How to Reduce Employment-Related Lawsuits

You may not realize it, but you could be a target of employment lawsuits. The Equal Employment Opportunity Commission (EEOC) has reported a 9% increase in discrimination charges for 2007. Race, gender and retaliation were the most frequently reported charges. The EEOC also stated that it settled over 72,000 charges filed in 2007, collecting $345 million in compensation for persons who claimed workplace discrimination. The weakening national economy has caused many employers to continue workforce reductions, so the number of charges from employees separated for economic reasons can also be expected to increase. In today’s litigious society, what can employers do to prepare and protect themselves from employment-related claims and lawsuits? Avoid making these mistakes:

  • Lack of an Employee Handbook/Harassment Policy.
  • Insufficient applicant evaluation process.
  • Inadequate or wrong documentation regarding employee performance.
  • Making the wrong personnel decisions.
  • Incomplete or inaccurate employment evaluations.
  • Not having or following appropriate procedures to investigate complaints.
  • Not providing timely required benefits information to employees.
  • Not structuring or documenting the selection process when faced with the need to reduce headcount to defend against possible discrimination claims.

A simple accusation by an employee can start the clock ticking on the expensive task of defending an employment-related wrongful act allegation. Many claims that are settled in arbitration or in administrative hearings cost employers $22,000 to $40,000 on average. Even those claims that are settled immediately cost a company an average of $7,500. Making sure you are complying with the law and have the correct policies and processes in place will minimize your company’s exposure to employment lawsuits and save thousands in settlement and litigation costs. Many employers consider purchasing Employment Practices Liability Insurance (EPLI) to help with these costs in the event of a claim of sexual harassment, discrimination, wrongful termination, etc. The Oasis Outsourcing HR Services Team can work with you and your managers on developing an Employee Handbook, Management Training and making employment decisions.