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How Small Businesses Can Reduce Risks Of Employment Litigation

Posted on in Business Litigation

Business owners face challenges at every stage of growth and development, and these challenges change over time. In the beginning, the biggest challenges tend to be things like finding customers and staying financially solvent. Of course, trying to operate on your own without any employees can also contribute to burnout.

As your business grows, you may finally be able to hire employees. But this comes with its own set of challenges and potential risks. Many small business owners are unprepared for the risk that they could be sued by an employee claiming discrimination, harassment or wrongful termination. According to a recent analysis, business owners in California are about 40 percent more likely (than the national average) to have an employment charge filed against them.

The results come from the 2015 Hiscox Guide to Employee Lawsuits. According to the study, companies based in the United States with more than 10 employees have at least an 11.7 percent chance of facing an employment charge. The risk to California business owners was 40 percent higher than that.

If your business is sued by a current or former employee, it is obviously in your best interests to seek the help of an experienced business law attorney. But the risk of facing such lawsuits can be significantly lowered by working with a business law attorney from the beginning. Measures that could prevent lawsuits include:

  • Drafting comprehensive and enforceable employment contracts
  • Drafting comprehensive and enforceable confidentiality and non-compete agreements
  • Ensuring compliance with anti-discrimination and anti-harassment laws
  • Ensuring compliance with wage-and-hour laws, including overtime pay

Working with an attorney may initially seem like an expense you don't need or cannot afford. But as with many things in life, preventing problems is a lot cheaper than trying to fix them later on. In this way (and many others), working with a good business law attorney is a wise investment.

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