Employee Lawsuits

It's not your imagination -- employees are suing their employers more than ever before and winning big awards. In a recent nationwide survey, the law firm of Jackson and Lewis found that 64 percent of the employers surveyed were sued by an employee in the last year, 70 percent handled a complaint of sexual harassment, and over 90 percent handled some form of employee complaint.

Add to that the most recent data from Jury Verdict Research, which shows a median jury award of $204,310 in employment-related cases. That amount does not include either side's attorney's fees, which many laws require the employer to pay if he or she loses.

How much can attorney's fees be? The Employment Equal Opportunity Commission recently announced its second largest settlement ever in a sexual harassment case, in which Lew Lieberbaum & Co. agreed to pay $1.75 million. The company denied any wrongdoing but said that settlement was preferable to the cost of years of litigation. With a nearly 50 percent success rate in cases that go to trial, it's no surprise that employees filing suits at previously unheard of rates. But you can take steps to protect your business.

Know About the Law

Anyone who has employees should have at least a passing knowledge of the major employment laws at the federal, state and local levels. These laws all have similar goals to prohibit employers from discriminating on the basis of certain traits.

Various federal laws prohibit discrimination based on race, color, religion, sex, national origin, handicaps and age. Florida law prohibits all of these types of discrimination and also prohibits discrimination on the basis of marital status and retaliation against an employee for filing a worker's compensation claim. Most local governments, such as Lee County, also have ordinances prohibiting some or all of these types of discrimination. That's a lot of laws, but the up-side is that Florida is an employment-at-will state, which means you can terminate an employee for almost any reason not based on one of those traits.

Yes, The Law Applies to You

Many employers hedge their bets knowing major federal and state laws only apply to employers with 15 or more employees. But don't bet the business on it. Many local ordinances cover much smaller employers. The Lee County ordinance regarding discrimination, for example, applies to employers with as few as six employees.

Further, some claims including a claim under the Fair Labor Standards Act, a claim of wrongful termination or a claim of intentional infliction of emotional distress have no specific minimum employee requirements.

Even if you do not have enough employees to fall under any of the laws, it is becoming more common to see employees filing discrimination cases against their employer anyway, hoping for a quick settlement. It could still cost you thousands of dollars in legal fees and major headaches to have a totally frivolous case dismissed, and your chances of collecting your costs from a low-paid employee are not very good.

An Ounce of Prevention

The key to avoiding most employee-related lawsuits is prevention. That means maintaining a workplace where the employees feel they are being treated fairly and with respect. This will not prevent the occasional gold-digger from filing an action, however most lawsuits are filed by employees who -- rightly or wrongly -- think they have been mistreated.

Florida is an at-will employment state, but few employees are aware of this or what it means. A 1996 survey by a Washington University law professor found that 86 percent of the at-will employees she surveyed believed they could sue their employer for wrongful termination if they were terminated for reasons other than misconduct. That means seven out eight of the employees who were legitimately terminated think they have a case.

Most lawyers and human resources experts agree these types of lawsuits can be avoided by a few simple practices, such as giving at least one warning, giving an explanation of the reason for the termination and good timing of the termination.

An employee fired without any warning or explanation on Friday afternoon will stew about it all weekend and probably be calling attorneys first thing Monday morning. On the other hand, an employee who has been given a warning, given an explanation and is let go when he or she can start the job hunt that week is less likely to pursue a claim.

Even employees who think they should not have been terminated tend to sue less if the employer has explained the reason for the termination and if they believe they were treated fairly and with respect. Finally, many terminated employees just want to tell their side of the story. Even if you have made up your mind, an exit interview giving the employee a chance to speak his or her mind is a lot cheaper than letting him or her do it in court.

Put Out Little Fires

Judges and juries do not usually give out huge awards for minor, one-time incidents. Instead, they penalize employers who do not take action and allow little incidents to grow into the prevailing workplace atmosphere. For example, an employer generally will not be held liable for a case of sexual harassment if he or she takes quick and decisive action to stop it when first learning about it.

Let employees, including supervisors and owners or partners, know you will not tolerate even minor incidents that can make you liable. Be aware of the atmosphere in your workplace, determine the truth behind rumors and look for employees who are not getting along or seem to be avoiding other employees. When you find something amiss, take quick corrective action before it can grow.

When You're Right, Fight

Fairness and a good work atmosphere will help you avoid most employee lawsuits, but sometimes you get sued anyway. If you've been treating your employees fairly and with respect and you've been keeping abreast of what is happening in your workplace, you will either know about the lawsuit before it's filed or know that it is frivolous. Lawyers aren't cheap, but having a reputation as an employer who quickly settles can be even more expensive.

If you know what the law expects of you, you have treated your employees fairly, you have practiced prevention and you have put out the little fire but you still are sued, it's time to fight. Some lawsuits can't be avoided, but if you have good practices, the terminated employee shouldn't win. The lawsuit you win today may discourage several tomorrow.

Kevin Hubbart is a practicing labor and employment attorney exclusively representing management and is also the chief operating officer of HRIS Staff Management, a professional employer organization based in Fort Myers.