlement includes reinstatement. An employee who comes back to work for you could turn right around and sue you again if he believed you are continuing to discriminate.

Solution: Sweeten the monetary settlement in exchange for a clause that prevents reinstatement.

Recent case: Luis, a New York City municipal employee, was by all accounts a difficult employee who had attendance problems. When he sued over alleged discrimination, the city decided to settle the case for about $600,000 but did not require Luis to quit.

Soon after settling, Luis began complaining again. He alleged, among other things, a hostile work environment and discrimination based on a disability (bipolar disorder) and national origins (Hispanic and Colombian).

The city tried to get the case thrown out because the complaint included incidents that had occurred before the first settlement. The initial settlement agreement said Luis could not in the future assert any claims that predated the settlement. That’s standard settlement language.

However, the court said that Luis could use those earlier incidents to bolster his later claims by showing the alleged discrimination was part of a continual pattern.

Luckily for New York City, the court went on to conclude that even with those earlier incidents, Luis had not proven that he had been discriminated against. That’s because the city was able to prove it terminated Luis for refusing to take a civil service test that was required for every worker in his classification. The city was able to show that it had a solid, nonretaliatory reason for discharging Luis.

The case was dismissed, but only after much time, money and energy spent on a case that everyone thought was essentially over. (Pena-Barrero v. City of New York, SD NY, 2017)

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