5 Strategies to Prevent Ex-Employee Lawsuits

By Andrew Chow, Esq. on August 07, 2012 | Last updated on March 21, 2019

When an ex-employee sues her former employer, everybody often loses in terms of precious time, money, and effort.

But there are some strategies that can help deter even the most disgruntled employees from filing suit in the first place. As in-house counsel, you'll likely have to join forces with your company's HR director and other managers to make these strategies work.

Here are five tips to avoid legal quarrels with workers after they leave your company:

  1. Establish termination policies and procedures early on. Employees and managers alike should know what grounds may lead to a firing, and what procedures will kick in when that happens. Failing to explain why an employee is being fired may raise suspicions about possible illegality and lead to a potential ex-employee lawsuit, Inside Counsel advises. At least two high-ranking company reps should be present when an employee is let go, IC suggests.

  2. Establish email, Internet, and social media policies. Upon hiring, have your employees sign agreements about the proper use of work-related electronic communications. But make sure your policies don't violate state or federal laws, such as by prohibiting protected free speech.

  3. Use non-compete and nondisclosure agreements wisely. These may be unlawful or unenforceable if they're worded too broadly. Check out FindLaw's Corporate Counsel Center for examples of nondisclosure agreements you can use as a starting point.

  4. Put it in writing. A written explanation about an employee's termination may help if your company is later sued. You may also want to require ex-employees to sign something that states they've returned all company property and deleted all company data from their personal devices, Inside Counsel suggests.

  5. Follow-through after the firing. Make sure ex-workers get their final paychecks and compensation for time off that they didn't use. Also make sure you have a plan to handle reference requests, as that could also lead to ex-employee lawsuits.

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