Retaliation and wrongful termination are two things that can get employers into trouble, potentially six-figure-mistake kind of trouble. When making policy and important on the spot employment decisions, knowledge and understanding of key laws are vital to avoiding the potential for trouble later. Here are some thoughts on how to set yourself up for success, and minimize the likelihood of costly mistakes when hiring, firing, etc. 

Retaliation is when an employee is engaged in a protected activity and the employer takes an adverse action against them—if the causal connection can be shown. Wrongful termination is when the employer terminates or lays off an employee engaged in protected activity, or in violation of an implied contract, among other reasons.

The problem is, many employers do not know that certain activities are protected, don’t perceive the action taken as adverse, or do not take proper steps to make the reason for their actions clear. Other employers don’t understand or care why this is important, until something bad happens to them. Unfortunately, any mistakes made with payment or treatment of employees can become incredibly costly. It is not uncommon for workplace lawsuits to cost into six figures over time. That is enough to close most small businesses! It is much wiser to avoid this possibility, or at least mitigate potential damages by taking decisive action to make some connections, educate oneself, and hopefully prevent most of these things from happening in the first place. 

Many employers are honestly lucky, not getting burned for some of the missteps they make along the way. That is, until they aren’t as lucky! Hindsight is always 20-20 in these situations. There are a couple of ways I tend to see trouble begin brewing in small businesses when it comes to employment related decisions. First, a lack of understanding of laws, or oversight by management. Another, is a small business that expands in such a way that regular administrative employees are acting as HR personnel, etc. without proper training or resources. Employment laws are not always very easy to interpret and apply to a given situation, especially in California! Nonetheless, employers are charged with the duty to know and understand the laws that apply to their business. Not understanding or knowing about a law is not applicable as a defense to these claims. 

I believe the best antidotes to help avoid costly mistakes altogether, or prevent issues from potentially becoming much worse, are awareness and self help. Arming yourself with some basic knowledge of the laws and regulations that apply to your industry and business are important. However, that will only get you so far, as there are going to be times as a business owner that the present circumstances make you unsure of what to do, or you have to make an important decision on an emergency basis. In addition, employment laws also change very fast and it is difficult to keep up. 

Developing a relationship with an employment attorney is a top business move I suggest business owners make. I know, I know, attorneys cost money. You know what costs a lot more money? Meeting an attorney after you’ve been served with a lawsuit, and it’s too late to prevent some of the problems that got you there. An hour or two of an attorney’s time when you’re feeling unsure, need to craft an important letter or need to prepare to terminate an employee under strange or tense circumstances can save you much more later. Making that one phone call and getting some guidance before making a decision could be the thing that saves you from a huge mess in the end. It will also help educate you over time, and give you more confidence and leadership skills. Likewise, giving your acting HR personnel access to that lifeline when unusual circumstances arise indicates that you want to do things right, you want them to succeed, and you care about your employees. Not to mention the peace of mind it should give you as the business owner! If you’ve been running your business for a while and aren’t sure how you’re doing with policies and practices, employment attorneys can meet with you to “audit” your HR policies, give you suggestions and tools to help you with day to day issues much much better. 

Of course, there may be times when legal employment issues come up despite your best efforts. However, as long as you’ve been listening to your lawyer and know when to call them, the fact that there has been a legal professional involved in the process from the beginning is likely to mitigate your potential liability by a lot! As always, you can further keep costs down by pushing for mediation early on to try to prevent any kind of litigation that could require keeping the attorney on for longer periods. These moves all help you run a business more efficiently, confidently, and allows you to keep your focus on growing your business happily, rather than on an icky lawsuit!

A wise entrepreneur is a happy entrepreneur.