Owning a business means being prepared for the unexpected. For example, many California business owners never consider that they may become embroiled in a lawsuit with an employee. Business litigation can devastate a company by diverting essential resources, demoralizing staff and distracting owners and managers from keeping the business moving forward. Avoiding employee lawsuits is one of the most efficient ways to minimize these losses.

How to avoid employee lawsuits

In general, most lawsuits employees file against their bosses boil down to receiving unfair treatment. Employment decisions based on a worker’s race, color, sex, religion or other protected factors violate the rights of that worker. Hiring, promoting, training and other decisions should stem only from an employee’s qualifications and performance. An employee who feels mistreated on the job or is terminated as a form of retaliation may seek justice in the courtroom.
Few managers and business owners can get through a career without terminating an employee for failing to produce or other legitimate reasons. However, without adequate and consistent documentation, a boss may have difficulty defending against an employee’s accusations of wrongful termination. Keeping careful performance reviews, records of disciplinary actions and personal notes about employee encounters may benefit a business owner whose employee decides to cry foul after being terminated.
Breaches of contract are among the most common reasons for business litigation. Whether a business has a written contract or a company policy that implies a contract, deviating from the terms of that contract may result in a lawsuit that can cripple a business. This is why many California business owners seek legal advice for their policies, contracts and handbooks, and they turn to a skilled attorney when facing accusations of having treated an employee unfairly.