No business owner should want to have an employee lawsuit to deal with. But unfortunately, we live in a lawsuit-oriented age and lawsuits are sometimes unavoidable, even with good business practices. Employees sue for varying reasons, especially when they get fired. In every case, a lawsuit can be disruptive, time-consuming, costly, and can negatively affect company morale.
How Often Do Employees Sue Their Employer
In a word, frequently. According to Good Jobs First, since 2000, 99 percent of Fortune 500 companies have settled at least one sexual harassment or discrimination lawsuit.
The EEOC reported that in Fiscal 2022 they received over 73,000 new discrimination charges, a 20 percent increase over the prior fiscal year. The charges included complaints regarding disability, race, sex, age, national origin, color, religion, and equal pay.
The 8 Most Common Reasons Employees Sue Their Employers
Here are the 8 most common reasons employees sue their employers:
- Discrimination. Employees sue when they feel their employer has treated them wrongly due to characteristics defined by law as “protected characteristics.” Those include race, nationality, religion, gender, pregnancy, disability, veteran status, citizenship, pay disparity, and age.
- Wrongful termination. Employees can file a wrongful termination lawsuit if they feel their firing has taken place for an illegitimate reason. That can include a claim that “I had no notice that I was not doing a good job.” It can also take place if an employee is fired for “poor performance” after a “good performance” review.
- Harassment. This can be physical, sexual, or verbal harassment and can be in the form of unwanted physical advances or contact, requests for sexual favors, slurs, name-calling, offensive comments, jokes, and innuendos.
- Wage violations. If wages are not paid in full, a lawsuit can take place. Wage violations include employee complaints regarding being denied minimum wage, overtime pay, or time off. It can also include less obvious compensation violations like wrongful changes to overtime, bonuses, insurance benefits, and retirement plan contributions.
- Personal injury. Injuries can certainly happen in some work environments, but lawsuits can take place if an employee can prove that the employer knew about a dangerous situation and failed to correct it, resulting in the employee’s injury.
- Retaliation for protected activities. This can include dismissal for an injury or illness, or for whistleblower activities.
- Denial of reasonable accommodation requests. If an employee has a disability and requires special accommodations to do his/her job, the Americans with Disabilities Act (ADA) requires that the employer provide them, as long as the extra accommodations are reasonable.
- Inconsistent policy administration. An employee might sue if he/she is disciplined for breaking a rule while another employee is not disciplined for doing the same thing.
How to Avoid Occasions When Employees Sue
With good awareness, proper planning, good training, and good management practices, the risk of most employee lawsuits can be avoided.
First, understand employee laws, rules, and regulations regarding proper employee/employer behavior and responsibilities. Ensure you comply with all laws, rules, and regulations.
Second, create strong positive relationships with all employees. Treat all employees with respect.
Third, handle all employee issues in a timely manner.
Fourth, develop comprehensive job descriptions for every position. That keeps each employee and his/her supervisors on the right track. Have written policies and/or an employee handbook to guide you. Additionally, define what success is for each position.
Fifth, avoid surprises. When an employee is terminated, a defined process of warnings, documented work performance, and shared information should have taken place.
Sixth, provide appropriate on-the-job safety training for all employees.
Seventh, protect your company with comprehensive commercial liability insurance.
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