Common Causes of Lawsuits Filed Against Employers

Business in Greenwood, Indiana

It is not uncommon for employees to sue their employers, either as individuals or as a union. All employees have rights that their employers must uphold, and when the employers fail to do so, it can result in a lawsuit that may or may not be covered by business insurance. Moreover, if there are more than a few employees involved, an employer can face a class action lawsuit, which can lead to class action lawsuit mediation or a court case.

There are many reasons as to why employees bring their employers to court, but there is a handful that occurs more frequently than others. In this article, let’s talk about the most common causes of lawsuits made against employers and businesses.

1. Employment discrimination

Federal anti-discrimination laws make it unlawful for employers to discriminate against employees based on religion, sex, race, color, age, or disability. The most significant acts among these anti-discrimination laws include:

Equal Pay Act of 1963. This act protects men and women who perform equal work from wage discrimination based on sex.

Title VII of the Civil Rights Act of 1964 makes it illegal for employers to discriminate against employees and job applicants on the basis of sex, gender, race, age, disability, and religion. The act, as amended, encompasses every employment decision, starting from recruitment to terminations.

Age Discrimination in Employment Act of 1967 or ADEA, as amended, protects people 40 years old and above from age-based discrimination.

Rehabilitation Act of 1973. This law protects employees and job applicants from disability-based discrimination and requires employers to make accommodations for disabled workers within reason.

Pregnancy Discrimination Act of 1978 bars employers from discriminating against a female individual because of her pregnancy, childbirth, or any other related medical condition.

There also other anti-discrimination laws that vary from state to state. Violations of both federal and local acts can lead to lawsuits from employees or job applicants.

2. Wrongful termination

Also referred to as wrongful dismissal or wrongful discharge, wrongful termination is when an employer fires an employee for illegal reasons or in such a way that violates the contract agreed upon by both parties. Here are some examples of wrongful termination:

  • An employer making an employee’s work so unbearable so that they quit on their own.
  • An employer firing an employee after they file a workers’ compensation claim.
  • An employee reporting an employer for illegal activity and getting fired as a result.
  • An employee getting fired because of discrimination.

people fighting

3. Harassment

Workplace harassment refers to a form of discrimination that violates federal, state, or local anti-discrimination laws. Harassment can be grounds for suing when employees are forced to endure it to stay employed; if the workplace becomes hostile, intimidating, or abusive; or if a supervisor’s harassment results in an apparent change in an employee’s salary or employment status.

There are many acts that can be considered harassment, including but not limited to: offensive jokes, sexual advances, physical assault, threats, intimidation, slurs, offensive pictures, and ridicule.

4. Wage law violations

Employers that violate wage laws on minimum wage, overtime, and misclassification, among others, can face wage and hour lawsuits. Some reasons for wage lawsuits include:

  • Denial of overtime pay
  • Employees wrongly classified as independent contractors
  • Paying sub-minimum wages
  • Failing to pay employees a final paycheck
  • Errors in the calculation of hours and overtime

5. Breach of contract

Another common reason for lawsuits made against employers is a breach of contract wherein the employer fails to comply with its terms. For example, an employee’s contract states that they are entitled to 2 weeks of PTO a year. When their employer fails to pay their PTO or does not allow the said employee to the 2 full weeks that they are entitled to, they can be sued for breach of contract.

The employer may then be required to pay damages, calculated based on what the employee would have received if a breach of contract did not occur (whether the case is settled in court or out of court). These calculations may include pay, benefits, failure to promote, demotions, or termination. Attorney fees and liquidated damages may also be awarded to the employee.

Moreover, it is important that employees know that the contract does not need to be written down. Agreements that are implied through statements, actions, or documents other than the contract can be recognized in court.

In order to protect themselves from abuse, exploitation, and other wrongful acts made by their employer, employees must be well aware of the laws that protect their rights. Moreover, they must know when and if they have grounds for a case to sue their employer and obtain what they are entitled to.

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