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Employer Lawsuits on the Rise — Is Your Company Next?

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Recent layoffs and corporate downsizing have led to a 15 percent rise in retaliatory lawsuits brought by disgruntled former employees against their employers whether they have a case or not. It’s a fact — unhappy ex-employees will sue you if they feel they have a legal right to do so. But your company doesn’t discriminate or harass its employees, so you’re safe, right?

Discrimination, harassment or other incriminating incidents occur in environments that support such events, even if that support consists only of neglect. Some employers saddled with mediocre employees don’t know how to boost those employees’ performance, so they just let them wither on the vine in a non-supportive environment in the hopes that the “deadwood” will eventually just give up and leave. But this just leads to employees feeling neglected and ignored by management — and if they can translate evidence of passive abuse into a lawsuit against the company, you’re in trouble.

What can you do? Actively support and motivate your employees if they’re performing poorly. Make sure your managers have the necessary skills and training to work with poor performers and encourage them to improve. Workers who feel that they have been treated fairly have no reason to sue.

At the same time, though, cover yourself with clear, unequivocal written policies on hiring and termination, including an “at-will” employment policy that gives either party the right to part ways without penalty. Apply supervision and disciplinary actions fairly and consistently, provide established procedures for stating grievances, and document every grievance and disciplinary action to make sure terminations have a legitimate basis.

And if an employee must go, you’ll sleep easier if you had them sign a claims release giving up their right to bring lawsuit as part of their severance agreement.

Dan Hettrich is the director of sales at Acadia HR located in Austin, Texas. He can be reached at or 512-745-2985.

Written by Dan Hettrich

December 17, 2010 at 4:50 am

Posted in Uncategorized

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