How to Keep Your Business from Getting Slapped with Employee Lawsuits
If you're an employer, you're probably juggling your share of HR and financial issues on a daily basis, even without also worrying about the ongoing rise in employee lawsuits. Civil suits over wrongful termination and/or various types of discrimination can devastate even the most well-meaning businesses that fail to guard against missteps and misunderstandings. Here are some smart practices you can implement to make sure your company isn't bankrupted by legal fees, judgments, and awards.
Clarify Your Policies
The surest way to defend yourself against employee lawsuits is to set your corporate policies down on paper clearly and irrefutably. A detailed anti-harassment and anti-discrimination policy clarifies your official position on what constitutes these behaviors at your organization, how reported incidents are to be handled, and at what point an employee may be terminated for violating the policy. It also protects your organization against any accusations that you have ever officially condoned such behavior.
Other policies and agreements can also be extremely helpful for keeping wrongful termination lawsuits at bay. If your state allows "at-will" employment agreements, for instance, you can insist that all new employees agree to this policy, which permits employers to fire employees (or employees to quit) without any stated cause. You can also have departing employees sign a release of claims agreement in which the employee gives up the right to file future lawsuits in return for a severance package.
Retain (and Organize) Your Files
Good record-keeping practices are especially critical when a wrongful termination lawsuit is brought against your company by a discrimination attorney. Various government agencies maintain different requirements regarding how long you must keep files on former employees. For instance, consider the following:
- The EEOC requires employers to hang onto personnel records for at least one year from the date of employee termination
- The ADEA calls for all personnel files to be held for three years; it also requires that all files related to benefits or seniority be held for either one year following termination or as long as the benefits stay in effect.
- The FSLA requires you to keep the payroll records for three years, and any information explaining pay discrepancies for two years.
The smartest thing to do with a terminated employee's files is simply to keep them forever, either digitally or in hard copy form. Keep termination files separate from other HR files that can safely be destroyed. Separating various types of employee documentation is an intelligent move can also allow for quicker, easier communication with specific agencies. For instance, you may be facing a lawsuit from an employee who claims to have been terminated due to disability or ethnicity, when in fact he was never authorized to work in the United States. If you keep all your I-9 forms in one place permanently, you can easily check this information and relay it to the USCIS (United States Citizenship and Immigration Services).
Revise Your Hiring Processes
No matter how fair minded and evenhanded your HR policies are toward your current staff, the slightest whiff of unfair hiring practices can result in your hearing from a disgruntled applicant's discrimination attorney. Any testing and application processes that appear to screen out specific populations can be considered discriminatory by a judge, even if those practices don't have a direct impact on the final hiring results. Have your legal team review all your application paperwork and hiring procedures, revising anything that could even imply discriminatory selection.
Asking prospective employees to include their credit histories or criminal backgrounds on application forms can also make you vulnerable to future accusations of discrimination. Many states and cities nationwide have adopted "ban the box" policies that apply to both government and private organizations. These policies, also known as fair chance policies, eliminate the check box on forms asking whether an applicant has ever been convicted of a crime. Updating your own application paperwork and processes accordingly may not only save you from legal repercussions, but it might even connect you with excellent talent who could never have joined your team otherwise.
Talk to your legal department or an independent civil rights attorney to make certain that your business is doing everything it can, not only to defend itself against wrongful termination lawsuits, but also to give employees as little reason as possible to consider such lawsuits. Find an attorney through an establishment like the Law Office of Faye Riva Cohen, P.C.