“Bankruptcy?” you ask. “Why are employment lawyers talking about bankruptcy?” Well, in fact, there are times when bankruptcy can provide a defense to employment discrimination claims. It involves a principle known as “judicial estoppel,” which precludes a party from taking a position in a case which is contrary to a position they have taken in earlier legal proceedings. 

Although there is no uniform definition of judicial estoppel under federal law, the U.S. Supreme Court outlined three factors that courts may consider in determining whether to apply the doctrine: (1) whether the party took “clearly inconsistent” positions, (2) whether the court accepted the party’s earlier position, and (3) whether the party would obtain an unfair advantage if not estopped. Failure to disclose a pending claim (discrimination or otherwise) in bankruptcy can establish that the party took a “clearly inconsistent” position.  As a penalty, the court can invoke judicial estoppel to dismiss the later case entirely.

Federal courts agree that judicial estoppel should not apply when the failure to reveal the claim was a result of inadvertence or mistake. Courts disagree, however, as to what constitutes ‘‘inadvertence’’ and as to what, if any, showing of bad faith is required. Last week, the Ninth Circuit weighed in and provided its view on the appropriate analysis.

Continue Reading (Plaintiff’s) Paradise Found? Ninth Circuit Allows Title VII Claim, Omitted in Bankruptcy Petition, To Proceed

Employment litigation dominates court dockets around the country. And the swing to the left in the political arena is not likely to put a damper on the number of filings. Everyone knows that litigation is expensive. So . . . what can the employer do to reduce its expenses if it finds itself on the receiving end of an administrative charge or a lawsuit? 

1. Early Case Assessment

 

            Ask your attorney to provide you with an early comprehensive analysis of the case after he or she has interviewed key witnesses, reviewed key documents and researched legal issues. Doing so will give you important information about whether an early settlement is likely to save you money in the long run and give you a good idea of what you are in for if you don’t settle.

Continue Reading How Employers Can Reduce Litigation Costs