Employee lawsuits can be very damaging for otherwise successful companies. It can cost tens of thousands of dollars to defend against litigation. Even if the company prevails in court, any media attention on the lawsuit could damage its reputation as a business and an employer.
Even the companies that do their best to treat their workers with dignity and conform to all employment laws sometimes face accusations of wage violations or discrimination from current or former employees. When workers become litigious, the company’s internal records might play a key role in defending against a pending lawsuit.
The law requires certain documentation
There are certain employment records, like payroll records, that companies must maintain for multiple years just to remain in compliance with federal employment laws. There are many other records that can be important for the protection of a company’s finances and reputation when responding to allegations from workers.
In addition to time clock records, companies may want to maintain thorough records of all employee complaints and investigations. Records related to disciplinary efforts and attempts to retrain workers struggling in their positions could also serve to defuse claims that the company mistreated workers or violated their rights. Even records of annual performance evaluations could potentially help justify a company’s decision to terminate a worker or pass them over for a promotion.
In general, companies have an obligation to comply with federal laws, including rules against discrimination. They should not consider protected characteristics when hiring, firing or promoting workers. They also have an obligation to respond appropriately if workers allege safety violations or harassment on the job.
The more internal records the company maintains, the easier it may be for the business to push back on allegations that they mistreated workers from certain groups or targeted an individual because they engaged in protected workplace activities, like discussing their wages with coworkers. Even employment contracts can sometimes provide clarity regarding the relationship between the employer and the worker and what obligations the organization had to an individual.
A review of workplace contracts and other key documentation can play an important role in a business’s response to complaints from workers or lawsuits filed against the company. Having the right contractual protections and maintaining appropriate business records can make a major difference for a company that might eventually face complaints from workers dissatisfied with their pay or position.