In legal disputes, five primary challenges can significantly complicate the defense of an employment lawsuit:

1. Failure to document routine employment issues.
In any employment litigation, whether it’s wage and hour claims, leave issues, or harassment claims – the amount of documentation an employer has dramatically increases the odds of prevailing in litigation. I would even go as far as to say there is a relationship in place here (similar to Moore’s law in the computing industry) that the likelihood of avoiding a devastating judgment is proportionate to the amount of documentation the employer has regarding the particular employee or group of employees involved in the litigation.

What should employers document? Conversations with employees, reviews, days absent and the reason for the absence, performance issues (both good and bad – see below), among other items.  With email and the ability to scan documents or take pictures of documents on a phone, there is almost no excuse not to have everything documented. The only issue preventing employers from documenting issues is not stressing the need to do document, and the press of business.

2. Not maintaining the proper time records.
Employers have the burden to record and maintain accurate time records under California law. If the employer knows employees are not properly recording their time, the employer needs to enforce a policy to have employees accurately record their time, even if it requires disciplinary action.  Some examples of inadequate time records by employers:

  • The records that do not record the employee’s actual time working. For example, the employee records their start and stop time and the same time every day even though the employer knows it changes.
  • Not keeping time records long enough. The statute of limitations can reach back four years in wage and hour class actions, and these records will be the primary evidence in most cases.
  • Not recording all required information. For example, employers are required to record employee’s meal periods under the IWC Wage Orders (see section 7 – Records).
  • Not keeping the time records in a manner that is usable. Maintaining records in a form that makes reviewing the records almost impossible is almost equivalent to not maintaining them in the first place. Some thought should be put into how an employer is keeping old time record information and how that data could efficiently be reviewed in the future if needed.

3. Loss of institutional knowledge.
It’s crucial that knowledge about the company’s employment policies, including their implementation and modifications, is not held by a single individual. This institutional knowledge should be well-documented and accessible to multiple people within the organization to ensure continuity and compliance.

4. Inconsistent communication of goals and expectations.
Regular and accurate performance reviews are fundamental.  They play a crucial role in cases of wrongful termination, discrimination, or retaliation. Accurate documentation of performance reviews and clear communication of expectations are vital.  Addressing performance issues in writing is not only necessary for improvement but critical in defending against claims.

5. Lack of written policies.
Operating on unwritten policies can lead to significant risks.  Clear, written policies in an employee handbook or another formal document are essential.  This ensures that policies are applied consistently and protects against claims of arbitrary discipline based on non-existent policies.

Addressing these five areas can significantly strengthen an employer’s position in employment litigation, emphasizing the importance of thorough documentation, proper record-keeping, shared institutional knowledge, clear communication, and formalized policies.