Below, I’ll discuss what a “probable cause” (PC) determination means, what a “no probable cause” (NPC) determination means, and what each determination may mean for you. Bad news first.

“No Probable Cause:” What This Means, and What You Can Do

If the ERD determination states there was “no probable cause” of discrimination, this means the ERD investigator believed it was unlikely that discrimination occurred, and he or she decided your case should be dismissed. And your case will be dismissed, unless you appeal the NPC decision. If you appeal your decision, you will be entitled to attend a hearing, at which an administrative law judge (ALJ) will decide whether the ERD investigator erred and there is in fact probable cause of discrimination. At these “probable cause hearings,” the ALJs agree with the investigators the vast majority of the time, and uphold the NPC determination. So the odds of winning a probable cause hearing are low (not to mention the odds of going on to win a second hearing on the merits), although not impossible. In my view, there are occasionally cases with very good evidence of discrimination (e.g. documentation or witness statements supporting that discrimination occurred) that nonetheless receive an NPC finding. On some occasions, an appeal is a good idea.

• How to appeal.

If you get a NPC finding and are considering an appeal, you should immediately read the appeal instructions and the deadline stated in the NPC determination.

To appeal, you need to write a letter, and the NPC determination describes the (brief) information you need to include in the appeal letter.

The deadline for appeal is 30 days. This deadline requires that the ERD receive your appeal letter within 30 days of when the NPC determination is dated. In other words, because of mailing times, the deadline is shorter than 30 days. If you are considering an appeal, pay close attention to the dates, be mindful of mail delays, and act promptly.

• Should you appeal?

Whether or not to continue a legal action is an important decision, involving several factors.

Your decision should not be a knee-jerk reaction, based on a gut belief that you are “right,” or that there is a “principle” that you must keep pursuing. Perhaps these things are true. But you should also consider: (1) how much time could this appeal take?; (2) how much will this appeal cost (in deposition fees, expert fees, fees for an attorney you hire, etc.)?; and (3) what is the risk you will lose?

When you get an NPC decision, that is a bad decision, and should serve as a reality check. Not necessarily a reality check that you’re wrong, but a reality check that, as far as ERD is concerned, you are more likely to lose your case than win it.

Often, this notion- that you can be right, but lose- is a big barrier for many ERD complainants to get over. If this is your first trip through the legal system, you may have assumed that the ERD would feel your pain, and would agree with the facts as you discussed them. Now you see that is not so, and that there is a serious risk you will lose your case, despite your best efforts.

With that said, there are certainly cases where I feel the ERD’s NPC determination was wrong, and where I feel an appeal is warranted. Also, for certain cases and circumstances, there may be an option to remove the case from ERD altogether and file a discrimination complaint in federal court.

Before proceeding with an appeal (again, be mindful of the deadline), you may want to contact one or more attorneys for their opinions, especially if you can do so for free. You can get their opinions whether appealing your NPC determination is the best decision, or whether there are other decent options available.

If you do decide to call an attorney, do it quickly. An attorney can be of much more help if you call on day one after the NPC determination, as opposed to the day before your appeal deadline.

The same is true for those of you who received a PC finding. While a PC decision is good news, that decision will trigger a series of legal obligations that you have to follow. There are several important things to consider after you receive a PC decision.

“Probable Cause:” What This Means, and What You Can Do

If you receive a determination of “probable cause,” this means (1) the ERD investigator decided there was evidence of discrimination in your matter; and (2) you will have a hearing before an administrative law judge (ALJ). At the hearing, the ALJ will decide whether the employer is liable for discrimination, and if so, what monies and relief the employer must provide you.

If you receive a finding of PC, you can take a moment to celebrate. You passed one big step. But before you win your hearing (the second big step), there are several things you should consider or do in the time following the PC determination.

• You should consider what damages (back pay monies) and relief you would receive if you won your hearing.

What is your case worth? If you haven’t asked yourself this by the point you’ve reached a probable cause decision, you should definitely do so. You are at a serious juncture. Going forward, you must make serious decisions, and possibly serious investments of time and expense, into your matter. Before you make these decisions and investments, it makes a lot of sense to figure out what you stand to gain in you win.

You could stand to gain considerable monies and relief if you win. With that said, some parties (despite a PC finding) stand to gain very little at the hearing. In any event, if you are assuming your case is worth hundreds of thousands, or millions, of dollars, chances are you are hugely overestimating what you stand to win.

The main things the ERD can award you if you win your hearing are the following: (1) reinstatement or placement in the job at issue (assuming you want that); (2) repayment of your attorneys fees (assuming there are any); and (3) payment of net wages (“back pay”) lost as a result of the employer’s discrimination.

I have a post here that describes, in the Section Titled “Damages (Monies that May Be Won),” how you can calculate back pay estimates.

• You should consider what your costs are going forward.

Costs? you may ask. Yes, costs. If you want to win your ERD hearing, you will have to invest some of your own money to do so. Even setting aside legal fees (which you wouldn’t have to pay if you didn’t retain an attorney, or if you retained one on a contingency-fee basis), there are other costs you’d have to pay if you want a realistic chance to win your hearing. These costs include: (1) deposition costs (ranging from about $200 to $750 per deposition); (2) expert witness costs (e.g. if you want to win a disability discrimination claim, you must have a medical provider testify- some doctors charge over $1,000 per hour for their time); and (3) witness fees, travel costs, copy costs, and other miscellaneous costs.

Up until the PC determination, your ERD complaint may have been a low-cost affair. But if you want to win your hearing, you’ll probably have to pay some significant costs between the time of the PC determination and the conclusion of the hearing.

The employer will have to pay significant costs as well. Because of this impending financial pressure on both parties, following a PC determination it is common for the parties to discuss settlement or attend mediation.

• You should consider whether to attend mediation (if the employer is also willing to do so).

After a PC termination, the ERD will offer you and the employer an opportunity to mediate- that is, to have a settlement-negotiation session conducted by a mediator. (The mediator is an ALJ, although not the one assigned to your hearing).

Mediation is usually a good idea for both parties. Employee-clients I’ve represented usually agree to go to mediation. Some employers will agree, some will not. If your opposing employer agrees, you should consider mediation.

However, before going to mediation, you should figure out how much your case would be worth if you won your hearing; there are several other important things you should also do before going to mediation.

I have a post about preparing for ERD mediation here.

• You will probably have to respond to written “discovery” requests in the time leading up to the hearing.

After the PC determination- and in the time leading up to the hearing- you will have several important requirements to follow. One big requirement is your obligation to respond to “discovery” requests- that is, written requests from the employer that you are required by law to respond to within 30 days.

There are three common forms of written discovery: (1) interrogatories (written questions) that one party asks and the other party has to answer; (2) “requests to admit” (numbered statements of proposed facts) that the answering party must admit as true or deny; and (3) document requests, where the responding party must turn over copies of important documents (e.g. performance reviews, disciplinary documents, medical records, etc. etc.) to the requesting party.

Discovery is serious business. If you have been served with written discovery requests, you will probably recognize that you’ve entered a new realm of legal formalities. There are more procedural requirements and legalese involved than what you encountered earlier during the ERD investigation phase. There are also legal deadlines and obligations, and if you violate them, there are potential sanctions and penalties.

If you are served with written discovery requests and want to discuss them with an attorney, please don’t wait until day 29 of your 30-day deadline period to do so!

You should also consider filing your own discovery requests (or having an attorney do this), so you can require the employer to provide documents and answers to questions that you want to request. There is a limited period in which you can issue discovery requests- if you wait too long, you may miss out on this opportunity.

• You will probably have to have your deposition taken in the time leading up to the hearing.

If you and the employer don’t settle your case after the PC determination and your case proceeds to a hearing, sometime prior to the hearing the employer will probably require you to attend a deposition.

A deposition is a question-and-answer session conducted by an attorney (e.g. the employer’s attorney), who questions a witness (e.g. you). If you are provided with a notice of deposition, you are required to attend. At the deposition, you are required to provide truthful answers under oath. A court reporter is present at a deposition, and transcribes a record (transcript) of everything that is stated . (The transcript- which you will need to prepare for your hearing- is the biggest deposition expense, and what pushes the total costs of a deposition into the hundreds of dollars).

It is unusual for an ERD case to proceed to a hearing without the employer conducting a deposition of the complainant-employee. Often, there are several persons who are deposed in a case. For example, an employee-complainant may decide to depose the supervisor and HR rep who terminated his employment, to see (in advance of the hearing) what answers those important persons will give to important questions. Your matter may need several depositions in order to thoroughly prepare for your hearing and give yourself the best chance to win.

• You will have to submit a witness list and exhibits within 10 days of the hearing, and follow any other deadlines established by the ERD and ALJ.

If your case proceeds to a merits hearing, no later than the 10th day before the hearing you must provide the ALJ with (1) a list of all the witnesses you may bring to the hearing; and (2) copies of all the exhibits (i.e. important documents) you intend to use at the hearing. To prepare for this, you may have to sort through mounds of documents and phone many prospective witnesses. Make sure you allow yourself enough lead time before the witness and exhibits deadline to make these sorts of preparations.

After your PC determination, you will receive a packet of information from ERD which describes the requirements and deadlines above, as well as other legal requirements. Please read those documents carefully, and schedule all referenced deadlines.

• You will have to prepare for the ERD hearing, including witness arrangements and organization of documents and exhibits.

If you wish to attend and win your ERD hearing, you will need to make several important preparations in the time leading up to the hearing. Namely, you will need to review and organize all your important documents and deposition transcripts, and you will need to plan arrangements and questions for witnesses. These detailed preparations are beyond the scope of this post, and will not be described here.

You can refer to Section I. of my post about preparing for an unemployment hearing, to get a general idea of the kinds of preparations you could make for an ERD discrimination hearing (e.g. preparing documents, preparing for witnesses, etc.). Please note that, while an unemployment hearing is similar to an ERD discrimination hearing, there are several large and important differences between these two types of hearings. Thus, the information in Section I referenced above- like all the information in this blog- is intended to give you ideas and information to consider, but is not legal advice that applies to your specific situation. Only an attorney can provide legal advice for your particular circumstances and your particular hearing.

• You should consider whether to get an attorney.

It is very difficult for a complainant-employee to win an ERD hearing without an attorney. (Even with an attorney, an ERD hearing is by no means a walk in the park to guaranteed victory). An attorney can improve your odds of success, and help you present your case in the an effective and legally- appropriate manner.

If you have a chance to consult with an attorney for free- many Wisconsin employee rights attorneys, including me, offer free phone consultations- it is definitely worth your time to do so. An attorney can help assess the potential advantages and disadvantages of your case, and potential monies that could be gained or lost.

Whether or not you retain an attorney and pay out-of-pocket fees (if any are charged) is an important decision. I have a post here about important questions to ask when you are considering retaining an attorney.

Ultimately, you must consider the costs of retaining an attorney versus the potential benefits that attorney can offer. There are several activities described above- particularly, written discovery, depositions, and preparing for and attending a hearing- where an attorney could offer considerable value.

Conclusion

Hopefully, the information above is of help to those of you who have received a probable cause or no probable cause decision from ERD. Again, this information is not legal advice, and cannot replace the informed advice of an attorney who has reviewed your specific circumstances. But I do hope this information demystifies some uncertainties you may have, and gives you a clearer idea of what’s to come, and what are some important things for you to think about following your PC or NPC determination.

DISCLAIMER: The information in this blog is NOT legal advice, nor does it establish an attorney-client relationship between you and Employee Rights Attorney Michael Brown or the law firm of Peterson, Berk & Cross. Legal advice often varies between situations. If you want legal advice for your specific circumstances, you must consult with an attorney.

For more information about Wisconsin employment lawyer Michael F. Brown and Peterson, Berk & Cross, S.C., please visit http://www.pbclaw.com/mb.html.

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- Closely review the ERD’s materials about mediation, and become familiar with the mediation process.

You are probably aware that ERD mediation is a process in which an employee (Complainant) and employer (Respondent) try to negotiate a settlement. It is important you consult with available materials and resources to learn all you can about the ERD mediation process. For example, it may help you to know that mediation discussions cannot be used as evidence or admissions at an ERD hearing. In other words, what you say at mediation cannot be used as evidence against you. Knowing things like this about the mediation process may help with your level of comfort and preparation.

- Calculate what your costs would be, and what your financial award (“damages”) would be, were you to proceed to an ERD hearing and win.

Before you go to mediation, it is important you estimate how much money it could cost you-and how much money or “damages” you could be awarded- if you proceed with your matter through an ERD hearing.

Costs

If you proceed to an ERD hearing, you may have to pay, out-of-pocket, the following types of costs:

- Attorneys fees (unless the attorney works on a contingency, pay-only-if-you-win, basis);

- Deposition costs (often somewhere between about $200 to $750 per deposition;

- Expert witness costs (e.g. what a doctor will charge to testify about your medical condition, sometimes up to $1,000 per hour or more);

- Vendor costs (e.g. Kinkos or Federal Express charges for document preparation, private investigator costs);

- Witness costs (e.g. subpoena service costs, witness fees required by law); and

- Miscellaneous costs you can think of, such as wages you may lose for taking work off, mileage costs, etc.

It is important you come up with an estimate of what these costs would add up to in the time before the ERD hearing. For example, if a doctor requires $1,000 per hour to testify in your disability discrimination case and you could rack up $5,000 or more in costs, you want to know this kind of information well in advance of the ERD hearing. You should also know the information prior to mediation, so you know what financial risks and costs will arise if mediation is unsuccessful and settlement not reached. In other words, if “Plan A” (mediation) is unsuccessful and you want to decline settlement, you should know what “Plan B” (going to an ERD hearing) will cost you.

If your costs are particularly high, and you do not have a lot of money to invest, this may affect your settlement valuations, and the level to which you may compromise at mediation. You should keep in mind that if you go to your ERD hearing and lose-which is there is always at least some risk of, no matter how strong your case- you will not recover your costs.

Damages (Monies That May Be Won)

Before mediation, it is also important you know the maximum monies or “damages” you stand to gain if your matter proceeded to an ERD hearing, and you won. At mediation, the value of potential damages may provide leverage to you (if a large-dollar amount) or to the employer (if a small-dollar amount). If you do not know how your damages are calculated, and/or fail to estimate your damages, you may grossly overestimate or underestimate the value of your case, and fail to offer or reach a reasonable settlement.

So, how do you calculate damages? If you win your ERD hearing, the ERD will likely award you with lost back pay. “Back pay” is the value of income you lost as a result of the discriminatory action (e.g. job termination), plus the value of out-of-pocket and benefits-related monies you lost due to the discriminatory action (e.g. job-search expenses & COBRA insurance payments you paid), minus the value of actual income or benefits that you have received since the discriminatory action. Back pay is basically the amount of monies it would take to be “made whole” for the financial losses you suffered due to being terminated. (Sometimes potential damages other than back pay may be available, such as front pay or other damages your attorney assesses to have value; because such damages are speculative and less likely to be awarded at ERD, they are not discussed here).

As an example of calculating back pay, consider the following situation.

- An employee’s job was terminated for discriminatory reasons on January 1, 2007.

- At the time of termination, the employee was receiving health insurance, making $15.00 per hour, and working 40 hours per week.

- The employee received 6 months of unemployment benefits (totaling $9,300 in income received), and went without work for 8 months total.

- The employee had to pay 8 months’ worth of COBRA health insurance at $400/month, totaling $3,200.

- The employee picked up a new job on January 1, 2008, where he still works, which pays him $12.00/hour, 40 hours per week, with health insurance.

- The employee has an ERD hearing on July 1, 2008, which is 18 months (or approximately 78 weeks) after the job termination. At the point of the ERD hearing, the employee will have worked about 26 weeks at his new job.

Here is an estimate of that employee’s potential damages if he won the ERD hearing:

- January 1, 2007 (termination date) thru July 1, 2008 (ERD hearing date) = @78 weeks

- 78 weeks x 40 hours/week x $15.00/hour (would have made for Employer) = $46,800 would have made for Employer, if no discriminatory termination

- $3,200 COBRA payments (paid because of discriminatory termination)

TOTAL Monies Lost: $50,000

MINUS ($9,300) unemployment income

MINUS ($12,480) income from new job (26 weeks x 40 hrs/wk x $12.00/hr = $12,480)

Total ERD Damages/Back Pay: $28,220

In the preceding example, the employee would stand to gain approximately $28,220 if he won an ERD hearing. (Also, note that if the employee uses an attorney for ERD proceedings, reasonable attorneys fees would likely be awarded if the employee prevails at the ERD hearing; thus, a reasonable estimate of attorney fees could be included in the valuation above as well).

While estimates of potential damages cannot be exact-and actual damages awarded could be higher or lower than the estimate-it is important that the employee comes up with a damages estimate based on the best information available, and uses this information for mediation.

Before the mediation, inform the employer of your damages estimate so the employer has advance notice of your valuation of damages.

In my opinion, it is usually helpful to inform the employer of your damages valuation in advance of the mediation. That way, when mediation day comes the employer will not be shocked to hear your valuation of damages, or to hear settlement offers based on that valuation. If the employer agrees with your valuation (or at least feels you are in the ballpark of what a likely damages award would be), the employer may come to mediation with authority to make higher settlement offers than it would otherwise have made.

Be prepared to compromise down from your damages value at mediation: the extent of compromise depends on various factors and leverage.

In the example above, the employee would not have a realistic chance for settlement if he walked into mediation expecting to settle at $28,220. This number reflects what the employee would get if he won an ERD hearing. If he expects to settle, he should know that settlement, by its nature, involves compromise.

How much should the employee compromise? This, of course, depends on the situation, and the employee’s leverage.

The following factors tend to increase leverage:

- if the employee was out of work a considerable time, and has a large amount of damages at issue;

- if the employee has witnesses or documents available that prove discrimination occurred (and thus increase the chance of winning at the hearing);

- if the employee has financial resources necessary to pursue her case to completion (e.g. she can afford the necessary costs to complete the ERD hearing, and even the costs to take the case to federal court and pursue larger damages);

- if the employee is represented by an attorney;

- if the employer is not represented by an attorney;

- if the employer is represented by an attorney but worried about legal fees or liabilities; and

- if the employer is obviously lying, irrational, disorganized, and/or poorly-prepared for hearing.

These factors, and several others, can affect an employee’s chances of winning an ERD hearing, and thus can affect her leverage at mediation. The more favorable factors present, the less the employee should compromise from the maximum potential damages. Again, however, at mediation the employee should always offer at least some compromise downward from the maximum damages. If the employee is only willing to settle at amounts equal to, or greater than, maximum damages, then the employer may be better off losing the hearing, and paying less for a judgment than for the employee’s unreasonably high settlement offer.

Too often, employees in ERD mediation will overestimate their damages and settlement valuations, and demand a settlement that feels “fair” to them, but is in fact higher than the maximum that Wisconsin law allows. I often tell clients that you could not get a higher damages award than what the law allows any more than you could travel faster than the speed of light. The damages limitations, like the speed of light, have a fixed maximum value, and that maximum value cannot be exceeded no matter how bad the employer’s discriminatory conduct, how “unfair” the maximum damages seem, etc. This may be a bitter pill to swallow, but it’s better to come to grips with these legal limitations before mediation than after.

In sum, before you go to ERD mediation, you should have an understanding of what types of damages are available, and you should estimate the potential damages for your own situation.

- Show up to mediation with (1) your damages calculations; (2) your settlement range; (3) your important documents and witness statements; (4) your attorney (if you have one); and (5) legal research/cases that are important to your matter.

When it comes time for mediation, you should walk in with a good understanding of what your estimated damages are. You should also have a reasonable range of settlement. That is, you should have an opening offer, and a “bottom line” offer, based on your potential damages and leverage factors as described above.

You should also bring copies of important documents and witness statements, so you can show the mediator and/or employer the strong evidence that you have in your favor, and the likelihood you would win an ERD hearing if things progressed that far. If you have an attorney or plan on getting one, bring her to mediation. Having the other side see you have an attorney can be just as important for perceived credibility purposes as for advice purposes-that is, simply having an attorney show up should show the employer that you are serious about your matter. An attorney may bring legal cases and authorities to cite, in anticipation of legal arguments that the employer may make.

- Leave your anger, righteousness and thin skin at home.

Often, parties in an ERD proceeding have hard feelings towards each other, and the proceedings that led up to mediation were negative and stressful. When you show up at mediation, be emotionally-prepared to communicate with the other party in a non-antagonistic manner. Be prepared to ignore antagonistic behavior from the employer.

Mediation is a time to leave those feelings behind, and a time to rely on logic and financial risks (not emotion) to resolve your dispute. Rarely does any employer or employee feel they are wrong, nor can they be convinced to feel they are wrong. Parties can be convinced to reach settlement so they can avoid financial risk, and reach closure on longstanding, difficult issues.

When you present your settlement offers and points of leverage (e.g. discussing a witness statement), do so politely and factually. For example, at mediation it would be acceptable to say something like the following: “Witness Jones gave a statement saying he observed Supervisor Smith say my termination was based on my medical condition. Because of this evidence and other evidence, I believe ERD would find my termination was discriminatory.” It would not be productive to state: “Witness Jones gave a statement saying Supervisor Smith discriminated against me, just like he did against everyone with medical problems. Supervisor Smith was ridiculous, and he knows it. The employer would be lucky to get out of this for $28,220.”

It may seem obvious to avoid talking like this, but know that settlement discussions can revive painful issues and old disputes between the parties. It is likely you will feel tempted, at some point during mediation, to speak negatively to or about the employer. Avoid the temptation. Politely stick to the facts. If you keep this and the other information above in mind, you will increase your chances of having a positive mediation experience and reaching a reasonable settlement.

DISCLAIMER: The information in this blog is NOT legal advice, nor does it establish an attorney-client relationship between you and Employee Rights Attorney Michael Brown or the law firm of Peterson, Berk & Cross. Legal advice often varies between situations. If you want legal advice for your specific circumstances, you must consult with an attorney.

For more information about Wisconsin Employee Rights Attorney Michael F. Brown and Peterson, Berk & Cross, S.C., please visit http://www.pbclaw.com/mb.html.