Retaliatory Counterclaims: Turning the Tables on the Overly Aggressive Defendent

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Twenty days after filing your class action complaint, you receive defendant’s Answer. Curiously, not only does the company deny each and every allegation, it also asserts counterclaims alleging that it is entitled to the disgorgement of salary paid to the named plaintiff because of his “crude, improper, and disruptive conduct” while an employee. Not only is this counterclaim entirely baseless as a legal and factual matter, it is also a form of retaliation against the plaintiff that aims to intimidate him and other employees from enforcing their rights.

Recently, we have seen a spate of frivolous, retaliatory counterclaims asserted against our clients in both individual and class employment actions. Such counterclaims present an opportunity for the smart plaintiff’s attorney to take the offensive with respect to her adversary and to appear the more reasonable party before the court (while also showing how nefarious her adversary is). Your options for responding to such counterclaims are myriad. Factors such as the strength of the counterclaim, the nature of the underlying litigation, the actual chilling effect of the retaliation, and the dispositions of the adversary and the judge will dictate the most appropriate strategy.

You may simply amend the complaint to assert a retaliation claim or seek to convince the opposing counsel to withdraw the counterclaims. Alternatively, you may want to aggressively litigate the retaliation from the beginning by moving to dismiss the counterclaims or even seeking to enjoin further retaliation and to impose other measures to repair the chilling effect of the retaliation. This article sets forth the advantages and disadvantages of these different options and the basic legal principles that are common to retaliatory counterclaims no matter what course you choose.