Starting a business isn’t easy, and as a business owner, you’re trying to make the company as lucrative as possible while keeping your activities within legal boundaries. Then it happens, an employment lawsuit. Borne from a loophole you have failed to recognize early on. It takes a toll on your business both financially and reputation-wise, and the threat of losing the lawsuit and closing your business is looming.
Employment lawsuits are rising as awareness spreads about the different kinds of allegations that have surfaced. These instances may or might not include harassment, retaliation, discrimination, and wrongful dismissal.
There is nothing wrong with raising awareness about these claims. However, some are made just for the sake of making money or destroying a company’s credibility.
It’s better to prevent these lawsuits from happening rather than facing them. Therefore, we recommend five steps to avoid employment lawsuits to give you and your business peace of mind.
1. Provide several avenues for complaints.
While this might seem counterproductive at first, providing several options to receive complaints allows the company to nip it in the bud before it becomes a full-blown lawsuit.
Address complaints early on to demonstrate that you value your employees and that their voice matters. This simple act often leads to resolution.
Providing more than one way for complaints to reach the management also allows for transparency in the company. Sometimes issues are kept hidden until they blow uncontrollably, causing irreparable damage to the company. It is best to set up a direct hotline to HR and a dedicated email for complaints to ensure that employees’ complaints are duly reported and not covered up by their supervisors, as in some cases.
2. Act on complaints as fast as possible.
This step is directly related to the one mentioned above. The urgency of the response to a complaint can be a deal-breaker, as employees who don’t find solutions in the lower levels are most likely to escalate the complaint to higher authorities. Acting fast on the issue works best for both parties as it aims to find common ground and a solution in a short period.
3. Document employees’ performance achievements and insufficiencies.
It’s standard practice for HR to document employees’ performance. One must record both sides, though; this practice serves many purposes. Performance documentation can serve as a basis for promotion, demotion, and termination. It also serves as a supporting document when an employee has filed a complaint or a lawsuit.
A document outlining an employee’s performance can hint at whether their complaint is valid. It’s easier to trace what could be causing their issues when there is a record of how they are doing and serves as fair practice for the company.
4. Be fair to all.
Better said than done, this step, however, helps you to deal with complaints and lawsuits with less frequency. Fairness in dealing with complaints means the same process is followed for everyone regardless of their position, race, or gender. It also fast-tracks solutions since everyone is treated the same way according to company policy.
Enforce fairness using the company handbook and be firm in implementing the policies. Constantly update this reference material so that it stays current and addresses various situations.
5. Keep the Golden Rule.
As a rule of thumb, treat employees as you would like to be treated – with respect. It might be overrated, but if your company consistently practices this, you keep your business efficient with satisfied, happy employees.
Aside from keeping productivity up and creating a good company climate, keeping the golden rule in your company also helps you deal with false accusations from your current or former employees. A good track record of being a fair and honest company tips the scales in your favor.
There is no perfect company, and no company policy can cover all of the loopholes that make employees file lawsuits and claim damages. Even with best company practices, a lawsuit will appear out of nowhere, with malicious intent. In this case, an EPLI will protect your business against these claims.
These five tips do minimize the instances of lawsuits filed against your company. When facing such cases, an established EPLI will support your company.
About Arroyo Insurance Services
Arroyo Insurance Services was officially established in 1986 but has roots dating back to 1950. Arroyo is one of California’s leading client-oriented and independently owned agencies. Arroyo has more than 140 employees with a combined experience of over 450 years, in 11 locations. Arroyo Insurance Services are committed to providing the best insurance and risk management services at the most competitive premiums and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today at (877) 220-4769.