30 Oct How to Respond to a Lawsuit: A Guide for Employers

When it comes to hiring new employees, you do what you can to make sure they’re the perfect fit for your business. If you’re like most business owners, this means sorting through countless resumes just to call one person out of every six applicants that apply for your opening.

Despite your careful hiring practices, you never know what the future holds. Sometimes, those employees that seem perfect may end up finding an issue with your company.

If they end up suing you, you need to know how to respond to a lawsuit the right way. Here’s what you need to know.

Speak with Your Attorney First

When you find out that your employee is suing you, you’ll likely feel frustrated, angry, and may even want to speak with the employee to figure out what went wrong. While these feelings are normal, that doesn’t mean you should give into them. Instead, speak with your attorney.

Schedule an appointment and let them know what happened. If the employee or their legal counsel provided you with documentation or paperwork, bring it with you. It may also be useful to bring your employee’s file to the meeting, too.

Review the lawsuit and let your attorney see if there’s even a valid case in the first place. Sometimes, employees may push for things that they’re not entitled to.

The more information your attorney has, the easier it will be for them to help you come up with a plan of action.

Compile All Relevant Documentation

Look at the type of complaint that the employee brought against your company. Are they alleging that your company or a supervisor discriminated against them? Are they filing a lawsuit for sexual harassment?

If so, you’ll need to compile as much documentation as you can find. If your employee has a history of bringing false allegations to your attention, provide evidence of those past claims. If they’ve gotten written up many times and are trying to file a wrongful termination suit, collect those write-ups and bring them to your attorney.

The more information they have, the better they can represent your company’s interests. This can mean the difference between a successful dismissal or a costly and time-consuming lawsuit.

Avoid Responding to the Employee If Possible

The most important thing you can do is acknowledge the lawsuit by immediately speaking with your attorney. Just make sure you don’t respond directly to the employee. Doing so could end up making their case against your business stronger.

When someone sues you, whether it’s an employee or a customer, you need to make sure everything gets handled through the proper channels. Your attorney can tell you which next steps you need to take after they have a chance to review the allegations against your business.

If you respond directly to the employee, you risk saying something or doing something that they can use against you. Don’t give them more ammunition than they already think they have.

Notify Your Insurance Provider

You bought business insurance for a reason: to protect your company in the event of a qualified threat. A lawsuit against you definitely qualifies.

Notify your insurance company as soon as you can and let them guide you through the process of filing a claim. Remember, your business liability insurance may help cover the cost of any settlements or court proceedings.

Keep in mind that the types of lawsuits your insurance provider can help you with may not be the type of lawsuit you’re facing. You’ll still need to speak with your insurance provider to see what you do qualify for and to initiate the claim.

Figure Out What You Want to Do

Do you want to try to settle things out of court or are you planning on fighting the lawsuit?

This depends largely on the type of lawsuit you’re facing, the people involved, and your budget. Remember, going to court will cost you both in time and money. But it can also help you regain your reputation, especially if the allegations are false.

If you choose to settle out of court, you’ll save time and be able to get through the process without facing much public scrutiny.

If you’re not sure which option is the best choice for your business, speak with your attorney. They’ll help you understand how each choice will impact your business, your budget, and your schedule.

Always Be Honest

When it comes to dealing with an employee lawsuit, honesty is always the best policy. If you or your management team are responsible for the issue that sparked the lawsuit, own it. Just make sure you work with your attorney to mitigate the damages.

Under no circumstances should you try to cover up evidence or get rid of the problem. This can get you in more hot water than facing the lawsuit head-on.

When your attorney asks for details, provide them to the best of your ability. And if the case does go to court, answer any questions put to you as honestly as you can.

Be Proactive After the Lawsuit Gets Settled

Once the lawsuit is over, review your company’s existing policies and see if there are things you can do to reduce the risk of future issues.

Review your employee handbook, discuss your concerns with your Human Resources manager, and implement the changes as soon as possible. You can always have your attorney review those changes and make sure they’re still in compliance with local employment laws and regulations.

The Key to How to Respond to a Lawsuit Is Patience

No matter what type of lawsuit you’re facing, the answer to how to respond to a lawsuit is to do so with patience.

You don’t have to agree with the employee who is suing you, but you do need to be rational, calm, and try to understand where they’re coming from. This will help you and your attorney put together a better defense and makes finding the information you need simpler and faster.

If you’re facing a lawsuit from an employee, don’t ignore the allegations. Contact us to schedule a consultation and let our legal team help you find a resolution.