As an employment litigator, I see first-hand the most common mistakes employers make that complicate litigation. There are three easy steps employers can take to protect their companies and avoid these common pitfalls.
- Utilize Employment Agreements: Confidentiality
Non-compete and non-solicit agreements get a ton of press, but these provisions are not appropriate in all circumstances. Even when these provisions are inappropriate, all employers should have employment agreements with their employees to protect confidential, proprietary, and trade secret information. Many employers avoid employment agreements because they fear such agreements change the at-will nature of the employment relationship. However, such agreements give employers a chance to affirm the at-will nature of the relationship and protect their information. If an employer does not protect its own information, a court may decline to extend protection if litigation arises.
Notably, under the Defend Trade Secrets Act, employers cannot recover punitive damages or attorney fees if they do not give their employers notice of employees’ rights under the statute. Employment agreements and employee handbooks are a good opportunity for employers to give this notice.
- Employee Handbooks: Consult with an Attorney
Employee handbooks inform employees of company policies. Many of these policies come into play in litigation after an employee is terminated. The handbooks are scrutinized by opposing counsel, dealt with in depositions, and often become exhibits at trial. Yet many companies get an “off the shelf” employee handbook from a human resources company and think it is sufficient. It is not. Company policies must be crafted to protect the company and reflect the most current laws. The policies must also be easy for managers to follow while still holding up in litigation. Additionally, policy needs and requirements vary by employer based on the industry in which they operate. As such, all employee handbooks should be drafted, or at least reviewed, by an attorney.
- Document, Document, Document!
Policies in employee handbooks are only as good as the managers who enforce them. One of the biggest pitfalls I see in litigation is a need for more disciplinary documentation. If an employee violates a company policy, it is important that all management personnel follow company guidelines regarding documentation of those violations. Even if it is not a formal “write-up,” verbal warnings should be documented in notes. Managers should be written up if they fail to follow company policies regarding documentation. Documentation is critical because when a company is sued for discrimination, harassment, or retaliation after the termination of an employee, a “legitimate business reason” for termination is a defense. Poor performance is a legitimate business reason for termination, but the company must be able to demonstrate any performance deficiencies. These deficiencies become more believable to factfinders at trial with documentation.
Cavitch Employment Attorneys Can Help Your Company Avoid Common Employment Law Pitfalls.
If you have questions, contact Cavitch Employment Attorney Madilyn M. Maruna at (216) 621-7860.