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In-house counsel are faced with a dizzying array of labor and employment law issues on a regular basis, but one of them stands out by far as the source of the biggest headaches that keep them up at night.
Employee discrimination complaints are the matters most likely to damage a company’s reputation if not managed properly and are the most expensive employment matters for the organization to litigate, according to a recent survey of in-house counsel.
We surveyed 100 senior legal executives at organizations of various sizes—ranging from Fortune 500 companies to small businesses and non-profits—to gain insights into the time and resources spent on employment law matters. Our analysis of the responses uncovered some interesting findings regarding the most pressing corporate legal employment issues, the costs and risks associated with handling workplace matters, and the HR issues that are most damaging to a company.
Of all the employment law issues we asked about, 81% of respondents told us that employee discrimination was a top reputational concern and 23% ranked discrimination cases in the most expensive category, perceiving these matters as threats to both public image and the bottom line. This data highlights that employee discrimination is, by far, considered the most expensive—and damaging—of all contemporary employment issues. DEI issues ranked second as a reputational concern (cited by 63%), followed by pay transparency (30%), unionization efforts (26%) and creating AI policies (16%). Non-compete agreements ranked second as a major financial concern (9%), followed by unionizing efforts (5%) and AI policies (5%).
Most survey respondents told us that their company was significantly affected by labor and employment matters in a variety of ways. The top reported type of matter involved was coverage of an employment issue in social media (cited by 44%), followed by a news article in the general press (42%), a business news story about the company (37%), and reports that the company’s stock price had dipped (23%). Roughly one in three respondents indicated their company is not negatively affected by employee legal issues.
A clear majority of executives (61%) said they have seen an increase in costs for employment issues. The top-cited factor for rising costs was attributed to outside counsel expenses, with 37% reporting increases in rates charged by outside counsel for labor and employment matters and 15% reporting outside law firms are spending more time on employment issues. Other leading factors contributing to rising costs were increased litigation for discrimination complaints (34%) and increases in settlement payments to employees (29%).
When asked about how their organizations deal with employment discrimination matters, the survey respondents told us they use in-house lawyers (52%) and outside counsel (48%) almost equally. But other areas showed a clear preference: Unionization matters are far more likely to be assigned to outside counsel (58%), while non-compete agreements are routine for in-house counsel (80%).* The factor considered most often when making the inside vs. outside counsel resource decision was whether their in-house team had the necessary legal expertise to handle the matter at hand (cited by 71%).
A recently published white paper, “Good Legal Technology is Good Business: A Case for Bringing Employment Issues In-House,” summarizes the results of this February 2024 survey conducted for LexisNexis® by TechValidate. Download a free PDF of the full report.
The survey findings illustrate the kinds of high-stakes employment law matters that in-house counsel are expected to navigate on a daily basis. This requires access to the necessary news, legal information and professional resources that support fast action.
Lexis+® General Counsel Suite is an online legal research platform with improved technology that is designed to increase in-house legal department efficiency. This all-in-one information resource for the modern GC delivers access to a vast collection of legal resources, breaking business and legal news, and Practical Guidance content regarding the pressing employment law issues of the day.
To learn more about the technology or to sign up for a free trial of Lexis+ GC Suite, click here.
*This survey was conducted in February, 2024, prior to the April 2024 Federal Trade Commission issuance of its rule imposing a nationwide ban on employers’ use of post-employment non-competes with current and former workers. Several lawsuits have been filed challenging the rule, which could delay implementation. This issue may become a more dominant issue for employers in the months to come.