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Some companies try to change names to avoid employee lawsuits

On Behalf of | Aug 12, 2019 | Firm News

Since the beginning of the #MeToo movement, more businesses have been exploring their legal options to avoid getting sued by their own employees for sexual harassment. Though many companies in California have put more effort into making their workplaces safer, others have tried more underhanded methods to keep their money and their reputation.

One of these ways is giving their company a fresh new start around the time of the lawsuit. These employers figure that if the business has a new name and someone else in charge, then they can’t be held liable for harassment accusations. Workers should be aware of this devious strategy and how they can overcome it.

New name, same problems

recent sexual harassment case in Iowa serves as an example of how bad this technique can get. Back in 2010, a female worker and four other employees sued the toy company they worked at and won. However, they did not receive the $2.4 million they were owed because the company changed names and even countries. The business they originally worked for apparently was no longer present in the U.S.

KCCI’s investigations reveal that the businesses had operated at the addresses they provided, but the companies denied ever working there. An attorney they interviewed claims that there are many businesses in Hong Kong, California and Iowa that have these contingency plans to avoid paying for these lawsuits.

It isn’t over yet

If you find yourself in this scenario, you shouldn’t give up hope. The women in the previously mentioned case are now filing a lawsuit against the employers that own the various backup companies. If they can prove the employers purposefully made these new companies and shut down old ones to avoid paying for hefty lawsuits, then the court will charge them for the money they originally owed and for committing fraud.

Make sure you take action as soon as you can. Even if it is supposedly the same company you sued before, California’s statutes of limitations still apply to you. Contact an employment law attorney as soon as you can to avoid losing your case to these dishonorable tactics.