09/ 17/ 2004
by Tamara E. Holmes
You may consider yourself to be fair to all of your employees, but the harsh reality is that one or more may not have that same perception. If that is the case, you may one day find your small business the subject of a discrimination lawsuit. But by at least considering what you'd do should the unthinkable occur, you could be better prepared to handle it if it does.
There were 81,293 charges of discrimination made against employers in 2003, according to the Equal Employment Opportunity Commission. Federal laws say it is illegal to discriminate against individuals based on age, sex, race, ethnicity, religion or physical disability. If you use any of these criteria for making hiring, firing, promotion or salary decisions, your company can be sued.
But what happens if you fire one of your employees for failure to do his job efficiently, and he says you really fired him because he is Latino?
Whether ethnicity came into play or not, you must take the charges seriously, immediately.
"As a business owner, you should always be concerned about [discrimination] issues," says Jared K. Ellison, a lawyer who handles discrimination cases for Washington, D.C.-based law firm Temple Law Offices.
When you start having problems with an employee's performance, document those problems on paper so you can justify firing him or her if that's what it comes down to.
The first thing an employee must do if he or she plans to sue is file a charge with the EEOC. The employee has up until either 180 or 300 days after an incident to file the charge, depending upon the state.
As a small-business owner, you might not be subject to federal discrimination laws, depending upon the size of your company. For example, the Civil Rights Act of 1964, which prohibits discrimination based upon race, sex or national origin, only applies to businesses with 15 or more employees. If you're faced with the threat of a suit, check to make sure your business is large enough to be subject to federal laws.
That's not to say that an employee can't file a civil suit against your company, but you'll want to be aware of the areas in which you are at risk.
The EEOC will review the case by first contacting you and giving you a chance to respond to the charges. Then the EEOC will give the employee a chance to respond again, after which the EEOC will decide whether or not it finds that the law has been violated. If it does, it will generally allow you to come up with a mutually agreed-upon resolution or it will file suit along with the plaintiff.
If the EEOC does not find fault with your company, that still does not mean you're out of the woods. Even if the EEOC decides not to take up any discrimination charges against your company, the employee has 90 days to file a suit of his or her own.
Because of the high stakes involved, you should seek an attorney who is familiar with discrimination laws as soon as you're contacted by the EEOC, Ellison says.
"A company cannot represent itself," Ellison says. "[It] must have an attorney."
There are a number of ways to find a trustworthy attorney who specializes in discrimination, he says.
"You can call the different bar associations in that state or you can do your research on martindale.com, which is a legal Web site, or you can ask other attorneys, 'Do you know anybody that handles Title 7 discrimination cases?' and they will usually let you know. Word of mouth is usually the most powerful tool."
Not only will an attorney be able to lead you through the process, which could last a number of years, but he or she may also advise you to settle the case or participate in the EEOC's free mediation program. That program gives employers and employees a chance to come up with a solution outside of litigation.
The bottom line, Ellison says, is that business owners should be proactive when it comes to proving they did not engage in discriminatory practices because losing a discrimination suit is no joke.
"A suit can hurt [business owners] financially where it can actually cripple their business and they may have to end up filing bankruptcy," he says. "It can put a small business out of business."
