Practices to Protect Your Small Business from Employee Lawsuits
by jdelung, Contributor
- Created: December 18, 2013, 8:01 am
- Updated: December 18, 2013, 8:02 am
Getting sued by current or former employees happens more often than you might think. In fact, the number of lawsuits filed regarding wage-and-hour laws alone in 2011 went up 32 percent from just three years prior. Don’t be too busy to check in and ensure you aren’t breaking laws or otherwise opening yourself up to a potential lawsuit — no small business owner has the time, or money, for that.
There’s a plethora of advice out there on the subject of protecting your business from lawsuits. Before you read on, remember, you should always consult your legal counsel to ensure you are complying with federal and state laws. Laws regarding certain practices, such as non-compete agreements, vary widely from state to state.
Information and resources on avoiding legal trouble
We’ve compiled a list of some of the most helpful tips from around the Web.
- Good intentions gone awry: This OPEN Forum article summarizes a whitepaper on how good intent regarding workplace flexibility could actually violate employment laws.
- Additional considerations on accommodating and hiring: SCORE expanded on the good intentions concept to make note that you must also accommodate disabled employees and pointed out the importance of hiring the right candidates the first place.
- Advice from someone who’s been there: A New York Times article earlier this year featured a small business owner who was sued by a former employee. The owner offers six tips to help small businesses prevent lawsuits from happening.
- An ounce of prevention is worth a pound of cure: Investopedia provides five tips for protection, including hire a competent attorney.
- Let’s talk about it: More tips are available from the Business Intelligence Group, including one important point — communicate. Clear, rational communication might just lead to a resolution.
- Go right to the source: Finally, it’s important that you review all of the actual laws and regulations with which you should comply. The U.S. Department of Labor has made this easy through its elaws website, a step-by-step tool that provides employment laws assistance for workers and small businesses. The site features ‘Advisors,’ which are virtual reports of applicable information based on responses to questions about your business. There are Advisors for Disability Nondiscrimination, the Fair Labor Standards Act and more.
When in doubt, consult your legal counsel. However, by taking some preventative measures, you could avoid legal issues before they start.
About the Author
I am an author for the the SBA.gov Community. I write about useful topics for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Our ongoing goal is to improve this site to meet your needs, so we're happy to receive your feedback and participation. Thanks for joining our online Community here at SBA.gov!
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