Employment discrimination and wrongful terminations are one of the most common types of lawsuits filed against small businesses. These violations can sometimes occur due to process mismanagement or lack of understanding of relevant laws, but it’s important for business owners to remember that intent doesn’t necessarily matter in these cases.
As for the outcome? The average claim amount received by terminated employees is $37,200, according to , although in many cases, award amounts can range from $5,000 to $80,000. Many of these claims are settled by employers rather than challenged in court to avoid damage to the company’s reputation. Employment Practice Insurance can help defray financial costs but cannot shield you from public embarrassment.
Avoiding a wrongful termination claim against your company can be challenging, especially when faced with so many regulations. Regulatory compliance, internal consistency and good resources are your best defense.
It’s important to know that both state and federal laws may apply in a wrongful termination claim, and there’s seldom consistency when it comes to state law. Further complicating the matter, a wrongful termination claim can be filed under several different federal laws.
Most claims are filed under the Equal Employment Opportunity Act, which expressly prohibits discrimination against employees, but other laws and acts may also apply depending on the circumstances of the employee’s dismissal. These include:
- Title VII of the Civil Rights Act of 1964
- Age Discrimination in Employment Act
- Occupational Health and Safety Act
- Equal Pay Act
- Americans with Disabilities Act
- Family and Medical Leave Act
- Genetic Information Nondiscrimination Act
- Fair Labor Standards Act
With so many laws, rules and regulations that must be addressed, it’s important for employers to have a system to manage compliance.