I have been asked by more than one frustrated California employer how to avoid or reduce employment lawsuits. It is not easy question to answer as there are many variables that go into generating employment law claims. However, in no particular order, what follows is a list of strategies and steps to consider to implement an effective claim reduction plan:

1. Document, document, document: Documenting employee issues and the employer’s response is a big part of disproving claims. Indeed, a consistent practice of documenting issues can even be used to indicate that something did not happen through the lack of documentation.
2. Arbitration agreements: Having arbitration agreements with employees improves the efficiency of dispute resolution and generally reduces the impact and frequency of claims.
3. Employee handbook: Having a good employee handbook that is updated each year is a big part of reducing claims. The law changes frequently; make sure you change with it. 
4. Employment forms and posters: Make sure the forms you use are up to date and that required posters and pamphlets are current. These need to be updated every year or so.
5. Know the handbook: You would be surprised how many employers do not follow their own policies. It is a lot to ask of California employers to be aware of all the nuances of California law, but reading and applying the handbook is a good place to start. 
6. Human resources training: Having a good human resources director is a good start, but that person needs to stay on top of legal developments and strategies. 
7. Compliance audits: Payroll practices, overtime and bonus payments, commission practices and agreements, salaries and pay rates, hiring practices, background checks, exemptions from overtime, record keeping, I-9 forms, retirement plans, leave practices, disability issues, OSHA compliance, information security, and HIPAA compliance are all areas that can be examined by professionals with expertise. 
8. Background checks: While an employer’s options in terms of requiring a post-offer, pre-employment credit check are limited by the duties of the position, nothing prohibits employers from doing other types of background searches, including reviewing litigation records and publicly available Internet postings. Employers are required to provide a copy of any document obtained which is relied upon for an employment decision. In addition, there are specific disclosures and communications required for use of criminal records. 
9. Performance reviews: Having useful performance reviews is a big part of effectively managing employees, which is a key component to reducing claims. Performance reviews should be checked for accuracy and completeness by someone other than the reviewing supervisor. Criteria used for the review should be updated periodically.  Further, whenever possible, the criteria should emphasize objective rather than subjective standards. Input should be sought from other supervisors to make sure that a consensus is reached.
10. Disciplinary actions: Discipline needs to be consistent, fair and reasonable. Always document any disciplinary issue.
11. Review the file: Before any termination decision is finalized, the personnel file of that person should be reviewed to make sure that there is a sufficient basis for the termination and that there is nothing in the file that would cause concern.
12. Effective investigations: Make sure that at least human resources is trained on workplace investigation standards and practices.  
13. Avoid delay: In many ways, delay or tolerance is an employer’s enemy. I cannot tell you how many times I have heard a plaintiff’s lawyer claim that the fact that an employer put up with an issue for a lengthy period of time meant that the issue was not a problem. Do not put off dealing with violations of policies or standards. 
14. Monitor morale: Employee morale can be a good indication of a potential for claims.  The worse the morale, the more likely that claims will be filed. If there is a morale problem, find out what it is and take steps to deal with it. 
15. Practice follow-up: Once any problem is dealt with, check on it with decreasing frequency over time and document the effort. This will make sure that the issue has been solved and will also serve to prove your efforts as a good and conscientious employer. 
16. Train supervisors: Supervisors need to know how to handle not just discrimination and harassment issues, but other employee management issues as well. Performance reviews, discipline, dealing with absences and leaves issues, and knowing when there might be a disability issue are important parts of every supervisor’s job. Supervisors also must know how to take a complaint and when to report issues to human resources.    
17. Consider severance agreements: Severance agreements can be a powerful tool to prevent claims, but you must know when to use them.
18. Monitor computer use: Employers should have effective policies limiting the use of computers and making clear that employees should have no expectation of privacy when using computers. These policies must be enforced on a regular basis. Put simply, you can learn a lot from the use or misuse of a company computer.
19. Check expenses: Make sure that you have an effective policy on all types of employee expenses and that you are reimbursing employees for all expenses and verifying such expenses. Cell phones, automobiles, computers and supplies or equipment are all expense traps for employers that can add up to a big problem if not handled properly.
20. Make it easy to address complaints: Having an open door policy is one thing; appreciating and enforcing it is quite another. Complaints represent an opportunity to deal with a problem or potential problem. Employers should therefore welcome the opportunity to take a complaint. More importantly, the attitude that complaints are welcome should permeate the workplace. 

In sum, all California employers are to some extent vulnerable to employment lawsuits, whether frivolous or not. The truth is that California, which has more employment laws than any other state, has created a playing field that is just not fair to California employers. However, taking these steps can help to reduce claims and to minimize the impact of claims when they come.