Five Workplace Torts Every Small Business Owner Must Be Aware of

Running a small business is hard work. Not only must you be the head of operations but often you must also act as the human resource department as well. Between trying to maximize profits, please customers, maximize the exposure of your products and services, and make sure everyone gets paid on time, the thought of defending a workplace tort lawsuit brought by a current or former employee may not even cross your mind. Turning a blind eye to common workplace torts, however, is a mistake no small business owner can afford to make.

From Patrick's interview for the Masters of the Courtroom series on

Just the word “tort” may intimidate some small business owners who are not used to dealing with legal matters. The word tort comes from Latin and simply means a wrongful act or an infringement of a right (other than under contract) leading to civil legal liability. While not all injuries lead to civil liability, there are certain types of workplace conduct that may give current or former employees a basis for filing a lawsuit. The following five torts are by no means the only types of workplace torts but are among some of the most commonly litigated. It is important to involve the services of an experienced employment and wage and hour law attorney at the earliest possible stage to head off or completely avoid such lawsuits.

1. Employment Discrimination

Federal, state and even certain municipal laws or ordinances prohibit employers from engaging in employment discrimination, which includes using prohibited criteria to make employment decisions such as hiring, firing, or compensation. Generally speaking, the prohibited criteria an employer should not take into consideration when making employment decisions include characteristics such as age, sex, race, national origin, disability, among other characteristics. When in doubt have an experienced attorney research the laws applicable to your business to provide you with a more exhaustive list of prohibited criteria for your particular jurisdiction as the criteria can change from state to state or municipality to municipality.

2. Unlawful Demotion

Closely related to the tort of discrimination is the tort of unlawful demotion. While a discrimination tort often involves termination or a failure to hire, this tort arises when an employee is demoted because of some illegal reason such as age, sex, race, disability, pregnancy, etc. So long as the decision to demote an employee is not made based on illegal criteria, a business owner is free to make employment decisions about where an employee best fits within an organization or whether the quality of the employee’s work justifies his or her current title.

3. Wrongful Failure to Promote

As with demotion, an employer may choose to promote or not to promote an employee for a variety of reasons. The decision not to promote an employee is perfectly legal so long as the rationale for that decision is not based on the employee’s membership in a protected class.

4. Wrongful Termination

As a small business owner, you enjoy wide latitude in deciding whether to retain or terminate employees. Despite this, the tort of wrongful termination arises when an employee is terminated for a discriminatory reason or as retaliation for engaging in protected activity, such as reporting illegal employment activities to the authorities or filing a workers compensation claim after suffering a workplace injury.

5. Employment-Related Defamation

Current and former employees are entitled to protection from an employer’s spreading of misinformation about that employee. In a sense, employees are more vulnerable to reputational harm from an employer’s smears than from similar smears from a fellow employee. Thus, it is important not to share disparaging, untrue information about current or former employers to others, including other prospective employers of that individual.

Defending against a workplace tort lawsuit can be an expensive and time-consuming matter. Best practice is to have policies and procedures in place to prevent the occurrence of such torts in the first place. If, despite your best efforts, an employee alleges misconduct in the workplace, it is important to act swiftly and diligently to protect your small business. This action often includes consulting an experienced employment and business tort attorney who will be able to advise you regarding how to defend against the lawsuit and steps that can be taken to minimize any legal exposure to similar suits in the future.

Super Lawyers named Illinois business and employment law trial attorney Peter Lubin a Super Lawyer and Illinois employment and business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Business law, libel, non-compete agreements and employment law. Lubin Austermuehle’s Chicago and Oak Brook business dispute lawyers have over thirty years of experience in litigating complex business lawsuits and shareholder oppression cases. Our Waukegan and Lake Forest business trial attorneys, civil litigation lawyers and copyright attorneys handle emergency business lawsuits involving copyrights, trademarks, injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits. We also assist Chicago, Evanston and Naperville area businesses and owners who are victims of fraud. You can contact us by calling 630-333-0333. You can also contact us online here.

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