How to prevent legal trouble from your employees

Your words and actions should show that discrimination and harassment aren't tolerated

In addition to every other challenge running your business, you know that managing employees is a constant and often confusing process. One problem you want to avoid is a discrimination or harassment claim, in which an employee claims that they have been treated in some manner that violates federal or state employment law.

This is a complicated and evolving area of the law, and many employers find it hard to keep up with changes. But there are some basic steps you can take that go a long way towards preventing discriminations claims, including:

  • Don’t base hiring, firing, promotion, and other employment decisions on color, race, sex, religion, disability, age, or national origin. Under federal and state law, these are “protected classes”, and employers cannot use them in making employment decisions. An employer can still make an employment decision such as promotion or termination involving an employee who falls into one of these categories, as long as their being in that category is not the basis of the decision. For example, an employer can decide not to promote an employee if their job performance doesn’t support the promotion, even if they fall into one of the protected categories. However, an employer can’t refuse an employee a promotion because your clients say they don’t like dealing with that person because she is a woman, or African-American, or over 40 years of age.


  • Have written policies in place that prohibit harassment of employees based on these protected categories. Make them part of your employee handbook, and ensure that all employees, including managers and executives, are trained on these policies. Every employee should sign a written acknowledgement that they have received and read the handbook.


  • Have a complaint process that employees know about and are required to follow. This will protect your company better than if you have no policy at all, or if you have a policy that the company doesn’t follow. Tell claimants that you will handle their complaint as confidentially as possible, but do not guarantee confidentiality as this is not always possible.


  • Take all harassment or discrimination claims seriously. Investigate the claims and discipline the person who committed the violation if you determine that the claims are true. Don’t ignore these claims or your company could be held liable in a lawsuit brought by the employee claiming harassment.


  • Pay male and female employees equally for doing the same work, unless you can justify the pay difference based on required education or experience or other meaningful factors. For example, if you hire two entry-level employees to do the same work but pay the male more than the female hire for no other reason than their sex, you are inviting a discrimination claim.


  • Keep good employment records! Document all employment decisions, including counseling and disciplinary actions, not just employee terminations. If an employee brings a discrimination claim, good records can be critical to defending the claim. Without documentation, you are at a real disadvantage. Even if you have only a few employees, you should keep good records of employment actions and decisions.

Running a business with employees means dealing with employment law and employee issues on a daily basis. Remember that senior management defines the culture of the company and sets an example for all employees. Both your words and your actions should demonstrate that you value fairness, equity, and diversity, and will not tolerate discrimination or harassment. This can only benefit your business in the long run.

Categories: Management & Leadership, Web Exclusives