Employment liability suits

Recent U.S. federal statutes make you, as an employer, responsible for compliance with a host of "employment related" regulations. The federal government and the court system is quite serious about this one. If you run afoul of the regulations you can be held liable. You make hiring and firing decisions everyday. Unfortunately, some pizzeria owners do it by the seat of the pants. These days, that can come back to bite you in the same place! Listen, pizzerias are subject to the exact same laws as any other business. You need to be aware of and follow these laws or you just might wind up in court over a "simple" hire and fire issue. The end result of these federal and state laws makes employers of all sizes, public and private, susceptible to employment lawsuits from their employees.

Here are some of the regulations you may be subject to:

  1. The Civil Rights Act of 1964 (Title VII) as amended in 1991makes jury trials available to all employees seeking recovery for workplace discrimination under federal laws.
  2. The Americans with Disabilities Act of 1990 Protects millions of Americans categorized as disabled against workplace discrimination.
  3. A 1993 Supreme Court ruling stated that that proof of psychological injuries was no longer necessary to win a harassment case.
  4. Pregnancy Discrimination Act of 1978
  5. Age Discrimination In Employment Act of 1967
  6. Equal Pay Act of 1963
  7. State & City Anti-Discrimination Laws These laws can sometimes be even tougher on employers than federal law Check your state and city discrimination laws.

Think that's scary? Here's the real problem. In 1998, the U.S. Supreme Court gave a 'blueprint' to lawyers across America on how to present a successful claim against you. For an employer, the problem is the decision. States said that in order to hold a company liable for the discriminatory or harassing actions of its supervisors, it is no longer the burden of the employee to prove that a company had knowledge of the bad acts of its supervisory staff. It is now the burden of the employer to show that it did everything humanly possible to seek out, and prevent these acts. Now, you as an employer can be absolutely liable for acts of your supervisors, whether you know about it or not. Look, the sad truth of it is that employment lawsuits are the hot ticket in law firms these days. I personally know of one Madison Avenue (literally) Law Firm that just made its newest and youngest a partner – he specializes in employment lawsuits. In order to get to be a partner you must bring in revenue in large amounts and with surprising regularity. He does!!!

Nightmare Scenarios That may Be Waiting to happen To You:

  • Wrongful Termination – Did you fire for cause? Or was it age discrimination?
  • Failure to Hire – Was your decision legitimate? Or did you discriminate?
  • Sexual Harassment – "He said he never touched anyone." Now prove it.
  • Handicapped Discrimination – Do you even KNOW your responsibility?
  • Family Leave Act – Are you subject? Do you have a policy?
  • Sexual Orientation – Are you "gender blind"? Or are you biased?

The High Cost of Being Sued

The net effect of these federal and state laws makes pizzeria owners of all sizes susceptible to employment lawsuits from their employees. So, you have some expensive problems to deal with:

  1. Defense Costs: Do you have $25 thousand or so laying around to retain a lawyer to defend you? Well, you will need experienced labor law defense counsel to protect you and maybe other employees against the allegations. Even a groundless allegation must be defended! If you don't, that fact alone can be viewed as an admission.
  2. Settlement Costs: If the worst happens and you are found guilty of the allegation, the costs might just put you out of business! Among the many costs are settlements, judgments, back-pay bonds, pre-judgment interest, post-judgment interest, appeals, administrative charges and possibly more.
  3. The Emotional Cost: Dealing with allegations of this type can be emotionally paralyzing. You need experienced well-trained staff to pick up the burden.
  4. Take steps to protect yourself!

Here are some 'nuts & bolts' things you can do to protect yourself:

  • Formulate a company policy that clearly states your "zero tolerance" to any discrimination or harassment.
  • Communicate that policy. Put it in an employee handbook. Put it on your web page. Hand it out with employment applications. Put it anywhere employees can get easy access to it!
  • Have a compliance procedure that is direct, open, anonymous and retribution free.
  • Really try to do the 'right thing'. You set the tone for how things go in your shop. Let everyone know that you just don't tolerate anything that could be remotely construed as being in violation of the statutes.

Finally – get a partner in this venture. You really should consider purchasing insurance for this one. Here's why:

  1. The stakes are high – too high to go it alone.
  2. It provides legal defense.
  3. Most insurance companies require you to have a compliance program and they will even give you a prototype for free. If you hire a consultant for compliance or even buy a "kit" the cost may come close to the insurance premium.
  4. Most companies include a 'hot line' service for day-to-day questions and answer dialogue.

The bottom line

Your employees can and will sue you if they have the chance. It's up to you to protect yourself and your family. If you do nothing else, put a compliance program in place. Sit down with your lawyer and get a cost estimate on this. He will bill you for the time, but, it's worth it for prevention (and it will give you an idea what you'd pay if you had to have a defense) – or call an HR (human resources) consultant and get their price for a compliance program. What you can't do is do nothing! Feel free to call me at (201)-945-3100 if you have any questions on this. If I can't answer your question I'll get you "state specific" help from one of our people on the ground in your state!