There are certain defense firms in California who are starting to use this tactic:
Employee has a claim, be it for wages, discrimination, wrongful termination or anything else employment related. He hires a lawyer, who, being the reasonable sort, tries first to see if the case can settle.
Settling a case without litigation offers a number of advantages to the employer: it keeps the dispute private; it saves almost all of the costs of defense; it frees managers to do their jobs, rather than focus energy and time to litigation; and it often results in a lower payout than an employee will demand after going through the litigation process (and sometimes paying a higher fee to his lawyer).
So the employee's lawyer sends out a "demand letter," which is intended to put the employer on notice of the opening settlement offer, explain the facts and evidence underlying the claim, and give the employer fair notice that litigation could result if the matter isn't resolved to everyone's mutual satisfaction.
These certain defense firms (whom I will not identify), who have advised their clients to respond to such letters by filing a suit for declaratory relief in Superior Court, against the employee.
There are three primary reasons employers might do this: (i) it gives the employers the title of "plaintiff," which they seem to covet; (ii) it lets the employer choose the venue, which is sometimes significant; and (iii) it puts word on the street to existing workers: complain to us, and we'll just sue you.
So far, those we have heard about have been thrown out quickly, either on demurrer or on an anti-SLAPP motion. But a very bad precedent has been set. We will never write a pre-litigation demand letter again, because we do not know, before filing suit or sending the letter, who the defense lawyer will be. And if we do not know that it won't be one of these firms, we can't be sure we won't have to "defend" one of these bad faith declaratory relief cases first. And that's a risk we will no longer take.
So when an employer or its lawyers complain that "we could have resolved this without resort to litigation," we will tell them that frivolous employer lawsuits have driven us to file first and ask [settlement] questions later.
And the next time you hear about plaintiff's lawyers filing frivolous suits, don't forget that some of those "plaintiffs" are employers who sue employees to get a "declaration" of whether the employer violated a worker's rights; and also don't forget that those "plaintiff's lawyers" include some of the largest so-called defense firms in the state.