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Tips for Business Owners to Avoid Employment Lawsuits

As a law firm specializing in employer’s defense, we have seen firsthand the devastating consequences that employment lawsuits can have on businesses of all sizes. Even if an employer wins a lawsuit, the legal fees and costs can be significant. That’s why it’s so important to take steps to reduce your risk of being sued in the first place.

The most common types of lawsuits filed against employers are:

Other common types of employment lawsuits include:

  • Wrongful termination: This includes terminating an employee for an illegal reason, such as discrimination or retaliation.
  • Breach of contract: This includes failing to uphold the terms of an employment contract, such as providing an employee with promised compensation or benefits.
  • Defamation: This includes making false statements about an employee that damages their reputation.

Here are a few tips for reducing your risk of employment lawsuits:

  • Create and implement a comprehensive employee handbook. Your employee handbook should outline your company’s policies and procedures on a variety of topics, including discrimination, harassment, retaliation, and wage and hour laws. It should also include a complaint procedure for employees to follow if they believe their rights have been violated.
  • Train your employees on your company’s policies and procedures. Make sure your employees understand their rights and responsibilities under your employee handbook. You should also provide training on specific topics, such as preventing discrimination and harassment.
  • Train your managers on applicable workplace laws and company procedures.  In most cases, business owners will not be conducting meetings to deal with performance and other workplace issues.  Instead, your management team will be handling these types of meetings and taking disciplinary action when necessary.  Their training and preparation for these situations will play a critical role in maintaining compliance.
  • Maintain accurate and complete employee records. This includes records of job applications, resumes, interviews, performance evaluations, disciplinary actions, and terminations. Keep these records for at least three years after an employee leaves your company.
  • Conduct thorough background checks on all new hires. This will help you identify any potential red flags, such as a history of violence or discrimination.
  • Have a lawyer review your employment practices. A lawyer can help you ensure that your policies and procedures are compliant with all applicable employment laws.

In addition to the above tips, you may also want to consider purchasing employment practices liability insurance (EPLI). EPLI insurance can help protect your business from the financial costs of an employment lawsuit, even if you lose the case.


Reducing your risk of employment lawsuits is essential to the success of your business. By following the tips above, you can help mitigate your risk of being sued and protect your bottom line.  

If you are sued, it is important to contact an experienced employer’s defense attorney immediately. The earlier you seek help, the earlier you start on the path to the resolution. Our law firm has a strong track record of defending against the different types of employment lawsuits that arise. We can help you build a strong defense and find the best path forward to protect your business.  So, if you find yourself facing an employment lawsuit, contact us today to set up a consultation.  


PLEASE NOTE: This is not a representation, warranty, or guarantee of a future result or outcome. Every case is different just like every one of our clients.