Ten Ways to Stay Out of Court
By: ROBERT C. BOISVERT, JR.
October 1995
There is no way to guarantee that your company will not be sued by an employee or former employee or that, if your company is sued, it will win the lawsuit. There are, however, then steps you can take to reduce the likelihood that your company will get sued and increase the odds of winning if your company is sued.
1. Know the Law. Not only is ignorance of the law no defense; it's a great way to get sued.
Every employer should train supervisors so they have a working knowledge of employment law and good personnel practices. In particular, supervisors should be aware of the three most common risk areas: discrimination, breach-of-contract, and defamation. Every supervisor should know that federal and state laws protect against discrimination based on age, race, national origin, sex (including sexual harassment and pregnancy), marital status, color, religion, creed, disability, sexual orientation, and status with regard to public assistance.
A termination or adverse action against an employee or applicant in a protected class raises the potential of a discrimination lawsuit. Supervisors should also understand that oral and written statements may form the basis for a lawsuit for breach-of-contract. Finally, every supervisor should realize that any false statement, oral or written, that damages an employee's or former employee's reputation may form the basis for a defamation lawsuit.
2. Take Responsibility. Each supervisor should recognize that he or she is, for practical purposes, the company. Supervisors act for the company, and their actions can expose the company to liability. Supervisors must understand the important role they play in reducing the company's exposure to lawsuits.
3. Interview Wisely. The people who interview for your company must know what they can and cannot ask or say during an interview. They should know how to ask job-related questions and how to avoid questions that seek unlawful information, including information about protected class status. Interviewers should not ask anything relating to protected class status, including questions about age, disability, and marital status.
4. Communicate. One of the best ways to avoid problems in the workplace is to have open, two-way communication. The company, from the CEO on down, should be clear about what is expected of employees. Feedback should be frequent, clear and fair. Employees who do not know where they stand are more likely to be surprised, and surprised employees are more likely to sue.
5. Give Performance Reviews. Performance reviews are one of the most important means by which a company communicates its expectations and positive and negative feedback to employees. If the company neglects its performance reviews, it is neglecting its employees. It is also passing up an opportunity to give constructive feedback, reinforce expectations and lines of communication, and document performance problems.
To be effective, performance reviews should be treated as important and given on time. The reviews themselves should be accurate, truthful and factual. The entire review process be a two-way communication process.
6. Document. Many supervisors say that they do not have time to document performance or discipline problems. This view is shortsighted, since the resulting problems take far more time than the few minutes it would have taken to document the initial problem.
Documentation is important for a number of reasons. First, documentation alerts the employee as to deficiencies and impresses upon the employee the importance of an issue. Second, documentation educates the employee as to the company's expectations and gives the employee the opportunity to correct a problem. Third, documentation improves the company's evidence and case if the company is subsequently sued.
7. Discipline Effectively. A company needs to respond appropriately to inappropriate or unacceptable employee behavior. To respond effectively, supervisors must have a working knowledge of employment laws and personnel practices and be familiar with the company's employment practices.
Effective discipline begins by clearly stating expectations and then pointing out when and how the employee fails to meet those expectations. The supervisor should be familiar with the facts of a particular situation and surrounding circumstances before deciding what disciplinary action to take. He or she should review the evidence, assess options, and get input from upper-level management or legal counsel, where appropriate.
8. Prohibit Harassment. Sexual and discriminatory harassment cases are among the fastest-growing areas of employment litigation. An anti-harassment policy is no longer a luxury; it is a necessity. Employers should also train their supervisors to handle harassment issues. Ideally, all employees should be educated about the company's anti-harassment policy.
These steps help employers avoid problems in several ways. Educated employees are less likely to engage in unlawful harassment. The steps create a procedure that enables an employee with a harassment complaint to bring it to management's attention immediately so that the company can resolve the problem. And, they communicate the company's intolerance towards harassment and give the company a possible defense in a harassment lawsuit.
9. Terminate Carefully. Terminating an employee is risky business these days. An employer can greatly reduce the risks by following the employment practices discussed above.
An employer who is considering terminating an employee can further reduce risk by carefully and objectively reviewing a number of issues, including the employee's personnel file and work history, the company's employment policies, any contracts or handbooks, and the underlying facts surrounding the potential termination..
The employer should also consider surrounding circumstances before terminating an employee. These include whether the employer is required to follow an escalating discipline policy and how the employer has responded to similar problems in the past, either with that employee or other employees. To avoid rash or inconsistent termination decisions, the employer should have those decisions reviewed by a designated company officer, human resources professional, or legal counsel. The employer needs to be particularly sensitive to past legal problems or issues with the employee, including whether the employee is a member of a protected class, has filed a workers' compensation claim or other complaint, has been involved in union organizing, or has just returned from a leave of absence.
10. Post-Termination Problems. After the termination, the employer should watch for signs that trouble might be brewing. Under Minnesota law, a terminated employee may have the right to payment of wages, a written explanation of the reasons for the termination, and a copy of personnel records. If a former employee requests any of these, or accuses the company of unlawful conduct, the employer should contact any attorney immediately.
Employers should also take steps to prevent employees from defaming former employees. These include adopting a procedure that prohibits employees from giving references, and designating one person in the company to respond to all reference requests. To be safe, employers should not give out references unless they have first received a written waiver and release from the former employee.
There are no guarantees when it comes to dealing with employment law issues. A careful employer can, however, cut its risks by following these sound employment law and personnel practices.