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Protect Against Employee Litigation

WGSF Newswire:  Protect Against Employee Litigation

By:  Michael E. Fiffik, Esquire

Employment-related claims are increasing at a dramatic rate. More than 40,000 employment lawsuits are filed each year and well over half of them are employment discrimination complaints. In addition to these suits, the Equal Employment Opportunity Commissions (EEOC) processes over 82,000 administrative charges of disability, race, national origin, sex and other forms of discrimination annually. Here is some practical advice to protect against employee litigation.

DEFINE WORK EXPECTATIONS When an employee is terminated, it should come as no surprise. Your expectations of any employee should be thought out in advance and communicated to the employee, preferably in writing. Employees must know how success will be defined and how they are doing. Spend time at least annually reviewing the employee’s performance and giving feedback. Write down the results of those meetings and have the employee acknowledge receipt of your evaluation of their performance and improvement goals. Although a small-business owner is not legally obligated to take and document progressive disciplinary measures, it is a good practice regardless of company size. In the event of a lawsuit filed by the employee, this documentation will be important evidence to substantiate the reasons for the employee’s termination or lack of promotion.

TERMINATE WITH CARE At the moment of termination, an employee can feel either inflamed or treated fairly. To help ensure a less combustible situation, deliver the message face to face but keep it brief. Resist the temptation to get into a detailed discussion of the reasons for the termination. If you do not intend to contest the employee’s claim for unemployment compensation, let them know that at the time of firing. Consider offering terminated employees a severance amount that would “smooth things over” and require them to sign a release of claims to collect it.

CONSIDER LIABILITY INSURANCE Premiums and deductibles are not cheap, but neither is defending a lawsuit. Defending even a simple employment claim could cost at least $20,000 and one that is more complex over $100,000. It is also crucial for small-business owners to negotiate with their underwriters for the right to select their lawyer, and for a requirement that the insurance company get the owner’s consent before settling. It is also important to seek a per-claim, not per-claimant, deductible.

FOLLOW THE LETTER OF THE LAW You need not do anything wrong to be sued. But when you are facing a lawsuit, it helps to be able to prove you have done everything by the book. This includes posting all labor- and employment-related materials in the workplace that are required by state and federal governments. Employers should draft employee handbooks with assistance from a trusted employment lawyer and make sure employees sign any handbook updates.

GET SERIOUS ABOUT TRAINING Even if you have only 10 employees, you should consider sponsoring regular training courses on discrimination and other workplace issues. You’ll learn a lot and hopefully your managers and employees will learn what behavior is to be avoided.

The experience of our business lawyers is perhaps most effectively used by clients to avoid or minimize the risk of litigation. Our attorneys can assess risks, help you comply with complex employment laws, develop employment policies and practices and provide training to supervisory personnel. You can find more information about the services that we provide to businesses at

Mr. Fiffik leads the business practice of Welch, Gold, Siegel & Fiffik, P.C. He can be reached at 412.391.1014 or at



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