How To Avoid Employee Lawsuit For Small Businesses

The worst that could happen to a small business is to be served with a court notice by a process server regarding an employee who had filed a lawsuit against its employer. The employee could be complaining for various reasons such as harassment, discrimination or violations of the employers when it comes to federal and state laws. The lawsuits are not limited to the existing employees of the company because former employees as well as incoming ones can also file one. Even if the business have a small contingency fund set aside for these cases, the fund will be easily eliminated during litigation and the owner will be distracted that he/she won’t be able to manage the business and lose profit in the process.

Here are some ways to make sure you avoid future lawsuits from employees:

  • Make yourself familiar with all the federal and state laws that apply to your case. Businesses in the United States are regulated by a lot of legal restrictions. If you are not sure, you can check out online the summary list made by the Department of Labor regarding federal statutes as well as rules that businesses must follow.
  • Before any problem happens, make sure to have an experienced employment law attorney at your payroll. A business will benefit a lot from hiring a qualified attorney including time and money. With a lawyer in your payroll, someone is in-charge of reviewing the hiring process of the company as well as the practices when it comes to employment.
  • Create a corporate structure which will enable the owners to protect their personal assets. It may come as a surprise but many businesses are operating under sole proprietorship and some under a corporate shell. If you have a small business and wants to protect your personal assets, it is best to operate under a corporation structure or a limited liability company.

Employees should be treated with equality and fairness. This may be considered a challenge for small businesses because of the collegial environment but it is important in order to avoid any lawsuit that might result to being served by a process agent.