Betty, Neuman & McMahon, P.L.C.
563-326-4491

Responding to an employee lawsuit

Despite your efforts to be a fair and generous employer in your small Iowa business, you may not be immune from accusations of discriminatory behavior. It seems that more often these days a simple misunderstanding or oversight can lead to legal action, and that can be devastating to the reputation and success of your business.

If you have learned that an employee or former employee has filed a lawsuit against you, you probably have many questions about how to respond. Perhaps you are even considering ignoring the whole matter, especially if you feel the accusations are unfounded. Unfortunately, the only way to resolve the matter is to prepare yourself for what's ahead and to face it head-on.

Facing the facts

After you receive the official documents detailing the lawsuit, your mind may spin with the legal jargon and the pages of allegations. It may seem that none of this pertains to you, and you may want to just put it aside. However, time is of the essence, and you have a deadline for deciding how to respond and acting appropriately.

Your instinct may be to contact the employee who filed the complaint and try to set the record straight. Maybe you feel you owe him or her an apology, or you simply want to understand the reason for the drastic action. Under no circumstances should you reach out to the employee. Anything you say, especially an apology, can become evidence against you. The lawsuit indicates that your employee does not want to negotiate with you, so you should let your attorney handle all communications with the other side.

Moving forward

Perhaps the most important step you can take is to seek the counsel of an attorney as soon as you learn of the lawsuit. Your attorney can review the documents with you, identify any errors in the information and help you plan a strategy that will minimize the damage your business will suffer. Some questions your attorney may discuss with you include:

  • Does your insurance policy will cover the cost of the lawsuit?
  • Is it in your best interests to admit the allegations in the complaint?
  • Should you countersue the employee or add a complaint against any other defendants?
  • Should you go to trial or attempt mediation or arbitration?
  • Would it be in your financial interests to offer a settlement even if you have done no wrong?

The answers to these and other questions will determine the next steps in the process. Following the advice of your legal professional may help reduce the amount of stress a lawsuit can bring and allow you to return your focus to operating a successful business.

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Betty, Neuman & McMahon, P.L.C.
1900 East 54th Street
Davenport, IA 52807

Phone: 563-326-4491
Fax: 563-326-4498
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