Legal Mistake #4: Don’t Fall Victim To Your Employees
Given the vast swath of laws and regulations, not to mention just dealing with employees, the area of human resources poses significant issues for business owners to be wary of. Typically, the critical times that the law intersects with business is during hiring, discipline, and firing. Another area of the law is wage and labor regulation. Hiring legal counseling will greatly protect you in this area which is full of pitfalls for business owners.
Do Set Clear Expectations in an Employee Handbook
In hiring employees, it is a good rule of thumb to be very careful about how the expectations are set. In many states, an employee handbook can be deemed an employment contract. Generally, from an employer’s perspective, it is preferable for employees to be deemed “at will.” Any employee handbook should be carefully written to preserve as much leeway as possible for the employer.
Do Keep Good Written Records
This ties directly to employee discipline. When an employee’s conduct warrants discipline and not termination, it is very sound policy to get it in writing. Keeping written records can protect the company from discrimination, wrongful termination, and unemployment claims. Without the documentation defending these sorts of claims, disputes often descend into word-against-word battles. Since keeping documentation is incredibly easy, it would behoove employers to protect their businesses with these simple measures.
A similar procedure with performance reviews is also warranted. Should an employee need to be separated, this too should be done in writing. Many employees would prefer to resign rather than be fired because it preserves some goodwill, and perhaps a decent recommendation. It is less common that an employee does not know that their performance is not acceptable. In having them leave, get it in writing or you are opening the company up to costly and annoying suits for discrimination and wrongful termination claims. Similarly, a written resignation is a solid defense to an unemployment claim.
Do Avoid Separating Employees Under Certain Conditions
It is important to know that separating an employee who has filed a workers’ compensation claim is a particularly hazardous maneuver. The law tends to offer significant protections and presumptions in their favor. If an employer is not careful in how such a separation occurs, a workers’ compensation discrimination suit is likely and, in these, the deck is stacked clearly against the employer.
Do Protect Your Company in Employee Contracts
When an employee does leave your company you can take some solace in the fact that you included non-compete and non-solicitation clauses in their employment contract. The former is problematic to enforce in most states. The reason for this is that the law favors free commerce and discourages contractual limitation on people plying their trades. However, non-solicitation provisions are widely enforceable. Here the law protects a company’s customer base from separated employees that want to poach this valuable asset. The protections are not absolute, but frequently they prove very valuable. Davis Business Law not only helps to defend clients in claims; we help prevent these claims by helping clients create sound policies and procedures to protect themselves.
The content on this page has been reviewed and approved by Matthew Davis: CEO of Davis Business Law.