Reducing Lawsuit Exposure: Eleven Things Your Company Should Know

Law Gavel on Bible You must do everything possible to avoid work-related lawsuits, but obtaining Employment Practices Liability Insurance (EPLI) to protect your business from workers who believe their legal rights as employees of the company have been violated, is a vital backstop. Here are eleven important things your company should be aware of in order to reduce your exposure to a potential lawsuit:

  1. It may be illegal for an employer to fire a worker to deprive him/her of large commissions, vested pension rights, a year end bonus or other expected financial benefits.
  2. It may be illegal for companies to fire workers who return to work after an illness, pregnancy or jury duty.
  3. It may be illegal to fire workers who complain about a safety violation or other wrongdoing.
  4. It may be illegal to fire a worker in a manner inconsistent with company handbooks, manuals, written contracts and disciplinary rules.
  5. It may be illegal to fire a worker who is over 40, belongs to a protected minority, or is a female, primarily because of such personal characteristics.
  6. It may be illegal to fire a worker who received a verbal promise of job security or other rights which the company failed to fulfill.
  7. It may be illegal to fire a long-term worker when the punishment does not fit the crime and other workers were not similarly treated.
  8. It may be illegal if an employer fails to act according to the terms of a written employment contract.
  9. Avoid firing workers for “job performance” who have received excellent performance reviews and appraisals and have been given copies of such performance reviews; never inflate performance evaluations for this reason.
  10. When possible, try to obtain an employee’s resignation rather than be fired. When workers resign they often waive claims to unemployment and other severance benefits.
  11. Confirm all severance arrangements in writing to document the final deal that has been made. Be sure a release is prepared and signed by the terminated worker to protect your company.


© Copyright 2021. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.