10/27/2026
3 mistakes small businesses make that lead straight to a lawsuit.
Mistake 1: No employee handbook.
Without a handbook, there's no written record of your policies — on attendance, conduct, harassment, PTO. When a dispute comes up, you have nothing to point to, and "we always just handled it informally" is not a defense in court.
Mistake 2: Firing someone with zero paper trail.
If there's no documented history of write-ups, coaching conversations, or performance reviews, a termination can look retaliatory or discriminatory — even when it isn't. Verbal warnings are easy to deny and even easier to challenge. Courts want documentation, not memory.
Mistake 3: Treating HR as a "someday" problem.
Most small businesses don't build HR infrastructure until something already went wrong — a complaint, a resignation, a demand letter. By then you're playing defense instead of prevention. HR done right from day one protects your business before it ever needs protecting.
The good news: all three are fixable, and none of them require a full internal HR department to solve.
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