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4 Lawsuits Your Business Should Avoid (And How to Avoid Them)


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It’s not uncommon for employers to operate under the notion that they are complying with the law when it comes to workplace policies and procedures. Nowadays, a greater number of businesses are out of compliance, unbeknownst to them. With an increasing number of discrimination and harassment lawsuits, employers everywhere need to take action to protect themselves and their business.

According to the Insurance Journal, California, Illinois, Alabama, Mississippi, and the District of Columbia are among the riskiest states for employee lawsuits, citing that “Businesses in these states and jurisdictions face a substantially higher risk of being sued by their employees compared to the national average….”

Is this a concern for your company? If so, read on to learn how your company can stay compliant and avoid some of the most common lawsuits in the workplace.  

1. Personal Injury

Injury lawsuits can take many forms—from work-related injuries to vehicle accidents. Injuries that take place on company time or property are susceptible to lawsuits, completely within the confines of the law. With more than three million nonfatal workplace injuries and illnesses occurring in 2014, as reported by a study conducted by the U.S. Bureau of Labor Statistics, the possibility of injury in the workplace is not one to be taken lightly.

Consider implementing safety training and OSHA training for your employees and supervisors in an effort to curb on-the-job injuries. Employees exposed to a risk management program can positively impact your business tremendously. With ever-changing regulations, staying abreast of the latest employment-regulated workplace safety information can help keep your company stay in business. 

2. Discrimination

The Civil Rights Act prohibits discrimination in the workplace based on religion, color, race, sex, or national origin. Other protected classes with discriminatory guidelines revolve around age and disability. Employers may not discriminate when making employment decisions such as hiring, firing, promoting, etc. When employees feel an act of discrimination has been committed, they must report their claim to the EEOC.   

Discrimination cases are all too common in the workforce; avoiding discrimination lawsuits is simple; educate yourself on the law. Always make sure business protocols and procedures are followed—and when they aren’t, be sure to document it.  

3. Harassment

Harassment can occur in many ways, from derogatory jokes to unwanted and inappropriate name calling in the workplace. Harassment can be dealt by a manager, supervisor, or co-workers. Often times, harassment claims are unreported due to a number of reasons; employees may be worried about losing their job or losing their chances of a promotion or they may fear ridicule from other co-workers. 

No employer wants to create an environment that is intimidating, hostile, or offensive. Implementing a harassment training and prevention program is ideal for educating your employees on  harassment considerations. Some states require an annual minimum number of training hours to be taken, so be sure to check with your state regulations to stay in compliance.

4. Wrongful Termination

The term “wrongful termination” is a comprehensive term that refers to any legal claim resulting in an employee’s termination that is against the law. Typically when a lawsuit of this type is filed, employees are asking their former employer to compensate them for  losses caused by their termination.    

Most employers hire employees on the basis of “at-will” employment, meaning an employee can be terminated at any time, for any reason (except a discriminatory or illegal one). With at-will employment, employers don’t need a valid reason, nor do they need to provide advance warning of any kind. Although most employers are safe-guarded from a lawsuit, it is still wise to have written guidelines in place that describe the termination process when positions are eliminated or reduced due to downsizing or restructuring.

You might also be interested in: 8 Best Practices for Telling Someone "You're Fired"

While the number of lawsuits is growing, it’s not impossible to avoid litigation. And, while you might be overwhelmed by the number of items requiring compliance with the law, keep in mind, there is help—especially for smaller businesses that don't have a full staff of litigation attorneys. Working with an outsourced human resources company can help you stay compliant with employment laws and regulations. 

Click below to download our free brochure to learn more ways that an outsourced human resources company can help you simplify and grow your business.

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