As a small business owner, you have a very full schedule. You likely devote time each day to monitoring employees, tracking sales and brainstorming improvements for your business. Getting sued is probably the last thing on your mind.
No small business owner wants to think about the stress and financial strain that a lawsuit could bring. But lawsuits against small businesses are not uncommon – and they are often filed by employees.
One key way to protect yourself from legal trouble is by recognizing why an employee might sue. This way, you can take preventative measures. Here are three main reasons that employees sue small businesses:
- Discrimination: During the hiring process, it’s important to comply with the Americans with Disabilities Act. This means never asking about your potential employee’s religion, children or disabilities. And of course, you cannot discriminate based on that person’s race, age, socio-economic status, gender, religion or physical activity.
- Wrongful termination: Firing due to discrimination is one form of wrongful termination. Another form is retaliation – which is firing an employee who has filed a discrimination or harassment claim. Less common cases of wrongful termination include firing an employee for refusing to do something illegal or for whistleblowing.
- Wage violations: Often, wage law violations by small business owners are honest mistakes. But that reasoning won’t hold up in court. To avoid a lawsuit, you should ensure you’re up to date on all employment law. This includes laws relating to wage, overtime and time off.
Nobody wants to deal with a lawsuit – especially one that is preventable. By educating yourself on the top reasons that employees sue, you can protect yourself and your small business.