As an employer, you want to keep your business safe and that includes legal considerations. Employee lawsuits are an important aspect to consider, as well as the most common types of claims employees file against their employers. Once you’re aware, you can take steps to prevent these from happening and avoid any legal issues within your company.


Five common types of employee claims

Employee claims often arise due to disciplinary action a company has taken against an employee, as well as termination. Employers walk a fine line. On one hand, you want to ensure your company is staffed with hard-working and productive employees, helping you get work done to the very best standards. On the other hand, if employees aren’t holding up their end of the deal (e.g., they’re behaving in a way that violates policies, breaks company rules, etc.), you need to take action to preserve your company’s reputation, as well as maintain consistent output and customer satisfaction. The key is taking action to mitigate any of the following types of common employee claims:

  1. Discrimination on the basis of personal traits, including race, color, religion, national origin, age, sex, and disability.
  2. Harassment based on inappropriate interpersonal actions or relationships in the workplace.
  3. Retaliation, or the belief the employee has been disciplined or terminated because he or she acted out against the company.
  4. Wrongful termination, in which the employee believes they were let go for unfair or illegal reasons.
  5. Post-termination, when a former employee files a lawsuit claiming negative consequences of being terminated, such as emotional distress or defamation of character.


How to prevent employee claims

Employers can take proactive steps in an effort to ensure these types of claims never happen in the first place. This involves fair treatment of employees, documentation and excellent communication:

  • Help employees understand what is expected of them. Provide all workers a copy of your employee handbook that includes information on dress code, work schedules, medical leave, compensation, harassment policy, and other common Human Resources topics—the more comprehensive the content, the better. You should also create documents employees can consult for more information that covers important company policies. Topics can include performance evaluations, performance improvement plans, retaliation, code of conduct and harassment. Ensure all employees sign an acknowledgment form confirming they received and understand your employee handbook.
  • Maintain accurate files. Every employee should have a file that includes employment information, performance evaluations and detailed reports of any incidents that may have occurred.
  • Create an improvement plan together. If you do need to discipline an employee, do so only for legitimate, job-related reasons. Stay unbiased as you talk to the employee one-on-one about what you’ve noticed and how it affects the company. Let the employee share their side of the story. Then, work together to form a plan for improvement. Be very clear about what the consequences are if the employee does not improve. Document the discussion and add it to the employee’s file.
  • Make termination objective and straightforward. In other words: don’t make it personal. In the unfortunate event you need to terminate the employee, meet again privately in a neutral location to review well-documented facts and details of their job performance AFTER you’ve conducted a thorough, fair investigation. Be clear and consistent in your explanation. Choose the best time of day or week to minimize disruption to company operations. Have one or two other people at the meeting, including someone from HR. Treat the employee with dignity and respect, even if they show anger or frustration at the decision. Collect all company property from the employee before they leave the premises.


Need help managing risk at your company?

It can help to work with a trusted partner to avoid lawsuits and legal action, as well as other risks your business faces, and Odell Studner can help. To learn more, contact us today!