Employee Lawsuits: Protecting Your Business from Employment-Related Litigation

If you own a business that employs others, it is crucial to have proactive measures to safeguard your company from employment-related litigation. Not only can lawsuits brought by current and former employees divert your attention away from your business operations, but they can also impact your reputation and bottom line. While you can’t always prevent employee lawsuits, taking certain measures can help ensure any disputes are resolved efficiently — and your company avoids liability.

1. Create an Employee Handbook

Creating and distributing an employee handbook is one of the most important things you can do to help prevent employee lawsuits. It can set forth workplace policies, clarify expectations, and provide employees with information about internal complaint procedures. While an employee handbook should be specifically tailored to your company’s needs, some things that may be included can include the following:

• Code of conduct
• Holiday and time off policies
• Employee benefits
• Safety policies
• Process for promotions
• Process for filing a complaint
• Anti-harassment and retaliation policies
• Equal opportunity statement
• Company culture
• Performance assessments

New hires should receive the handbook on their first day of work and be required to acknowledge that they have read it. An employment law attorney can assist you with creating an employee handbook that will be compliant and legally enforceable.

2. Conduct a Workplace Investigation After an Internal Complaint Has Been Made

If an employee makes an internal complaint, it’s essential to address such claims promptly — especially if the claim involves allegations of discrimination. A workplace investigation involves gathering and evaluating information regarding the complaint to determine whether anything illegal occurred. While complaints can range in severity, not all require an extensive or lengthy investigation. Failure to conduct an investigation after a complaint has been made can lead to serious legal consequences.

3. Ensure Employees are Classified Correctly

One of the most common types of employee lawsuits involves misclassification. Significantly, there are two primary categories when it comes to employment: a worker may either be an employee or an independent contractor. Employees are entitled to a wide variety of employment benefits. Independent contractors do not have the same legal protections regarding wages, overtime, and rest breaks. Failure to classify employees correctly can result in legal action being filed against your company, monetary fines, and back pay claims.

4. Keep Detailed Records

A business should always maintain detailed records and conduct regular audits. Detailed and accurate records can help ensure fairness during the hiring, promotion, and termination processes. They can also assist with identifying potential problems and recognizing practices that may result in discrimination. In the event an employer files a lawsuit, the records maintained by your company can serve as crucial evidence to support your position.

5. Provide Training Programs to Employees

Providing an orientation program, refresher courses, and regular training can be critical to reducing the risk of employee lawsuits. By training both supervisors and employees about discrimination, harassment, safety, and wage regulations, you can help to safeguard your company against damages and being exposed to reputational harm.

6. Use Severance Agreements

Although California is an at-will employment state, this doesn’t necessarily stop employees from pursuing litigation upon termination. Severance agreements can be extremely useful to protect an employer from employee lawsuits in these cases. With such contracts, severance pay is offered upon termination in exchange for an employee’s release of claims against an employer. In addition to the use of a severance agreement, you should also ensure your company has procedures in place concerning what to do — and what not to do — during the termination process.

7. Work with an Experienced Employment Law Attorney for Ongoing Regulatory and Legal Compliance

You shouldn’t wait until litigation arises to consult with an employment law attorney. A skillful employment law attorney can work with you every step of the way to ensure you remain compliant with your legal and regulatory obligations as an employer. They can also inform you of changes in the law and help you stay up to date with new developments that may impact your company.

Contact an Experienced California Employment Law Attorney

Dealing with employee lawsuits can be complex and overwhelming. It’s best to have an employment attorney by your side who can ensure your rights are protected while you keep your focus on your business operations and bottom line. At White & Bright, LLP, our team of employment law attorneys is committed to providing reliable representation and knowledgeable counsel to employers in California for a wide range of legal matters, including those involving employee lawsuits. We welcome you to contact or call us at (760) 747-3200 to learn more about our legal services.