Every day, you hear the news of the rise in lawsuits. What if your company becomes an unwilling part of this? On average, companies with less than 100 employees face at least 5 lawsuits.
In recent news, JBS Food Company and Tyson Foods agreed to settle for USD 127.30 million for an employee wage-fixing case. The American lawsuit system costs small businesses at least USD 160 billion in commercial liability. Yes, lawsuits can get expensive for employers.
Did you know that business lawsuits can even lead a company to file for bankruptcy? This happens when the company doesn’t have a good legal defense or enough financial resources to fight the case against the suing parties.
As a business owner, it’s important to know the reasons your employees can sue you. In this blog post, we’ll discuss the common incidents at the office that can lead to this.
#1. Harassment
Statistics suggest that workplace misconduct and harassment affect 52% of employees. Just last year, an American agency filed a lawsuit against Tesla, alleging that they harassed Black factory workers.
In office environments, 80% of people have observed and experienced inappropriate or unethical behaviors. This could be a type of discrimination against someone’s age, gender, religion, and sex.
Let’s say an employee complained about weird advancements from a coworker. However, you didn’t have the proof to hold someone liable and thought of letting it slide. In such cases, employees can file a harassment or discrimination lawsuit. You’ll have to eventually pay over USD 50,000 in punitive damages.
If left unaddressed, this can lead to your workplace becoming hostile, intimidating, unwelcoming, and inappropriate. That’s why your company will need clear anti-harassment policies and effective reporting mechanisms. Performing prompt investigations and taking impartial actions can help foster a respectful work environment.
#2. Unsafe Working Conditions
Your business premises can often be the cause of the lawsuits. Let’s say there is poorly maintained machinery or harmful substances. These can pose significant risks to any employee’s health and safety.
Usually, employees will go down the legal route if your company has ignored safety regulations and hasn’t addressed workplace hazards. This falls under the purview of personal injury law. The revenue generated from personal injury was USD 57 billion last year, proving its popularity.
Without a safe working environment, employees can get injured or become ill. As a result, this can lead to loss of work and expensive medical bills.
Victims will eventually hold the company responsible and seek compensation for the damages. They will file a lawsuit with the help of an experienced personal injury lawyer. According to Russell & Hill, these attorneys work tirelessly to guide the plaintiffs through complex legal avenues and ensure they win the case.
So, what can businesses do to avoid such an incident? Remember to remove obstacles from walking paths to avoid slip-and-falls, ensure safety protocols, and take your employees through proper training. Moreover, employers are legally obligated to follow Occupational Safety and Health Administration (OSHA) standards to ensure a safe work environment.
#3. Wrongful Termination
A news report suggests that eight migrant workers from Mexico were awarded more than USD 23,000 in lost compensation after winning a wrongful termination case. They filed complaints in 2021, and the judge ruled in their favor in 2023.
Usually, wrongful termination occurs when you’ve fired an employee without proper notice. These can violate their employment contract or legal rights. Sometimes, they can get fired due to whistleblowing or breach of contract terms.
It can also occur as a result of unwilling discrimination based on disability, race, and gender. Employees can be terminated for violating public policies by refusing to engage in illegal operational activities.
In either case, the employees facing wrongful termination can sue your company. This can be in retaliation to the business’s decision to protect their rights. They can claim that you fired them based on discrimination, which is a breach of their contract. The American government actually encourages such employees to seek legal counsel and exercise their rights under the labor law.
As a solution, your company must adhere to the contractual and legal guidelines to avoid facing potential legal consequences. Following proper procedures during termination and ensuring clear and documented reasons can also help.
According to Forbes, lawyers will either charge a contingency fee, have a flat rate, or take hourly payments. For example, a small business lawyer will charge USD 150 to USD 325 an hour.
Based on this, you can invest in the company’s legal defense. Or, you can simply avoid making the aforementioned mistakes.
For instance, keep your company safe from harassment and discrimination by having strict policies. When terminating an employee, remember to go through the proper channels and provide enough feedback to support the decision. Most importantly, you must create a safe working environment to prevent accidents.
Also Read: How Arc Flash Training Improves Workplace Safety Standards
