5 Common Workplace Lawsuits and How to Avoid Them

Steven Cook

Steven Cook

Steven Cook

5 min. read

Updated October 25, 2023

Many employers assume that because they are “good” to their employees, they aren’t breaking any employment laws. Although this is sometimes the case, employers are often surprised to learn about the causes of action based upon which employees can bring suit.

In order to be less susceptible to workplace lawsuits, employers should stay up-to-date regarding the various state and federal laws that affect them. Doing this is however much easier said than done.

Disclaimer: This article is intended to be general information only. Nothing in this article constitutes legal advice. Please consult with an attorney before making any legal decisions.

I’ve broken down five common types of workplace lawsuits that employers frequently face—all of which can often be avoided:

  1. Personal injury
  2. Overtime
  3. Discrimination
  4. Harassment
  5. Wrongful termination

Although these might seem obvious, the laws are quite nuanced and employers may not realize the smaller details that could help them avoid these lawsuits. Read on to get the lowdown on these common workplace lawsuits.

1. Personal injury

An employer’s nightmare is a personal injury lawsuit brought against them. The truth is, more often than not, they are quite preventable. Employers may be held liable for injuries that an employee suffers while at work, which are the result, at least in part, of an employer’s negligence, when acting reasonably within the scope of his or her employment. This might seem like a no-brainer and something easy to prevent, but consider that in 2012 alone, there were 2,976,400 recordable instances of workplace injury. Workplace injuries can and do happen.

Often, claims of on-the-job personal injury are covered by worker’s compensation insurance. This insurance prevents an employee from seeking damages in excess of the payments received pursuant to worker’s compensation insurance.

In order to avoid such lawsuits, employers need, at a minimum, to carry worker’s compensation insurance and to respond promptly to safety issues communicated to the employer. Furthermore, employers should diligently monitor potential safety hazards, follow published safety guidelines, and adequately train employees on workplace safety.

2. Overtime

Overtime can be tricky if not tracked and properly understood. The Fair Labor Standards Act, or FLSA, is a federal law that sets forth, among other things, overtime pay requirements for non-salaried, hourly employees.

To help prevent overtime lawsuits, employers should implement systems or processes that both accurately and correctly track the amount of time that an employee has worked. By making sure that these systems and processes are in place and working properly, employers can rest assured knowing they are taking proactive steps to monitor the hours worked by their employees.

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3. Discrimination

Unfortunately, discrimination is another common type of workplace lawsuit. An employee who is member one of the following protected classes can file suit against an employer if he or she has been treated unfairly.

Federally protected classes:

  • Gender
  • Race
  • Color
  • National origin
  • Age
  • Disability
  • Religion
  • Veteran status
  • Pregnancy
  • Citizenship
  • Familial status
  • Genetic information

State-law protected classes (varies from state to state):

  • Sexual orientation
  • Marital status

In the absence of direct evidence, like a written statement by an employer that a particular employee was fired because of his or her gender, the following four things must be proven as to the case:

  1. The employee is a member of a protected class;
  2. The employee is qualified and performing his/her job in a satisfactory manner;
  3. The employee has suffered an “adverse action” (such as termination or lack of promotion); and
  4. The “adverse action” was the result of the Employee’s membership in a protected class.

If a court is satisfied as to the preceding requirements, the employer must then prove, by records and other documentation, that the adverse action was the result of legitimate business reasons.

Avoiding discrimination lawsuits can be easy if you are aware of the law and prepared. Make sure that all business protocols, policies, and procedures are well documented and available to employees. Always document and retain records of employee reviews, poor performance, and tardiness.

4. Harassment

Although harassment doesn’t necessarily require that an employee be a member of any of the aforementioned protected classes, as bullying or flat-out hatred can apply to anyone, harassment is commonly associated with membership in a protected class. Incidents of harassment can range from seemingly benign statements or actions to outright hostile statements or actions.

Perhaps the best way to prevent harassment and discrimination is by developing and distributing an employee handbook and requiring regular review of its contents by all employees, especially those whose jobs include employee supervision or management. An employee handbook should not only set forth harassment rules and guidelines, but should also provide a discipline to those who violate such rules and guidelines.

5. Wrongful termination

Unlike discrimination and harassment, wrongful termination is not an actual cause of action upon which a lawsuit can be filed; it’s a blanket term used to describe various causes of action, both direct and indirect, that result in the wrongful termination of an employee.

For most employees, employment with a particular employer is “at-will” and not guaranteed pursuant to a contract. Unless there is a contract, either written or implied that guarantees continued employment, an employee must prove that the basis for the firing was illegal—this could include violation of public policy, breach of fair dealing or good faith, whistleblowing, or fraud, among other reasons.

Accurate and detailed records regarding employee performance, employee discipline, employee-employer communications, and so on, can help an employer prove the termination was legal and defend against claims of wrongful termination.

To recap, some steps employers can take to treat their employees fairly and mitigate the risk of these lawsuits include:

  • Implementing systems to accurately track hourly employees’ time
  • Developing, distributing, and reviewing an employee handbook
  • Keeping detailed records of employee performance, discipline, and communications

Although these suggestions don’t guarantee that employees won’t be treated illegally or unfairly or that an employer won’t be sued, they can go a long way to prevent such problems.

Remember: An ounce of prevention is worth a pound of cure.

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Content Author: Steven Cook

Steve Cook is an attorney at Cook & Cook in the Phoenix, AZ area. His law firm represents established and startup businesses in the capacity of outside/concierge general counsel. Prior to attending law school, Steve worked as a web designer/software developer and helped create web-based applications for some of the largest brands in the world. During his undergraduate studies, Steve co-founded a digital advertising company that received over $1 million of venture capital.