Legal landmines: The keys to keeping your company out of court

​Every day, managers make decisions about hiring, firing, disciplining, and promoting. In many cases, these decisions are made without any formal training or guidelines. If you aren’t careful, it could land you or your company inside a courtroom.

​Joining us on this episode of Business Trends Today is labor and employee relations expert and president of Greer Consulting, Jason Greer.

​Greer says the problem is both simple and costly. Companies are putting untrained managers in positions of legal authority without equipping them to handle it. When something goes wrong, it is the company, not the manager, that pays the price. Without documented training, consistent communication channels, and a proactive approach to workplace conduct, he says, businesses are asking for a lawsuit.

Managers are agents of their employer

When a manager acts, the company acts. That’s the legal reality Greer says most businesses fail to recognize until it is too late. Managers function as agents of their employer, meaning that any lawsuit filed against a manager’s conduct lands squarely on the company, not the individual.

"Having untrained managers essentially leaves you vulnerable to all kinds of legal risk, all kinds of moral risk, all kinds of risk across the board."

Greer points to three main problem areas: Managers who do not know their own employee handbook, failure to comply with union contracts, and outdated attitudes about workplace conduct.

The price for making one wrong move can be very high, Greer cautions. Even when a company wins in court, Greer says legal fees alone can top $100,000. For that reason alone, many businesses choose to cut their losses and settle out of court.

Key legal risks: Harassment, retaliation, & Wrongful termination

When harassment claims reach a courtroom, Greer says the first thing a judge looks for is documented proof that the company took training seriously. A memo is not enough, he says. Companies need to show proof that managers had consistent training, retraining and that they were held accountable over time. Companies that cannot produce that record walk into court without a defense.

“The moment that you get called into court, the basic, what I tell my clients is, can you provide a legally defensible thing in front of a judge where you essentially say we have documented training?” Greer said.

The legal problems don’t stop there. Greer says retaliation is one of the most common mistakes a company can make after a harassment complaint is filed. When an employee’s hours get cut, sudden grievances appear on their record or performance write-ups begin surfacing shortly after a claim, courts take notice.

Firing the accused manager doesn’t solve the problem either. Terminating an employee without documented evidence of wrongdoing opens the door to a wrongful termination suit, Greer says.  The fired manager can pursue damages for lost income and reputational harm, and it does nothing to make the original claim disappear.

The importance of a paper trail

​​Without paperwork, a company’s version of events means very little. When documentation is missing or inconsistent, workplace disputes turn into he-said, she-said situations that courts don’t often find in the company’s favor, Greer says. Without a proper paper trail, it appears negligent.

“When things aren’t documented, then it becomes a matter of he says she’s safe, right? But unfortunately, he says she’s safe doesn’t hold up in a court of law,” Greer said.

Grievance records carry particular weight in these situations. Greer says courts look for clear, traceable timelines connecting manager behavior, company response, and disciplinary actions.

​Limiting litigation

Another legal threat business owners face can come from their own employees. Unhappy  workers who feel underpaid, overworked, and unappreciated often sue, Greer says. It’s not something most business owners want to hear, but a reality Greer says they should plan for. Greer says untrained managers add to this issue by becoming easy targets for lawsuits.

"You always have to assume that the employee you hire today might take you to court tomorrow. So what do you need to do to protect yourself tomorrow?"

“One of the most common denominators amongst those employees is they’re overworked, underpaid, and so many employees are looking to get a payout for their company,” Greer said.

Settlement culture feeds the cycle. When companies pay to make cases disappear, Greer says, it signals to others that the strategy works. Each settlement invites the next claim.

​Train now or pay later

Proper training, Greer says, is the key to protecting your business from lawsuits and legal trouble. Proactive, documented, consistent training is the only approach that holds up when a case is filed, he says.

Greer recommends bringing in third-party certified trainers rather than relying on internal staff. Outside trainers, he says, establish legal credibility and create an independent record that carries weight in court.

Greer pushes his clients to conduct quarterly rather than annual training. New employees shouldn’t wait until the next session, he says; they should start training on day one without exception.

“I’m not just saying once a year just to check the boxes. I’m saying as much training as you possibly can get,” Greer said.

The price of a comprehensive training program is a fraction of what a single lawsuit could cost business owners. Staying out of court is just part of the benefit. Greer says well-trained managers become stronger leaders, and stronger leaders move up. The same program that keeps a company out of court also builds the next generation of senior staff.