When employers face employment disputes, the legal advice they receive can significantly influence the outcome, particularly in cases involving senior employees or complex financial interests. Howard Levitt, a senior partner at Levitt LLP and an employment law specialist, emphasizes that understanding the full economic value of a case is crucial and that misjudgments by lawyers can have costly consequences.
Levitt points out that legal counsel often calculates damages based on conventional parameters, such as wrongful dismissal compensation, without fully appreciating other financial interests at stake. He recalls instances where lawyers overlooked substantial economic components—for example, the value of an investment adviser's client book or the appropriate valuation of stock options for an employee. In both situations, a more nuanced legal and economic analysis led to significantly higher settlements than initially recommended.
These examples underline Levitt’s central argument that expertise in employment law does not automatically translate into the ability to assess the potential financial ramifications of a dispute fully. This gap can affect both employees and employers. Employers frequently select their legal counsel based on referrals, familiarity, or firm reputation, but such factors do not guarantee that the lawyer can handle complex claims involving senior executives, equity incentives, human rights issues, or novel legal challenges that could impact an entire workforce.
Levitt warns that employers may struggle to evaluate the advice they receive and might remain unaware of unasked questions, overlooked claims, or whether settlement recommendations reflect a thorough risk assessment. He stresses the importance of lawyers possessing both experience and creativity to navigate the intersection of legal principles and economic realities.
The article draws attention to the broader implications of employment disputes, which can involve deferred compensation, restrictive covenants, lost business opportunities, and equity arrangements—factors often missed if assessments focus solely on salary and notice periods. Levitt cites the Supreme Court of Canada case Matthews v. Ocean Nutrition Canada Ltd., which led to widespread revisions of Canadian compensation plans, as an example of how legal precedents can dramatically reshape employer obligations.
Effective legal counsel, according to Levitt, must provide more than routine calculations and settlement suggestions. Counsel should understand the strength of evidence, witness credibility, and subtle legal principles that might influence a case’s outcome. Additionally, early errors—such as poorly drafted agreements or inadequate investigation into workplace complaints—can escalate disputes and increase exposure.
Levitt concludes that striking the right balance between quick settlements and vigorous defense requires judgment and experience. He cautions against relying solely on high-priced lawyers, advocating instead for counsel who can judiciously allocate resources, involving junior lawyers when appropriate or specialists when needed to ensure comprehensive analysis.
Ultimately, Levitt advises employers to be proactive in assessing whether their legal representation comprehensively addresses the complexity of employment disputes before costly issues arise, highlighting a significant difference between lawyers who recognize the full scope of a case and those who focus solely on the obvious elements.