Pre-litigation investigation strategies in single-plaintiff employment cases

Investigating your employment case after you retain the client but before filing a lawsuit will help ensure you avoid common litigation pitfalls and maximize case value

2023 March

Employment lawyers must often rely solely on their client’s version of events to assess the case before filing a lawsuit. If they fail to investigate their client’s story before filing the lawsuit, many pitfalls may arise. They can find themselves deep into litigation when they discover their client may not have been forthright with all the facts, evidence is missing from documents, or witnesses that they could have spoken to and obtained evidence from prior to the lawsuit have disappeared or maybe never actually existed. In some cases, having diligently investigated the situation prior to filing the lawsuit could have made the lawyer realize the case was not the right case to litigate.

Once a lawsuit is filed, there are several legal hurdles that must be overcome before a case goes to trial or arbitration, including a motion for summary judgment. The more you can investigate and corroborate your client’s story, and address and undermine the defendant employer’s defenses prior to litigation, the better chance you will have to ultimately win your case.

Litigating one employment case can involve hundreds of hours and require all of your time. The stakes are too high for you and your client not to properly investigate your employment case before litigation. I have organized this article by referring to the form interrogatories – general and employment law, where possible, as your pre-litigation guide for your investigation. What I’m sharing with you has been learned the hard way; following the simple strategies within this article will go a long way to maximize your case value and save you a lot of headaches.

Obtaining information from your client and identifying potential warning signs

With experience, your intuitive gut feeling for employment-law cases will enable you to properly screen and retain cases. You want to obtain all documents your client has within his or her possession to prove their employment case. These documents may include communications such as emails and text messages and/or medical records and doctor’s notes given to the employer, which are crucial in disability discrimination cases. For clients who have already been terminated, they often no longer have access to their company email, but they still may have work-related communications, including texts, which you must obtain.

When you request this information, you also want to determine how the client responds. Do they promptly collect this data or do they delay and even fail to respond at all? If your client doesn’t provide you with the needed information in a timely manner before the lawsuit is filed, how do you think the client will respond under the deadlines and pressures of litigation?

There are usually clear warning signs for difficult clients. If you do not like your client or have issues working with them, you will regret taking the case solely because you know you can win on liability and make money. Therefore, part of your prelitigation investigation should be an assessment of the client. How well do you work together and are they credible and likeable? This is also key for any fact finder to provide a favorable award, including for settlement purposes. Plaintiffs in employment-law cases have many emotions and sometimes the client wants revenge; a remedy the law cannot provide. If at any point before filing a lawsuit you start to notice issues with your client, you need to reassess your case because you may not work to your fullest potential and maximize the case value with a difficult client.

Obtaining your client’s employment records pre-litigation

Prior to the lawsuit being filed, you must obtain your client’s employment records through an employment records request for personnel and payroll records pursuant to California Labor Code sections 1198.5 (personnel file); 432 (all agreements and other instruments your client signed with the employer) and 226 (payroll information). Within the plaintiff’s personnel file, you want to identify any arbitration agreements. Arbitration agreements may require a stronger liability and damages case as part of your pre-litigation case evaluation. Look for any performance-related issues within the client’s personnel file and other documents that will justify the employer’s termination decision before you file the lawsuit.

Identifying business entities and naming all potential defendants

Before filing a civil action alleging violations of the Fair Employment and Housing Act (“FEHA”), an employee must exhaust his or her administrative remedies with the Civil Rights Department (formerly the Department of Fair Employment and Housing). (Wills v. Superior Court (2011) 195 Cal.App.4th 143, 153 [“exhaustion of the FEHA administrative remedy is a precondition to bringing a civil suit on a statutory cause of action”].)

From the client’s pay stub, you will obtain the actual legal name of the entity who employed the plaintiff. It is often easy to overlook the correct legal entity name of the employer. You want to name all potential legal entities and potential defendants, including joint employers, all fictitious names of the potential employer, and individual defendants. You should verify the legal entities through the California Secretary of State website.

Several courts have concluded that where a plaintiff fails to name a defendant in either the body or caption of a DFEH complaint, the plaintiff has failed to exhaust his or her administrative remedy against that defendant and is therefore precluded from bringing suit against that defendant. (Alexander v. Community Hospital of Long Beach (2020) 46 Cal.App.5th 238, 251.) Some employers are franchises with different names than the franchisor, and you want to ensure you name the franchisor as well in the DFEH complaint and the lawsuit. However, the franchisor is vicariously liable for a franchisee and its employees only if it has a general right of control. (Patterson v. Domino’s Pizza, LLC (2014) 60 Cal.4th 474.)

Calendaring statutes of limitations

With the passage of California Assembly Bill 9, plaintiffs have three years to file complaints with the Civil Rights Department for claims arising after January 1, 2020. The lawsuit must be filed within 365 days of obtaining the Civil Rights Department right-to-sue notice. However, wrongful-termination cases still have a two-year statute of limitations under Code of Civil Procedure section 339. If you are looking at naming an individual defendant, particularly if you might be dealing with an out-of-state defendant and removal to federal court is a possibility, you should calendar a one-year statute of limitations, typically from the termination date but sometimes before, for potential defamation claims. (Code Civ. Proc., § 340.)

Respond to form interrogatories prior to filing the lawsuit

Simply answering the Form Interrogatories – General and Form Interrogatories – Employment Law and obtaining the documents that correspond to those interrogatories before the lawsuit is filed should form the foundation of your pre-litigation investigation, and will help you avoid common employment litigation pitfalls. Think of the form interrogatories like a pilot’s pre-flight checklist; to ensure that the basic information needed to litigate your case is not overlooked. For example, Form Interrogatory-Employment Law No. 201.1 asks, “Was the employee involved in a termination?” with subsections that also require all reasons and all documents for the termination decision. By answering this form interrogatory and identifying and obtaining all related documents, you will build a solid foundation for your pre-litigation investigation while ensuring you do not overlook key facts, witnesses and documents.

Background checks on your client

Although no plaintiff is perfect, you must perform a comprehensive background check on your client before a lawsuit is filed. Form Interrogatories – General 2.8 series questions can help with this process because they ask about prior felony convictions, which you want to know about, including any convictions for moral turpitude. Prior to filing a lawsuit, review all the general form interrogatories with your client. For certain types of cases, a criminal background could prevent you from winning the case altogether. These issues, though they might be obvious, are easy to overlook and going through the interrogatories pre-litigation will force you to gather the necessary background information. You then want to perform a criminal background check on the client. You want to make sure your client’s honesty and trustworthiness cannot be impeached.

The 6 series Form Interrogatories – General and Form Interrogatories – Employment Law No. 212 relate to mental or emotional injuries and the 10 series Form Interrogatories – General relate to pre-existing injuries involving the same body parts. For employment cases, this will relate to pre-existing psychological or mental-health treatment. You must obtain all records from prior mental-health professionals that have treated your client. There are some types of employment cases where other medical records are more important, such as disability discrimination cases.

However, all single-plaintiff employment cases derive significant value from general damages based on emotional distress and mental suffering. You may find that your client has a significant past psychological treatment history that the defense will use to vilify your client and undermine your emotional-distress claims entirely by citing “pre-existing” mental health issues.

The client needs to be aware that bringing an employment case will put their psychological past under scrutiny. Past psychological history can range from anxiety, family trauma, depression, substance abuse, to more severe forms of childhood abuse and even potentially embarrassing topics such as extramarital affairs. These past psychological records can be very distressing when used against your client in their deposition and can impact damages as well.

If you go far in the litigation, your client may also be forced to undergo a defense medical examination with the defense’s psychological expert, where all of the client’s past psychological history will be used to undermine the emotional distress arising from their employment. You want to know how you can frame these underlying psychological issues as potential pre-existing conditions that made your client more vulnerable and susceptible to the effects from an adverse employment action before you file the lawsuit.

On another note, it is often important in proving your client’s emotional-distress claims that the client received treatment from a mental-health-care professional. However, you should notify your client that anything they say to their mental-health-care professional may become public and shared with the defense lawyers, so they are mindful of this issue.

Government benefits and WC records, including applications

When you ask about prior claims through following the Form Interrogatories – General Nos. 11.1 (prior personal injury claims); 11.2 (prior workers’- compensation claims); Form Interrogatories – Employment Law Nos. 204.2 (injuries arising in the course and scope of employment) and 209.1-209.2 (prior employment related claims/lawsuits) as your pre-litigation investigation checklist, you want to obtain your client’s workers’- compensation file, especially in employment and workers’ comp crossover cases such as disability discrimination cases. You then need to verify and perform ISO searches for prior claims, such as personal injury and workers’ compensation claims.

It is important to work cooperatively with the client’s workers’ comp lawyer and make it known that you must review any settlement releases (commonly known as compromises and releases) before the client signing to avoid releasing any potential employment claims in your case. We have increasingly seen voluntary resignations signed by clients as becoming more standard in workers’ comp settlements. Voluntary resignations as part of the workers’ comp settlement could negatively affect a wrongful-termination cause of action but may not impact other discrimination and harassment causes of action. (Camacho v. Target Corporation (2018) 234 Cal.App.5th 291.)

The WC deposition

Your client’s workers’ compensation deposition will almost surely involve sworn testimony regarding your client’s employment, including potential reasons for termination or discrimination. This can be a valuable component of the employment case. Remember, the workers’ compensation lawyer will typically not be as aware of potential issues that will adversely impact an employment-law case.

If possible, attend the workers’-compensation deposition of the client to prevent and/or limit the client from providing testimony regarding their termination or unfair treatment at work entirely. Employment-defense lawyers will almost surely subpoena the workers’-compensation file and try to use any statements to impeach your client. Your client may also have been on disability through the workers’ compensation system, which may impact not only their claims of past and future loss of earnings, but their ability to do their job entirely, specifically for disability discrimination claims. It is possible to also encounter sub- rosa evidence in the workers’ compensation case, which will be used by the defense in the employment case to argue the client did not have a disability that limited major life activities and therefore did not need reasonable workplace accommodations.

Government benefits—Unemployment and disability

Government benefits such as unemployment insurance and disability benefits through the Employment Development Department must be obtained, including all applications for such benefits. These benefits require information regarding whether or not the client can work in cases of disability benefits and the reasons for your client’s termination for unemployment insurance benefits. Following the Form Interrogatories – Employment Law will force you to obtain this information, including any associated documents. (See No. 204.2(e), asking whether the employee has filed or applied for disability benefits of any type.)

The application for and receipt of government benefits, particularly disability benefits, can negatively impact the employment case. If possible, and if you are retained early enough in the process, you want to help your client complete the applications for disability and unemployment insurance benefits. If you are not able to help with the application, you must obtain not only the application for government benefits, but their entire benefits history and documents related to the obtainment of any government benefits.

Disability benefits can offset any past and/or future loss of earnings and/or eliminate economic damages entirely, particularly in disability discrimination cases where you must establish that the employee could perform the essential job functions with or without reasonable workplace accommodations. Some courts have held that disability benefits are collateral sources and should not offset economic damages. (McLean v. Runyon (9th Cir. 2000) 222 F.3d 1150, 1155.) If you can help with the application for disability benefits, you may be able to address the fact that the client can still perform essential job functions with certain workplace accommodations that the employer failed to provide. Either way, you must know what information is contained within the government-benefits records to effectively prosecute your case and address issues that could arise to avoid common issues with mitigation and economic damages.

Interviewing all potential witnesses and obtaining declarations

Before filing a lawsuit as part of your investigation, develop a list of witnesses to support the client’s claim(s), which is obtained through answering Form Interrogatories – General 12.0 relating to investigation. Witnesses could be “me too” witnesses who have also experienced discrimination and harassment, provided the evidentiary requirements are satisfied. (Pantoja v. Anton (2011) 198 Cal.App.4th 87.) Obtain executed declarations regarding liability from witnesses, including “me too” witnesses. You can and should use an investigator if possible to speak to the witnesses if you do not have the time or have other evidentiary concerns about speaking with witnesses yourself.

Social-media searches

The defense may use a company to look at your client’s social-media profiles. Ask for your client’s social-media usernames and passwords and determine if there is any content related to their past employer and/or generally that can reflect poorly on your client. Review any posts where your client discusses his/her possible termination or any conduct that forms the basis of your employment case. Advise your client not to delete anything as that may be considered destruction of evidence.

Creating a timeline of events

From your pre-litigation investigation, you will compile a timeline of events. The timeline will serve as a guide throughout the litigation which you should continuously review and update over the course of discovery as new facts and documents emerge. The sequence of events is critical to proving discrimination, harassment, retaliation, and wrongful termination cases. You want your timeline to include all the information discussed so far in this article, particularly prior claims, specific dates/times of unlawful conduct and significant medical events with doctors’ notes for disability discrimination cases and/or mental health treatment. This timeline will form the foundation for your factual allegations in your DFEH complaint and pleadings filed with the court.

After-acquired evidence

Form Interrogatories – Employment Law No. 201.2 asks, “Are there any facts that would support the employee’s termination that were first discovered after the termination?” In Salas v. Sierra Chem. Co. (2014) 59 Cal.4th 407, the California Supreme Court considered whether the “after-acquired evidence” and “unclean hands” doctrines acted as a complete bar to an employer’s liability for discrimination and/or retaliation. The Court held that these equitable doctrines operate to potentially limit the remedies of the plaintiff against whom these defenses are asserted and proven. (Id. at 430.) Typically, the effect of a proven “after-acquired evidence” defense is to limit the award of front pay or future economic damages to the date on which the employer proves it discovered the alleged misconduct. (Id. at 431.)

After-acquired evidence can literally relate to anything that the defense lawyers will conjure up. The defense can argue that had the employer known about a certain fact they would have terminated your client. The client may misrepresent or lie on a job application or on their resume. Or the client may be accused of engaging in some type of dishonest act during their employment that, had the employer known at the time, would have justified their termination. Before filing the lawsuit, you should cross-examine your client to determine if there is anything they did at their previous job(s) that could have resulted in termination such as the following: Were they tardy?; did they harass or bully anyone?; did they lie on their resume, job application or about anything while they were employed? These lies might include immigration status, prior criminal history, and even prior terminations.

Through a thorough pre-litigation investigation using the form interrogatories before filing a lawsuit, you will be able to address any potential “after-acquired” evidence the defendant may use. Always ask about any prior issues with past employers, such as terminations. Defense lawyers will subpoena pre- and post-termination employers to dig up as much dirt as possible on your client and also to assess economic damages.

Post-termination job applications

Misrepresentations on post-termination employment applications could be used by the defense to impeach your client and attack his or her credibility. This could result in termination from their current job position. You want to advise your client that they must be truthful in post-termination job applications and not misrepresent the fact that they were terminated.

The “same decision” defense

Often, employers will rely on the “same-decision” or “mixed-motive” defense which, as stated in Harris v. City of Santa Monica (2013) 56 Cal.App.4th 203, 211, means “proof that the employer, in the absence of any discrimination, would have made the same decision at the time it made its actual decision” even if there was proof of discriminatory or illegal motives.

Even after you retain the client, but before filing the lawsuit, thoroughly evaluate the legitimate business reason(s) the employer is putting forth to justify the adverse employment action because the “same-decision” defense will almost certainly be used.

Sometimes the client engaged in conduct that, in and of itself, would still have justified their termination even if you believe the client’s civil rights were violated and you may not thoroughly think of the employer’s reasons for termination when you initially retain the client. Some reasons for termination are more legitimate than others, but you need to investigate the employer’s reason for the termination because it could bar the client’s damages altogether. (Harris at 232.) If you are unsure, discuss the facts of the termination with other employment lawyers.

In Loggins v. Kaiser Permanente International (2007) 151 Cal.App.4th 1102, 1113, the court reasoned that a plaintiff may raise a triable issue of fact on the issue of pretext by showing that other similarly situated employees did not suffer adverse employment actions when they engaged in conduct similar to the plaintiff. Sometimes your client may know of others who were not terminated when engaging in the same conduct that your client was terminated for, and if you can verify that information before filing a lawsuit, or as soon as practical after a lawsuit is filed, it will greatly help you to defeat a summary-judgment motion and win your case.

It is important to objectively evaluate the facts and circumstances prior to filing a lawsuit in light of the “same-decision” defense.

Do you have doubts?

Lastly, if any of your pre-litigation investigation uncovers any doubts, inconsistencies or shows your client is misrepresenting the facts in any way, strongly consider whether the case is worth filing a lawsuit at all. By paying close attention to the early warning signs revealed through an effective pre-litigation investigation, you can avoid common pitfalls and position your client for a positive outcome.

We all know that it is often easy to ignore effective pre-litigation investigation and file the lawsuit as soon as possible. However, unless there is an upcoming statute of limitations, slowing down and taking the time to employ these pre-litigation strategies will help avoid common pitfalls and defense tactics in order to maximize your case value and minimize negative litigation outcomes.