Doug Carter Of The Carter Law Offices On The Top 5 Mistakes Businesses Make Without Legal Counsel
An Interview With Chad Silverstein
Failing timely to provide reasonable accommodations for disabled employees. Many employers do not fully appreciate that requests for accommodations made by disabled employees require a response that is both prompt and reasonable. Even without receiving an express request, employers may still be required to provide reasonable accommodations for an employee’s physical or mental impairment which is otherwise made known or is apparent. A delayed response in addressing such situations may violate the ADA and expose the employer to civil liability with substantial resulting expense.
In today’s fast-paced business world, the complexity of legal matters can often be overlooked, leading to significant repercussions for businesses of all sizes. From startup ventures to established corporations, the absence of legal guidance can result in errors that affect growth, operations, and sustainability. These mistakes range from issues with contracts and intellectual property to compliance and employment law, each carrying the potential for financial loss and reputational damage. I had the pleasure of interviewing Doug Carter.
Doug Carter is the CEO of the Carter Law Offices in Kansas City, Missouri. For more than 40 years, Doug has litigated complex civil cases from coast to coast. Time and again, Doug has seen businesses — from Fortune 500 companies to mom-and-pop shops — make the same types of costly, albeit avoidable, legal mistakes when implementing employment decisions and confronting employment claims.
Thank you for joining us. To start, could you share your “origin story” with our readers? How did you begin your career? What challenges did you face in the early days? How did you overcome them?
My career began in 1981 working two blocks from the White House in the litigation department of a large, fast-paced Washington, D.C. law firm. I had just graduated from Duke Law School and aspired to become a great trial lawyer. I understood the law and how to research it but struggled at first learning how to discover and manage the facts in a case. Young and perhaps a bit naïve, it surprised me to find out that facts matter more than law — and that the more important a fact is, the harder it may be to nail down. You must dig deep and hard, even in discussions with your own client — and sometimes especially in discussions with your own client.
With continued experience and mentorship, I also came to appreciate that combing page by page through box after box of seemingly endless documents may be the only way to find the proverbial smoking gun — that sparking gem that will make or break your case. I learned to do this type of hard, sometimes boring work first. The rest then got easier.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
PBS named it the US’s all-time favorite novel in 2018: Harper Lee’s To Kill a Mockingbird, published in 1960 when I was 4 years old.
I read the masterpiece while in grade school after watching the movie at our local small-town theater in southern Missouri. Four or five years later, competing in a high school drama contest, I prepared and then performed an excerpt from the climactic courtroom scene in which Atticus Finch cross-examines Mayella Ewell. I still think of Atticus Finch’s character — and I’m referring here to “character” in both senses of that word — when I try a civil-rights case. Who wouldn’t aspire to have the courage and the dignity of Atticus Finch? Fictional or not, he is a great role model.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
There are many starting with the Golden Rule. But a favorite in recent years is a statement that Nelson Mandela made in 1994. Mandela said, “Do not judge me by my successes, judge me by how many times I fell down and got back up again.” How we respond to obstacles — and certainly Mandela had a lifetime full of those — measures strength and character. It’s also true that you learn more from your mistakes and failures than from success.
As for a personal life story, I decided to learn how to ski as an adult when I was almost 50 years old. Like most newbies to the sport, I fell down more times than you could count. I took lessons. I improved. I then started teaching and got certified as an instructor. This year I completed my 16th season teaching downhill skiing to adults at Vail for two or three weeks each season. I sometimes joke, “Skiing almost keeps me sane!” For those who know me, the joke is funny because it has a grain of truth. And, when you try lawsuits for a living, you also fall down. You don’t always win. Judge me please by how many times I got back up and tried again!
How have you used your success to make the world a better place?
I would like to think that when an employer is held liable for racial or sexual misconduct, or for denying a disabled employee’s request for a reasonable accommodation, and then pays a substantial sum of money because of the wrongdoing, the underlying pattern of civil-rights violations that typically is present would cease. Sometimes that is the case. Unfortunately, it’s not always the case. Far too many employers — for example, state and local governments whose decision-makers aren’t risking their own pocketbooks — permit the same pattern of costly mismanagement to continue apace. We end up suing these same defendants time and again for repeating the same mistakes.
I do know, however, that by enforcing Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and other important civil-rights legislation, we improve the lives and the well-being of our firm’s clients and their families. I also know that the businesses we advise typically follow the law and rarely get sued. For these blessings we are grateful and do believe that our work has made the world a more humane and better place.
Ok, let’s now turn to the central part of our interview. What is the most common legal mistake you see businesses make due to the lack of proper legal counsel, and what are its potential consequences?
It’s appropriate that your question uses the word “proper” with respect to the legal counsel that a business needs.
The most common overall mistake that we see in our practice is consulting with the wrong attorney. Lawyers are not one size fits all. As with medical doctors, areas of specialization matter. Just because your friend or neighbor did a good job handling your divorce or planning your estate doesn’t mean that she or he can or should provide advice on employment law questions or claims. The root cause of many legal mistakes is receiving bad or incomplete legal advice. That’s one reason why our firm also prosecutes legal malpractice claims — which doesn’t always make us popular, but which we think is the right thing to do.
More specifically, the mistake that we see most commonly is the failure to recognize implicit bias. Today, if not in the 50’s and 60’s before the civil-rights legislation mentioned above became effective, few people admit to themselves that they do indeed have prejudices. Subconscious bias held against women, minorities, and persons who suffer from a mental or physical impairment is a pervasive problem that skews many important business and employment decisions.
Thus, when a discrimination complaint is made, or when a disabled employee requests a workplace accommodation, a more impartial set of eyes is frequently needed. Achieving that goal frequently requires consulting with outside legal counsel — even if your company has an internal legal staff or general counsel. Failing timely to engage such outside counsel results in a great number of expensive lawsuits which otherwise could have been avoided.
Can you share an example where early legal intervention could have significantly altered the outcome of a business dispute or challenge?
Yes. We recently represented a client with an excellent work record who has a progressive neurological disorder. As the employee’s condition worsened, she needed to perform some of her computer-based work from home late at night due to the effects of prescribed medications on her sleep cycle. Without the advice of counsel, her employer refused to allow the late-night work ostensibly because doing so would constitute “special treatment” not enjoyed by other employees. That decision, which we concluded violated the ADA, ended up costing the employer a substantial sum of money plus the loss of a good employee.
How do changes in digital technology and online business practices complicate legal issues for businesses without dedicated legal advice?
The list of such complications is long. But the situation that we encounter most often in our practice involves arbitration which requires an employee’s legally effective consent.
Requiring arbitration makes economic sense for many employers. Counsel for employees resist arbitration because arbitral awards favoring the employee occur infrequently when compared to the average outcome of a jury trial.
In the pre-digital age, a physically signed acknowledgement establishing the employee’s consent to arbitration was common. Today, employers often fast-track the onboarding process for new employees by using paperless tools and software. Establishing an employee’s consent to arbitration in the current electronic environment requires creating and then preserving sufficient electronic evidence of the required consent. Employers need competent legal advice on issues such as contract formation and the governing rules of evidence to achieve that goal.
In your experience, how does the absence of legal counsel impact a business’s approach to contracts and negotiations, and what advice would you give to mitigate these risks?
In addition to the example above involving arbitration agreements, a common situation that we encounter involves employers that treat employees as independent contractors. The regulatory environment in which the distinction between contractors and employees is determined regularly changes and can vary substantially from state to state. The consequences of misclassifying employees as independent contractors may bankrupt a solvent company. Attempting to address this issue without first receiving sound legal advice provides fodder for the old adage, “He who represents himself has a fool for a lawyer.”
What legal pitfalls do new businesses often overlook during their initial setup and growth phases, and how can they proactively address these issues?
There are a great many answers to this question. But let’s take a brief look at one common scenario: the closely held corporation in which one or more investor/owners provides the start-up capital, and another owner/participant is going to provide most or all of the sweat equity.
In an example that I encountered earlier this year, a small investor group ponied up $1,000,000 in seed capital without the benefit of legal counsel for a new business venture that has an eight-digit start-up budget (yes, seven zeros after the first numeral). The business concept potentially is a hit. But the implementing contracts, which the five participants already had signed, were a mess. We were called upon to redraft the agreements on the eve of threatened litigation over numerous ambiguities and omissions that the original documents contained. Best not to have to unscramble the egg. If a contemplated business venture is worth your time and money, spend a relative pittance for competent advice to structure the deal correctly up front. It may end up saving you a fortune.
Lesson №1: Don’t use online forms to start up a new business.
Lesson №2: Don’t try to write agreements (even if you’re lawyer or think you can play one on TV) that define the business’s structure and the intended relationship between the parties.
Here is our main question. Could you list and briefly explain “Top 5 Mistakes Businesses Make Without Legal Counsel” based on your experiences and insights? If you can, please share a story or example for each.
1 . Failing timely to provide reasonable accommodations for disabled employees.
Many employers do not fully appreciate that requests for accommodations made by disabled employees require a response that is both prompt and reasonable. Even without receiving an express request, employers may still be required to provide reasonable accommodations for an employee’s physical or mental impairment which is otherwise made known or is apparent. A delayed response in addressing such situations may violate the ADA and expose the employer to civil liability with substantial resulting expense.
To illustrate, we tried a case less than a year ago in which an employee asked for a fitness-for-duty examination to establish that she could return to work after she had sustained an on-the-job rotator cuff tear. Her work comp doctors had given the employee “permanent” lifting restrictions — which means one thing in a work comp setting but can have an entirely different meaning under the ADA. The employer’s decision-makers concluded that the employee could not perform her job in light of the work comp lifting restrictions. The employee disagreed, claiming that she had recovered sufficiently and could in fact return to work.
Ultimately, the employee received the fitness-for-duty examination that she had been requesting — which didn’t cost that much. The employee passed the test with flying colors and was then allowed to return to work. But in the meantime, the employee had missed five months’ work and lost $18,000 of pay.
The employer’s delayed response in providing the requested fitness-for-duty examination ended up costing the employer just shy of $1,000,000 in jury-awarded damages and court-awarded legal fees — plus the substantial cost and distraction of defending against a lengthy lawsuit that the employer eventually lost.
2 . Failing to discover and prevent unlawful workplace harassment.
Swift remedial action is likewise needed anytime there is workplace harassment involving an employee’s race, gender, religion, national origin, or an actual or perceived disability — even if management is not fully aware of the problem. Ignorance should not be regarded as bliss. Policies against workplace harassment must not only exist. Policies against workplace harassment must be proactively enforced. However, effective enforcement of such policies often does not take place, especially in employment settings such as the restaurant-workers industry where instances of sexual harassment are rife.
A common scenario involves the young female waiter with whom a co-worker or manager wants to have sex or wishes to date. Often, the waiter feels embarrassed and/or fears retaliation if she speaks out — just like victims of more violent sexual assaults often do not report such crimes to the police. Although claiming ignorance of the situation may exonerate the restaurant owner, that is not always going to be the case. Why didn’t management know that such harassment was taking place? What exactly did management do in order to find out? These can be difficult questions to answer even when a complaint of harassment was not timely made.
The safest harbor is to have people in place who are trained to recognize these types of problems and seek immediate legal advice.
3 . Failing to distinguish between the requirements of the ADA and the FMLA.
Although related in terms of subject matter, the Americans with Disabilities Act and the Family Medical Leave Act are two very different statutes. Time and again, we see personnel in HR departments who do not appreciate the important differences between these two legislative schemes. A company’s HR director may be great at authorizing and keeping track of medical leave. But when presented with a potential ADA problem, a surprising number of HR representatives — even in companies with hundreds of employees — are effectively clueless.
4 . Failing to have effective safeguards in place against unlawful workplace retaliation.
No one likes to be accused of misconduct. But retaliating against an employee who furnishes information about potentially unlawful conduct may itself be actionable under a number of federal and state statutes which include the ADA and the Occupational Health and Safety Act of 1970 (OSHA).
If you’re an attorney who handles employment cases, you learn early on that retaliation is typically easier to prove than racial or sexual discrimination. That’s why a retaliation count is included in most every employment discrimination case that gets filed. It’s analogous to what we’ve seen time and again in public affairs. It’s not the wrongdoing that ends up bringing someone down. It’s the cover up. It’s the Non-Disclosure Agreements. It’s what you’ve done in response to claimed wrongdoing that costs you dearly. The same is true for employers when it comes to workplace retaliation. Yet, many employers fail to understand this fact and put effective safeguards in place.
5 . Failing timely to evaluate and settle legal claims.
Advising a client to settle a legal claim is often made difficult because once again, no business owner, no manager, nor anyone else enjoys being accused of wrongdoing. Paying money to the accuser can feel like putting salt in a wound.
Nonetheless, there are sound business reasons why many legal claims should settle before substantial related costs are incurred. A good lawyer will tell you this. The most common business mistake I see is not having at least one such lawyer a phone call away — then picking up the phone and following her or his advice.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
Let’s have a “me too” movement in which people take pride in watching different media outlets. Henceforth, left-wing liberals declare: “I watch Fox New and am proud of it!” Right-wing conservatives shout out: “I take great pride in regularly watching MSNBC and CNN!”
Exposure to different points of view is soooo lacking in our present media-frenzied environment. We MUST find common ground.
As we wrap up, how can our readers follow your work?
Simple. Go to www.carter.law.
Thank you for these fantastic insights. We greatly appreciate the time you spent on this.
About the Interviewer: Chad Silverstein, a seasoned entrepreneur with over two decades of experience as the Founder and CEO of multiple companies. He launched Choice Recovery, Inc., a healthcare collection agency, while going to The Ohio State University, His team earned national recognition, twice being ranked as the #1 business to work for in Central Ohio. In 2018, Chad launched [re]start, a career development platform connecting thousands of individuals in collections with meaningful employment opportunities, He sold Choice Recovery on his 25th anniversary and in 2023, sold the majority interest in [re]start so he can focus his transition to Built to Lead as an Executive Leadership Coach. Learn more at www.chadsilverstein.com
