Proactive Ways to Avoid Legal Trouble

Make sure you aren't discriminating against employees or failing to protect yourself against other legal liabilities.

By Cynthia McCay

After a tumultuous year, I'm thrilled to leap into 2009 with the expectation that this year will hold a myriad of mysteries, successes and peace of mind for us all. However, as a business owner who's crawled through the trenches with the best of them, my wishes are accompanied by a feeling of trepidation. I handle those feelings by making certain I have control over the things I can control.My New Year's gift to you consists of some handy tidbits to keep you in control when it comes to legal liability.

Is there any liability within the workplace that you can prevent? The simple answer is yes, but all of these require attention:

The Age Discrimination in Employment Act (ADEA): Depending on the circumstances, as a business owner you may be liable for what occurs within your workplace. Be familiar with your employees and their relationships with other workers, vendors and clients.

I know an attorney who hired a law clerk in her late 50s. The office manager routinely berated the woman and frequently mentioned that the previous employees were "much younger and faster" than she. Behavior like this is no longer tolerated. In 2005, the Supreme Court ruled 5 to 3 that employees do not have the burden of proof to show intentional discrimination against them based on age to win a case under federal law.

The employee can prevail in a suit and be awarded a handsome settlement on the theory that an employer's practices offered a stronger negative impact on older than younger workers. The ADEA applies to workers ages 40 and up. Congress targeted age discrimination under the ADEA because older employees were disadvantaged in maintaining and recapturing employment, restricted by age limits and adversely affected by unemployment. Congress also knew these issues had an unfortunate influence on the American economy.

The ADEA applies to employers, employment agencies and labor organizations.

Title 7: Another employee at the firm mentioned above often referred to her distaste for homosexuals. A hostile work environment presents a likelihood for litigation if you allow such verbal attacks to occur. Title 7 protects individuals falling within certain protected classes:

Race and color

National origin

Sex, sexuality and pregnancy

Religion and religious practices

In the case of religion, for example, the employer has an assumed duty to accommodate an employee's faith. There are some exceptions to this rule. If the accommodation for the employee is too burdensome and somehow adversely affects business, there may not be a duty to provide certain alterations.

When it comes to national origin, the Act prohibits discrimination against ethnic groups (Italians, Latinos, Poles, etc.). It further prohibits discrimination based on cultural differences (Armenians, Gypsies, Cajuns, etc.). A simple joke at an employee's expense may open the potential for a federal law suit.

Here are additional ways a business owner might experience liability:

Underinsured. State statutes may make the owner of a business liable for accidents or worker's compensation within the workplace if an independent contractor or employer is uninsured or underinsured. Consult an expert in insurance to make sure you are completely covered for all aspects of accidental injury and worker's compensation claims.

Safety. A business owner has a specific responsibility to keep the premises safe for customers and employees. I've seen my share of owners who neglected to shovel a driveway or common area. Such disregard for safety can lead to a debilitating liability and ruin a business in the event of a lawsuit.

Corporations.If you establish a corporation or LLC, you may not be completely protected from personal or corporate liability. Take the time and expense to consult an attorney well-versed in business law.

As we enter this new year, don't give up on your dreams. But make sure you're safe, informed and free of liability.