The small businesses lawyer Rush Nigut has represented from start-up to profitability are disparate, but their owners have one frustration in common: They agree their lives were simpler when they were focused solely on getting their products to market.

“Inevitably, they wish it could be the way it was, when they didn’t have to deal with employees,” said Nigut, a shareholder at Sullivan & Ward, a 70-year-old corporate law firm that moved from downtown Des Moines to an office building at 6601 Westown Parkway in West Des Moines. The firm’s practice areas include employment law, with lawyers representing both employers and employees in disputes such as wrongful termination, employment discrimination and other labor disputes. Lawyers at Sullivan & Ward help business clients avoid costly disputes by conducting employment audits and developing comprehensive employee handbooks, but also represent employees who believe they have been wrongfully fired.

“Employers realize employees are important, but it’s a balancing act,” Nigut said. “Some people say they want to sell their businesses because there are so many headaches to deal with.”

It’s no wonder. Retaliation claims – that is, claims in which the former employee claims to have been fired for bringing problems to the attention of supervisors – represent more than a quarter of all claims filed with the U.S. Equal Employment Opportunity Commission, the key federal agency responsible for enforcing anti-discrimination laws. In fiscal 2004 alone, the last year for which statistics are available, the EEOC resolved 24,750 cases and recovered more than $90 million in monetary benefits for aggrieved individuals. That number excludes future pay and punitive damages for emotional distress that could be granted in judgments or court settlements the discharged employee might receive through a subsequent lawsuit.

It all adds up to an expensive and, Nigut said, largely preventable problem for businesses. “If you’re dealing with an employee claim, whether it goes to trial or not, you could have 40 to 100 man-hours or more spent by people in the company, aside from what you’re paying the lawyers to handle the case,” he said.

When dealing with a specific case, Nigut advises a policy requiring supervisors to document their legitimate, non-retalitory reasons for firing the employee and also requiring firing decisions to be reviewed by company executives and lawyers.

In general, though, a comprehensive employment manual that clearly states the company’s policy against retaliation, outlines its procedures for dealing with complaints against supervisors or executives, and details drug-testing, Internet use and other special policies is a good line of defense in preventing problems, Nigut said.

“Lots of times, the company won’t have procedures in place to tell employees what happens if they have a complaint against a supervisor or executive,” he said. “Handbooks are sometimes silent about that, and they need to have procedures in place to have multiple people to report those complaints to.”

He cautioned that if the employee handbook is not well-written, “it can create as much of a problem as not having one at all.” For example, care should be taken to ensure the handbook’s provisions can’t be construed as forming a binding employment contract. It should also contain language stating that employment is “at will” in Iowa, Nigut said.

In addition, without a handbook, employers won’t have a policy in place for dealing with allegations of discrimination and harassment and can’t raise that as an affirmative defense. “It’s the first thing a court is going to look at,” he said.

Big and mid-sized companies usually have the proper handbooks, but small-business owners and start-up entrepreneurs often avoid the expense of a professional employment manual.

“”Start-ups don’t have a lot of capital, and one of the things that goes by the wayside is the legal documentation,” Nigut said. “It’s one of the things that is on the back burner.”

He cautioned that could prove to be a costly oversight later on. “A substantial number of small employers don’t think about it until the time comes, and then they realize they haven’t done what they should have to protect themselves,” he said. “Often, you see that they don’t document the disciplinary action very well. If you want to terminate someone and have nothing in the files that indicates the person has performed below the standards, it’s much harder to justify a non-discriminatory reason for dismissal.

“They’re often surprised to learn they need to think about whether they can get rid of this person.”

Women filing bulk of discrimination claims

In its 2004 study “Women at Work: Looking Behind the Numbers 40 Years After the Civil Rights Act of 1964,” the National Partnership for Women & Families analyzed Equal Employment Opportunity Commission claims from fiscal year 1992 through fiscal year 2003. Among the advocacy group’s findings:

* Sex discrimination claims increased by 12 percent. Claims by Latinas rose 68 percent, claims by African-American women rose 20 percent, claims by Asian/Pacific Islanders rose 83 percent, and claims by American Indian/Alaskan Native women rose 44 percent.

* Pregnancy discrimination claims increased by 39 percent, though the nation’s birth rate dropped 9 percent during that period.

* The number of age discrimination claims filed by women rose 39 percent, while the number of age discrimination charges filed by men fell 24 percent.

* Overall, sexual harassment claims by women increased 22 percent, mostly among women of color. Claims by Caucasian women increased by 5 percent, claims by African-American women rose 42 percent and claims by Latinas increased 120 percent. In comparison, the percentage of sexual harassment claims filed by men increased to 14.7 percent in fiscal 2003 from 9 percent in fiscal 1992.

* More women than men file claims of retaliation for complaining about discrimination they received on the job. In fiscal 2003, women filed 60 percent more claims of retaliation than men did.

* From fiscal 1992 to fiscal 2003, the number of national origin discrimination complaints filed by women increased 22 percent, due primarily to increases in discrimination claims by women of color. Claims filed by Latinas increased 16 percent and claims filed by African-American women rose 92 percent.

Source: National Partnership for Women & Families