A lawsuit against your business can cost you in a number of ways. In addition to costing you money in legal fees and damages if the case goes against you, it can also take months to resolve, absorbing a lot of your valuable time. A lawsuit can also hurt your business' reputation. In some cases, especially if yours is a relatively new business, the reputational harm may be irreparable.
A lawsuit by a current or former employee can also cost you in other ways. Not only is it likely to cause a rift between you and the other party, but it may engender distrust in your other employees, which is something you can ill afford. You may be able to avoid an employee lawsuit if you know what is likely to prompt it and take steps to avoid it.
1. Keep Meticulous Records
If you ever have to go to court because of an employee lawsuit, court reporters Spokane will record every word you say. You don't have to be quite that thorough in your day-to-day dealings with your employees, but you should be careful in obtaining documentation of all significant interactions and keeping detailed records of all employment actions, including hiring, firing, lay-offs, promotions, complaints, etc. If you keep track of this information, you can use it in court as evidence in your favor if you do ever face an employee lawsuit.
2. Know What the Law Requires
There are many different reasons that an employee may file a lawsuit against you. Suits that tend to come up fairly often include wrongful termination, harassment, and discrimination, as well as wage and hour complaints. You can be proactive in avoiding lawsuits on these grounds by knowing what the law requires of you as an employer and being as transparent as possible in your attempts to comply with these legal obligations. Even if you do end up facing a lawsuit from an employee, if you can demonstrate compliance, the court may throw out the case without hearing it, which means a less costly and time-consuming legal ordeal for you.
3. Communicate Expectations to Employees
From the day they are hired to the day their employment with you ends, involuntarily or otherwise, your employees should always know where they stand. You must communicate with them clearly and specifically what you expect of them. At the beginning of employment, this means providing them with detailed job descriptions that concretely outline best practices and job duties. Periodically, you should give your employees performance reviews that explain what they are doing well and, perhaps more crucially, what they need to do to improve. Employees should understand the rules they are expected to abide by during their time at the company and be informed of the penalties for lack of compliance.
If your company operates in a right-to-work state, you technically do not need to provide any reason or advanced notice for the termination of an employee. Nevertheless, it is more fair to your employees, and may save you some legal headaches down the road, to communicate closely with them about their standing at all times.
4. Inform Employees of Policy Changes
If your company goes through changes in policy that alter what you expect of your employees, you need to let them know of this, preferably ahead of the implementation, if possible. Employees can become set in their ways and need time to adjust to new changes.
Sometimes, instead of merely informing employees of the changes, you need to provide them training on the new procedures. Be proactive in arranging this, and follow up with employees who may be struggling with adopting them, providing additional training as necessary. Be patient with your employees during this sometimes challenging process.
Neither you nor your employees should ever be able to claim that you did not know what was expected. If you can provide documentation showing that you provided employees job descriptions, explained your disciplinary process to them, respected their protected statuses, and continually communicated with them about their job performance, any employee lawsuits that are filed against you may not have much credibility.