Litigation and Claiming in Organizations:
Antisocial Behavior or Quest for Justice?
E. Allan Lind
ãSage Publications and E. Allan Lind
Litigation, and to an even greater extent the fear of litigation, is arguably a driving force in many organizational decisions. Recruitment practices, procedures, and tests are often developed with an eye to defending against claims of bias. Employee evaluation and compensation procedures today often take into account the possibility that unfavorable evaluations can lead to lawsuits, that inequalities in remuneration can be seen as bias, and that past favorable evaluations can be used as evidence in wrongful termination claims. Layoffs and firings are seen as minefields of potential EEOC complaints and civil lawsuits. The design and enforcement of organizational procedures and practices, and supervisory practices from the factory floor to the board room must now be sensitive to the possibility of sexual harassment and lawsuits deriving from inappropriate actions.
Concerns about litigation are understandable. There is, of course, the cost associated with losing a lawsuit. Not long ago, General Motors settled a discrimination lawsuit for more than $3 million in direct payments, more than $13 million in raises for employees who said they had been discriminated against, and changes in pay raise practices that were estimated to cost between $20 million and $40 million over several years (Closing a color gap, 1989). An interesting aspect of the GM suit, in light of some points to be explored here, is that it started with a grievance by a single employee and grew to a class action with more than 3800 plaintiffs. More recently, Polaroid Corporation was ordered to pay $400,000 to a Black employee who claimed that injurious job assignments were prompted by racism (Ex-Polaroid Employee, 1995). It is not uncommon for commentary on the organizational side of the "litigation explosion" to focus on such awards in giving the impression that litigation poses a threat to the operation of most corporations.
A lawsuit not only exposes an organization to possible losses from an unfavorable verdict, it also brings with it steep costs for paying defense attorneys. Additional costs of being sued include the time and resources expended within the firm to gather evidence and the "downtime" of employees and supervisors, often ranging well up the organizational hierarchy, as representatives of the firm advise attorneys, give depositions, and prepare to testify. Modern discovery law requires not only that the firm expend resources on its own case, but also that it gather together information and documents requested by the opposing side in the lawsuit.
Even for firms that are not engaged in current litigation, there are costs of the climate of litigation. As I noted at the outset, many aspects of organizational life have been affected by efforts to avoid litigation and to assure that litigation will not be successful, if it does arise. It is these indirect costs of litigation that are perhaps the most expensive and most pernicious. Specific policy and supervisory actions might be decided upon not so much because the policy or action is the best one available, but because that policy or action minimizes the perceived likelihood of lawsuits. Thus, inept or even dishonest employees are keep on, raises are given that have little to do with either need or merit, and promotions are made on easily quantified or documented, but sometimes invalid criteria—all in the interest of avoiding potential lawsuits (Dertouzos, Holland, & Ebener, 1988). An especially ironic aspect of efforts to control litigation is that they may, in fact, be encouraging more litigation, for reasons noted below.
For all the importance that business people accord to lawsuits and potential lawsuits, however, organizational behavior scholars have not paid much attention to what it is that predisposes a potential, current, or former employee to sue. For all that is written in personnel and business law journals about the dangers of various sorts of lawsuits, there are no hard empirical investigations of claiming, suing, and their consequences for organizations and management. Fortunately, there is a literature in the social and behavioral sciences generally about why and when people sue. Most of the research on this topic concerns what is termed "tort" claiming--claims for compensation for injuries, which is not much of a problem in intra-organizational settings in the United States--but the general findings and theory that emerge can provide some good leads to understanding claiming and litigation in organizations. Later in this chapter, I will review three theories about litigation behavior, introducing the empirical literature as I discuss the support that each theory has received. Although additional research on organizational claiming per se is clearly needed (and, fortunately, such research is underway), the current state of knowledge is such that we can make some tentative statements about how litigation arises in organizations and about how procedures and practices might be structured to reduce the likelihood of unnecessary litigation.
Some Background Issues
This last phrase--"unnecessary litigation"--raises a point that deserves discussion at the outset of this chapter. Executives and managers might prefer that there be no litigation at all and no possibility of litigation in their workforce, but we must not forget that discriminatory, dangerous, biased, and just plain wrongheaded practices certainly exist, and that some of these practices deserve to be complained and litigated against. We also should not forget that much of the progress that women and minorities have made in the past forty years has come about not voluntarily, but under threat of litigation. No small part of the "humanization" of the workplace can be traced to lawsuits about practices that now seem to us antiquated, but that posed a very real threat to the safety, security, and well-being of employees. We need to keep firmly in mind that not all litigation behavior is "anti-social" in nature.
But just as there are legitimate claims, there are also certainly claims that an objective observer would say are unjustified. A point that is really the theme of this chapter is that claiming, litigating, and the perceptions and choices that surround these actions are psychologically and socially conditioned. That is, it is the perception of injury or injustice that gets people thinking about suing, it is the perception of avenues for claiming that direct their actions, and it is the perception of restitution that leads people to settle or abandon claims and lawsuits. These perceptions can be accurate or inaccurate, but whether accurate or not they determine what people do. Some claims will be legitimate, in some objective sense, and some will not be. If the legal system does its job well, most of the legitimate claims will be successful and most of the illegitimate ones will not be successful, but this certainly does not mean that removing any legitimate basis for claims will remove claiming. Unless one can assure that no employee feels unjustly treated, regardless of whether he or she is in fact unjustly treated, there will still be claiming. And one must remember that even unjustified claims consume organizational resources until they are abandoned or until the legal machinery works.
Given the perceptual underpinnings of claiming and litigation in organizations, a far better way to think about unnecessary litigation is to view it in much the same way we view organizational conflict. That is, unnecessary litigation is "unnecessary" when better management could have avoided it. To place all of the responsibility for unnecessary litigation on the employee, by labeling claiming and litigation behavior as "antisocial" is not only at variance with what we know about the history and psychology of litigation against organizations, it is simply counterproductive for modern organizations. Only by understanding what it is that leads an employee to consider claiming, and by taking some responsibility for counteracting the beliefs that are the basis for claims, can employers lessen their exposure to claims.
In fact, as will be seen below, our knowledge of the psychology of claiming suggests that the first and greatest rule of how to avoid litigation should be to treat people fairly, to be considerate and to seek to humanize and dignify the organizational experience for one’s employees and subordinates. If decisions are made honestly, with human--as well as economic--values in mind, and if these aspects of the decision-making process are obvious to the potential litigant, litigation rates will drop substantially. Another way of saying this is to note that lawsuits are generally the result of someone feeling that they have suffered an injustice, and that the best way to avoid lawsuits is make workplace justice a major criterion for organizational decisions. I will argue below that this approach to justice may well yield better financial payoffs than does the conventional approach of making decisions on purely economic criteria and then trying on a post-hoc basis to cope with claiming and litigation problems that arise from economically-oriented decisions. Before the validity of these suggestions can be demonstrated, however, we need to review what is known about litigation and the psychology of claiming.
Social and behavioral scientists engaged in the study of "law and society" have long been interested in what makes people seek out legal forums to resolve their grievances. Over the years, three rather distinct models of claiming have arisen: 1) an economic model of claiming behavior based on the costs, benefits, and risks associated with initiating and pursuing a lawsuit; 2) a psycho-social model of what leads people to perceive an injury and to attribute it to others; and 3) a model that describes how people define fair and unfair treatment and the role of perceived unfairness in motivating claiming and litigation. Each of these three approaches will be discussed in the sections that follow.
Economic And Quasi-Economic Models Of Claiming
The idea that people will sue if they think it will benefit them underlies both lay and economic explanations of what is termed "the litigation explosion". The basic argument is that people see the opportunity to get money if they sue their employer, that lawyers are happy to help them (for a fee), and that there is really very little disincentive to suing. At the level of lay analysis, this explanation seems to have a lot going for it. It is bolstered by news accounts of the substantial sums that some plaintiffs win from their former employers (including the reports cited at the beginning of this chapter), and it fits well with what has been termed "the myth of self-interest", the great belief in our culture that most people do what they do for personal gain (Miller and Ratner, in press).
At a more sophisticated level, social exchange theorists (MacCoun, Lind, & Tyler, 19xx), sociologists, and economists (Posner, 1986; Priest & Klein, 1984), have analyzed the probabilities, costs, and benefits associated with initiating a lawsuit and with continuing with the suit or terminating it at various points in the litigation process. Unlike the lay accounts, these analyses include examinations of the not insignificant costs associated with litigation from the plaintiffs perspective, as well as analyses of the impact of differences between plaintiffs and defendants in assessments of the likelihood of various outcomes, and analyses of the impact of various levels of defendant wealth on the likelihood that a particular verdict could be collected. For example, many commentators have speculated about a "deep pockets" effect on claiming: Potential defendants, such as large corporations, who can pay large awards are more likely to be sued than are defendants with lesser resources. One psychological account of personal injury claiming uses a similar argument (Harris, Maclean et al., 1984) to explain that those who are most likely to pay are also be most likely to be seen as responsible for the injury. Thus, automobile accidents are blamed on other drivers, whose insurance can be made to pay for injuries, rather than on the governmental entity that build the road, which is generally a far less promising target for a lawsuit.
Economic models of litigation behavior often analyze the benefits and costs associated with various options: Initiating suit, negotiating a settlement, continuing to trial (see, e.g., Bebchuck, 1984; Cooter, Marks, & Mnookin, 1982; Danzon & Lillard, 1982; King & Smith, 1988; Landes, 1982; P’ng, 1983; Posner, 1986; Priest & Klein, 1984; Whittman, 1985). The general prediction is that lawsuits will be started when defendants refuse pre-litigation demands of the plaintiffs, and that defendants will refuse demands that exceed the expected value of the trial, which is a function of estimates of the likelihood of various possible trial events (e.g., favorable or unfavorable trial verdicts) multiplied by the estimated costs associated with each event. Factors that alter either the likelihood of a given outcome or the costs associated with it are predicted to change litigation behavior. Thus, if government policy provides less costly access to lawyers, by assigning Justice Department lawyers to represent work discrimination plaintiffs, for example, then people are expected to sue more often.
Clearly these economic models of litigation can be applied to litigation against employers as easily as they can be applied to tort litigation, and indeed some economic analysts have turned their attention to issues like wrongful termination (Dertouzos et al., 1988). If "deep pockets" incentives do exist for litigation in general, the phenomenon would certainly play out in litigation against employers. As noted below, however, the existing research does not suggest that richer defendants are really any more at risk than poorer defendants.
Economic analyses of claiming generally stick to the financial costs and benefits associated with claiming and suing actions, but other social science disciplines predict that the social costs associated with claiming would enter into the equation (e.g., Black, 1987). Thus, it is not unusual for empirical studies of claiming to find that people are less likely to engage in litigation against family and friends than against people with whom they have more distant relations (see, e.g., Harris, Maclean et al., 1984).
The empirical evidence that exists on the impact of economic and quasi-economic factors suggests that economic analyses have some validity with respect to gross trends in litigation, but that these analyses miss the mark with respect to many aspects of claiming. It is likely that economic considerations figure relatively powerfully in plaintiffs lawyers’ decisions about whether or not to accept a case as well as their assessments of the wisdom of settling or continuing a lawsuit. For example, in the area of personal injury claiming, it is difficult to get a lawyer to represent one in a lawsuit over an injury that will not result in a substantial payoff. In the areas we are most concerned with here, economic considerations may play a role in determining when litigation will be pursued or abandoned, by making legal representation more or less easy to obtain or by influencing the settlement offers proffered by the defendant corporation.
There is, however, a growing body of research that shows that the decisions of both individual and corporate litigants with respect to initiating and pursuing legal claims are not explained very well by the payoffs and probabilities associated with these courses of action (Lind, Kulik, Ambrose, & Park, 1993). When researchers attempt to predict claiming actions from either the actual or the perceived outcomes attached to various actions, only a small proportion of the variance in behavior is explained. Only when one adds non-economic factors, such as judgments of wrongdoing, responsibility, and injustice, to the equation does one begin to explain much claiming behavior. These issues are addressed in the remaining two models of claiming.
The "PIE" Model Of Claiming
There have been several important conceptual analyses of the claiming process by sociologists and political scientists (e.g., Felstiner, 1974, 1975; Felstiner, Abel, & Sarat, 1981; Kritzer, Bogart, & Vidmar, 1991; Kritzer, Vidmar, & Bogart, 1991). Most of these "socio-legal" analyses have followed seminal work of Felstiner, Abel, and Sarat (1981) in distinguishing at least three stages of claiming: naming the event as an injury or harm, blaming someone or some organization or institution for causing the harm, and claiming compensation or restitution through a legal or administrative forum. The key target of these analyses is the "perceived injurious event" or "PIE", which must be identified, attributed, and acted upon before it becomes a cause of action in a lawsuit.
Felstiner et al. (1981) argue that before any thought of claiming can occur, a person must decide that they actually have been hurt—that is they must "name" the event an injury. Just because some has in fact been injured--or discriminated against, or otherwise harmed--does not mean that they necessarily know that they have been harmed. A prime example of how the absence of naming can forestall claiming outside organizational contexts is a recent study of potential medical malpractice claims (Harvard Medical Malpractice Study, 1990). The researchers found that most potential claims are never realized because the patient does not know that they have been injured. Apparently, many patients who might have had real, legitimate claims simply thought that the longer recoveries or additional surgery they experienced were part of the normal consequences of their original problem. This type of error, which might be compared to Type I error in statistical inference, involves not seeing a harm when one is in fact there.
Clearly, such errors can occur with respect to organizational claims, just as they do with respect to medical claims. Consider, for example, the example of the discrimination claims by Black GM employees, which I mentioned at the beginning of the chapter. The claim began with a single employee deciding that he or she had been discriminated against in pay, but it spread to include more than 3800 other employees as they too named their pay discriminatory.
Not part of the Harvard medical malpractice study, but equally interesting are instances where "naming" of injuries does occur but where the perception of harm is inaccurate. This would correspond to Type II errors in statistical inference. For example, in the realm of medical malpractice a person might think that some pain, inconvenience, or other negative event was not part of their original illness, when in fact it was.
Similar naming problems can arise in organizational contexts. An African-American employee might not notice that he or she was not receiving deserved raises or promotions because of corporate policies of keeping pay information secret , or the employee might know that he or she was earning less that a European-American employee but nonetheless have a difficult time deciding that discrimination was going on because of a desire to avoid being seen as a victim of bias. Similar errors in naming have been documented empirically. Crosby (1984) reports that working women often resist seeing themselves as victims of gender discrimination, even though they admit that most other working women are discriminated against.
Once a "perceived injurious event", or PIE, has occurred one must decide whether someone is to blame for the injury. The "blaming" part of the sequence involves the injured person deciding that the injury is not only caused by someone’s actions but that the person is somehow at fault. If I lose a prize position in the firm to a harder working coworker, the other’s actions are the cause of my loss but there is no blame, because that person is simply doing what a good employee is supposed to do. On the other hand, if the person’s actions were somehow outside the realm of normal, and normative, conduct, the loss could more readily give rise to blaming. Blaming involves the judgment that actions or consequences are somehow outside the normal scope of things. And blaming seems to be one of the key elements in the development of a claim. Recent research (Hensler, Marquis, et al., 1991) shows that the attribution of blame is one of the most important single factors in personal injury claiming. It seems very likely that blaming is just as central to claiming in organizational contexts, although I am aware of no research at this time that demonstrates such an effect.
The final step in the psychological and institutional process described by Felstiner, Abel, and Sarat (1981) is claiming recompense for the PIE. Felstiner et al. refer to variations in "claims consciousness," meaning that a person with a legitimate claim has to be aware of the avenues and possibilities for claiming before a claim can occur. Research on claiming for personal injuries suggests that often it is not the claimant himself or herself who comes up with the idea of claiming, but instead someone else who suggests the possibility to the injured person (Harris, Maclean et al., 1984; Hensler, Marquis et al., 1991). For example, Hensler, Marquis et al., found that more than half of the people who file claims for personal injuries say that the idea of claiming came from someone else, usually a relative or a doctor. Presumably because the social and normative factors surrounding a PIE are generally less than perfectly clear, people may well want and seek some social reality before they take action. The same processes seems likely to occur in organizational settings: Employees may talk to others about the fairness or reasonableness of their experiences and only after discussion decide that they have been treated badly and that they should sue. Advertising by lawyers about the possibility of discrimination claims or knowledge that others in the organization have successfully pursued such claims could also provoke a transition from "blaming" to "claiming. Again, though, the organizational research literature has not yet shown that such "contagion" or "suggestion" effects do in fact occur.
An additional factor that bears on the transformation of a potential claim into a real claim or lawsuit is the willingness of an attorney to take the case. As noted above, it is at this stage in the claiming process that economic incentives and disincentives for claiming seem likely to be most important. An individual with a legitimate claim might not be able to pursue it if he or she cannot find an attorney who views the case as profitable enough to justify the cost of litigating it. Of course, part of the attorney’s consideration is whether or not there is likely to be adequate legal basis for the lawsuit.
Claiming versus complaining.
In recent work building on the PIE model of claiming, scholars have begun to distinguish between "complaining" to a wrongdoer about his or her actions and "claiming" compensation from a third party (e.g., Kritzer, Vidmar, & Bogart, 1991). Kritzer, Bogart, and Vidmar (1991) have built on earlier conceptualizations of the claiming process (Felstiner, 1974, 1975; Felstiner et al., 1981; Silberman, 1985) to examine the transitions and barriers involved in moving from one state to the next in the development of a claim. Kritzer et al. (1991) use the label "recognition" to describe the transition from the raw experience of some injury to the perception of the experience as injurious (i.e., to what Felstiner et al. call naming the experience), "attribution" to describe the transition from knowing that one has been injured to deciding that one has been injured by someone (i.e., to blaming), "confrontation" to describe the transition from blaming someone to deciding that one has a claim (i.e., the move from blaming to claiming), and "litigation" to describe the transition from having an informal or nonlegal claim to initiating a lawsuit. In this construction, as in the original Felstiner et al. model, the principal point is that as people move from one stage to another, disputes can be pursued, abandoned, or resolved. This leads researchers (e.g., Hensler, Marquis et al., 1991) to talk about the "claiming pyramid": there are many more injurious incidents than there are PIE’s with blame attached, many more instances of blame than confrontations, and many more confrontations than lawsuits.
The distinction between "claiming" and "complaining" may have special significance for intra-organizational disputes. There is some evidence in medical malpractice research that people who complain rarely sue. In organizational contexts this argues for the provision of a readily available avenue for internal complaints concerning discrimination, sexual harassment, and other problems that might give rise to litigation. It might be possible to divert to internal resolution channels disputes and charges of wrongdoing, even after naming and blaming have occurred. As we will see in the next section, there are other reasons to suspect that an internal process that is seen as fair can do a great deal to remove the impetus to claim.
The Justice Model
Over the past several years Tom Tyler and I have developed a theory of justice judgments in organizations (Lind, 1994,1995; Lind & Tyler, 1988; Tyler & Lind, 1992) that offers a new perspective on the question of when people can be expected to litigate over grievances. The theory dovetails nicely with the recent thinking and research of other scholars who work on organizational justice issues (e.g., Greenberg, 1993) in that it focuses on links between the way people are treated, the perception of justice or injustice, and behavioral responses such as those involved in initiating, pursuing, or abandoning a claim.
The relational model of organizational justice
The Tyler and Lind (1992) relational model of justice begins with a new perspective on what motivates people in organizations and on what leads employees to view their treatment as fair or unfair. We begin by arguing that people use their membership in organizations not only as a way of obtaining financial remuneration, but also as a way of validating their social self-identity. For most of us, our membership in various social entities is a large part of who we are. People who are employed tend to see themselves in terms of their jobs and the organizations to which they belong.
We argue that, because people depend on their organization for both their livelihoods and their self-identities, they are extremely attentive to their relationships with their organizations and with its authorities. If an employee feels that his or her relationship with the organization is fundamentally positive, that he or she is viewed positively by the organization and protected from arbitrary power or rejection, the theory predicts that the employee will tend to adopt a very cooperative orientation toward the organization. If, on the other hand, the employee feels subject to exploitation or not valued by the organization, the he or she will adopt a much less cooperative, more self-interested orientation toward the organization. We argue that employees’ perceptions that their treatment is fair or unfair serves as a global evaluation of their positive or negative relationship with the organization. Thus, justice is considered "relational," because what people mean by just or fair treatment is treatment that tells them their relation with the organization is positive or negative.
With this relational view of organizational justice in mind, we have done a good bit of research and theorizing concerning how people arrive at these relational justice judgments (e.g., Lind, MacCoun et al., 1990; Tyler, 1990, 1994; Tyler & Lind, 1992). What we have found is that people tend to use the nuances of interpersonal process to arrive at the justice judgments. They look to such things as whether they are treated politely and with dignity, whether they feel that their views are listened to and considered, and whether they feel that decisions they care about are being made on a factual, rather than a biased, basis. Three aspects of process have emerged as being particularly important. We term these elements "status recognition," "trust in benevolence," and "neutrality."
Status recognition is the belief that others in the organization, especially those in positions of authority, view the person as a full-fledged member of the organization. The most humble employee can feel substantial status recognition if he or she receives positive messages from his or her treatment by others in the organization, and high-level executives can feel little status recognition if their superiors treat them in a disrespectful or demeaning fashion. A number of studies (e.g., Lind, Kanfer, & Earley, 1990; Lind, Kulik, Ambrose, & Park, 1993; Lind, MacCoun et al, 1990; Tyler, 1990) have shown that people who are treated with dignity emerge from experiences, even from experiences that entail substantial negative outcomes, with a feeling of fairness.
Trust in benevolence refers to the belief, again usually engendered by the quality of interpersonal treatment, that authorities and those with power in the organization are well-intentioned and honest in their decision-making process. Trust involves attributions about the motives of authorities and inferences about their motives. One of the strongest sources of these inferences is the feeling that one is being listened to and that one’s views are being considered. If authorities give the impression that they are trying to do the right thing, that they are considering all points of view, this sort of trust in engendered.
The final relational aspect of organizational justice judgments is neutrality. As with the other two elements, the perception of neutrality turns on inferences drawn from interpersonal process and treatment. Some elements of process can lead directly to inferences of bias, as when one hears a superior use racial or gender epithets, but sometimes the issue is more complex, involving an interplay of social cognition and ideological elements. On the one hand, if there is a playing out, in process or in process-related rules and symbols, of the idea that the organization wants a level playing field and that organizational decision makers will base their judgments on facts, rather than personalities, then people will feel fairly treated. On the other hand, if cronyism or favoritism seem to be major factors in decision making, as evidenced by the way organizational authorities act, or by the unavailability of information on the way in which decisions are made, then people will feel that their treatment has been less than fair.
A strong theme in recent research on organizational justice judgments, and a key element of the relational model of justice, is the idea that most of the perceptions that determine whether a person will feel fairly or unfairly treated are drawn not from factors traditionally thought to be essential elements of fairness--such things as equitable allocations or formally unbiased procedures. Instead when people feel they are being treated fairly or unfairly they base their judgment on the patterning of everyday social interaction.
Turning from the antecedents of a feeling of justice or injustice to the consequences of that feeling, there is a growing body of evidence that fairness judgments are what might be called "pivotal cognitions" with respect to many social and organizational behaviors. Unlike many other dimensions of attitude and belief that seem to have little effect on behavior, justice judgments have been found to exert a profound influence on such behaviors as acceptance of and obedience to the mandates of authorities (Lind, Kanfer, & Earley, 1990; 1993; Tyler, 1990); protest behavior (Greenberg, 1987); and theft (Greenberg, 1993, present volume; Greenberg & Scott, 1996). Building on the ideas included in the relational model, I have suggested that people use fairness judgments as a decision heuristic in a variety of social contexts (Lind, 1994, 1995)--that is that they refer to their perceptions of fairness to decide whether to behave cooperatively or competitively, whether to obey or ignore authorities, and whether to extend themselves in the interest of the organization or to look after their own narrow self-interest.
Justice Judgments And Claiming
We can apply the relational model to the issue of litigation and claiming in organization by considering the implications of a sense of injustice for decisions about whether to claim and whether to pursue claims and lawsuits. If we assume that feelings of unfair treatment can result in complaining, claiming, and lawsuits, then we should look to the antecedents of justice judgments for clues as to what might predispose people to claim or not to claim. In any given claim-prone situation, the relational model of justice suggests, the likelihood of claiming will be enhanced if the person feels that he or she has been denied dignified treatment (i.e., if the employee feels denied his or her due as a member of the organization), if his or her views and needs seem to have been ignored (which would lead the employee to feel little trust in the benevolence of organizational superiors), or if the employee feels that decisions and decision makers have not been neutral. Because feelings of unfair treatment shift people from cooperative, accepting modes of interacting with the organization to competitive, self-interested modes of interacting, the model predicts that the a person who feels unfairly treated will want to complain and to pursue his or her complaint until a feeling of fairness has been restored. In other words, once an employee feels that he or she has suffered a substantial injustice, he or she will engage in a search for some forum or action that will restore justice.
The relational model suggests that this "quest for justice" can take on major proportions in the person’s life, because the unjust treatment that instigates it carries with it the message that the person’s social self-identity is being denied. Since self-identity can often be far more important to a person than even substantial monetary gains or losses, the search for a restoration of a sense of justice might well be continued even when it appears to be against the person’s own best interests.
Implications of the Models for Avoiding Unnecessary Litigation
The models just described, especially the PIE and justice models of claiming, have some rather straightforward implications for how to avoid litigation. (The implications of the economic models are less certain because, as I noted above, the claiming research that does exist is not very supportive of economic models as predictors of when people will claim.) The strong prediction of all three models described above that the best time to resolve an injury, from the perspective of all involved, is at the time it occurs or, better still, before it occurs. The data on costs and compensation in tort litigation, if applicable to the economics of organizational litigation, makes it clear that everyone stands to lose, relative to a host of other possibilities, if the issue goes to court. The PIE model makes it clear that the social construction of injury, blame, and complaint offers opportunities for those involved to negotiate an understanding of what happened and how injuries can be accounted for and compensated in ways that are mutually productive. And the justice-judgment model gives us some rather specific clues about how perceived justice can be restored short of litigation.
The PIE model argues matters is what people think has happened to them and how they interpret this perceived state of affairs. For this reason, organizational claiming will be affected profoundly by such things as suggestion or contagion concerning what is a harm and what are appropriate ways to pursue one’s grievances. When one claim occurs, it is not unreasonable to expect that other, similar claims will occur. When the outside world labels some action a harm, it is unreasonable for those within an organization to expect that their own employees will know better than to interpret a long-standing practice as wrong.
When claims do arise, the newer versions of the PIE model suggest that a good, well-accepted, and obviously fair internal process may well be able to handle most or all of the claims. There is not room here to discuss the issue at length, but we know a great deal about what is needed to convince people that a claims handling procedures is fair (e.g., MacCoun, Lind, & Tyler, 1992). Formal processes are not needed. Instead what is crucial is a hearing process, formal or informal, in which the complainant is allowed (and assisted in realizing) a full opportunity to tell his or her story to a truly impartial third party without fear of reprisal or bias.
The relational model also tells us a good bit about what might predispose people not to claim, complain, or sue. If a person experiences some treatment that reassures him or her about their relation vis-à-vis the organization, a feeling of fairness might be restored, and the inclination to claim might disappear. Other organizational justice researchers have shown the capacity of explanations and accounts to dissipate the effects of unjust treatment (e.g., Bies & Shapiro, 1987; Greenberg, 1990), and it seems likely that such actions can ameliorate feelings of injustice in claim-prone situations. If management explains the reasons for treatment that seems unfair (and if the explanation is seen as honest and reflecting unbiased decision making), or if the organization offers an apology or acts quickly and convincingly to remedy the situation, the injured person may feel reassured about his or her standing with respect to the organization and the claim may die at that point. Absent some restoration of dignity, trust, or some reassurance of neutrality, either via explanations, apologies, or a grievance process of the sort described above, the person may feel that they can only find reassurance of their personal worth by prevailing over the organization in court.
Taken together, all that we know about the social and psychological dynamics of organizational litigation suggests that a personal, proactive approach to remedying injuries and resolving complaints would work better than do current approaches that seek to hide decision making processes or quantify and document every organizational decision. As I noted earlier, the lesson from the whole body of claiming research is that if one wants to avoid litigation, one must both be fair and be seen to be fair. If instead of worrying about whether any given decision might be objectively actionable, managers worried about whether each decision is fair and is viewed as fair, litigation would be a far smaller problem. If mistakes are made, apologies and explanations should be forthcoming, quickly and publicly. In other words, if more attention were paid to the issues commonly raised by organizational behavior researchers in general, and organizational justice researchers in particular, and less attention were paid to the issues commonly raised by lawyers, the company in question might be better off in financial, as well as human, terms.
Ironically, the actions that the relational model suggest include options that most lawyers or insurers would consider dangerous. Accounts and explanations can be fuel for lawsuits, so many employers might tend to let injurious events take place with little or no communication from higher management. In termination actions, for example, giving the person a reason for laying them off might be seen as dangerous, because an enterprising lawyer can often twist the reason to give the impression of bias, making the reason evidence against the organization. But the option of giving no explanation may be worse, since this compounds the injury of being laid off with the insult of being given no reason for the injury. It is arguable that it would be in the organization’s interests to give explanations and forestall many lawsuits, even if the policy worked against the organization in the few lawsuits that were not forestalled.
There is only one study that has looked in any detail at the role of justice judgments on organizational litigation. Bies and Tyler (1993) interviewed employed people in the Chicago area about their experiences with their organizations and supervisors. Focusing on people who reported negative experiences and who said that they believed there was some agency or court to whom they might complain, Bies and Tyler compared the relationship between their respondents’ reports that they considered suing their employers and seven possible antecedents of claiming: 1) process justice judgments, 2) outcome justice judgments, 3) the favorability of the outcome of the experience relative to the respondent’s initial expectations, 4) the favorability of the outcome of the experience in absolute terms, 5) the probability of winning in court, 6) organizational commitment, and 7) job satisfaction.
The Bies and Tyler (1993) study used structural equation modeling to test which of the possible antecedent factors showed a strong enough link to consideration of claiming to be judged as causes of consideration of claiming. They found that only two factors- process justice judgments and job satisfaction- showed significant links to the consideration of claiming measure. To a small extent, people who were satisfied with their jobs showed less inclination to think about claiming in response to these negative experiences. To a much greater extent, people who felt that they had been fairly treated and that rules and procedures were fair were less likely to consider claiming.
Bies and Tyler (1993) then turned to the question of what factors led their respondents to experience feelings of process fairness or unfairness. They examined the relationships linking process fairness ratings to four potential antecedents of that variable: 1) status recognition, 2) trust in benevolence, 3) neutrality, and 4) perceived control over the information considered in making decisions and influence over the decision. They found significant links between all four factors and process fairness, with trust and neutrality showing very strong links and status recognition and control showing less strong links. Together the four antecedent factors accounted for more than 80% of the variation in process fairness ratings.
The findings of the Bies and Tyler (1993) study offer substantial support for interpersonal justice models of claiming, such as the relational model described above. By showing that process fairness was more important than outcome-oriented factors such as the absolute or relative favorability of the experience and more important than traditional organizational life factors such as organizational commitment or job satisfaction, the study provides good reason for additional investigations of fairness-based models of organizational claiming. By showing that much of the variation in process fairness is attributable to impressions of relationships and nuances of treatment, the study suggests that much of the story of what makes people sue their organizations lies in the quality of treatment that people receive when they experience negative events.
We have only just begun to study what it is that causes litigation behavior within organizations. The theories, models, and research I describe above have started us on the road to a fuller understanding of litigation behavior, but much of the material can only be applied to organizations by inference. What is clearly needed is more research drawing on ideas such as those described above, but sited in employment and organizational settings. The Bies and Tyler study is a start in this regard, and more studies of this sort are getting underway (e.g., Greenberg, Lind, Scott, & Welchans, 1995), so there is reason to hope that four or five years from now we will able to draw far stronger conclusions about the social, economic, and organizational dynamics that increase or decrease the likelihood of litigation.
Bebchuck. L. A. (1984). Litigation and settlement under uncertain information. RAND Journal of Economics, 15, 404-415.
Bies, R. J., & Shapiro, D. L. (1988). Voice and justification: Their influence on procedural fairness judgments. Academy of Management Journal, 31, 676-685.
Bies, R. J., & Tyler, T. R. (1993). The "litigation mentality" in organizations: A test of alternative psychological explanations. Organizational Science, 4, 352-366.
Black, D. (1987). Compensation and the social structure of misfortune. Law & Society Review, 21, 563-584.
Closing a color gap. (1989, February 13). Time, p. 63.
Cooter, R., Marks, S., & Mnookin, R. (1982). Bargaining in the shadow of the law: A testable model of strategic behavior. Journal of Legal Studies, 11, 225-251.
Crosby, F. (1984). The denial of personal discrimination. American Behavioral Scientist, 27, 371-386.
Danzon, P. M., & Lillard, L. A. (1982). The resolution of medical malpractice claims: Modeling the bargaining process. Santa Monica, CA: RAND.
Dertouzos, J. N., Holland, E., & Ebener, P. (1988). The legal and economic consequences of wrongful termination. Santa Monica, CA: RAND.
Edelman, L. B., Abraham, S. E., & Erlanger, H. S. (1992). Professional construction of law: The inflated threat of wrongful discharge. Law & Society Review, 26, 47-83.
Ex-Polaroid employee awarded $400,000 in suit. (1995, November 3). Wall Street Journal, p. A6.
Felstiner, W. L. F. (1974). Influences of social organization on dispute processing. Law & Society Review, 9, 63-94.
Felstiner, W. L. F. (1975). Avoidance as dispute processing: An elaboration. Law & Society Review, 9, 695-755.
Felstiner, W. L. F., Abel, R. L., & Sarat, A. (1981). The emergence and transformation of disputes: Naming, blaming, and claiming.... Law & Society Review, 15, 631-644.
Galanter, M. (1983). Reading the landscape of disputes: What we know and don’t know (and think we know) about our allegedly contentious and litigious society. UCLA Law Review, 31, 4-95.
Greenberg, J. (1987). Reactions to procedural injustice in payment distributions: Do the means justify the ends? Journal of Applied Psychology, 72, 55-61.
Greenberg, J. (1990). Employee theft as a reaction to underpayment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561-568.
Greenberg, J. (1993). The social side of fairness: Interpersonal and informational classes of organizational justice. In R. Cropanzano (Ed.), Justice in the workplace: Approaching fairness in human resource management. Hillsdale, NJ: Lawrence Erlbaum Associates.
Greenberg, J., Lind, E. A., Scott, K., & Welchans, T. (1995). Final report on "Collaborative research on layoffs and wrongful termination litigation." Columbus, OH: Ohio State University, Fisher College of Management.
Greenberg, J. & Scott, K. S. (1996). Why do workers bite the hands that feed them? Employee theft as a social exchange process. In B.M. Staw & L.L. Cummings (Eds.), Research in organizational behavior (Vol. 18, pp. ). Greenwich, CT: JAI Press.-
Harris, D., MacLean, M., Genn, H., Lloyd-Bostock, S., Genn, P., Corfield, P., & Brittan, Y. (1984). Compensation and support of illness and injury. Oxford, England: Clarendon Press.
Harvard Medical Malpractice Study. (1990). Patients, doctors and lawyers: Medical injury, malpractice litigation and patient compensation in New York. Harvard University, Cambridge, MA.
Hensler, D. R., Marquis, M. S., Abrahamse, A. F., Berry, S. H., Ebener, P. A., Lewis, E. G., Lind, E. A., MacCoun, R. J., Manning, W. G., Rogowski, J. A., & Vaiana, M. E. (1991). Compensation for accidental injuries in the United States. Santa Monica, CA: RAND Corporation.
Huo, Y. J., Smith, H., Tyler, T. R., & Lind, E. A. (1996). Superordinate identification, subgroup identification, and justice concerns: Is separatism the problem; is assimilation the answer? Psychological Science, 7, 40-45.
King, E. M., & Smith, J. P. (1988). Dispute resolution following airplane crashes. Santa Monica, CA: RAND.
Kritzer, H. M., Bogart, W. A., & Vidmar, N. (1991). To confront or not to confront: Measuring claiming rates in discrimination grievances. Law and Society Review, 25, 101-115.
Kritzer, H. M., Vidmar, N., & Bogart, W. A. (1991). The aftermath of injury: Cultural factors in compensation seeking in Canada and the United States. Law and Society Review, 25, 499-545.
Landes, E. M. (1982). Compensation for automobile accident injuries: Is the tort system fair? Journal of Legal Studies, 11, 253-260.
Lind, E. A. (1994). Procedural justice and culture: Evidence for ubiquitous process concerns. Zeitschift für Rechtssoziologie, 15, 24-36.
Lind, E. A. (1995). Justice and authority in organizations. In R. Cropanzano and K. M. Kacmar (Eds.), Politics, justice, and support: Managing the social climate of work organizations (pp. 83-96). Westport, CT: Quorum.
Lind, E. A., Kanfer, R., & Earley, P. C. (1990). Voice, control, and procedural justice: Instrumental and noninstrumental concerns in fairness judgments. Journal of Personality and Social Psychology, 59, 952-959.
Lind, E. A., Kulik, C., Ambrose, M., & Park, M. (1993). Individual and corporate dispute resolution: Using procedural fairness as a decision heuristic. Administrative Science Quarterly, 38, 224-251.
Lind, E. A., MacCoun, R. J., Ebener, P. E., Felstiner, W. L. F., Hensler, D. R., Resnik, J., & Tyler, T. R. (1990). In the eye of the beholder: Tort litigants' evaluations of their experiences in the civil justice system. Law & Society Review, 24, 953-996.
Lind, E. A., & Tyler, T. R. (1988). The social psychology of procedural justice. New York, NY: Plenum.
MacCoun, R. J., Lind, E. A., & Tyler, T. R. (1992). Alternative dispute resolution in the courts. In D. Kagehiro and W. Laufer (Eds.), The handbook of law and psychology; pp. 95-118. New York: Springer-Verlag.
Miller, D., & Ratner, R. K. (in press) The power of the myth of self-interest. In L. Montada and M.J. Lerner (Eds.) Current societal issues in justice. New York, Plenum.
P’ng, I. P. L. (1983). Strategic behavior in suit, settlement, and trial. Bell Journal of Economics, 14, 539-550.
Posner, R. A. (1986). Economic analysis of the law. Boston: Little, Brown.
Priest, G. L., & Klein, B. (1984). The selection of disputes for litigation. Journal of Legal Studies, 13, 1-56.
Selvin, M. & Ebener, P. A. (1984) Managing the unmanageable: A history of civil delay in the Los Angeles Superior Court. Santa Monica, CA: RAND.
Tyler, T. R., & Lind, E. A. (1992). A relational model of authority in groups. In M. Zanna (Ed.), Advances in experimental social psychology (Vol. 25, pp. 115-192). New York: Academic Press.
Whittman, D. (1985). Is the selection of cases for trial biased? Journal of Legal Studies, 14, 185-214.