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For Employers Back

10 Reasons Why Employers Get Sued

| May 31, 2022

Every employer fears getting sued, whether it’s a legal claim brought by a current employee or one that was let go. Unfortunately, fear alone will not help you avoid litigation. Understanding why employers get sued and what you can do to at least reduce your potential exposure is necessary. More importantly, you must be willing to make important changes. While you may not be able to avoid lawsuits entirely, identifying the potential risks and managing them can go a long way toward reducing the number of claims you may face. 

1. Lack of Candid Feedback

Many wrongful termination lawsuits are based on the allegation that the employee was let go for no good reason. Even if you are in an employment-at-will state, your company’s policies may limit the situations where an employee may be terminated. As a result, you need to carefully document the reasons why you are terminating a problematic employee. 

Many employers tend to avoid conflict in order to avoid disrupting the work environment. In other situations, this issue can arise with inexperienced or untrained managers because they often struggle when providing reviews for under-performing employees. They fail to document specific instances where the employee failed to meet expectations or when they failed to perform essential job duties. Perhaps more importantly, they also fail to communicate these failures to the employee. 

To address this situation, you need to take steps to supervise your management personnel to ensure that they are providing candid feedback to their subordinates. Furthermore, you need to require that there be a regularly scheduled review process where managers and supervisors are required to provide candid feedback to the employee. 

2. Ignoring Potential Issues

Managers or supervisors who dismiss complaints out of hand are putting your business at risk. While many of the complaints you hear may be without merit, ignoring them tends to create frustration and resentment. Making your employees feel heard not only improves morale but also helps you identify and resolve potential legal problems before they are unavoidable. 

Employers should work with their management team to ensure that they have a mechanism for receiving and responding to complaints from employees. Furthermore, you should also invest in training for your managers to improve their listening skills and ability to resolve disputes in a non-confrontational way. 

3. Negative References

Another potential issue that tends to spark litigation is providing negative feedback to prospective employers. Even though “negative” can be a matter of interpretation and perspective, employers should be extremely careful in what they say in providing a reference to prospective employers. 

One solution, of course, is to establish a policy whereby you decline to provide references beyond confirming the employee’s dates of employment and other basic information such as their job title and duties. Also, the policy should be communicated to anyone who contacts you for a reference, so that the lack of a reference isn’t interpreted negatively. 

4. Gossip About Former Employees

Gossip is bad enough when dealing with current employees is bad enough, but gossip involving former employees is far worse, even if the employee left of their own volition. Employers should be careful to avoid any involvement in such gossip and make an effort to limit any such discussions among the employee’s former colleagues. 

5. Difficult Bosses

Fairly or unfairly, managers or supervisors can cause a great deal of resentment among employees. Being overly blunt, inflexible, dismissive, or simply unreasonable can negatively affect employee morale. When conflict arises, a disgruntled employee may seek legal counsel in an effort to gain control of a situation in which they feel powerless. Even if they cannot directly connect their boss’s behavior to an employment law violation, poor behavior will reflect poorly upon your business and subject you to greater scrutiny than you might otherwise face. And if there is an employment law violation, this sort of behavior will make it very difficult to defend yourself. 

As a result, employers should invest in developing the “soft skills” of their management personnel via coaching and training seminars. Furthermore, managers and supervisors should be held accountable when they behave poorly toward their employees. Your employees feel confident unprofessional conduct will not be tolerated at any level and that everyone is held to the same standards. 

6. Embarrassment

Losing your job can be humiliating for anyone, even in the best of circumstances. Employees who are terminated for underperformance or other negative reasons are often embarrassed and unwilling to admit to friends and family why they lost their job. As a result, they may sue their employer on a meritless basis simply to save face. 

One of the things you can do is to talk through the situation with the employee you are terminating. You should inform them that the reasons for their termination will be kept confidential and gossip will not be tolerated. Secondly, you should help them formulate an explanation for their termination and that you will not do anything to contradict that explanation. 

7. Hostile Work Environments

While “hostile work environment” is a legal phrase that covers conduct prohibited by law, we’re using it in this context more generically. Employees often think the law protects them from uncivil or other unfriendly behavior, which can lead to lawsuits when left unchecked. Even if there is no legal violation, dealing with the claim and responding to it can consume considerable time and resources. In addition, a hostile work environment lawsuit can negatively affect your company’s reputation and spark additional complaints.

Employers should strive to create and sustain a professional and collegial atmosphere in the workplace. To that end, employees should be counseled to avoid making rude or derogatory remarks, engaging in ridicule, or otherwise behaving in a manner that is unprofessional or inappropriate in the workplace. 

8. Selective Enforcement

One of the most difficult situations an employer can deal with is when someone claims in their lawsuit that they were singled out. In other words, they were reprimanded or terminated for something that other people get away with. This could be generally underperforming in their job duties, leaving early, or submitting inaccurate timesheets. 

This can be difficult to address because these allegations are often made without much proof. Ultimately, the only way to guard against an accusation of selective enforcement is to take steps to ensure that all company policies are being applied equally and that all employees are measured against the same standards. The best way to do this is to actively monitor the management of your employees and routinely review how these policies and standards are being applied. You need to go beyond assuming that everyone understands that employees should be treated equally and that you have no reason to believe that this isn’t happening. 

9. Retaliation 

Many employment-related lawsuits are filed because employees believe that they were terminated, reprimanded, or passed over for promotion in retaliation for doing something they believe they had a right to do. This could include filing a complaint concerning harassment or discrimination or simply refusing to do something that they feel is contrary to their moral or ethical beliefs. 

To guard against retaliation claims, employers need to make sure that all employee issues are carefully documented. You should include all pertinent information concerning these issues – the date and time of specific incidents as well as who witnessed the incident. You want to make sure your file is fully documented if you need to take adverse action. 

That said, we understand that employees may engage in prohibited conduct that they believe is protected. For example, the employee may routinely be using inappropriate language, believing that it is within their First Amendment rights. If you find yourself in this position, it is best to contact an employment lawyer before going forward so that you can reduce the risk of facing a lawsuit. 

10. Discrimination

Discrimination is one of the most common reasons why employers get sued. As an employer, it is important to understand that you can be sued for discrimination, even if the alleged discriminatory behavior wasn’t intentional. In fact, probably most discrimination claims involve policies or procedures that had a “disparate impact” on a protected class that was never intended when the policy was implemented. 

Discrimination claims also often arise in situations where the employee was reprimanded, terminated, or passed over for promotion with no explanation or basis. In these situations, the employee may assume that they were adversely treated for discriminatory reasons. 

The best thing you can do is be proactive. Make sure that your equal opportunity and anti-discrimination policies are current and being consistently applied. Provide regular training and coaching for your management team to ensure that they understand the potential issues involved. Lastly, we recommend that you have a mechanism by which discrimination complaints can be handled that communicates that your company is serious about maintaining a work environment that is free from discrimination.