Texas employees pursuing workplace discrimination, retaliation, or other employment claims typically must begin by filing a charge with the Equal Employment Opportunity Commission (EEOC) or the Texas Workforce Commission Civil Rights Division (TWC-CRD).

However, employees should approach the administrative process with an understanding that obtaining full and fair compensation may require pursuing the matter through litigation. In many cases, demonstrating the willingness, resources, and resolve to take a case beyond the EEOC stage provides greater leverage and a stronger opportunity to achieve a favorable outcome.

While the EEOC process relies largely on voluntary cooperation, a court-filed lawsuit forces the company to defend its actions and may place employees in a better position to secure a settlement that more accurately reflects their damages.

Solely Filing an EEOC Claim Vs. Going to Court

While filing a charge with the EEOC is often a necessary first step in pursuing an employment discrimination, harassment, or retaliation claim under Texas Labor Code Chapter 21, the administrative process frequently does not produce the most favorable outcome for employees. One reason is that, at the EEOC stage, an employee has filed only an administrative charge, not a lawsuit.

Because employers know that many EEOC charges are ultimately dismissed or resolved without litigation, they often face little immediate legal pressure to offer substantial settlements. As a result, employers may be less inclined to negotiate meaningful resolutions until a formal lawsuit is filed and the costs and risks of litigation become more significant.

Another challenge is that the EEOC process occurs before the parties have engaged in formal discovery. At this early stage, employees and their attorneys typically do not have access to internal company emails, personnel records, witness testimony, or other evidence that may strengthen their claims. Without the ability to fully evaluate the facts, employers may discount the value of a case and offer only modest settlements. Similarly, some employers approach EEOC mediation as an opportunity to resolve claims for what they view as a relatively small “nuisance value” payment rather than compensation that fully reflects an employee’s alleged damages.

Additionally, a settlement may be lower during the early stages of a claim because damages such as backpay have had less time to accumulate and the parties typically have less information available regarding the merits of the case.

In many cases, only a few months of lost wages have accrued by the time EEOC mediation occurs. As litigation progresses, however, backpay and other damages can increase substantially, affecting the overall value of the claim.

Finally, EEOC resolutions frequently emphasize non-monetary remedies, such as policy changes, management training, or neutral employment references. While these measures can provide important workplace reforms, they may offer limited direct financial compensation to the employee bringing the claim.

Why Litigation in Court Makes Sense

Filing a formal lawsuit increases the valuation of an employment settlement because it shifts the dispute from an administrative process to an active financial and legal threat for the employer. While the EEOC stage relies on voluntary cooperation, a court-filed lawsuit forces the company to play defense.

Defending an employment lawsuit typically requires substantially greater legal expenditures than responding to an EEOC charge, particularly once discovery and motion practice begin.

Because litigation can involve significant defense costs and business disruption, some employers may become more willing to evaluate settlement opportunities as a case progresses.

Changing the Dynamics of a Case

Further, filing a formal lawsuit can significantly change the dynamics of a case, and several key drivers explain why settlement numbers rise substantially once a complaint is filed in court.

For example, once a claim moves from the administrative process into court, the employer is no longer responding to allegations in a relatively low-risk setting. Instead, it faces the prospect of litigation, mounting legal expenses, public scrutiny, and the possibility of a jury trial. These factors frequently increase the pressure to resolve disputes and can affect how both sides evaluate a case.

One reason litigation often changes settlement discussions is the substantial cost of defending a lawsuit. Although responding to an EEOC charge may require a limited investment of time and resources, court proceedings typically involve motions, document production, depositions, expert witnesses, and other litigation-related expenses. Even when an employer believes it has strong defenses, the costs associated with prolonged litigation can be significant. As a result, employers may become more willing to consider meaningful settlement discussions to avoid continued legal expenses and business disruption.

Formal Discovery

Litigation also opens the door to formal discovery, which is often one of the most important developments in an employment case. Through discovery, employees and their attorneys may obtain internal emails, personnel records, payroll information, performance evaluations, and other documents that were previously unavailable. Parties may also take sworn deposition testimony from supervisors, human resources personnel, and company executives. As additional facts emerge, both sides gain a clearer understanding of the strengths and weaknesses of the case, which can significantly influence settlement negotiations.

Fee-Shifting Provisions

Another important consideration is that many employment laws include fee-shifting provisions. In certain cases, an employer that loses at trial may be required to pay not only damages but also the employee’s reasonable attorneys’ fees and litigation costs. As a lawsuit progresses and legal fees continue to accrue, the potential financial exposure can increase, creating additional incentives for employers to resolve disputes before trial.

Unlike EEOC proceedings, which are generally confidential, court filings are typically matters of public record. Allegations contained in a lawsuit may be accessible to the public, including customers, competitors, current employees, prospective employees, and the media. For some employers, concerns about reputation, public perception, and business relationships may become an additional factor in evaluating settlement opportunities.

Motion for Summary Judgment

Finally, settlement leverage may increase as it successfully advances through key stages of litigation. One particularly significant milestone is surviving a motion for summary judgment, where the employer asks the court to dismiss the case before trial. If a court determines that sufficient evidence exists for a jury to consider the claims, the risks associated with a trial can increase substantially. At that point, employers may face uncertainty regarding a jury’s verdict, potential damages, attorneys’ fees, and public exposure, all of which can make settlement a more attractive option.

For these reasons, Texas employees should understand that the EEOC process and litigation serve different purposes. While some cases are resolved successfully during the administrative phase, others may not gain meaningful leverage until a lawsuit is filed and the full range of litigation tools and remedies becomes available. Therefore, employees who believe their workplace rights have been violated should seek legal guidance promptly to ensure compliance with applicable administrative requirements and deadlines.

Texas employment is subject to laws and regulations that differ significantly from those in other states. Consulting with a Texas employment lawyer can make all the difference. Tully Rinckey’s team of dedicated employment attorneys is available to assist you today. Please call 8885294543 to schedule a consultation, or schedule a consultation online.

Sean C. Timmons’ years of experience as an active-duty U.S. Army Captain in the selective and prestigious U.S. Army Judge Advocate General’s (JAG) Corps are a valuable asset to Tully Rinckey PLLC’s employment and military law practice groups. An aggressive and tenacious advocate for all employees and service members facing legal issues, Sean is able to pull from his significant and diverse experience as an active-duty attorney in the Army JAG Corps, and as a civilian military law attorney, and forcefully and efficiently represent service individuals in both administrative and criminal proceedings across the United States and around the world.