4 Recent Court Decisions Impacting Small Business
The biggest impacts on your business can often come not from your customers or employees, but legislative changes and court rulings that have a ripple effect across industries. Whether or not you have your own legal or compliance teams, it's important to stay current on legal matters related to your business.
Below are five recent court decisions that could impact the way you run your company.
EEOC v. Darden Restaurants
Darden Restaurants recently settled an age discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC) for $2.85 million. The lawsuit sought relief for applicants over age 40 who had been denied employment opportunities at Darden's Seasons 52 restaurants. Some applicants provided testimony that during interviews they were told, “We're looking for someone younger.”
Why is this important? Discrimination on the basis of age is wrong and, of course, illegal. Not only that, it puts companies at a disadvantage by limiting their candidate pool. You always need to find the best talent, regardless of age.
EEOC v. Alorica
Alorica, a provider of customer management solutions, settled a sexual harassment lawsuit brought by the EEOC for $3.5 million. The lawsuit stated that male and female customer service employees were subjected to harassment and a hostile work environment by managers and co-workers. In addition, the suit alleged that the human resources department failed to properly address the matter when employees expressed concerns.
Why is this important? Organizations need to take allegations of discrimination, harassment and retaliation seriously. Not only is the law quite clear on this, but businesses can be destroyed by the ramifications of such a toxic work environment. Employees and managers need training and HR needs to respond when issues surface.
Epic Systems v. Lewis
The U.S. Supreme Court upheld class-action waivers in arbitration agreements. This means that businesses have the power to stop employees from teaming up to file claims for work-related issues. Instead, each employee must file an individual claim when a suspected violation arises.
Why is this important? Besides shielding employers from class action lawsuits, this ruling does bring focus to arbitration as a way to resolve issues. Arbitration programs can be less expensive and less public for everyone involved.
(You don't want to be on this list!)
According to the Society for Human Resource Management (SHRM), the top-ten employment related lawsuits cost companies over $2 billion in 2017. Two of the most common mistakes are misclassifying employees as exempt from the Fair Labor Standards Act (FLSA), when they should receive overtime, and misclassifying freelancers, then directing their work like employees.
Why is this important? Wage and hour violations can be expensive. Organizations need to make sure they classify work correctly and manage both internal and external employees appropriately. It will save you money in the long run, as well as maintain your reputation as a fair and desirable employer.
To stay current with legislative changes and legal news that could impact your business, utilize professional and networking organizations, legal resources, new outlets and benefits providers to make sure that you're always on the right side of the law. Even with the best of intentions, costly mistakes can be made. With a little research now, you can avoid those missteps.
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