7 Keys to Avoiding Employment Lawsuits

The oftentimes very public employment lawsuits brought by tens of thousands of disgruntled ex-employees each year can embarrass and financially destroy your business. Before your business (and really, you as owner or your managers) is ever accused of discrimination, wrongful termination, or FMLA violations, among many others, you have a better option. It is within your control to proactively empower your HR department and win before lawyers or the government gets involved.

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Do not undervalue your HR department’s gate-keeping function — preventing and mitigating employment lawsuits begins with your HR department and its tools, culture, and best practices. To mitigate or simply avoid employment lawsuits, you must:


  • To steer clear of lawsuits, fund and empower your HR department. To win before an ex-employee even contemplates a lawsuit, empower your HR department to be more than just about hiring, compensation, benefits, and employee relations. An empowered HR department promotes your company’s success by engaging, training, mentoring, and inspiring your employees to feel safe, appreciated, and supported.
  • An empowered HR diligently communicates with your employees and documents everything. An empowered HR is accessible and transparent to everyone as it consistently and objectively applies your written policies and procedures.
  • An empowered HR serves as the central station in keeping abreast of the ever-changing laws and regulations governing your business and maintains an open line of communication with management — and not just as it applies to employment matters. By properly funding and empowering your HR function, you will confidently steer your overall business trajectory consistent with laws and regulations and mitigate and, more often than not, altogether avoid employment lawsuits.


An empowered HR department starts with custom-tailored policies and procedures. We often refer to these documents as the Company’s Constitution, which can take various forms. Among others, these include a Code of Business Conduct, an Employee Manual, and stand-alone policies and procedures tailored to your industry-specific compliance needs.

Of course, these documents provide for crucial instruction, among many others, regarding employee discipline, discrimination, and harassment, complaint procedures, safety, confidentiality, and compensation standards. But these are only foundational matters. Employers must be mindful of the intersection between employment and industry-specific compliance laws and unforeseen events like the present COVID-19 pandemic.

To properly respond to novel challenges, and empowered HR department knows when to seek guidance and best practices advice from objective third-party professionals.

For these reasons, securing template HR policies from the internet is a mistake.

In any case, employers should seek professional help to draft or review their existing policies and procedures (and to tailor and periodically update them, noting that compliance is never a static matter). Proper legal advice will also flag problems if you use template employment or severance agreement or releases.

As in all things contract and documentation, procuring templates from the internet translate to an unnecessary gamble. Failure to implement the right tools and seek legal advice misses the opportunity to mitigate or simply avoid employment lawsuits and government interventions.


Proper communication and best practices for employee performance management are the single most important acts your HR can do to combat an employee’s initial reaction to being terminated; the initial reaction being, “to sue.”

Human beings (and employees are human) do not excel at being objectively self-critical. Accordingly, when terminated without a reason — which is perfectly legal in at-will employment states, even on a whim — this leaves the employee to make up their own improper or illegal reason for being fired (which their lawyer will champion). This is where good communication and performance management practices avoid lawsuits and government inquiries.

First, from the first interview to the moment an employee is terminated, your HR function must be exacting in its communication with the employee. Good communication takes on many forms. For example, communicating to the employee the functions and responsibilities of the job. Good communication also includes proper onboarding and training.

This lets your employees know what is expected of them and makes it easier later on for HR to highlight and correct problems in their performance. Indeed, your HR should communicate like a coach, both to new and existing employees.

Regular verbal praise and constructive criticism give the employee feedback so that they always know where they stand — well before any discussion of progressive disciplinary action or termination is ever had.

Second, when an employee has not improved after (well-documented) verbal coaching, you should not be hasty to fire. First, your policies should provide for and you should institute in the appropriate case, “progressive discipline” (“PIP”) or other forms of “written counseling.”

Of course, any progressive discipline process must be consistent with your existing procedures. When implementing a PIP, always plainly communicate to the employee (in writing) the problem, the detailed goals for what it is that you expect to be corrected, and the consequences for failure. Depending on the type of issue, the PIP might take various forms.

It may relate to attendance or skills matters, working with other employees, or workplace safety, among many others. Whatever the issue, your HR communicates your requirements, the consequences for failure to correct, and gives your employee a reasonable timeline to improve.

Thereafter, HR must do more and follow up with PIP-related extra support or training, because in the end, if you do all you can do, your employee will not be surprised when you terminate. Proactively addressing and exactingly documenting employee problems (and your actions to address and correct the same) before termination will tend to smother plaintiff lawyers’ motivation to sue on behalf of your ex-employee; that is, the evidence will be in your favor.


Proper communication and performance management of your employees is crucial, but if you fail to document your actions, the employee (or their lawyer) will argue that it did not happen. This is where proper documentation comes into play. First, before hiring (and for every job at your company) you must have a carefully drafted job description.

Thereafter, when performance or other issues arise, HR must simultaneously document everything that happens and when it happens — including any verbal coaching or conversations. Make no mistake, judiciously investing the time and resources to memorialize everything will pay hefty dividends when you are faced with a weakly-evidenced accusation.

Accordingly, when documenting progressive discipline, put the PIP in writing. The PIP must be in simple language and communicate expectations and consequences. Finally, the PIP must include the employee’s written acknowledgment of their understanding of what is required of them and the consequences for failure.

Of course, exacting documentation extends to many other employee-related matters. Whether it involves an employee OHSA or sexual harassment complaint, any of which may require an investigation, your HR function must adopt a culture of rigorous documentation. When lawyers or the government get involved, proper documentation will mean the difference between winning and losing.


Safety in the workplace means keeping your employees from harm. It includes much more than employee injury or illness. It also includes protecting your employees from, among many others, sexual or verbal abuse, intimidation, or harassment — and not only from other employees but from visitors or guests to your business.

Keeping your employees safe translates to treating them with respect and building trusting relationships. In this manner, your employees know that they are important to you. For this reason, your Company’s policies and procedures should explicitly identify safety standards and set out procedures for addressing deviations any of which may affect the safety of your workforce.

When you consistently enforce your safety policies, investigate and remediate deviations from them, and regularly train your employees (including procedures for reporting any safety concern) you go a long way to protect your business from lawsuits and government interventions.

Importantly, you also protect against accidents and actual damage to your employees, which independently impacts your bottom line.  Indeed, when you identify and correct safety issues, you build an environment for your employees to thrive in; you boost morale and increase productivity in addition to avoid lawsuits.


When workplace safety, discrimination, or retaliation concern comes to your attention, do not delay, follow the instructions set out in your procedures and investigate.  Employers must remember that the key to avoiding lawsuits is to respond and resolve similar claims similarly and consistently. For example, if you punish an employee more than another in a similar situation, document why you did so; if you investigate one complaint but not another, document your explicit business reason for not doing so.

Failure to act consistently in investigating and implementing resolutions are the very types of facts that plaintiff’s lawyers like to highlight when they sue you.

Nonetheless, when appropriate, you should consider the complaining employee’s help in the investigation. Of course, you should be mindful that investigations be done confidentially and not intrude into employee privacy matters.

In addition, throughout an investigation, employers should be careful to not compound their exposure by subsequent/additional retaliation or harassment claims. Investigations can be tricky. For this reason, employers should seek outside help. For example, when you determine that an investigation’s objectivity or critical assessment may be compromised.

In all cases, carefully document your findings, decide on and implement resolutions, and when appropriate, inform the complaining employee of the resolution. This does not mean that every issue raised will require a time-consuming investigation and remediation, but the key to avoiding lawsuits is that you transparently address, document, and communicate your resolutions to the problem and seek professional help in appropriate circumstances.


If you are concerned about being sued, you may consider asking the departing employee to sign a release as part of a severance agreement. More often than not, a severance package paid to a departing employee in exchange for a release of all potential claims is a better investment than defending an employment lawsuit. Nonetheless, take note that severance agreements (in most cases) should be drafted by your legal counsel.

One size does not fit all. Indeed, depending on the facts and circumstances (and for it to be valid or binding on the employee), a severance agreement/release must not come about through coercion, must allow the employee a specific timeline to decide whether to sign (or even revoke their agreement), must not be written in legalese and it must be clear on the rights the employee is waiving — noting that when entered into with employees over 40 years of age, the severance agreement must also be compliant with the federal Older Workers Benefits Protection Act (an amendment to the Age Discrimination in Employment Act).

Although the decision to enter into a severance agreement/release presents with exacting challenges, it almost always serves to protect employers better than an alternative escalation through litigation.


While implementing the guidelines set out in this article will go a long way to prevent employment lawsuits and government intervention, you and your HR department should take every opportunity to have a working knowledge about the federal, state, and local laws and regulations that apply to your business. Just as a sampling of the federal laws you should be knowledgeable about:


Title VII protects employees against discrimination in the workplace as to specific protected characteristics — race, color, national origin, gender, and religion — and as may also be demonstrated by a “disparate treatment of” or “impact on” these protected groups. Also, Title VII prohibits harassment and retaliation. Under Title VII, employers may not discriminate about any term, condition, or privilege of employment. This includes recruiting, hiring, promoting, transferring, training, disciplining, discharging, assigning work, measuring the performance of, or regarding the provision of benefits to any employee. Title VII applies to all private and public employers with more than fifteen employees and is enforced by the Equal Employment Opportunity Commission (“EEOC”).


The FSLA establishes minimum wage, overtime pay, employer recordkeeping, and child labor standards. It applies to private employers and federal, state, and local governments — noting that states concurrently have laws regarding the same protections with which employers must also comply.

Employees exempted from the FSLA’s minimum wage and overtime rules include most salaried employees and independent contractors. Nonetheless, the FSLA requires employers to maintain time and pay records for all employees and to inform their employees of their FSLA rights by prominently posting official posters in the workplace.


The EPA is part of the FSLA and mandates that men and women in the same workplace doing substantially equal jobs be given equal pay; noting that under the EPA, “substantially equal” is measured considering the skills, effort, responsibilities, and working conditions nature of the work. Employers should note that the EPA covers more than salary. It covers any manner of compensation; including vacation and holiday pay, travel reimbursements, life, and health insurance benefits, overtime pay, profit sharing options, stock options, and bonuses.


The ADA prohibits discrimination against physically challenged individuals. A “disability” under the ADA is an employee’s physical or mental impairment that substantially limits one or more major life activities, having a record of such an impairment or being regarded as having such an impairment. If an employee qualifies as disabled, they are entitled to “reasonable accommodation” as long as they can carry out their job roles without any hassles.

An employer does not have to implement an accommodation if it amounts to an undue burden considering, for example, a significant expense in light of the employer’s size, finances, or nature of business.

Whether an employee has a disability under the ADA is a matter determined on an individual basis (i.e. the ADA does not specify covered disabilities).  Moreover, the ADA excludes certain employee conditions, for example, current drug use, compulsive gambling, and pyromania, among others. ADA violative employment actions (against individuals who are qualified to perform the essential functions of a job with or without reasonable accommodation) is not just limited to termination matters.

An ADA violation can lie in not promoting or hiring qualified individuals or refusing to make reasonable accommodations for known disabilities. Specific reasonable accommodations might entail, among innumerable examples, providing for the ability to sit down for certain amounts of time, or flexible hours, or oral instead of written performance reviews. The ADA applies to all private and public employers with more than fifteen employees and is enforced by the EEOC and the Department of Justice (among others).


The FMLA allows eligible employees of covered companies to take unpaid leave (but protecting their job) when the leave is related to personal or family medical issues. It provides for job security after the employee returns from their leave of absence. Upon the employee’s return from FMLA leave, they are to be reinstated to the same or equivalent position.

Employers should be aware that some states’ law provides for additional leave than that afforded under the FMLA. Generally, the FMLA applies to employers with more than 50 employees and provides eligible employees to go on 12 weeks of leave for 12 months.

Employees can sue the employer for discrimination or retaliation if the employee is terminated for taking FMLA leave.


The ADEA protects employees against discrimination in the workplace based on age (individuals 40 years or older are protected under this law). Under the ADEA, discrimination may be demonstrated by “disparate treatment of” or “impact on” covered employees. The ADEA also prohibits harassment; for example, creating a hostile work environment that unreasonably interferes with a covered employee.

Generally, to avoid liability for age discrimination, an employer must establish a “bona fide occupation qualification” which demonstrates a requirement that an employee is younger than the employee claiming discrimination — for example, an airline pilot. The ADEA applies to employers in industries affecting commerce that have 20 or more employees.


If you would like more information about our firm’s employment litigation and compliance practice, we encourage you to get in touch. Our lawyers and consultants have significant experience in helping clients develop and implement comprehensive employment policies and procedures and can instruct on best practices to avoid or mitigate employee lawsuits or government scrutiny.

When it comes to avoiding or mitigating your company’s potential exposure as a result of employment litigation, acting quickly can be essential to maintaining a position of strength in the matter at hand. We provide complimentary initial case assessments, and our federal defense lawyers can take action immediately as necessary to protect you or your company.

  • Drafting, application, and interpretation of Employee Handbooks, Codes of Business Conduct and employment and industry-specific compliance policies and procedures
  • Harassment, and Retaliation Claims
  • Discrimination, Wrongful Termination and Wage and Hour Claims
  • Severance Agreements and Post Employment Covenants/Covenants not to Compete
  • Breaches of Contract and Fiduciary Duty
  • Hiring, Promotion, Termination, Discipline, and Reductions in Force
  • Compliance and Employee Misconduct Investigations
  • Pandemic Employment Issues.


Interesting related article: “What is HR or Human Resources?