Is your business prepared to get sued? It can happen to organizations of any size, including nonprofits, and it will probably happen to you, says S. A. “Sam” Murray, CEO of ManagEase.
“It’s almost inevitable. If you’re in business long enough, you’re going to get sued for something,” says Murray. “It could be employment-related, it could be product-related, but we live in a litigious society, and eventually it’s going to happen.”
Smart Business spoke with Murray about what to do if your company is sued and how working with an HR firm to establish policies now can improve your chances of prevailing in a lawsuit later.
How can you prepare now for a potential lawsuit?
Having regular HR assessments of policies and practices is something that you should institutionalize at your company. Businesses should do this at least once a year.
During the assessment, the HR company will interview managers to identify how they’re implementing policy, review records to make sure that recordkeeping is consistent, and examine compliance factors such as how you’re paying people and how frequently you’re conducting training.
Having the right documentation, policies and practices won’t prevent a lawsuit, but it is a good liability management strategy and will give you ammunition in the event that you are sued. Those documents become most valuable when you have to defend yourself, and working with an HR firm to make sure those documents are in order will pay off down the road.
Is the number of lawsuits against employers increasing?
We are seeing a rise in the number of employee disputes because, as the economy has gotten tighter and more challenging for businesses, they have made some tough decisions, and sometimes employees don’t agree with them.
Perhaps a layoff is made but the employee feels that he or she was singled out and unfairly selected. Jobs are hard to find right now, so laid-off employees are anxious to find some way of getting revenue, and that could be in the form of a lawsuit against a former employer.