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Steps to Take When an Employee Sues Your Company

Even if your company follows the most ideal HR practices and follows all the compliance laws, there is no guarantee that you won’t get sued by an employee. It’s one of the many risks that are ever-present for companies, regardless of size or age.

If you get sued by an employee, it doesn’t automatically mean that it will turn into a big, dramatic mess. However, things can get pretty ugly, and quite fast, at that. Here are the steps you can take to prevent that.

Be ready for the lawsuit

A lawsuit shouldn’t take you by surprise. Before an employee files a lawsuit against you, you will receive a legal demand letter asking for corrective steps and often threatening a lawsuit if those steps aren’t made. This demand letter may be written by the employee themselves, their attorney, or another legal entity.

It is imperative that you don’t ignore a demand letter, no matter how insignificant it may seem. When you receive one, send it to an attorney as soon as possible to determine its credibility as well as help you figure out the next steps. Get an attorney that specializes in this kind of lawsuit, just as you would get a motorcycle accident lawyer for a vehicle crash.

Find a lawyer

Ideally, your company should already have a lawyer on standby for these kinds of incidents. In this way, you can receive legal counsel as soon as possible as opposed to scrambling for a lawyer when you are already being sued. If your current lawyer is not experienced in the particular kind of lawsuit you’re facing, however, it is advisable to find another one that has more appropriate skills and experience.

Prompt action is the key to avoiding a lawsuit from spiraling out of control, and getting immediate legal counsel from an experienced lawyer is the best first step you can do when you are already being sued.

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Gather documentation

Proper documentation will help strengthen your case in court. Gather relevant documents, such as receipts, correspondences, employee files, incident reports, and so on. Although employee-related lawsuits are not as reliant on documents as other types of cases, proper documentation is still vital. Moreover, it goes without saying that you should never destroy any relevant documents in hopes it will help your case. Doing this might get you into more trouble than you originally are.

Contact your insurance company

If there is a chance of your business going to court, contact your insurance company as soon as possible. Business insurance policies might cover the expenses of a lawsuit, but it is not guaranteed. Nonetheless, you should still let them know what’s going on and find out the extent of coverage you are entitled to.

But what if you don’t have business insurance yet? Now is a good time to acquire policies that will help protect your finances (that is if the case has not gone to court yet). In this way, you can protect both your business and personal funds from being claimed legally.

Don’t take it personally

It can be hard to not take it personally when an employee sues you, especially if you’ve had a good relationship with that employee in the past. However, this is business we’re talking about, and responding aggressively can make it seem like you’re retaliating. If you do or say anything that can be viewed as a personal attack, it can cost your company even more as retaliatory actions can spur on additional claims.

Remain calm. It is understandable to feel upset about the lawsuit, but keeping your emotions in check is crucial in minimizing damage.

Lawsuits can be incredibly damaging to a business, but it doesn’t have to be that way for yours. If you get sued by an employee, remember these steps and navigate the lawsuit with a trusted lawyer by your side.

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