Employees should be one of your company’s greatest assets. Unfortunately, there are times in which an employee can become your company’s greatest liability or threat. Employee lawsuits such as claims under the Fair Labor Standard Act (“FLSA Lawsuits”) which include claims for unpaid wages, overtime, improper salary/exemption status or retaliatory discharge can be very costly to your company.
To the surprise of many business owners and managers, employment claims, such as those arising under the Fair Labor Standard Act can result in personal liability to the owner or manager of the company. Also unknown to most employers, is the fact that a discharge of an employee can spell trouble, if the employee’s discharge is not properly done or if the discharge is alleged to have occurred as a result of the employee complaining about his or her wages or whistleblowing as to some wrongful act by the employer.
Though FLSA lawsuits, can arise even when employers keep proper timekeeping and employee records, many of the FLSA claims seem to arise when employers do not keep proper timekeeping or employee records, as required by the FLSA. For more information as to how to mitigate your company’s risk of being sued and the importance of employment agreements, employee handbooks and policies, please see Employment Law-Transactional, 6 Tips to Help Your Company Avoid Fair Labor Standards Act (FLSA) Violations; 8 Tips to Help You Mitigate Your Risk of Employee Lawsuits, Do You Need An Employee Handbook?; Why Your Business Needs a Handbook for Employees; 10 Key Elements of a Solid Employee Contract.
Employee liability may also come in the form of the employer’s need to enforce a non-compete agreement against a former employee or third party or when an employee has stolen the company’s confidential information and is improperly using the information for the economic gain of themselves or a third party. In these types of situations, the employer may be required to file a lawsuit against the employee or third party for misappropriation of trade secrets, deceptive and unfair trade practices act or a tortious interference claim.
Employment litigation is a highly fact intense and complex area of law that company’s should seek competent legal counsel regarding their rights and obligations to ensure that their company is properly represented and prepared in the event of a lawsuit.
Employees should be one of the company’s greatest assets. However, employment issues have the potential to be costly and even ruinous for your business, and while it is impossible to completely avoid lawsuits, it is vital that you take steps to mitigate your risk. The Campbell Law Group can help your company develop legal strategies to suit your company’s needs and mitigate your risk of employment lawsuits through drafting comprehensive company policies, employment agreements and employee handbooks.