How To Avoid Employee Lawsuits

how to avoid employee lawsuits

Avoiding employee lawsuits should be a top priority for every company. Luckily, by taking precautions such as implementing specific hiring and management rules, establishing an employee evaluation system, and securing legal assistance, a business can easily avoid them. 

Lawsuits are difficult to deal with, especially when an employee becomes emotionally involved due to unfair dismissal or unsatisfactory working conditions. Here are the best ways to protect a business and avoid employee lawsuits. Never underestimate how complicated employment law is. 

Provide Employee Handbooks 

An employee handbook should include the company’s code of conduct or quality management system (QMS) which outlines all the legal practices of the company, including day-to-day operations, appeals policies, and employee management procedures. An employee handbook will protect both the company and employees from discrimination, harassment, and unfair conditions of employment. 

Some companies may have a zero-tolerance policy on something specific, and employees need to be made aware of what this is, otherwise, they may not realize that they have violated company policy. A lawyer should also look over all employee handbooks to ensure they’re within legal boundaries. 

Understand The Rules 

Every business owner needs to have a good working knowledge of labor law and how to ensure that basic working conditions are upheld. Before any employee is hired, make sure that you have spoken with a legal firm, that your employment contracts are up to standard, and that all legal risks have a management plan in place. 

These are just some of the employee labor laws your business should know. Without the proper understanding of what is required as a business owner, you could pay thousands for legal representation. 

Define Job Descriptions 

This may seem unnecessary, but if more than one employee is in charge of a task, it may result in negative consequences later on. Employee responsibilities should be laid out to avoid both overlaps in expected tasks and possible shortfalls. Instead, delegate specific tasks to specific employees and ensure that there aren’t too many people responsible for the same thing. 

The company workload should be spread out equally among the staff, with more competent employees tackling harder jobs. If a particular department requires multiple people to oversee one duty to ensure quality, then that can be justified. 

Record Everything 

A business will always have tons of paperwork, but this is a good thing because it provides hard physical proof of what has transpired. A business that isn’t well versed in labor law may see an employee taking advantage to earn a bit of extra money. If, for example, an employee accuses someone of harassment, evidence will need to be provided in court if the business chooses not to settle. This can be video footage or email communications that either prove or deny the plaintiff’s claim. 


Employees and business owners don’t necessarily need to do something majorly wrong to have a lawsuit on their hands - a simple misunderstanding is sometimes all it takes to lead to legal proceedings. The main point is to equip the business with every mechanism possible to avoid an employee lawsuit. With these tips, businesses can ensure they are operating legally and under fair working conditions that won’t cause employees to file a complaint.

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