Legal issues can have a ripple effect for employers

| Feb 3, 2021 | employment law

When the #MeToo movement expanded in 2017, employers faced a sharp increase in sexual harassment complaints and cases. The trends of this movement demonstrated a common risk for employers: if one person comes forward with a complaint, many more will likely come forward as well.

This risk not only manifests with similar claims, but any sort of legal dispute can open the door to other lawsuits or serious issues. Essentially, if one complaint develops into a lawsuit, it can cause a ripple effect that employers could face.

McDonald’s is a prime example of the ripple effect

The recent legal issues stacked against McDonald’s are a clear example of the lawsuit ripple effect employers are especially prone to face. The company has faced compounded legal issues, including:

  • Several McDonald’s employees joined the #MeToo movement and went on strike in 2018. They claimed they experienced persisting sexual harassment at work.
  • As we briefly discussed in a recent blog post, McDonald’s also took legal action against the former CEO for having inappropriate relationships with subordinate employees.
  • Now, most recently, CNBC reports that 50 franchisees are suing the company for racial discrimination.

These cases might not seem inherently related. However, the discovery of one infraction can quickly lead to other issues. Soon, other employees feel they can come forward. If even one complaint gets out of hand, employers suddenly face increased scrutiny. And this can quickly lead to legal disputes having a considerable ripple effect for the company.

Employers must be aware of this risk

This prospect of a ripple effect is one of the most critical reasons why employers must take action immediately if they face complaints from employees. California employers must respond to complaints effectively so they can:

  • Prevent complaints from developing into something bigger;
  • Mitigate the risk of a ripple effect; and
  • Minimize the impact ripple effect litigation could have on the business’s finances.

Identifying and mitigating risks is critical, especially if employers face complaints from employees. To protect the business’s reputation and future, they must ensure they respond properly to prevent a ripple effect of legal issues.