Employee lawsuits – for unwarranted termination, workplace harassment, or other issues – can be time-consuming, costly, and disruptive to your business and can negatively impact your team’s morale.

Avoiding employee lawsuits should be a prime objective of any business, and by taking prudent steps, initiating uniform hiring and management policies, and creating an employee evaluation system, it’s possible to help lower your risks of employee lawsuits.

Know the laws, rules, and regulations. Before you hire your first employee, take some time to learn about all the regulations you’ll need to comply with, and seek legal counsel to get you started on the right foot. There are laws regarding hiring practices, rules and regulations about workplace safety, anti-discrimination laws, etc.

Be prepared with insurance. Identify your company’s risk exposure, and consider carrying a comprehensive commercial liability insurance policy. A potential insurer will conduct a risk analysis to design the precise coverage you require to help defend yourself against an employee lawsuit.

Create job descriptions for every position. A detailed job description provides employees with a list of responsibilities, a management hierarchy, a list of best practices and acceptable practices, and other information vital to clearly define what’s expected of the employee each day. A well-written, comprehensive job description gets employee and employer on the same page before the candidate is hired.

Define job success. In order for employees to be successful in their jobs, they first have to know how your management team defines success and conveys that information to employees. How will employees know they’re meeting company expectations? Weekly quotas? Monthly sales? Quarterly performance reviews? As the successful achievement of objectives is reached and new goals set, employees should be informed of any changes to the company definition of employee success.

Avoid surprises. When an employee is terminated, it should come as no surprise to anyone. Employees who fail to deliver for the benefit of the company should go through a review process, receive warnings of under-performance, and if needed, receive additional training to improve that performance. Only after employees have been informed of unacceptable performance – perhaps several times – should the termination process begin.

Provide on-the-job safety training to all employees. The federal government’s Occupational Safety and Health Administration (OSHA) offers numerous safety training programs for employees – on site or online. Train employees in safe work practices and document the training each employee receives. Encourage managers to attend employee safety conferences to learn more about the latest in best safety practices. The better trained your team is, the safer your team is. That may lower the likelihood of an employee lawsuit due to an on-the-job injury.

Document everything. Maintain detailed employee records, a file of performance reviews, remediation training, your company’s latest OSHA safety audit – get it in writing. Does your employee manual provide an explanation of the company’s termination policy? Get it in writing. Is a manager report filed when an employee is reprimanded or rewarded? Are job descriptions updated as necessary? Get it in writing.

Treat employees with respect, keep them informed, make sure they understand their job requirements, company policies and safety procedures from the front office to the loading dock. Provide the training and tools to help keep employees safe.

Be consistent in your company’s hiring and termination policies, establish your company as a caring corporate citizen, focus on improving employee performance, and be transparent in your expectations of every member of your company team.

Your company, and your staff, don’t have to do something “wrong” in order to find you’re faced with a potentially expensive employee lawsuit. However, you can lessen the likelihood of a lawsuit, and properly defend your business, with well-documented, compliant business practices.

 

The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of Zions Bancorporation, N.A. Member FDIC