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The most common lawsuits that businesses face are those filed by employees. Often it comes down to accusations of discrimination, wage and hour issues, or failure to accommodate a disability.

But what many managers fail to realize is that if they act early when receiving complaints and institute strict workplace guidelines that minimize the chance of making employees disgruntled, they can avoid costly lawsuits.

Often these suits stem from mistakes that company management can make that sink a company if it is sued. Employee Benefits News recently came out with this top 10 list of the main mistakes managers make:

  1. Ignoring complaints – The biggest mistake a manager can make is disregarding an employee’s complaint of being treated unfairly or if they are complaining about what they think are illegal actions. If someone complains about a perceived injustice, take it seriously and give it the attention it deserves.
  2. Mistakes in the interview process – Many companies are sued for rejecting candidates, particularly if they are more qualified than other applicants. If you are going to reject a candidate who is obviously qualified for the position, you should take great care to document why you decided to pass them over. 
    Your interviews should focus on how well the person would fit and perform in the position. Never ask about age, race, marital status, children, day care plans, religion, health status or political affiliation.
  3. Poor documentation – If someone complains about discrimination, it’s of utmost importance that you document everything they say. You need to keep copious notes and write a report and make sure that you can show that you investigate their complaints. Also, ensure that you don’t make any demeaning comments in e-mails or other communications with other managers when discussing these complaints.
  4. Ignorance of company policies, procedures – All of your supervisors and managers should know your organization’s policies and procedures. It’s an integral part of their job. If you have a supervisor on the stand and they profess ignorance of the company policies, it can hurt your case immensely.
  5. Jumping the gun on firing – If you are going to fire someone, you need to make sure that you have documentation to back up why you are doing so. Any appearance of discrimination or unfair treatment can come back and bite you if the case goes to court.
    Nobody should be fired on impulse. You should show that you tried to work with the employee and help them improve their performance or perceived deficiencies before letting them go.
  6. Not knowing the law – Juries will expect that a manager who is on the stand should know employment law as that knowledge could be critical when it comes to how employment matters are handled. You should hold refreshers on laws that affect human resources that also include updates on new regulations and laws that affect the workplace.
  7. Being mean and rude – The most stressed-out employees are those who are subjected to bosses who harangue, dispirit and demean them on a regular basis. Some managers and supervisors have a mean streak. Don’t let that kind of person become a liability for your organization.
  8. Not keeping the story straight – If you change your story as to why you made an adverse employment decision, it can cost you in court. This is why documentation is so important – and that you have sound reasons for making the decision. If you change your story, it will cost you in court.
  9. Handling accommodation demands – Under the Americans with Disabilities Act, employers must make accommodations for disabled employees. If someone claims they are disabled and asks for certain accommodations, you need to enter into a process with them to come up with ways to help them do their job. 
    Don’t tell them what they need. Let them tell you, and see how you can work with them and come to a compromise if you think it is going to cost the company too much or if their request will disrupt the work of others.
  10. Dishonest reviews – If you have a manager who is regularly giving reviews that overstate the performance of employees, it can become a liability if you later have to make an adverse employment decision. If a manager later tries to cite “poor performance” for that person’s termination or demotion, those overly positive appraisals create a heap of credibility concerns. Stay honest and consistent.