Q: What are the negative consequences of settling out a discrimination case against my small business? (barring publicity)
I had an upcoming scheduled deposition on a case that was a guaranteed win. The plaintiff's attorney knew this and did not want to go to trial or come out of his pocket any further. He has simply been trying to get me to spend enough that settling is the better option.
I am not currently in good financial standing, which is the only reason to even debate this. It is a very small settlement, only $2k, compared to the probable additional $6k to take it to trial.
My only question is, are there any drawbacks to settling? I am a very small company so there isn't really a publicity issue. I am mostly worried about potential government contracts (I do water damage remediation), or future business loans, things like that. I cannot find anything discussing any consequences of settling online and would appreciate any feedback.
(The plaintiff lied about business size and demanded the minimum settlement amount to get this into a federal court. Not sure if that changes anything.)
A:
You should immediately settle for the $2,000 if that offer is still on the table. It will cost you much more than $2,000 to defend the matter at trial. If Plaintiff recovers any amount of a judgment, he will be awarded attorney fees under employment discrimination fee shifting provisions. Most federal court employment lawyers charge a significant hourly billable amount.
Plaintiffs' attorney is not simply trying to cause you to incur fees, but is also racking up billable hours that will be presented at the separate hearing on the motion for attorney fees.
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