Unemployment jumped from 5.0% to 5.5% in May, the largest increase in 22 years.  Check out the Department of Labor’s latest Employment Situation Report for all the gory details.

According to a study by Stanford Law School, a rise in unemployment triggers an increase in employment lawsuits.  For example, a 1.5% rise in unemployment was found to result in a whopping 21% jump in lawsuits.  The study also found an increase in damages awarded during a downturn because it takes plaintiffs longer to find jobs.

Those findings are supported by the EEOC’s numbers.  Last year, there was a 9% increase in charge filings, the highest since the 1990s.  The EEOC recovered more than $345 million in damages, a 26% increase over the prior year.

What does this mean for employers?  Be even more careful to follow the law during a downturn.  The risk of a big lawsuit goes up the more the economy goes down.

This entry was posted on Monday, June 9th, 2008 at 6:57 am and is filed under Employment Law News, Litigation, Recession, Studies, Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.