Want to Avoid Being Sued? Avoid the Following!

The top 10 reasons employers are sued are the following (presented at SHRM 2025):

1. Unhealthy Work Environment

Putting up with bullying, teasing, harassment. Remedy: create an environment that prohibits such conduct between and among employees. Managers and supervisors must be accessible, circulating among the employees at least periodically so they are known to be accessible. This includes regular contact with remote workers.

2. Neglected Leave Alternatives

Employees with serious health conditions may need more leave time than is available through standard programs. Simply terminating them without exploring alternatives may lead to a disability lawsuit. Checking out available alternatives to enable them to continue their employment status – whether in paid or unpaid status – can go a long way to maintaining loyalty … or at least avoiding hostility.

3. Misclassifying Workers as Contractors

The law is fairly clear on the difference between an employee and a contractor relative to the employer. If an individual is retained as a contractor, they must have a certain degree of autonomy. If the employer attempts to become too controlling, the individual’s status in effect becomes that of an employee, which puts a whole different set of rules and regulations into effect.

4. Untrained or Otherwise Poor Managers

First-line managers/supervisors are a critical component of a well-run company. The keys are training and good communication, along with clear expectations of their role. Failure by members of the management team to understand legal and ethical requirements of their positions can be a serious source of problems.

5. Ignoring Policies

Ignorance of or failure to follow company policies across the organization can lead to different – even disparate – treatment of employees between different supervisors. This can even lead to charges of discrimination. Management owes it to supervisors to provide consistent reminders and reinforcement of organizational policies and practices so they are followed consistently throughout the organization.

6. Payroll Errors

Few items are more sensitive than employee pay. The basic rule is “Get it right the first time!” Consistently verify pay rates, hours worked, etc., and ensure that the payroll system is accurate.

7. Botching Investigations

Take all complaints seriously. Do NOT simply “blow off” the complainant. Have a procedure in place in case an investigation is warranted, and ensure that the complainant receives a response – whether or not the answer is what they wanted to hear.

8. Inadequate Interactive Process

If an employee requests an accommodation, conduct a thorough investigation of the request. It is recommended that the company have a checklist of items to be considered in such a case. Whether or not the request will be difficult to honor, prepare a valid, credible response to give to the employee, to show that their request mattered and was taken seriously. This can avoid potential problems and potentially create goodwill that will be a boost to employee morale.

9. Not Revealing Termination Reasons

Even in an “at-will” state, just because an employee “can be terminated for any reason or no reason” does NOT mean that it is acceptable or advisable to do so. ANY termination should be backed up by documentation. Whether or not that is presented to the employee at the termination meeting depends upon the situation, but especially in the event of a contentious separation, it is absolutely necessary to have backup documentation of the reason for termination. Communication of the reason is certainly preferable if that is feasible. If no reason is given, suspicions are immediately aroused and may be difficult to deal with – even legally.

10. “Performance Review Sabotage”

A supervisor wants to terminate an employee for poor performance, but their ratings of the employee are all “Satisfactory” or above. The employee, being aware of those ratings, is justified in being suspicious of the “real” reason and may seek legal counsel or file a complaint with a relevant governmental unit – never a pleasant prospect for an employer.