A critical part of a leader’s role in business is something called
performance management. Proper goal setting and regular check-ins are crucial
in order for your team members to understand how they are doing and where they
might need improvement. It’s also about the manner in which you communicate.
Having gotten this wrong in the past and suffered the consequences, I wanted to
share some useful tips on how to protect the organization against
employment-related lawsuits.
We live in an ever-evolving litigious society where peoples' first
inclination when they feel wronged is to do what? Sue. As a business owner, I
have learned many things the hard way. Mistakes invariably cost you time and
money. But they are also learning experiences from which to gain wisdom.
According to the Equal Employment Opportunity Commission, since 2005
the amount of wrongful termination lawsuits has increases significantly every
year, with the most significant peak in 2008 when the economy crashed.
Desperate times call for desperate measures, right? Typically these claims are
groundless but there are many reasons that an employee can fall back on to put
together a lawsuit such as discrimination, harassment, wage and hour
violations, unsafe work conditions, worker’s compensation claims and so on.
That is why proper performance management and regular documentation is so vital.
Here are six big reasons employees will sue you when terminated.
1. Not giving a reason
for firing. If you’re an at-will employer, you can fire at will, right? Wrong.
Most employees think they’re wonderful workers, and if they get fired for a
mysterious reason, they’ll make up their own reason – or their lawyer will. The
reason for termination needs to be clear.
2. Firing an employee
for bad performance when the employee has good performance reviews. This is the
cousin to “not giving a reason for firing.” Supervisors need to understand that
they’ll need a poor-performance paper trail if they want to fire someone. Or
else a judge will smell something fishy.
3. Poor timing. For
example, let’s say an employee files an internal complaint about the employer
or a supervisor, and then shortly after is disciplined for a supposedly
unrelated event. It won’t be hard for a
lawyer to connect the dots in court between these two actions. Employees who
file complaints can be disciplined, but the supervisor better have the
documentation in order before making the move.
4. Delayed internal
investigations. When employees file complaints, they want them thoroughly
investigated and they want it done now. If you can’t investigate immediately
(because, for instance, a key player is on vacation), let the complaining
employee know why and when the investigation is likely to begin.
5. Improper response to
an Labour Department charge. If you’re contacted by the Labour Department
regarding an employee complaint, respond promptly and courteously – and treat
the complaining employee courteously, too. If you’re tardy in your response or
treat the employee like a leper, expect to hear about it in court.
6. Failing to follow
your own policies. You can have the best policies and training in the world –
and indeed some companies have used that as a defense against a complaint. But
you better be able to show that your supervisors followed those policies and
applied the training.
If you are a manager or business owner, you have most likely experienced
this to some degree and know how absolutely frustrating it is. Insurance can
help mitigate costs, but that’s a double edged sword too. Having it is good,
but if you use it your premiums go up. Or they might drop you. Then what’s the
point?! Make sure your HR and legal teams are providing the proper protection
and training for management. Sometimes these things can happen simply because
management didn’t take the proper steps, thereby leaving the company exposed.
Don’t allow that to happen. Being prepared won’t stop someone from attempting
to sue you, but it can definitely mitigate time and costs involved in defending
against it.
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