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Closely held businesses could face employment litigation

On behalf of Kadish & Associates Law Group posted in Closely Held Businesses on Friday, April 1, 2016.

Arizona companies that have employees are most likely prepared for there to be disputes from time to time. As part of that possibility, closely held businesses must be able to defend a lawsuit filed by an employee. Implementing proper policies and procedures could provide a paper trail that could relieve the company from liability.

For example, a former employee of Lockheed Martin filed a lawsuit against the company, alleging that he was wrongfully terminated for racial and retaliatory reasons. The African-American man says that he was removed from his supervisory position to another position while he awaited a move to a different section of the company. He complained that he was not given any assignments. Soon thereafter, he was told that he needed to find another position in the company or he would be laid off, along with at least three other people — an African American and two Caucasians.

The man who filed the lawsuit was let go, along with the two Caucasians. The fourth man found a new position within the company. The layoffs were necessary due to a reduction in work and a reallocation of personnel as the company reorganized. The trial court and an appeals court agreed that, based on this and the fact that there was no paper trial indicating that there was any racial or retaliatory motivation for letting him go. Ultimately, the man agreed he had never expressed any such concerns to the company.

Lockheed Martin won this employment dispute based, in part, on the fact that the company’s policies require that records be kept regarding any employee complaints of discrimination or harassment. Closely held businesses here in Arizona could take this example and craft their policies and procedures to create a record for each employee that would catalogue any complaints, the results of any investigation and the actions taken. If an employee files litigation accusing the company, it will have detailed records to present to the court.

Source:, “Lockheed Martin granted summary judgment in employment discrimination action”, Nicholas Malfitano, March 25, 2016Closely Held Businesses

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