Employment litigation is exploding, and employers are searching for new ways to reduce the risk of being sued by their employees for such things as discrimination, wrongful termination, and harassment. From the initial pre-employment inquiry to the final termination notice, employers can minimize their exposures to liability by taking some basic preventive steps. The following is an outline of some helpful hints and costly mistakes.

Hiring Employees

• Exercise care in hiring. The single best way of avoiding employee lawsuits is careful hiring practices.
• Know and follow your company’s hiring policies and procedures.
• Do not rely too heavily on a resume. It is the employee’s best opportunity to cast their own credentials in a favorable light and hide past problems. A written employment application, a sound interview process, reference checking, and other techniques should be used to verify information on the resume.
• Use proper interview techniques. Interviewers should avoid making representations concerning the job or the applicant’s long-term future with the company. To the extent that such representations become necessary, the interviewers should attempt to give a realistic impression of the company and the job duties. If interviewers create false impressions in the applicant, that person will become disenchanted rapidly once those expectations are left unfulfilled. If possible, conduct interviews in teams, and make and keep good interview notes. This will prove invaluable if the applicant subsequently makes claims arising out of the interview process.
• In screening applicants, consider the candor and honesty displayed during the application and interview process. If an applicant has been less than honest, it is unlikely that they will make a trusted employee.
• Always obtain a detailed employment history, including inclusive dates of employment and reasons for leaving each prior employer. Especially watch for frequent changes in employment, unaccounted-for gaps in employment, and reasons for leaving prior jobs.
• Obtain and check references prior to hiring.
• Consider conducting background checks. Don’t forget compliance with the Fair Credit Reporting Act, which regulates background checks.
• Prior to hiring, consider the use of pre-employment testing, including drug screening, and skills, personality, honesty, and psychological testing.
• Be courteous in rejecting applicants. Detailed reasons for rejection normally should not be given.

Effectively Handling Problem Employees

• Document, document, document!
• Attempt to be fair and consistent. But avoid references to such words in dealing with employees. Other words to avoid include “just,” “good cause,” “company shall,” “employee will be granted,” “employee is entitled,” and “job security.”
• Don’t represent to employees that they will be employed for a specific duration.
• Follow the company’s policies and procedures.
• Handle problems with employees expeditiously. Because handling problems with employees is distasteful to most managers, there is a tendency to ignore the problem and hope that it will go away. This not only has the effect of reinforcing the employee’s undesirable conduct, but also can cause resentment by other employees. Pointing out a deficiency too long after the fact loses impact and leaves more room for the employee to deny your observations. Also, implicitly, many employees feel that their transgressions have a very short “statute of limitations” and that it is unfair for you to point out such problems too long after the fact.
• Administer discipline confidentially. If an employee feels publicly humiliated, they are more likely to take legal action to redeem themselves.
• Conduct severe or sensitive disciplinary meetings in the presence of a company witness.
• Provide the employee an opportunity to give his or her side, but maintain control over the time, place, duration, and participants in any meeting.
• Document shortcomings and corrective action taken. It is one of your few opportunities to create evidence in support of your defense in the event that charges are filed.
• Watch raises and bonuses. No matter what you tell a marginal employee, they may perceive the raise or bonus as being based on merit.
• Do not enter into any written agreement or understanding with an employee without approval from the CEO.
• Be accurate in the reasons given for disciplinary action. In most cases, a reason should be given. If no reason is given, the employee may assume that there is an illegal motive. Also, employees will often recognize an untrue reason and may assume that the real reason is discrimination. Once given, a reason is difficult to change.
• Watch your comments. Ethnic or sexist jokes or remarks concerning an employee or a protected class can prompt discrimination charges.
• Use progressive corrective discipline, but make the penalty fit the infraction.
• Get the facts before taking disciplinary action. Give the employee the chance to give his or her side.
• Watch performance evaluations. They are a double-edged sword; you may be creating evidence against yourself. Evaluate accurately or not at all.
• Do not use performance evaluations as a substitute for employee counseling or disciplinary action.
• Recognize when you are getting in over your head. Get help from your employment counsel before making a mistake.

Terminating Employees

• Lay the correct groundwork. Where possible, use progressive discipline prior to termination. Document deficiencies.
• Seize the opportunity for a clear termination of a problem employee. Timing is everything!
• Be careful of the reasons given for termination. In some cases, it may be best not to give any reason or explanation, although this is the exception rather than the rule. Employees who are not given any reason are more likely to assign an illegal reason. If a reason is given, it generally is best not to go into great detail. A broad description of the reason will leave the employer’s options open should litigation arise. On the other hand, if a limited reason is given, the employer may become locked into that reason, even if other factors were considered. Avoid expressly giving reasons that are inflammatory or cannot be supported, even if they are being considered, but make sure that the reason given does not preclude use of these other reasons should litigation arise. Don’t put the reasons in writing.
• Where possible, have a company witness present.
• Like all disciplinary actions, terminations should be handled confidentially. If an employee is publicly humiliated, they are more likely to take legal action to redeem themselves.
• Where appropriate, offer the employee a chance to resign. Many employees file charges because they are primarily concerned with having a “black mark” on their record as a result of being terminated. Offering the employee the chance to resign, and thereby save face, may relieve these fears. Additionally, if the employee chooses to resign rather than be terminated, your case may be easier to defend.
• Consult with the human resources or an employment attorney for especially high-risk or sensitive terminations. Any time a termination involves an employee in a protected class, consideration should be given to consulting an employment attorney. Also, if the employee has complained of discriminatory practices or threatened legal action, an attorney should be consulted in advance of termination. Employees with a known history of filing suit also are high risk. Employees with a common interest may serve as a mutual support group and induce one another to file a charge. Termination of pregnant or recently disabled employees always should be preceded by consultation with an employment attorney.
• Conduct exit interviews of departing employees where feasible. Sometimes you can learn things about your operation and areas of needed improvement that have previously been undetected or unaddressed. This also can give the employee a needed opportunity to vent.
• As a part of the exit process, collect keys, passes, employer identification cards, and any other company property, but do so without making the employee feel like a criminal.

Disclaimer: This discussion is generalized in nature and should not be considered a substitute for professional advice. Readers are advised to contact counsel before embarking on any of the options discussed in this article.