Those starting new businesses and those growing existing ones often need employees to help complete various business functions. Hiring a new worker is an investment in the organization and also an expression of trust. A business owner or executive risks the possibility that a worker may do a poor job or might damage working relationships with clients, customers or vendors. There’s also the possibility that an employee might take legal action against the company.
Worker lawsuits can be very expensive. They can disrupt business operations and damage an organization’s reputation. The following are some of the most common reasons that employees decide to sue their employers.
A termination that feels wrongful
One of the most common reasons that workers take legal action against a company is frustration after losing a job. Recently terminated workers may try to claim that the company fired them in retaliation or that the firing was discriminatory. Both targeted terminations of single workers and mass staff reductions could potentially lead to wrongful termination lawsuits.
Claims related to unpaid wages
Workers in a variety of scenarios might allege that an employer failed to pay them their wages in full. Perhaps a worker claims that they deserve overtime pay for functions performed off the clock, or maybe a worker classified as an independent contractor alleges that they deserve additional pay because they are actually an employee. Any number of seemingly minor workplace decisions might lead to workers believing they have not received their wages in full and taking legal action against a company. Even assumptions that workers make about bonuses could sometimes lead to lawsuits.
Allegations of discrimination
Harassment is effectively a type of workplace discrimination, as companies either engage in or ignore misconduct targeting workers because of their protected characteristics. Discrimination could also look like lost opportunities or other unfair workplace decisions that affect workers who belong to a certain group. When workers reach the conclusion that a company considered race, age, sex, religion or other protected characteristics while making key employment decisions, they may try to sue the company.
Legal compliance is very important for businesses that bring on employees. Those who know the laws about wage rights, discrimination and wrongful termination can avoid operational mistakes that might lead to litigation. Those hiring new workers often find that addressing key concerns in contracts and handbooks can help deter unnecessary litigation by clarifying what the company offers its workers and how it intends to protect and compensate them. Being proactive about preventing worker lawsuits may benefit those running organizations that need to bring in new workers.