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Protecting Your Business From Employee Lawsuits

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  • Posted on: Jun 27 2018

Given the spate of high-profile sexual harassment cases that have been reported in the media, employers must understand their rights and responsibilities under state and federal employment laws. In particular, business owners must establish policies and procedures that clarify relationships with employees. By enlisting the services of experienced attorneys, you can protect your business from civil lawsuits brought by employees — here’s how.

Employee Policies and Procedures

Regardless of the size of your business, it’s important to establish employee policies in a handbook that clarifies the expectations of all workers and the company’s code of conduct. In particular, policies that should be covered include:

  • Anti-discrimination rules
  • Equal opportunity employment guidelines
  • Paid time off
  • Medical and family leave procedures
  • Social media and internet usage rules

Employee Classification

It is crucial to properly classify workers as exempt, non-exempt, or independent contractors. It is also necessary to establish compensation for hourly wages and overtime work in accordance with the Fair Labor Standards Act (FLSA). It is also important to consider any applicable state wage and hour laws.

Protect Intellectual Property

If you intend to bring new products to the market or your business holds other confidential information, it is essential to protect this valuable intellectual property. While it may be necessary to obtain patents and trademarks, employees can also be required to sign non-disclosure and non-compete agreements.

A non-disclosure agreement (NDA) prevents an employee from disclosing confidential information to anyone outside of the company. In a non-compete agreement, the employee agrees not to work for a competitor for a certain period of time, within a specific geographic region, after his or her employment ends. In short, well-designed NDAs and non-compete agreements can help your business prevent the misappropriation of your IP and the resulting costly litigation.

Business Insurance

While you can protect your business with a general liability policy, there are different types of insurance that can protect a business from certain disputes. Directors and Officers Insurance (D&O), for example, indemnifies executives from claims that are brought against them individually in connection with business activity. Another type of insurance — Employment Practices Liability Insurance (EPLI) — covers legal costs that arise from employee lawsuits over claims of discrimination, harassment, retaliation and wrongful termination.

Legal Representation Can Help Reduce The Risk of Litigation

In the final analysis, employment-related disputes that rise to the level of civil litigation can be costly and have an adverse impact on your business’ reputation. Legal representation can help you mitigate the risk of litigation and ensure that business operations run smoothly. Contact us today for more information.

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