Do You Want To Stay Out Of Court?

As a law firm, we have members of our firm in court virtually every day of the year. However, our lawyers are in court as advocates for their clients. Generally, they are there because this is the profession which they have chosen to pursue, and they enjoy the task of working hard - both in and outside of court - on behalf of their clients.


However, it is much less pleasant to actually be a party to a lawsuit, especially a defendant, and thus face the possibility of a substantial monetary judgment being entered against you or your business. Although complaints from some members and interest groups in America about the litigious nature of our society are probably exaggerated, there is no question that in the United States, especially in California, tens of thousands of lawsuits are filed every day, and the people and businesses against whom lawsuits are filed are not necessarily bad people. Indeed, lawsuits have become an integral part of the process of conducting business, and the fact that you or your business are sued does not necessarily mean that you are a bad person, or running a bad business. In fact, it may not even mean that you have done anything wrong. Sometimes a lawsuit is unjustly filed and pursued, and never should have been commenced in the first place.


Notwithstanding the fact that a lawsuit against you or your business may be inevitable, there is no question that you can reduce the chances of being sued by concentrating heavily on the major problem areas that seem to lead to the filing of lawsuits more than other areas. In short, just as a doctor cannot examine and counsel his patient with respect to every single potential disease known to mankind, a good doctor will certainly concentrate his efforts in connection with the leading causes of death in the United States such as heart attacks and strokes. Similarly, a good lawyer will advise his client in the areas which, in recent years, have turned out to be most likely to lead to the filing of lawsuits.


One of the most common forms of litigation that businesses face today are lawsuits arising out of relationships between a business and its employees (usually ex-employees). Typical lawsuits filed in the area of employer/employee relations include lawsuits for sexual harassment, gender discrimination, racial or ethnic or religious discrimination or age discrimination. The following constitutes an important guideline to help you decease the chance of spending many of your valuable days in court: 


You might be discriminating even when you don’t think you are discriminating. Sometimes, an office needs a file clerk or part time messenger. Since many employers often think of these jobs as appropriate jobs for young people, such as college or high school students, a business may run an ad in the classified section of a newspaper of general circulation encouraging high school or college students to apply. Without intending to do so, a business which advertises for college or high school students may actually be engaging in age discrimination. After all, is it not true that a person with extra time on his hands, in his early sixties, could perform the job of a file clerk or part time messenger as well as a high school or college student?  In many cases, this is true.


As a result, a business cannot discriminate by seeking only young people for a particular type of job. It is important to remember that although an age discrimination lawsuit may conjure in one’s imagination the situation of a 70 year old person being fired and replaced by a 25 year old, age discrimination lawsuits are common with individuals over the age of 40 who believe they have been discriminated against in favor of younger individuals.


  • Don’t ask just because you’re curious. Often, when businesses are hiring employees, they unintentionally give the interviewee the impression that they are discriminating against the interviewee based upon an inappropriate reason such as age, gender or race. You may want to know whether or not a young prospective female employee will be getting married in the future, because maybe you think that if she gets married she will have to move out of state. However, if you ask the question, “Do you plan to get married?”, this is sometimes a red flag to a potential employee that a business owner has some type of bias against married female employees, presumably out of fear that a female employee, after getting married, will take a maternity leave. In the State of California, it is illegal to fire a woman because she is pregnant, and it can also lead you into troubled areas of the law if you attempt to exclude from employment certain individuals simply based upon the prospective female employee’’s intent to have children.


The best way to conduct interviews, or to instruct your staff on how to conduct interviews, is to only ask questions which are absolutely job related.


  • Oral contracts are not worth the paper they are written on. Once you have retained a new employee, you may want to consider reducing your employment agreement to writing. The written contract can specify a specific period of time of employment, or even state that either side may terminate the employer/employee relationship“at will”. If the employment relationship may be terminated “at will” this means that you may terminate the employee for any reason whatsoever, or no reason, as long as the employee is not terminated in violation of public policy such as an employee’’s failure to subject herself to sexual harassment. If you do not have a written contract with an employee, the relationship can probably be terminated “at will”, but this could change after a while.

  • Make sure your employee handbook is up to date. Most companies, regardless of their size, should have an employee handbook. It is also a good idea for each employee to be required to sign the handbook upon being retained, and to periodically sign various amendment or updates to the handbook.

  • The employee handbook is an excellent way to insure that all employees are treated fairly. As long as you apply the rules of the employee handbook to all of the employees in a fair and efficient manner, then all employees will be treated fairly.

  • Create a file. For every single employee in your business, you should have a file. An individual, such as an office manager or human resource executive, should be in charge of each of the employees’ files. Each file should contain all important material and documentation related to the employee, including all information and documentation provided to you by the employee during the interviewing process. This should help you explain why you hired one employee over another. In addition, any time an employee is reprimanded, you should make a note of the reprimand in the employee’s file. Most businesses which want to be careful about avoiding lawsuits tend to give employees written evaluations at least once a year, go over the evaluation with the employee together, and then obtain the employee’s signature on a copy of the evaluation, and then placing the signed copy of the evaluation in the employee’s file.


There is no guarantee that if you do all of the right things that you or your business will avoid being sued. However, every lawsuit against you or company costs money, and the less money you spend on lawsuits means more money for you and your employees.


Therefore, just as an individual evaluates his health from time to time to ensure that he does not suffer any unnecessary diseases or illnesses, a business should also evaluate its policies to minimize the risk of being sued.

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