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The Malicious Prosecution Risk Associated With Counterclaims Against Staff

A confidential settlement will end a seven-year-long legal battle between the chairman of Waffle House and his former housekeeper over tapes she secretly recorded of the two having sex.

In 2012, the chairman sued his former housekeeper for allegedly recording their sexual relations in order to extort money from him. He also sued the lawyers of his former housekeeper for allegedly conspiring with her.

The former housekeeper and her attorneys were indicted on charges of unlawful surveillance, but all three were cleared of all charges in 2018.

The housekeeper maintained that she recorded the sexual encounters in order to prove that the chairman sexually harassed her on multiple occasions.

The settlement was announced shortly after the opening statement in a civil trial. "Waffle House chair, ex-housekeeper settle sex tape lawsuit" local21news.com (Aug. 07, 2019).

Commentary and Checklist

Engaging in a sexual relationship with a staff member, whether consensual or not, is an incredible employment practices risk.

Many employers, including family employers, sue departing employees for a variety of reasons – for taking uniforms, not returning keys, or breakage of items. These lawsuits are generally met with counterclaims by the former employee, alleging some discrimination, harassment, or other misconduct of the family employer which claim has to be defended, even it is ultimately determined to be meritless.

Always talk at length with your attorney about the propriety of filing a lawsuit or a counterclaim. Lawsuits without merit, including counterclaims, are not without risk.  Asserting claims may subject a family employer to a malicious prosecution claim.

In general, a malicious prosecution claim alleges that a party began or continued a legal proceeding without reasonable grounds to believe the allegations of the proceeding, and another party was damaged by the baseless case.

Family employers should review the following to help avoid retaliating against staff:

  • Never take negative employment action in any form against a staff member because he or she has reported wrongdoing, participated in an investigation, filed for worker's compensation, or engaged in any other protected activity.
  • Provide a safe and reliable method for staff to report wrongdoing, ideally to a third-party reporting mechanism. If possible, allow them to report to multiple individuals rather than requiring them to only report wrongdoing to you.
  • Have outside experts immediately investigate all allegations of wrongdoing, including allegations made against you.  
  • Take remedial action to stop any discriminatory or harassing behavior. Do not engage in sexual activity, consensual or not, with any staff member.
  • If a staff member is no longer comfortable working with you, allow the staff person to keep his or her job and work with your household manager.
  • Work with outside counsel to make certain that you follow your procedures in a fair and professional manner.
  • Consistently discipline staff, including managers, that retaliates against other staff.
  • Provide the same retaliation protection to witnesses of discrimination that you provide to those who experience or report discrimination.
  • Consult your attorney when investigating any claims of wrongdoing to make sure that no retaliatory actions are taken against any staff member.
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