Avoiding employment claims and lawsuits

Eilene Verret and Gibson Pratt discuss how to prevent major employee issues

PM_employee_Lawsuits_600x300While it may not rise to the same level of alarm as your front desk telling you a 60 Minutes film crew and interviewer are in your waiting room asking to speak to you, a claim or lawsuit filed against you by a former employee can be just as problematic. And, it promises to have a very long and disruptive shelf life. It will unquestionably be an emotional and disruptive force in your practice, and it will result in lots of money trading hands between you and lawyers.

“Are you telling me I can’t terminate an employee any time I want to,” you ask? Yes, you can. It is true that while most employees do not have written employment contracts and are considered “at-will” employees in most states, that does not insulate you from claims and lawsuits.

There are two primary attacks for the disgruntled former employee to launch in an effort to obtain money from you. The first is by way of a claim of discrimination filed with the local labor department or the U.S. Equal Employment Opportunity Commission (EEOC). Those claims are typically not screened well at the EEOC and are generally based on allegations of unfair treatment due to race, color, religion, sex (including pregnancy), national origin, age (over 40), disability, or genetic information. They can result in the EEOC proceeding against you or issuing a right to serve letter to your former employee. The second is a lawsuit filed directly against you for the creation/maintenance of a hostile or abusive work environment which is based on harassment rather than discrimination. So, how do you minimize, if not altogether eliminate such potential disasters?

Maintain written employment policies
Regardless whether you create an employee handbook or simply post them online for employees to view, this is the single most important step to protect you as an employer. Outline the necessary procedures for employees to follow in the event they believe they have been subjected to discriminatory behavior under Title VII of the Civil Rights Act, i.e., age discrimination, sex discrimination, or racial discrimination, the Americans with Disability Act, or the Family Medical Leave Act. Employers should make payroll policies available to employees to avoid costly wage claims, and everyday operational policies to reduce unemployment claims.

Create job descriptions
Doing so allows an employer to clearly outline the responsibility, requirements, and expectations for each position. Present the written description to an employee upon hire, so they may review and sign it. This document should become part of the personnel file.

Develop a comprehensive performance management program
Regardless of an employee’s performance, schedule and conduct performance reviews after the first 90 days of employment and upon annual anniversary dates. Set measurable and realistic performance goals, and determine how the supervisor will help the employee succeed and reach those established goals. Communicate in a timely manner if an employee is not meeting those goals. Don’t ever assume an employee knows that he/she is not performing up to your expectations. Make sure to discuss with them when necessary.

Provide employee training
An employer is ill advised to throw an employee into a new position or task to sink or swim. The employee is set up to fail from the start, and your practice will be the one to suffer the consequences. Whether it is simple internal training among peers or a 2-day seminar offered by an association or company, training is worth its weight in gold.

Maintain fair and consistent treatment of all employees
Labor laws are put in place to protect employees. However, there are several areas that are not regulated, but could still cause an employer legal headaches. They include time off (paid and unpaid), work schedules, and compensation. An employer should never show favoritism. If you have written policies as outlined above, then follow them.

Perform employment verification and reference checks
They are not easy to get because all employers are wary of a lawsuit. However, there is always one failproof question you can ask, and nine times out of 10, the answer speaks for itself. “If given the opportunity, would you hire this individual again?”

Severance agreements
You can consider entering into a written severance agreement with the employee you intend to terminate by offering to pay some money he/she would not otherwise be entitled to, measured by weeks or days of salary in exchange for a full and complete release of all claims he/she could raise against you, whether known or unknown. It is worth the money in most cases to eliminate the risk.

Employment Practice Liability Insurance (EPLI)
Lastly, employers can secure EPLI, but with deductibles that can be high, it simply guards an employer against catastrophic lawsuit loss. Everyone has the right to file a lawsuit. You have the knowledge to protect yourself against one.


Gibson Pratt is Vice President and General Counsel of OrthoSynetics. He left his law firm in San Diego, California where he was partner specializing in corporate transactions and litigation to join OrthoSynetics in 2001. He received his BA degree from the University of Arizona and JD from California Western School of Law.

Eilene Verret, PHR, Director of Human Resources, has been employed by OrthoSynetics for 15 years. She received her Bachelor of Science Degree in Business Management with HR Concentration from Louisiana State University, and she is also a Certified Professional of Human Resources.

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