For many large companies, settling employee lawsuits have become part of the cost of doing business. Employees file lawsuits for many reasons, but one thing they all have in common is that the company did something that an employee perceived as unfair. Whether it is a dispute over fair wages or an accusation of wrongful termination, employee lawsuits are costly.
According to a 2015 report from the Equal Opportunity Employment Commission, one of the most common reasons for employee lawsuits is workplace discrimination. Out of the 89,385 workplace discrimination lawsuits filed, the largest percentage, at 44.5%, were for claims of retaliation. Unlawful retaliation is defined as an employer taking adverse action against an employee for participating in activities that are protected by statute, such as serving as a witness in an investigation of violations of employment law.
7% of the lawsuits were for claims of discrimination based on race and 31% were for claims of harassment. Others claimed discrimination based on disability, sex, age, national origin, or religion. Less common were suits based on the Equal Pay and Genetic Information Non-Discrimination Acts. Labor law experts cite a number of other common causes of employee lawsuits, including unpaid overtime and commissions.
Violations of workplace safety conditions are a common reason that employees file complaints or grievances. It is essential to address any complaints regarding unsafe working conditions or equipment immediately, and to document all actions taken to remedy the situation. Any employee that is injured as the result of inaction after a formally filed complaint is likely to file, and win, a lawsuit. For manufacturing businesses, providing adequate safety equipment is a must. Experts advise that for every job within a company, the risks and potential hazards of that job should be assessed, especially if the job involves storage or transport of goods. After a comprehensive assessment, the next step is to eliminate as many of those workplace hazards as possible. Investing in the safety of your employees is one of the most important investments you can make in your workplace.
To remain effective in an increasingly global society, employment law must continually evolve to keep pace with changes in the workplace caused by rapid technological advances. Unfortunately, those advances are occurring more rapidly than changes to existing employment law and the creation of new employment law that addresses issues that have never before existed, such as outsourcing and telecommuting. The current class action suit against Uber illustrates the increasing difficulty of classifying employees.
While employment law is becoming more complex, there are a few simple things employers can do to establish and maintain a safe, non-discriminatory workplace and reduce the likelihood of an employee lawsuit.
Asking the right questions, and avoiding the wrong ones, during an initial job interview is one of the most important factors in preventing a future lawsuit. In addition to following EEOC guidelines, it's a good idea to ask prospective employees why they left their last position. Their answers can provide insight into what kinds of working conditions they find unacceptable, which is valuable information you can use to determine whether changes are needed in that particular area of your business. Finally, avoid making promises regarding the duration of the job during the interview.
Clear and Concise Policies and Procedures
Every employer should have an employee handbook that outlines the performance requirements of each position within the company. The handbook should outline measurable goals for advancement within the company, including specific actions employees can take to achieve those goals. It should also include a process for reporting grievances and a reasonable time-frame for addressing them. Many employers have found it a worthwhile investment to have their employee handbooks reviewed by an employment lawyer.
Regular Performance Reviews
Performance reviews are an excellent tool to for complimenting employees on their strengths as well as helping them develop strategies to compensate for their weaknesses. Equally important, performance reviews provide written documentation that can legally justify a raise, bonus, or disciplinary action in the event of a dispute.
Educating Managers and Supervisors
Managers and supervisors must be trained in how to give effective feedback and properly document employee performance, which includes documenting any problems as they occur. To create and maintain positive working relationships, they should fairly accommodate the needs of employees whenever possible. Following the policies outlined in the handbook, they should promptly investigate and resolve any complaints.
Implementing Employee Suggestions
A TINYpulse survey of over 300 companies with employees providing 40,000 anonymous responses, concluded that employees' relationships with one another are even more important than their relationships with their supervisors. Cultivating company loyalty begins with supervisors demonstrating appreciation for the value of their employees' ideas as well as their hard work. However, the best managers find ways to promote satisfying working relationships between them. Employees who feel like valued members of a team with a shared goal rarely sue their employers.
Clear communication and consistently fair treatment are the foundations upon which job satisfaction, company loyalty, and businesses that not only survive, but thrive, are built.