A career in employment and labor law has shown me just how devastating unwarranted lawsuits can be for businessowners in all industries. Too often, employers in the U.S. face costly lawsuits that trial attorneys use as a means of scoring big fees from bloated settlement agreements or courtroom wins. For many small-business owners, however, the costs of fighting and settling these lawsuits represent a serious economic challenge to running their business.
This is especially true here in Missouri. Right now, there are too many avenues for ill-intentioned trial lawyers to use as a pathway for filing more meritless lawsuits that hurt employers across the state. For the sake of building a more robust business climate that treats employers and workers fairly in all workplace disputes, the Missouri Legislature needs to undertake significant reforms to curb lawsuit abuse in the upcoming 2020 legislative session.
One of the top priorities for lawmakers moving into the 2020 session should be limiting punitive damages that can be awarded by Missouri courts. Punitive damages are supposed to be a way for courts to punish genuine and verifiable wrongdoing. However, rather than using it as intended, attorneys in Missouri too often use punitive damages as a sort of add-on to their claims so they can drive up settlement amounts, and in turn increase the fees they are able to collect from the case.
By implementing reforms that require attorneys to more sufficiently prove the need for punitive damages, we can discourage this practice and help keep legal costs down for employers in the process. This way, employers are not subjected to unnecessarily harsh damages simply so plaintiffs’ attorneys can drastically increase the amount in fees that they are able to collect at the conclusion of the case.
Another issue for the Missouri Legislature to address in its upcoming session is the Missouri Merchandising Practices Act (MMPA). MMPA was originally designed to allow the attorney general to bring claims on behalf of the state’s consumers, but plaintiffs’ lawyers have since turned it into justification for private lawsuits and class-action cases in pursuit of disproportionate damage awards, including the punitive damages mentioned above.
In each of the past five legislative sessions, state lawmakers have proposed reforms to MMPA, all of which ultimately came up short. Now, it is time for the legislature to take up the issue once again and finally pass changes that can better align MMPA with its original intent of protecting consumers without putting small-business owners at risk of lawsuits in the process.
However, these are only two of the many problems fueling Missouri’s lawsuit crisis. There are still plenty of more things for the legislature to address that can rein in all the litigation facing the state’s employers.
One other issue is arbitration in employment contracts. Arbitration is both a less costly and more efficient way for all parties to address workplace issues than litigation. However, it has faced continued attacks at both the state and federal level as trial attorneys push to limit arbitration in favor of lawsuits, which are often far more lucrative for the plaintiff attorneys. The Missouri legislature must buck this trend and pass legislation to authorize greater use of arbitration in employment and other litigation matters.
The Missouri Legislature showed last year that it was willing and able to pass legal reforms that can curb unnecessary lawsuits when it passed legislation to prevent out-of-state attorneys from venue shopping in our courts. Now, they must continue those efforts in 2020 so that Missouri businesses no longer have to constantly be on guard for the next frivolous lawsuit.
A healthy business climate is vital to a healthy state economy. Because of this, it is our state legislature’s responsibility to be on the watch for things that put Missouri businessowners at risk. To fulfill this responsibility, reforms that bring a halt to lawsuit abuse must be at the top of lawmakers’ dockets in the upcoming legislative session.
Jerry M. Hunter is a partner at Bryan Cave Leighton Paisner LLP and serves as Chairman of the Board of Directors of the Associated Industries of Missouri.