1. Maintain Consistent Work Policies. Businesses should establish specific policies for the way they treat employees and their conduct in the workplace. These policies should be written and applied consistently to all employees. If exceptions are made for certain employees, allegations of discrimination could lead to costly lawsuits.
2. Stay Current with Changes to the Law in Your Industry. All businesses at one time or another are affected by local and state regulations, state and federal statutes, and court rulings. Particularly in the employment context, failure to follow current law could lead to such problems as misclassification of workers or improper payment of wages and overtime. Errors such as this could lead to serious consequences with state and federal authorities, as well as employee lawsuits for claims such as wage theft. A regular review of your current policies and work practices to ensure that they are compliant with current legal standards is essential to prevent and/or minimize legal action against your business.
3. Document, Document, Document! Whether interacting with customers or employees, steps should always be made to document any incident or transaction, particularly if there is a complaint or problem. With customers, it may be preparing a comprehensive agreement or writing an email or letter outlining complaints made and the solution offered. When it involves an employee, any complaints or incidents should be documented in writing in detail, so that anyone from the outside can see what transpired and any corrective action that was made to resolve the situation. If a situation cannot be resolved, an explanation as to what occurred and the reason for the outcome should be documented. Litigation can be prevented or become less likely with proper documentation stating that the situation was properly addressed.
4. Properly Train Your Employees. Often, improper or nonexistent training leads to lawsuits by both customers and employees alike. An employee needs to be properly trained in the handling of his or her daily activities at the company and to understand the proper way to interact with customers as well as employees. This is particularly true at the management level, as it will be up to the manager, foreman, or other supervisor to oversee the employees and instruct them on appropriate conduct. Managers should not only be trained in customer service and interaction, but more importantly management should be trained in all aspects of employment regulations, company policies, and human resources best practices.
Even if your business is small and does not have general counsel or a human resources manager, you need to be prepared and organized in the event of a lawsuit. Assistance from outside legal counsel or other appropriate professionals can be a cost efficient, time saving, and proactive way to prevent costly litigation.
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