A company’s policies are important but can be become a business litigation case when acts like shareholder oppression, breaches of contract and other matters occur.
You have to follow many employment-related laws as an employer, and failing to do so — even accidentally or unintentionally — can result in a lawsuit. At the same time, you likely have company rules or regulations laid out as policies in your employee handbook. Every new employee gets one so that they know what to expect.
But are these policies legally binding? They are not law, of course, since not all companies have to follow the same rules, but are there any instances in which they apply across the board no matter your industry?
You must follow your own policies
The key here is to remember that you are bound by the policies contained in your employee handbook, even if the law doesn’t hold you to that standard. Violating them can be illegal.
For instance, Company A has a rule that employees will always get two warnings before being terminated. The law doesn’t require it, but if you fire an employee without warning, they may be able to file a wrongful termination lawsuit. They believed that you would warn them first, and they had a right to it as per your handbook.
At Company B, there is no handbook at all. Under current employment laws, employers can fire workers at any time without advance notice. If your fire an employee without warning, they may feel that it is unfair, but they likely have no grounds for a wrongful termination suit.
Knowing how to proceed when facing a lawsuit
If an employee believes that you have violated their rights and threatens to sue — or files a lawsuit against your company — then it is absolutely crucial that you know what steps to take.