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How to safeguard your business against costly employment lawsuits

On Behalf of | Jun 18, 2025 | BUSINESS & COMMERCIAL LAW - Business & Commercial Law

No matter how carefully you run your business, one employment dispute can throw everything off course. Allegations of discrimination, wrongful termination or unpaid wages aren’t just Human Resources headaches. They’re legal landmines that can entangle you in time-consuming and expensive court cases.

While the risk of a lawsuit is real for every business, most employment-related lawsuits are preventable with the right systems, policies and awareness in place. Here’s what you can do to protect your business.

Clear policies are your first line of defense

If your business doesn’t have a solid employee handbook, now’s the time to create one. Clearly outline and consistently enforce policies on anti-discrimination, harassment, paid leave, overtime and disciplinary actions. Most importantly, ensure that your employees sign off on the handbook and receive updates on any changes.

Train your staff

Your supervisors are on the front lines, and you need to equip them with the necessary skills and knowledge to handle sensitive situations before they escalate. Too often, lawsuits stem from simple missteps, such as applying policies inconsistently or failing to respond to a complaint in time. Regular training of your staff on how the law works and what’s expected of them can go a long way in creating a more compliant workplace.

Keep meticulous records

Documentation is key when employment disputes arise. Keep accurate records of employee performance reviews, disciplinary actions, pay records and complaints. A well-documented personnel file can be the difference between a dismissed claim and a costly judgment against you.

Get guidance when in doubt

Running a business involves juggling many responsibilities, but navigating legal issues alone is ill-advised. Having experienced legal guidance if you’re unsure of how to handle an employment dispute can help you respond in the right way and defend your interests if the matter goes to court.

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