About our blog post author: Jason Carney is the director of human resources at Indianapolis-based WorkSmart Systems, Inc., a leading professional employer organization (PEO) serving more than 300 clients with employees in 37 states.

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Employee-related litigation is a constant worry for any employer.

Complaints filed by the U.S. Equal Employment Opportunity Commission (EEOC) reached an all-time high in 2010, and many other complaints constantly threaten a company’s bottom line.

Responding to an EEOC charge, legitimate or frivolous, can cost a small company thousands of dollars – and that’s before it even reaches the formal stage. Legal fees can skyrocket if a complaint goes to court.

Staying up to date on labor laws is critical to the success of small- and medium-sized businesses. Many of these businesses lack the resources to do so on their own, which is why having airtight workplace policies in place – including for the evolving world of social media – is key.

In 2010, a record 99,992 charges were made to the EEOC, a 7-percent increase over 2009.  A stale economy could be to blame.  Individuals terminated from jobs might have lacked the financial resources to fall back on, spurring attempts to recoup lost paychecks.

Case in point: The dynamic of charges has changed.  Retaliation claims are on the rise.  In 2010, 36.3 percent were retaliation charges, marking the second year in a row it led all categories.

Simply responding to an EEOC charge with labor counsel will likely cost an employer a minimum of $3,000 and can quickly climb to as much as $8,000 – even if the EEOC finds no merit in the claim.  Defending against a charge at any level can be catastrophically costly.

The nature of retaliation charges has also evolved over time. Increasingly, for example, the National Labor Relations Board (NLRB) is targeting non-union employers because of some provisions of the National Labor Relations Act (NLRA), namely the guidelines surrounding concerted protected activity.

Social media has played a key role in retaliation charges rooted in concerted protected activity.

Consider this scenario: A few employees are disciplined for something and then tweet or post a Facebook entry complaining about the discipline. If the employees are then fired or disciplined further, they could have a legitimate retaliation charge because their conversation may be protected under Section 7 of the NLRA, which protects employees’ rights to “concerted activity” for “mutual aid or protection.”

A renewed investigatory focus by federal agencies could also be fueling an uptick in employment-related claims. Agencies such as the U.S. Department of Labor and the EEOC have increased personnel as more funding is available for enforcement. For example, the budget for OSHA’s whistleblower protection program is slated to increase by $6 million in 2012, giving renewed focus to the activity.

It’s no wonder that employers can feel overwhelmed when it comes to safeguarding against litigation.

An employer can stay ahead of the game with a few easy steps:

  • Policy development: Have good policies in place and regularly update employee handbooks.  Policies should including one addressing social media participation, specifically mentioning that the terms of the policy are not intended to interfere with concerted protected activity.
  • Ongoing informal education: Guide your employees to changes in federal labor laws.
  • Formal training: Ensure that your employees are well versed in company policies and federal guidelines, such as unlawful harassment prevention and wage and hour law proficiency.

Costs associated with employee-related litigation can destroy an otherwise healthy business. By staying in front of workplace issues, an employer can enjoy a productive environment and gain the trust of his most valuable resource – its employees.