6 Big Reasons Employees Sue, And How To Protect Yourself

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.
  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.

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.
