AUTHOR: The Dental CFO
October 01, 2023
One of the challenges of being an employer is the responsibility to your business and patients to prevent employment lawsuits. The focus of any great practice is providing the best care possible to your patients, and the last thing you want is an employment lawsuit distracting from your primary purpose. Unfortunately, these lawsuits are more common than you may think and are not only reserved for careless employers.
There may be ways you have been unknowingly putting yourself as an employer and your practice at risk. A lawsuit will at the very least cost your practice money and will cost you time and energy, even if you end up winning. Be sure not to rely on having no issues with employees or employment lawsuits in the past. Even if you have never had to terminate an employee before, it only takes one lawsuit to negatively affect your time and finances.
Employer Lawsuits, How Often Do They Really Happen?
Did you know, in the last 5 years, 6 out of 10 employers have faced some form of an employment lawsuit? Another jarring statistic is that nationwide, only 3% of employment law complaints ever make it to trial. While this may seem like a small fraction of employment lawsuits, there is no guarantee that you would be able to avoid trial, and if you do find yourself facing an employment lawsuit in a trial, you could be up against an aggressive attorney.
Depending on which attorney the previous employee hires, the chances of an expensive and time-consuming legal process can increase significantly. Most contingency attorneys working on a 30% or higher fee arrangement of any recovery don’t have the wherewithal or stamina to see a lengthy legal process through over the course of a year or more.
However, if you do come across an attorney who specializes in those cases, they may take the time to settle. If you do face an attorney who takes that sort of time, they are usually aggressive and can endanger your practice. No matter the scenario, the legal process is usually expensive and a huge time commitment, so any way you can avoid enduring it altogether will benefit you in the long run.
Avoidable Mistakes That Many Employers Make: Employment At-Will
Employment-at-will is a common term used in contracts when signing on a new employee. As defined by the NCSL, “At-will means that an employer can terminate an employee at any time for any reason, except an illegal one, or for no reason without incurring legal liability. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences.” If an employee for any reason, signed a Non-Disclosure Agreement, it is best practice to ensure their exit is in good standing with the agreement in place.
While this may seem very straight-forward and allows for freedom when it comes to terminating positions and employees, it can be easy to tear apart in a legal disagreement. The term “at-will” is overly simplified; there are many exceptions to “at-will employment” such as protected classes. Protected classes are defined as “The groups protected from employment discrimination by law. These groups include men and women on the basis of sex; any group which shares a common race, religion, color, or national origin; people over 40; and people with physical or mental handicaps.”
Even if the termination has nothing to do with their race or class, if you are lacking a clear reason to terminate the employee, you are subject to accusations of discrimination. You need to have a valid, performance-based reason for termination to protect yourself and your practice from any lawsuits. Protecting yourself and your practice by having air-tight systems in place will give you peace of mind, and ensure that you can focus on what is really important: patient care.
To be sure that the issues which have led to the termination are clear, be sure to document everything. This starts at the beginning of the person’s employment, which should outline expectations, policies, and the type of employment arrangement that the employee has. Moving forward, every time you have a performance-related meeting or evaluation with any employee, it needs to be documented in detail.
If you are having issues with an employee, be sure to address the issue clearly with them and document that you have done so, along with any write-ups, so that if the issues are not resolved you are able to prove that the issues were brought up with the employee prior to termination.
Even though it is important to be thorough when it comes to documentation, don’t be afraid to take action when necessary. Do not allow unfit employees to continue at your practice; just be sure to do your due diligence prior to termination. If you are keeping consistent and thorough documentation, you should feel free to do what is best for your practice and work culture.
Incomplete or Contradictory Documentation
As mentioned in the prior section, documentation is essential when managing employees. Although paperwork is required when starting employment and throughout employment, personnel files are frequently unkept and disorganized. This is a common issue that may seem like a simple mistake, but can really cause a number of problems for your practice.
Following and maintaining a file organization system is a simple but effective way to be sure that you are straight on all of your bookkeeping and documentation. If you do have all of your employee’s documentation, but there is not much in their files, that might be a sign that you do not meet with your employees for evaluations frequently enough ,or if you do, that perhaps you are not as thorough in documenting these conversations as you should be.
Be sure to continuously counsel your personnel on performance concerns, and review their performance periodically so that both parties are clear on how the employee is doing in their role. If there are issues regarding an employee, address them promptly and document every interaction. Do not let the issues go unaddressed until it becomes a bigger issue or jeopardizes the employee’s job. Be sure to inform the employee of their mistakes or carelessness so that they are aware of the issue and have a chance to correct their behavior before it gets more serious.
Once you have addressed the issues with the employee, ask for their commitment to improve their performance. This commitment should be documented as well, and sometimes drawing attention to the issue is all that is needed to see improvements. Be sure to include that future action will be taken if improvements are not seen.
Clear communication, and documentation of communication, will hopefully address performance issues properly before it comes to termination, but if not, it will make the employee aware and give you written reason for termination that is inarguable. Be sure to document all meetings and evaluations, good or bad. If you are terminating the employee for an issue seen in their performance, make sure there have not been any claims that contradict this issue.
If a variety of people in management have evaluated an employee, be sure that the performance reviews are discussed so that all of management is on the same page, and so that the employee is not being given mixed messages on their performance.
First Steps Toward Updating Systems to Avoid Lawsuits
Even if you have never faced any issues with employees or employment lawsuits in the past, be sure to still re-evaluate the systems you have in place for documentation and performance evaluations. It really only takes one incident to significantly affect your practice, create unnecessary expenses, and take up tons of time and energy. It’s far better to address potential errors in your system before an incident, rather than have to deal with one after a lawsuit is already in motion. Ask yourself the following questions to get an idea of how air-tight your systems are as-is:
- What are some potential mistakes you’re currently making or have made in the past that could subject you or your practice to a potential lawsuit?
- What is your system for performance reviews, and what could be adjusted?
- Are you writing your employment documents in a way that will protect you, and are you relying too heavily on “at-will employment”?
If your answers to these questions are sparking any concerns about the systems you have in place should you need to fire an employee, there is no time like the present to start making changes. In employment lawsuits, as in dentistry, an ounce of prevention is worth a pound of cure.
Speak with our team of Dental Practice Management experts about ways you can plan to be proactive and prevent potential lawsuits, instead of speaking with an attorney when you encounter one. There is no better time than now to begin planning for your practice’s continued success and future.