Bad for the Culture
For employers, receiving notice of a lawsuit can feel personal, especially if you felt that you put a lot of effort into resolving issues with the employee before the lawsuit was filed.
These emotions often come to a head when we are discussing settlement. There are some common refrains that I want to address here.
“They don’t deserve the money!”
A settlement isn’t a gift from Santa. It is not bestowed upon someone because they’re on the nice list. A settlement is when both sides agreed to a compromise to avoid the continued cost of litigation and avoid the uncertainty of trial. A settlement provides a mutual benefit. Whether or not you think someone is “deserving” should have no bearing in a settlement decision. In workers’ comp, benefits are calculated based on specific guidelines, and settlement decisions are based on the facts of the case, and not on the character of the individual. It doesn’t matter if the employee was rude, disrespectful, horrible at their job, or never refilled the coffee pot after pouring the last cup. There is no special settlement calculation for “good person/bad person.” Nice employees get hurt at work, and jerks get hurt too. The statutory benefits apply equally to both.
“I don’t want to settle this claim!”
Let me hold your hand when I say this: in most cases, it’s not even your claim. It’s the carrier’s claim. If you are in a self insured, stand alone program, then perhaps you have more of a say since it is your money. But many employers (particularly if they operate in multiple states) are in a fully insured or deductible program. This means that you’re playing with carrier money, not your money. The carrier calls the shots. Even if you are in a self-insured risk pool, the claim belongs to the pool, not to you.
“If they get a settlement, it will be bad for our organizational culture!”
If they had a work injury and subsequently filed a lawsuit, then trust me, the damage to the culture has already been done. You cannot control the narrative that the employee makes. If you settle, the employee will paint it as a win, even if the settlement is favorable to you, because they won’t know that the settlement is favorable to you. If you go to trial and the employee prevails, they are going to paint it as a win. If you go to trial and YOU prevail, the employee will paint it as a David and Goliath scenario where they never had a chance and you were the big, bad employer, so they win on principle. If you, as the employer, have done the work to build a strong culture and consistently show your employees that they are valued, a settlement is not going to damage your culture. However, if your culture is so weak that word of a settlement on a claim can cause damage, then you have much bigger problems than a litigated workers’ comp claim.
And hey, don’t get me wrong. There are claims that make me angry too. I’ve seen people lie in depositions, lie to doctors, and abuse a system that is meant to protect people who are hurt at work. But remember that this type of abuse typically consists of a very small overall percentage of claims filed. When you see it, fight it. But don’t let a handful of bad experiences give you the impression that every employee is trying to lie and cheat.
Claims decisions are financial decisions, not emotional decisions. Approach settlement discussions accordingly.
