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How to Avoid Employee Lawsuits: 5 Legal Tips for Bosses and Business Owners

By George Khoury, Esq. | Last updated on

As an employer, facing lawsuits from current or former employees may be an unavoidable consequence of doing business. Sometimes, however, lawsuits are the direct result of an employer hiring a bad, or maybe just naive, boss.

There are countless reasons why employees decide to sue. For employers and bosses, both new and old, the following five tips will provide some guidance on how to avoid employee lawsuits.

1. Play Fair

Particularly when it comes to terminations, layoffs, discipline, raises and promotions, rules should be enforced evenhandedly across all levels and types of employees. Both adverse actions and rewards should be based on objective criteria that can be seen and verified. If employees feel that the rules are applied fairly to everyone, there will be less motivation to sue when they are passed over for promotion or are laid off.

2. Don't Discriminate

Discrimination does not have to be intentional to be actionable. If policies or practices are having a discriminatory effect, changes should be made. If the discriminatory effects of policies or practices are visible to employees, then the likelihood of being sued by a terminated or spurned employee on a discrimination claim increases.

3. Don't Bully, Insult, or Yell at Employees

When a boss is mean the likelihood that an employee will be willing to file a lawsuit for other, valid, reasons, increases. While bullying, jokes and insults that don't refer to protected classes, and yelling at employees, are all technically not illegal under federal laws, there may be some state laws that prohibit certain workplace conduct. Additionally, these types of actions can often be imputed to a discriminatory, or retaliatory, motive.

4. HR Should Provide Solutions, Not Cover Ups

If your HR department is solely focused on avoiding corporate liability, then problems may only get covered up, and not fixed. Additionally, when an employee feels that an HR department has taken advantage of them, they will be more willing to seek outside assistance. If your HR actual provides solutions that satisfy complaining employees, rather than just seeking to silence complainants and keep business running as usual, then the likelihood of being sued decreases.

5. Don't Retaliate When Employees Complain

If an employee files a complaint about discrimination, unfair treatment, or other bad employment practices, employers need to be careful not to retaliate, or let others superiors or employees retaliate. A complaining employee does not have to be terminated to have a cause of action for retaliation. Any action that materially effects an employees job, such as available hours, overtime, responsibilities, status, or more, can be considered an adverse action and the basis of a retaliation lawsuit.

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