There is an all-to-common growing number of events when a disgruntled former employee — or even an applicant you didn’t hire — brings a legal action against your company. The legal “fire” is lit and you are going to waste a lot of time and money on litigation. In fact, you may not win, even if you are right. In building a practice or business, you are constantly faced with business challenges that have nothing to do with your actual business service.
In that light, I will give you some advice or “heads up” thinking for you to be ready now rather than try to remember when you are sitting in front of opposing counsel in a three-hour or longer deposition on what happened long ago. Here are a few things you cannot do. You cannot terminate anyone due to discrimination, whistleblowing, complaints based on criminal activities at the company, sexual harassment, company policy and others. Defining what each of these terms means is very complex and unique to each company and circumstance and also way beyond the scope of this article. Understand anything written here is NOT legal advice which should be secured from attorney experienced in this area or any specific legal practice at the onset of any issue and full-involved at any point.
I am writing this to give you some practical ideas that I have found useful from one-business person to another. First, write, publish, distribute and secure a signature by every employee or contractor to all company policy documents including all updates and changes. Second, keep your company policy documents current with changing HR case law and even pending legislation. Remember your best defense is a good offense which means regular updates and notifications to all employees, contractors and others on key policies sets the stage for demonstrating your concern for these issues. For example, should an employee claim they been sexually harassed (not assaulted) by a contractor (not an employee), let them know that is may not be a legal offense but familiarize them with the specific EEOC and legal issues regarding sexual harassment. In the employee policy document, outline specific notification rules by employees and contractors as well set forth by the company and other legislative and regulatory requirements. That is, make policies an “all-hands” responsibility. Third, document, document, and did I say, document your business activities. I wish I could have said this better but this is one good reference from via HR.com Gloria Lewis, “The decision to terminate an employee should not come without prior warnings. The steps leading up to the termination should be documented in the personnel file of the employee. This should include the employee’s signed statement that they received a copy of the employee handbook detailing the company’s policies and procedures, verbal and written warnings, performance evaluations, and any other materials that the company deemed necessary to show disapproval of the performance, actions, or behavior of the employee.” Note the specifics in her comments, have employee signed receipt of company policy document, including all updates (which is often forgotten). There are other issues in the article that you should also review, click on her name for the complete article.
In other to keep this to a one-minute read, I leave with that Farmers has employee practices liability insurance, yet our goal is not just to help you after the tragedy but to avoid it to begin with. Please email me with any comments, thoughts, omissions and other ideas you think I may have missed or would like to share.
Farmers Employment Practices Liability can help cover your business entity, directors and employees if you are accused of wrongful termination, harassment, discrimination or other employment-related offenses. There are many other protections, please refer to the link above.