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An Employer’s Top 10 List for Staying Out of Court, Part 1

Tony Comden

Why should you want to avoid litigation? Lawsuits filed by employees and former employees are expensive. And time-consuming. They are frequently divisive internally, with employees “taking sides” in the case. Sometimes lawsuits can generate negative media attention, and they may involve customers. An employer that is sued in court can expect to incur $100,000 or more in attorney fees through trial. And, if the employer loses, the employee may receive back pay, front pay, emotional distress damages, punitive damages, and attorney fees, all of which adds up to hundreds of thousands of dollars very quickly. Here is Part 1 of my Top 10 List for employers to stay out of court. The other five strategies will be covered in Part 2 in next month’s issue.

1. Communicate Effectively

Effective, honest, and direct communication with employees is critical for their engagement and success. Employees deserve to know what is expected of them, what they are doing well, and where they need to improve. An employer cannot reasonably expect an employee to perform well if the employee does not understand what is expected of him or her. Clearly communicating job duties and expectations will give employees every opportunity to be successful.  

2. Carefully Monitor Legal Developments

As we have seen over the last two years with COVID, the law can develop and change rapidly in response to current events. Governors issue emergency orders; legislatures push through new legislation; judges issue new opinions, all of which can directly affect your obligations as an employer and can lead to liability for employers who are a step or two behind. And this can happen at the national, state, county, and local levels. Employers need to carefully monitor these developments so they can proactively comply with them rather than reacting after a problem arises.

3. Regularly Update Your Employee Handbook

As a part of your strategy to clearly communicate your expectations, having a well-drafted and regularly updated Employee Handbook is very important. At least for certain topics, the law requires employers to adopt policies for employees. For example, an employer must have a harassment policy that informs employees how to report complaints of harassment or discrimination. For employers with 50 or more employees, an employer must have a Family Medical Leave Act policy. And there are several more mandatory policies.

Beyond the legal requirements, an Employee Handbook is a primary way in which employers communicate their expectations, rules, and standards. Such communication is critical when holding employees accountable for failing to meet expectations and for maintaining consistency in how employees are treated. As in most areas of life, it is very important that employers do what they say, and say what they do. In other words, make sure that your practices are consistent with your rules, and that your rules are consistent with your practices.

4. Consistently Follow and Enforce Your Employment Policies

Perhaps the most effective way for employees to prove discrimination in court is to establish that they were treated differently from another employee for similar conduct or performance concerns. To use a simple example, if two employees both miss five days of work, they should receive the same consequence, unless there is an objective basis to treat them differently. If two employees get into a fight at work, they should receive the same discipline unless the employer can establish that one employee was more responsible for the altercation.  

This is important because in these examples, one employee will be older than the other, or one will be a man and the other a woman, or one a Caucasian and the other a minority, etc. There will be some difference in legally protected characteristics between any two employees, and treating one differently than the other can lead to a discrimination claim. Consistency in enforcing and applying expectations is one of the most effective ways to avoid getting sued.

5. Provide Harassment, Discrimination, and Retaliation Training

Another effective strategy to avoid being sued is providing training to all employees on the company’s anti-harassment and discrimination policy. Employees need to understand what harassment is and how to report it. Providing such training is an effective way to manage employee behavior by emphasizing that the company will not tolerate harassment. And, under certain circumstances, providing harassment training can be a defense in court if an employer is sued for harassment. If an employer has a harassment policy and has provided harassment training to its employees, an employee’s failure to follow that policy by reporting alleged harassment as required under the policy can be a defense to a harassment claim in court.