Employee lawsuits happen more often than you’d expect. Bad management style might cost your business as much as its entire annual revenue!

But that’s not everything. A lawsuit will also affect your reputation. Many people are hesitant to do business with a company that was involved in an employment lawsuit. Nobody wants to be associated with an organization that had to deal with a lawsuit that involved some discrimination charge.

Lawsuits are expensive, and you could wind up spending tens of thousands of dollars in legal fees. And once everything is over, you might be forced to raise your pricing and put your business at a competitive disadvantage. In other words, the consequences of a lawsuit are vast and extend way beyond the initial conflict, seriously hurting your business in the process.

Here are 8 mistakes managers make that might lead to employee lawsuits and how to avoid them.

1. Carelessness in documentation

Most discrimination lawsuits are based on circumstantial evidence. That type of proof may be compelling, and employees can use it in court to win the case against a manager.

Employees who sue employers often use documents, in particular, email correspondence, to show the jury that manager was acting toward them with a discriminatory intent.

That’s why managers should be careful in daily communications, and when they’re going to write something to an employee, they should imagine what their words will look like when presented as evidence in court. If an employee is causing problems, keep calm and try to get to the bottom of the problem without communicating your frustration to them – they might use your words against you later on.

2. Lack of attention to employee complaints

Managers may hear complaints that involve bullying, harassment, or other types of workplace misconduct, and not do anything about them.

Don’t brush off such complaints, no matter how insignificant they seem. If you do that, you are doing the groundwork for a lawsuit. Every employee complaint should be documented and investigated to check whether requires further action.

Every organization should have an appropriate complaint procedure to help managers manage that process.

3. Firing someone promptly

When an employee doesn’t do their job properly, shows signs of substance abuse, frequently misses work, or the affects your workflow, it’s only natural that you feel frustrated. But don’t get caught up in that emotion and fire them for not doing their job.

This is a discrimination lawsuit material. You never know what happened to employee – they could be ill, pregnant, or in another protected class. There could be some legitimate reason why your employee is performing the way they are.

That’s why you need to examine the case and documented everything together with the HR department before taking any action. Find out what’s going on and share your knowledge with the HR department before deciding what to do next.

4. Not following company procedures

Business rules are there for a reason. They not only hold the employees accountable but also the managers.

As a manager, you should be aware of the personnel policies of your company and make sure that everything happening in your team or department is organized according to these rules. In case of a lawsuit, courts will expect managers to know what is their organization’s procedure for a given case.

Make sure to review the policy on a regular basis and double check that you have it right before taking a disciplinary action against an employee for not following rules.

5. No anti-harassment policy

Smart employers have well-documented anti-harassment policies that in reality help to deal with harassment claims. Employers who don’t have these policies put themselves at risk – when it comes to defending a harassment claim, they will have a weak position against employees. They simply won’t be able to point out that the employee failed to observe the policy. Managers should ensure that such a policy exists at their organization and be aware of its content.

6. Compromising confidential information

Another mistake many managers make is unveiling confidential information, such as formulas, strategies, company IP, or customer lists to others.

Leaving the company IP vulnerable to outside parties is a serious risk, and when an employee steals the company’s intellectual property, the court may not enforce company confidentiality agreement if it turns out that managers have been violating it as well.

Make sure that you know how to handle sensitive information at your company and follow the procedure yourself before implementing it in your team or department.

7. Browsing employees’ social media

Another grave mistake is looking at employees’ social media accounts and interacting with them there.

If you spot an employee sharing negative comments about the company on social media, you might be tempted to react. But firing someone for complaining about working conditions in public is material for a lawsuit.

In fact, the National Labor Relations Act forbids companies from firing employees in retaliation for engaging in that type of protected activity. By looking at employees social media, managers are violating their privacy rights, and that could pose a danger to the entire organization.

8. No track of employee hours worked

Another serious problem is that many managers fail to keep proper track of the hours employees worked. If managers are sloppy, they’re just asking for wage and hour lawsuits where employees complain that they were not properly paid for the number of hours worked.

That’s why you need proper documentation procedures to account for the hours worked, including meal breaks, and a number of money employees are paid for – that’s the best way to prevent this common type of lawsuits.

Follow these 8 steps, and you’ll be on your way to ensuring that your business steers clear of employee lawsuits and develop a positive, transparent working environment everyone will appreciate.

Lucy Taylor is an avid blogger who enjoys sharing her tips and suggestions with her online readers. Working as a legal expert at LY Lawyers, Lucy often helps people dealing with legal problems.

Cady: And they have this book, this “Burn Book” where they write mean things about girls in our grade.
Janis: Well what does it say about me?
Cady: You’re not in it.
Janis: Those bitches.

Mean Girls 2004

Before social media, we ranted to ourselves or to our families and friends about things that upset us. Today, we post it on social media. Problem with customer service? Post it on the company’s Facebook business page. Upset about a contestant’s behavior on a reality television show? Post it on Facebook. Very upset about someone or something? Create a Facebook Hate page.

I discussed defamation via Twitter in my last post, this article will focus on defamation via Facebook. I encourage you to read the cases, they are really interesting – I’ve used the legal citations so you can look them up. Search them.


The law of defamation protects a person’s reputation in the community, in the sense of their right not to be denigrated eyes of others. This involves in a sense, the restriction of another common law principle – freedom of speech. The High Court of Australia said about this balancing act:

The public interest in free speech goes beyond public benefit that may be associated with a particular communication…[everyone] has an undoubted right to lay what sentiments he pleases before the public…but if he publishes what is improper, mischievous or illegal, he must take the consequence of his own temerity. Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [31]-[32].


Facebook was launched in 2004 and its impact on society is growing with it.

It’s currently the largest online social media network. It currently has 1,310,000,000 active users, who share 1,000,000 links every twenty minutes [Link]. Social media has an informal and unreserved style, allowing rapid and spontaneous exchanges. And users are often unconcerned, uninformed or reckless when it comes to the legal risks of what they post online.

Legal Action

Facebook posts have given rise to defamation proceedings in Australia. In the matters discussed, the usual elements of defamation – publication, identification and defamatory matter – were considered. They all involve ordinary people.

Burtenshaw and Knueppel (2012)

Ms Burtenshaw was a school principal in a small community. Ms Knueppel was a parent of a student at that school. In December 2012, in the South Australian Magistrates court, Magistrate Morris was satisfied a Facebook hate page defamed the Ms Burtenshaw and awarded her $40,000 in damages. The Magistrate said:

I am satisfied that prior to the publication of the defamatory material the plaintiff had a sound personal reputation…[and] that the imputations of the subject defamatory postings are untrue. The fact that Ms Knueppel used the publication via a Facebook format and the ease of access and republication should be taken into account as a factor that aggravates the award of compensatory damages.

Polias v Ryall [2013] NSWSC 1267 is a matter which is, at the time of publication, still before the Court. It involves various messages on Facebook profiles between (former) friends. So far, the presiding judge has found some of the defamatory imputations complained of are “abusive words incapable of conveying any defamatory meaning; meaningless abuse; or vulgar abuse not damaging the plaintiff’s reputation”. Interestingly enough, these proceedings have generated some media interest because of the subject matter. A point to bear in mind is the publicity generated by defamation actions, ironically get the message out further.

Mickle v Farley [2013] NSWDC 295 involves a social media double whammy. The defamatory postings were made to Twitter as well as Facebook. The posts were brought to the attention of Ms Mickle by the school principal, who spent time each week to dealing with Facebook issues that arose in relation to students. Mr Farley was a former student of the school, but not of Ms Mickle. His father had been replaced by Ms Mickle when he went on sick leave. Mr Farley was ordered to pay $105,000 in damages. The trial judge found in favour of Ms Mickle, a high school music teacher:

When defamatory publications are made on social media it is common knowledge that they spread. They are spread easily by the simple manipulation of mobile phones and computers. Their evil lies in the grapevine effect that stems from the use of this type of communication.

Opening a fictitious profile to be a “mean girl”

Don’t think that if you have a fictitious profile, it’s open slather to spread hate. Courts have ordered social media platforms to disclose the identities of anonymous social media users through applications for preliminary discovery. In Western Australia, the Supreme Court ordered the disclosure of information relating to posters’ identities in relation to defamatory statements/postings on forums [Resolute Limited and Anor v Warnes [2000] WASC 35 and HotCopper Australia [2010] WASC]. In Britain, the High Court granted an order requiring Facebook to disclose information including the IP addresses of the creators of an offending Facebook page [Applause Store Productions v Raphael [2008] EWHC 1781 (QB)].

How can you protect yourself for being sued for defamation?

  1. Think before you post!
  2. Anonymous or fake profiles are no protection.
  3. Think before you post!
  4. Ordinary people can be sued for defamation.
  5. Think before you post!

Social media has transformed modern communication. It allows people to share interesting as well as mundane stories, engage with businesses, market their own expertise and connect with peers. But when you use social media, temper your behavior online and don’t be impulsive.

Yolanda Floro is Leaders in Heels’ Social Media Editor. This is an edited and modified extract from a recent paper she wrote on Defamation and Social Media as part of her Masters in Law, Media and Journalism studies.