Steps to Take When an Employee Sues Your Business

Steps to Take When an Employee Sues Your BusinessAny business can run the risk of getting sued by an employee. A lawsuit can do serious damage to your company, so it is critical to consult a corporate business attorney as soon as you receive notice that you are being sued. These steps can help you protect your reputation and finances and put you on the right track for dealing with a lawsuit.

Be Proactive

Although you treat your employees well and offer great pay, benefits, and a positive work environment, there is always a chance a worker may feel they have been wronged in some way. If a current or former employee makes a complaint or you are aware that they may be disgruntled, talk to your lawyer to get your lawyer’s thoughts on the matter. If you have an HR specialist, keep them in the loop and make a plan for how to move forward.

Contact an Attorney If You Receive Notice of a Complaint or Lawsuit

Before a lawsuit is filed against your business, you will likely receive a demand letter from the employee, their attorney, or another organization such as the EEOC. This letter may ask your company to take corrective steps and threaten to sue if these recommended measures go ignored. It is normal to be frustrated and angry if you or your company is accused of wrongdoing, but do not contact the employee or respond to the letter in any way to avoid risking further legal peril.

Instead, stay calm and seek the counsel of a business lawyer who is well-versed in handling employee claims. Whether your company is faced with an employment lawsuit, personal injury claim, or another matter, an experienced attorney can assess the situation, advise you of possible outcomes, and determine a course of action to protect your personal and professional interests and your company.

Protect Your Finances

Depending on the type of lawsuit, you may already have insurance that can help safeguard your finances. For example, if an employee is suing you due to an injury your employee sustained at work, your worker’s compensation or your general liability insurance company may cover it if a claim is submitted. Employment Practices Liability Insurance (EPLI) insurance is specifically designed to provide coverage against claims related to workplace-related issues such as discrimination, harassment, wrongful termination, and retaliation.

Regardless of what the lawsuit is about, do not automatically assume that your insurance will cover a claim, as the circumstances surrounding the lawsuit may make it a non-coverable event. If you receive a legal demand letter or notice of a lawsuit, contact your insurance company as soon as possible.

Safeguard Yourself Against Future Lawsuits

Unfortunately, the lawsuit you are dealing with may not be the last. Creating a risk mitigation plan, having a business contract attorney draft or review any employee agreements, and providing a comprehensive employee handbook outlining policies, rules, and guidelines can prevent problems before they start. Whether you run an office or a factory, keeping up with employment and labor laws and OSHA safety standards can help you avoid litigation as well.

Our experienced business lawyers in West Chester handle all aspects of business law, including succession planning, employment issues, business entity formation, litigation, and more.