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Labor Litigation and Firm Performance

In: The Law and Economics of Patent Damages, Antitrust, and Legal Process

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  • Nicolae Stef
  • Jean-Christian Tisserand

Abstract

We assess the impact of labor litigations on theex postperformance of firms. Using a sample of 44 French labor litigation cases, our empirical results confirm that the compensation amount requested by an employee has a significant and negative influence on the firm financial performance. Although that effect fades over time, it still remains significant four years after the employee has initiated the legal procedure. In addition, firms that have opted for a trial rather than a conciliation procedure improved their financial performance only in the first two years following the triggering of the litigation. That effect can be mainly explained by the long delays in the judgment of French labor courts. Our results contribute to the debate on the labor litigation impacts by assessing the financial opportunity of enacting pro-worker labor legislation dealing with employment redundancies.

Suggested Citation

  • Nicolae Stef & Jean-Christian Tisserand, 2021. "Labor Litigation and Firm Performance," Research in Law and Economics, in: The Law and Economics of Patent Damages, Antitrust, and Legal Process, volume 29, pages 69-87, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:rlwezz:s0193-589520210000029005
    DOI: 10.1108/S0193-589520210000029005
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    More about this item

    Keywords

    Litigation; labor; performance; employee; firm; French labor courts; K41; L25; J39;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other

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