I have had cases where clients have been paid literally millions of dollars more than their legal entitlement

What is a wrongful dismissal case genuinely worth?

This question came to mind this week while sitting at a Halifax restaurant bar, having dinner after a day of trial. Next to me was a gentleman who, as it turned out, was a lawyer recently terminated from a large national law firm.

He recognized me (this sketch isn’t so bad) and, with my consent, told his tale.

He had already received a legal opinion from a local employment lawyer as to the value of his case. That advice was fundamentally misguided.

To be clear, the advice reflected what a lawyer with his age, length of service and remuneration would normally be entitled to. But it totally missed the mark.

The reality is that my seatmate’s law firm had behaved so poorly that it could never risk the publicity, neither within the legal community nor in the pages of a newspaper, of a public Statement of Claim, let alone a multi-day public trial.

My inquiry to this former employee was not as to his age and length of service, but what was it worth to this law firm to place the facts of the case in a vault and bury them in the depths of the Atlantic Ocean, never to be heard of again. That is the value of his dismissal claim, a much higher number than the opinion he had received. This lawyer had some inkling of that insofar as the firm had made it clear, when making its settlement offer, that non-disparagement and confidentiality clauses were absolute requisites.

I always have, whenever acting for employees, viewed cases through that prism.

Of course, absent legal cause, (very difficult to establish), an employee will be entitled to, at least, reasonable notice or severance based on the usual factors of length of service, age, re-employability, position etc. But that is just the starting point for my analysis.

I have had cases where clients have been paid literally millions of dollars more than their legal entitlement. I remember, some years ago, at the height of the subprime mortgage crisis, a bank executive client was fired. He had warned the bank, in writing, of the risks of its practice but it went ahead regardless. Class-action lawyers were prowling about looking to sue banks for their clients’ losses.

We settled the case for many millions of dollars, an amount which was close to four times what a judge friend told me the case was worth if it had appeared before her.

Since potentially billions were at stake for that bank if my client’s early warning to it was publicized, that is obviously an extreme example.

But any case with reputational or branding risk, or even embarrassment to those in a position to write the settlement cheque, provides an opportunity to use such “hidden persuaders“ to resolve a case quickly and lucratively.

Sometimes employers foolishly fight such cases and refuse to make offers beyond only the value based on length of service etc., without calculating the losses they will suffer in customer relations, goodwill, regulatory approvals or even potential lawsuits when perfidy, stupidity or negligence at the top is exposed.

Now, on the other hand, I sometimes advise employer clients, when faced with such allegations to “get a grip” and consider whether the public realistically has any interest in their case and its allegations. There are only so many cases with sufficient public interest to land their stories in the news. Too many companies believe that they are of greater public interest than they actually are.

And many employees exaggerate in their own minds the potency of the information that they have. Good judgment in evaluating that and knowing how to maximize the impact of the information should be essential legal skills.

An interesting sidenote is the recent trend toward legislative prohibition of non-disclosure agreements. Certain women’s rights organizations in particular have lobbied against them declaring that “women should not be silenced.“ They might want to speak to the women actually affected.

I have had many cases on behalf of women who are the victims of harassment or worse, who would happily lynch such advocates. They are delighted to obtain the settlements which they secured in return for non-disclosure agreements. But for their agreeing to a non-disclosure agreement, the amounts would never have been paid and the women would not have had the compensation they genuinely deserved for what they had incurred.

P.E.I. has just passed a prohibition on some non-disclosure agreements and similar legislation has passed first reading in Nova Scotia and been discussed elsewhere.

It might well be that non-disclosure agreements, as a matter of policy, are inappropriate to conceal fraudulent activity but, short of that, it is in neither employees’ nor employers’ interest to prevent parties from resolving their concerns quietly and permanently.