gavel resting on a law book

Helpful HR Tips for Small Businesses

Watch out for employee lawsuits.

There are certain situations in which your business can be sued by an employee.  Because an employee-filed lawsuit can be devastating for your company, it’s important that you understand the circumstances under which an employee can sue.  Here are some of the most common employee lawsuit situations and what you can do to avoid them.

  • Sexual Harassment

One common type of employee-filed lawsuit has to do with sexual harassment claims.  The best way to prevent these types of lawsuits is by requiring all staff, particularly management, to attend sensitivity and harassment training.  You should also have your company’s HR representative discuss the consequences of engaging in harassment.  If one of your employees comes to you with a harassment complaint, it’s important that you take immediate and strong action.  Document all steps that you take to investigate and address the situation to ensure that you have proof of action in the event that the employee claims that you ignored their complaints.

  • Discrimination

Many employee lawsuits stem from claims of discrimination.  For instance, employees can claim that they were discriminated against due to their race, sex, gender, sexual orientation, and so on.  Employees can claim that they were discriminated against during their time working at your business, or were unfairly treated during the hiring process.  To avoid discrimination claims, make sure your business’s management undergoes sensitivity and inclusion training.  You should also educate your staff about the questions that they can and cannot ask during the interview process.  If you recognize that members in your management are engaging in discriminatory behaviors, take steps to address this behavior and establish clear guidelines for how they can improve.  If they fail to mitigate their action, then make sure you follow through with punishment.

  • Wrongful Termination

Former employees can also sue your company if they feel that they were fired wrongfully.  For instance, they could sue if they feel like they were fired as a result of becoming pregnant, asking for a raise, filing a complaint against management, or as retribution.  To ensure that former employees do not hit you with a lawsuit, make sure you have a documented process for firing employees.  For instance, many companies institute a “3-strike” policy.  According to this policy, an employee can only be fired after three warnings or complaints.  Make sure that every warning or complaint is carefully documented so you can prove that the employee was fired on fair grounds.

These are some of the suggestions that you should try to prevent employee lawsuits against your company.  Want another way to keep your business safe from this risk?  Then make sure you have the right commercial insurance in place.  For assistance with all your business insurance needs, contact the experts at East End Insurance Agency today.



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August 2019
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