With the average cost of employment litigation topping about $150,000, ethical hiring and employment decisions are not only essential to keep your workplace culture moving in a positive direction but also to keep your company profitable and in the black. That figure doesn’t include preparing statements, negotiations, and representation.
With costs in employment litigation lawsuits on the rise, it’s important that your company take steps to prevent being involved in a lawsuit. Here are five ethical hiring and work decisions managers can and must make to save their company millions and even billions over the long haul.
Do Minimal Investigation. Checking references, calling on past employers, and verifying that the information on an application is accurate, will protect you from hiring an unethical and irresponsible employee. Sometimes the best way to tell someone’s character is to talk to a former employer.
Establish Standard Termination Policies and Procedures. Knowing ahead of time what type of activity can get you, your boss, or your employees fired will prevent future lawsuits for wrongful termination. Failing to explain why someone is being fired, even if you work in an at-will state, can lead to future lawsuits. Having upper management present at the time of firing an employee will create witnesses and prevent the “he-said-she-said” argument.
Get it in Writing. Sounds laborious, but a written explanation of why the employee is leaving the company can protect you down the road if the employee tries to sue for any number of things. It may also be wise to get information stating that the employee has returned all company property and deleted all data from their own devices. In the world of working from home, employees can store a lot of intellectual property on their personal devices.
Keep Records. From performance reviews to statute changes, keep everything. You want to make sure you have a good collection of employee files, not only to maintain organization, but to use to your advantage if you have to show a trend in history. These records should include disciplinary notices, promotions or demotions, payroll records, job applications, resumes, etc. It doesn’t seem like a lot, but it can help you out in the long run when an ex-employee comes back saying he was treated unfairly.
Take Action. One of the top reasons a company is involved in a lawsuit is for not taking action against a formal complaint. Acknowledging a legit problem could go a long way in reducing employee-related lawsuits. If a complaint arises makes sure to take it seriously, even if it doesn’t seem so serious. Eliminate problems before you have a real mess.
If you follow this list of ways to reduce employee lawsuits, you can help ensure that your company doesn’t fall into the trap of an ex-employee’s revenge. The last tip is to make sure your management is professionally trained in employment policies and practices to avoid any minor slip that could cost your company hundreds of thousands.
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