Business owners face a myriad of hurdles, some of which arise on a daily basis. We have discussed many on this blog, such as allegations of sexual harassment in the workplace and legal issues with other companies. However, the consequences of an employee lawsuit can be particularly damaging for any business, regardless of its size. If one of your current or former employees has decided to pursue legal action against your company, for any reason, it is important to know what is at stake and be aware of how litigation could harm your company. Aside from the financial penalties and potential loss of key business relationships, the damage to your business' reputation could be significant.
Sometimes, lawsuits filed by employees become highly publicized. Local and national media may cover certain cases, which could be incredibly damaging to the reputation of your business and cause potential customers to take their money elsewhere. Moreover, clients and business partners may decide to move on as a result of the allegations. In fact, this damage can occur even if an employee falsely accuses a company of wrongdoing. In the digital age, information can spread rapidly over social media and the rest of the internet, which can add to the damage.
You should do all that you can to protect your business' reputation in the event that an employee decides to take legal action or your firm is taken to court for any reason. Our business law page covers more that has to do with employee lawsuits.