Protection Against Employee Lawsuits

 Posted on April 13, 2016 in DuPage County Business Law Attorney

Under federal and state laws, and employee can sue his or her employer for age discrimination, disability discrimination, racial discrimination, and sexual harassment. An employee can also sue for retaliation, which appears to be increasing more and more.

Allegations of discrimination or misconduct can cost a small business owner thousands of dollars to defend against. Moreover, if the employee is successful and wins his or her lawsuit, it could spell financial disaster for a small business and literally put an owner out of business.

National statistics reveal that approximately 100,000 employee claims are filed against employers every year. However, there are steps that businesses can take in order to help protect themselves against a disgruntled employee.

Employee Handbook

Every company should have an employee handbook and it should be updated every year. All company policies and practices should be clearly explained in the handbook. There should be a clear explanation as to how they can file a complaint, as well as the process if they do. Each new employee should receive a copy of the handbook when hired and all employees should receive the update version each year. It is important to make sure that each employee signs an acknowledgement showing that he or she received the handbook.

Training

All management and employees should receive training with regard to the federal, state, and local employment laws. Since these laws are always changing, business owners should consider providing this training on an annual basis. Training, combined with the employee handbook, provides all employees with a succinct indication of the company's policies.

Enforce and Investigate

Business owners leave themselves wide open to liability if they have all these policies in place yet fail to take any action when an employee does file a complaint. Having a clear procedure in place as to how an investigation will proceed when there is a compliant is essential. Additionally, if a complaint turns out to be valid and an employee is guilty of some type of misconduct or violation, take the proper action in reprimanding the employee.

Release

If you do have to let an employee go—no matter what the reason—make sure to have that employee sign a release before handing over any severance. Otherwise, you may be hit with a lawsuit if the employee decides to sue and you have no release to any claims signed by the employee. A business attorney can assist in the proper drafting of a standard release.

There are so many legal twists and turns when it comes to running a company. This is why you should consult with an experienced DuPage County business law attorney for any questions that arise.

Sources:

http://www.forbes.com/sites/evangelinegomez/2011/10/03/the-top-5-steps-small-businesses-should-take-to-minimize-their-risk-of-an-employee-lawsuit/#5a14d0a33d25

http://www.inc.com/guides/2010/12/how-to-reduce-employment-liability-claims.html