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Suiting Up With a new breed of professional plantiffs on the prowl, closely screening job applicants could save you lots of dough.

By Jane Easter Bahls

Opinions expressed by Entrepreneur contributors are their own.

The payroll clerk you hired a month ago has sued your businessfor sexual harassment, alleging that her supervisor made unwelcomeadvances. The Equal Employment Opportunity Commission (EEOC)dismissed her claim as having no reasonable cause, but she suedanyway. Just defending the lawsuit could cost you $50,000 in legalfees, not to mention the time and effort required to gatherevidence. If you lose, it could cost far more. The plaintiff hasoffered to settle for $10,000. What should you do?

Hundreds of entrepreneurs would lean toward paying thesettlement just to cut their losses. And that's what a newbreed of con artists is counting on. Michael D. Karpeles, anemployment attorney with Goldberg, Kohn, Bell, Black, Rosenbloom& Moritz Ltd. in Chicago, explains that professional plaintiffschange jobs frequently with the chief intent of finding a grievanceand threatening to sue. "Seeking out potential litigation is afull-time job for chronic suers, who threaten legal action wheneverthey think there's the slightest hint of provocation that couldresult in a cash settlement," Karpeles says. "Itdoesn't matter if there's a legitimate claim; the perceivedthreat alone is often enough to prompt some companies tosettle."

It's difficult to track these people or gauge the prevalenceof their scam because many agree to a quick settlement without everfiling formal charges. Even when they do file a lawsuit, asettlement agreement would effectively hide the matter from publicscrutiny. After all, one reason companies are so eager to settle istheir desire to avoid negative publicity. However, some statisticsfrom the EEOC provide a hint of the growing problem. In 1992, 33percent of the 10,532 resolved sexual harassment claims filed withthe EEOC were classified as having no reasonable cause. By 1998,the number of resolved sexual harassment claims had ballooned to15,618, and 42 percent of them were classified as having noreasonable cause. Likewise, EEOC statistics for 1998 show that 61percent of the 15,191 charges of age discrimination and 70 percentof the racial discrimination charges had no reasonable cause. Youcan see the potential for abuse.

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