In this day and age, many small business owners are very concerned about avoiding employment lawsuits. It seems that everywhere you look, stories abound of small business owners getting involved in employment litigation. These types of litigation can be costly and damaging to the morale and reputation of small businesses. While employment litigation is often a cost of doing business in today’s world, there are a number of things a small business owner can do to protect against and employment lawsuit. Two very important things that an employer needs to do is to communicate and document the employer’s expectations and the employees’ deviations from those expectations. While those two things seem very simple, they can mean the difference between getting slapped with an employment lawsuit and avoiding one altogether. An, in the event a lawsuit is filed, these steps are often the difference in whether an employer can successfully defend itself from the allegations the lawsuit contains.

Document Employer Expectations

How To Avoid An Employment Lawsuit

Oftentimes employment lawsuits are filed by former employees who are upset about being let go. They typically allege the reason for their termination was an unlawful motive. An easy way to reduce the risk of that common type of lawsuit is to communicate clearly and in writing to employees the expectations set for them and the consequences that can result if they fail to meet those expectations. An employee manual is the perfect way to present and document those expectations. Have each employee sign an affirmation that they received and read the manual upon starting their employment. That way, there is never an argument that the employee did not know the rules or expectations of employment.

Document Corrective Actions

How To Avoid An Employment Lawsuit

Once you have an employee manual in place, if employees fall short of the expectations clearly documented in the manual, the employer should discuss the problem with the employee and document the discussion and resulting correction on a corrective action form signed by the employee and placed in the employee file. If a small business owner is consistent in that practice, when a problem employee is let go, that employee’s file will speak for itself and provide clear support for the real reason he or she was let go, greatly reducing the risk the employee could successfully allege an illegal motive for the termination.

While there is no guaranteed way to prevent an employee from filing a lawsuit against a small business owner, clearly communicating the expectations and documenting an employee’s deviations from it places the employer in a strong position to defend any lawsuit that is filed. Additionally, former employees are less likely to find an employment law attorney eager to take or advance their case when their employment files are filled with well-documented corrective actions for violations of clearly established and consistently enforced rules.


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