Don’t get yourself entangled in litigation because you terminated an employee that you should not have hired in the first place. Federal discrimination and retaliation lawsuits are so prevalent today that many employers consider them of the cost of doing business. With a couple of preventative measures at your disposal, you can cut back on your litigation costs by hiring more carefully [For more information about discrimination and retaliation claims, see]
Recently, the Supreme Court determined that an employee need not be fired or demoted in order to maintain a retaliation claim against an employer. Burlington Northern & Santa Fe Railway Co. v. White, 548 U.S. 53 (2006). This means that simply transferring an employee to another position can give rise to a lawsuit, because the employee may not consider the new job to be equivalent and could charge retaliation. Furthermore, an employee facing termination may be able preempt his firing by complaining to the proper personnel about his boss, which enables him to argue that any subsequent disciplinary action is retaliatory. 
Because whistleblower and retaliation claims are far easier to establish, you should take certain precautions at the hiring stage so that employees who are prone to complaining do not get by the first interview. This article will go over the various ways where you can stop the problem before it starts. 
KNOW THE LAWS: Familiarize yourself with the latest local, state, and federal employment regulations that may apply to your business. For small businesses, Federal regulations can be found at the websites of the Department of Labor (, EEOC ( smallbusinesses.html), and OSHA (
SCREEN YOUR APPLICANTS: Even the lowest-level prospect should be thoroughly questioned by at least two interviewers. Try not to hire too quickly. Give applicants a questionnaire seeking answers on such topics as job expectations and career goals.  Once you have identified the best candidate, check the applicant’s references, driving record, and health record, and you may even ask for a drug test. Smaller employers should never rely exclusively on another employee’s recommendation or referral.
Be an active listener during the interview process. Problem employees may drop hints about their personal lives, such as marriage problems or a constant-party lifestyle, which are legitimate and non-discriminatory reasons not to hire an applicant. However, you must be sure not to ask questions about age and marital status directly. You will be amazed at what you can learn through an in-depth hiring process. 
REFRAIN FROM CONTRACTS: Save for certain state and federal statutes, the law allows you to terminate any employee at-will. A written employment contract can impair your ability to fire an employee. For example, you cannot let an employee go after six months if his contract states that you will employ him for three years. If you want something written to govern the terms of employment, use an employee handbook. It should establish that you treat all employees equally and that no employee is ever singled out.
CREATE A PAPER TRAIL: Have your managers document conversations and evaluations immediately, even if it means making brief notes for personnel files.  Use professional word choices, and think about the kind of evidence you might need in a litigation situation.
The key is to be proactive in resolving any issues early on. Even the smallest personnel problem should be addressed immediately. Over time, the problem could get worse and ultimately give rise to firing, but any delay on your part will have given the employee time to build ammunition for a lawsuit. 
Your PEO can give you information about local laws and provide advice on the best employment decisions so you can minimize your legal risks. Get back to the business of running your business. For more information go to
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