Avoiding employment lawsuits should be a high priority for small companies. They are distracting, expensive, unpredictable and unpleasant. After being involved in hundreds of these cases as an employment lawyer in New York City, I created this list of the top 5 things a company can do to almost guarantee a lawsuit.
Below is a list of things you should never do as a company if you want to stay out of court.
Do These Things and You’ll End Up Being Sued
1. Retaliate Against Employees Who Complain about Sexual Harassment
Retaliation cases are easy for employees to win and they produce high verdicts. Sexual harassment and retaliation are a natural combination because jilted harassers often retaliate against employees who reject them. The perfect storm arises when a subordinate employee complains about sexual harassment by a manager and winds up fired in the aftermath.
When this occurs, the company faces liability for both sexual harassment and retaliation.
But the worst part is that the company looks terrible and will need to write a large settlement check or face a potentially high verdict. Companies can avoid this situation by protecting employees who make sexual harassment complaints against their superiors. If the complaining employee is truly a bad apple, do not terminate them for at least a year after the storm passes and make sure the performance problems are legitimate and well documented.
2. Terminate Employees Who Inquire About Overtime Pay
Most wage and hour class actions are started by disgruntled employees who get fired. The odds of litigation increase substantially if a company fires employees who inquire about overtime pay. This will create the impression that that company is violating labor laws and induce wage and hour litigation.
Small companies need to take these inquiries seriously and treat employees fairly. Firing employees who ask about overtime pay and other wage issues is a sure way to get sued.
3. Fire Employees Over Pregnancy Related Issues
Pregnancy and disability discrimination laws were recently expanded to protect employees from any kind of pregnancy related discrimination including pregnancy related medical problems and breast feeding. Companies, however, continue to fire employees over these issues. Pregnancy discrimination cases are on the rise and employees are winning in court.
Companies should let their employees take time off for any pregnancy related matter and allow them to breastfeed at work. Firing an employee during this period is asking for a lawsuit.
4. Fire Disabled Employees Who Request Accommodations
Companies are required to work closely with disabled employees to help them do their jobs. Employers are also prohibited from discriminating against disabled employees. One sure way to get sued is to violate both of these requirements at the same time.
This happens when a company fires a disabled employee in response to a request for reasonable accommodations. For example, we had a case a while ago involving a long term employee who was diagnosed with cancer. The employee was able to beat the disease but needed a flexible schedule for a short time to recover from treatment. When the employee asked for a flexible schedule, the company fired him.
The employee sued for discrimination (i.e. firing him because he had cancer) and denial of reasonable accommodations. The company eventually settled after years of litigation. If the company went to trial, it risked looking like an insensitive organization that fired people for getting sick and asking for help.
5. Pick Fights With Difficult Employees
Every company eventually hires a few problem employees. The kind of employee that causes problems at every turn and engages in bizarre or unprofessional behavior.
The goal in terminating these employees is to get rid of them. But sometimes companies make the mistake of disputing the employee’s application for unemployment benefits. This can provoke a lawsuit as some employees see this as the final straw.
At our law firm, we talk to people frequently who say that they were angry about getting fired but willing to let it go – until the company challenged their request for unemployment benefits. If your company routinely challenges unemployment claims, make an exception for these employees. Don’t pick fights with difficult people and instead focus on your business.
These are examples of behavior that can embroil a small business in an employment litigation. Often the driving force behind these cases is an employee’s desire to get revenge or strong feelings of being wronged. They best way to avoid being sued is to treat employees well and listen to their complaints.
Another great way to avoid being sued is to provide certain departing employees with a severance payment in exchange for a release.
Courtroom Testimony Photo via Shutterstock
Thanks, Robert! As a former corporate counsel AND Human Resources head, I think these are good approaches overall.
But a question: would it get you into further trouble if you challenge unemployment claims for others, but not for the so-called “problem” employees?
I wonder how many employers simply allow most employment claims and don’t contest them. When I was head of HR in the corporate world, we routinely allowed most unemployment claims. After all, short of someone thumbing their nose at the employer and trying to “work” the system, maybe it’s better to let employees have that safety net. But I guess that varies by employer….
Good question Anita. Trouble could arise if it appeared that that discriminatory intent was behind the decision to challenge certain unemployment claims. Otherwise a company is free to challenge certain applications and not others. But the safest route is to not challenge claims and let employees have that safety net.
To truly head off these types of problems before they happen, you’ve got to be much better during the hiring process. If you don’t hire a difficult employee, you don’t have to fire them and worry about getting sued.
Great post, been lucky up to this point. Now a days, just pay cash for spot help, once they turn into official employees – good luck!!
I’m surprised these are pretty easy ways to get sued! I think it’s more of a maturity thing. Bosses are expected to stay calm and reasonable at all times, it’s important because some employees lure you into their traps for this opportunity. Not that I have trust issues but anything we can say can be taken against us.
Great read Robert and as a business owner I completely relate to this. These are very sensitive issues which need to be handled with care and times it really puts one in a spot.
The article is a very useful one for the employees and these ideas needs to be cleared to everyone working in office. I have a question to ask, might sound fishy, but will surely appreciate if someone gives an answer.
If the boss decides to fire an employee at the time when she didn’t know that she was pregnant, what will happen then? I meant to say if the employee knows about her pregnancy after getting fired. Is there anything that can be done?