Why Employees Sue Their Boss

“What is the number one reason an employee files a sexual harassment complaint?” I’ve asked this question to over 50,000 managers and employees attending our Professional Conduct Training over the past 12 years and the top two guesses have always been the same – for money and for revenge. In fact, these answers are so predictable that if I was forced to wager a large amount of money on my ability to predict the answer to a particular question, this might be it.

Of course, the real reason people file harassment complaints is to stop offensive behavior. The money motive or revenge incentive guessed by countless CEOs, VPs, middle managers, and factory workers is a stab at a separate but related puzzle – why people sue.

However, these aren’t the right answers to that question, either. Having served as an expert witness in a number of emotional distress-as-a-result-of-harassment-or-discrimination claims, I can tell you that the neither money nor simple revenge tops the list of any plaintiff I’ve evaluated.

Feelings – not money – drive an employee to the lawyer's office and into the court system. The vast majority of normal people file charges because they don't feel valued, respected and listened to. When employees are not treated fairly, litigation can carry immense psychic and otherwise perceived benefits – to “show” the company that they were wronged, to be taken seriously, etc. In this article, we’ll take a look at the nine reasons employees file employment lawsuits and some preventative strategies employers can take before money becomes the measuring stick of justice.

Reason #1:

My boss didn’t take me seriously. When an employee comes to a boss with an interpersonal problem, there is often a sense of urgency and a serious need to “vent” before serious progress can be made; effective managers are trained to meet that need. In addition, putting off an employee, telling the employee to "handle it," making excuses for the offensive behavior, or implying the complainant was somehow at fault can turn a brushfire into a forest fire.

What to Do:

• Don't just focus on managers' legal responsibilities for handling offensive behavior complaints; help them deal with the psychology as well. Help them understand the perspectives of the complainant and the accused, natural responses that can easily be perceived as retaliation, and how to help coworkers get through an investigation. When an employee feels cared about, the chances of being sued are much less.

• Make sure your harassment/discrimination policy has multiple channels of reporting and that employees know how to use them. This way, if an employee feels uncomfortable going to his or her manager with a complaint, s/he has other resources.

Reason #2:

I don't know why I was laid off. Reductions in force put companies at high risk for lawsuits, particularly when they seem to either come out of the blue or to be applied arbitrarily. Ideally, no employee should be hijacked by a sudden downsizing, just as no employee should be clueless about the criteria for layoff selections. If HR does not give them a rational answer for layoff decisions, employees draw their own conclusions. And, they may share these conclusions with an attorney.

What do Do:

• Keep your employees informed. Employees who are kept informed about their company’s financial goals, and progress towards achieving them, take more ownership for their contribution to the bottom line. In addition, should a tough decision (like a layoff) be necessary, a well-informed employee is more likely to understand the business necessity and not take it personally.

• Have an employment law attorney review any layoff plans before they are initiated. S/he can help you proactively evaluate the potential adverse impact on protected classes, evaluate your layoff policies and procedures, and offer guidance on strategies that will reduce your employment liability risk during the process.

Reason #3: But I got good evaluations.

Confronting a poor performer is one of the most dreaded management tasks, which is why so many managers either avoid it altogether or overrate a marginal employee. However, being "nice" creates a false sense of security and expectations and, when the manager finally gets fed up, the employee feels betrayed and mistreated. With demotions, the most common complaint is the employee did not see it coming. Honest communication works wonders in eliminating lawsuits.

What to Do:

• Train your managers to set clear performance expectations at the beginning of the relationship and to give informal feedback regularly. Setting expectations proactively can make it easier for a manager to address performance deficits early on – when there’s a better chance of turning them around.

• Review your managers’ performance appraisals to insure that their evaluations are consistent with the employee’s performance and to increase the odds that you’ll spot any unconscious or intentional biases that may be adversely impacting the performance review process.

Reason # 4. Other people got away with the same thing I was fired for.

Want to just about guarantee a company visit to the courthouse? Hire managers who fail to address the behaviors and actions of people that are inconsistent with stated and published organizational expectations and policies. Better yet, employ managers who let non-conformance go on until they’re out of patience and then ambush the next offender with a disciplinary action.

What to Do

• Specifically include questions about the perceived fairness of your grievance procedures and disciplinary process in yearly employee satisfaction surveys. Not only can this help you spot potential liability, it can help reduce turnover, as perceived inequities in treatment is a leading cause of voluntary terminations.

• Have exit interviews conducted by a third party and make sure they ask about inappropriate behavior and management’s reaction to it.

Reason #5. My boss is an insensitive jerk. Perhaps you’ve worked with a manager who treats all employees as if they are untrustworthy - watching them, tracking them, admonishing them for every slight failing. Or the boss who fails to create standards or give people clear expectations so they know what they are supposed to do. The equal opportunity harasser may not be liable under civil rights law, but s/he is often the reason for a claim.

What to Do:

• Make sure interpersonal skills training is a mandatory part of your management development track, and have a way to evaluate them before their promoted. In particular, consider implementing 360-degree feedback as part of your management development program.

• Give your managers help. Emotional and psychiatric claims are now the leading reasons why people sue employers for on-the-job discrimination. Managers who are trained on how to identify and deal with mental health issues at work, and who have easy access to an EAP or other professionals, are much less likely to handle these situations poorly.

Reason #6: My boss just doesn't like me.

There is no such thing as a legal claim for "my boss just doesn't like me." In spite of the prevalence of at-will employment, the average employee isn't necessarily familiar with 'at will' legalese. Proof: In a recent survey conducted by a law professor at Washington University, 337 job seekers were asked if they believed it would be illegal to fire someone out of personal dislike. A whopping 89% said yes.

What do Do

• Teach your managers how to manage difficult people, including how to conduct behavioral feedback sessions and how to evaluate and document conduct problems

• Make sure interpersonal core competencies are included in your employees’ job description. Many managers fail to address energy-sucking behaviors such as the chronically negative employee or the backstabbing coworker because they don’t perceive these as a part of the job requirements.

Reason #7. I saw what happened to others who complained.

Let’s face it; management behavior ALWAYS trumps organizational policy. No one will pay attention to offensive behavior policies and procedures when managers won’t behave, or if they ignore or retaliate against employees who complain. And, a jury is likely to believe that, given the potential consequences, an employee who failed to follow a company’s policies and procedures was not unreasonable in doing so.

What to Do:

• Tie your harassment/discrimination training to your corporate values and have all compliance training visibly endorsed by a member of senior management.

• Assign one person per location to oversee all offensive behavior investigations. Not only will this help insure a consistent investigative approach, the centralized coordination creates a greater likelihood of spotting an problematic manager.

Reason #8. My boss is sabotaging my chances of getting another job.

Libel suits filed by discharged employees against their former bosses now account for approximately one-third of all defamation actions and the average winning verdict in such cases exceeds $112,000. Many employees who were willing to move on without suing their employer have turned on former employers when they learned someone at the previous place of employment has jeopardized their chances of gaining new employment.

What to Do:

• Maintain tight control over personnel files and avoid distributing personal information without an employee's consent. Managers and supervisors should be instructed to avoid distributing copies of damaging records, such as memos in personnel files or poor performance evaluations

• Avoid criticizing an individual in front of others, particularly at the exit or firing interview. In addition, enforce a policy that allows only name, dates of employment, and last position and/or salary to be distributed to prospective employers. Avoid giving negative references to prospective employers.

• Reason #9. I was treated like a criminal during my termination meeting.

Let’s see; there was the employee who was asked to interview a candidate for a position – his! There was the employee who, when asked to retrieve something from his office, was met by an armed security guard. I’ve heard some horror stories in my time, most often during my independent evaluation of a plaintiff. A termination meeting is as sensitive as a relationship breakup; while you can’t expect the rejected party to leave feeling good, you can help him or her leave with dignity intact.

What to Do:

• Have all termination decisions reviewed independently prior to their being carried out. Make sure all documentation is in place and that the employee understands the jeopardy s/he has been in.

• Train, train, train. The termination meeting is emotionally difficult for both the terminating manager and the terminated employee. Make sure your discipline and termination includes the “psychology” of termination, i.e., how managers can handle their own feelings so they don’t let them impact their communication, how to communicate clearly and respectfully, and so forth.

The Bottom Line

Yes, there are a few bad apples in every bunch, and the trick there is to keep them out of the store. For the other 99% of employees-who-turn-into-plaintiffs, the best way to avoid winding up in a courtroom defending your company’s behavior is to treat your employees with respect and give your managers the interpersonal training and the professional resources they need to manage effectively. And, of course, to hold them accountable when they fail to do either one.