By Jeffrey Hayzlett
If you’re running a business today and think legal risk is something you deal with after there’s a problem, let me save you a lot of money, time, and sleepless nights: you’re already behind.
On All Business, I sat down with David Lichtenberg, Regional Managing Partner at Fisher Phillips, one of the top labor and employment law firms in the country. This wasn’t a theoretical legal discussion. It was a real-world look at the workplace issues that can wreck your culture, drain your budget, and put your reputation at risk if you’re not paying attention.
Here’s the truth: most legal disasters don’t start in the courtroom. They start with people.
The Legal Landmines Leaders Can’t Ignore
According to David, two issues are front and center for employers right now — big or small.
First is disability and leave management. At some point, every employee will get sick or have a family member who does. The challenge isn’t empathy; it’s consistency. One poorly handled conversation can set the tone for an entire legal dispute.
Second is whistleblowing and retaliation claims. Even when complaints come from underperforming employees trying to protect themselves, employers still have the same obligation to investigate and remediate. Ignoring it or mishandling it is how companies get sued.
Social Media Isn’t Off the Clock
Social media used to be personal. Now it bleeds directly into the workplace.
Employees post. Other employees react. By Monday morning, it’s an HR issue. And once it becomes a workplace issue, on the clock or not, employers have a legal obligation to act.
Forward-thinking companies don’t wait for chaos. They create clear social media policies that spell out expectations, reputational risk, and consequences. And here’s the key: HR, legal, and leadership must be aligned. When they aren’t, things get messy fast.
Train Managers or Pay the Price
If there was one message David drove home, it was this: your managers are your biggest legal risk and your strongest line of defense.
Most lawsuits don’t happen because companies are malicious. They happen because managers say the wrong thing at the wrong time. That first reaction to an employee dealing with illness, performance issues, or conflict matters more than anything that follows.
Training managers from day one isn’t optional anymore. And not just lectures, it has to include real-world role-playing, so leaders aren’t practicing for the first time when it actually counts.
Documentation, Consistency, and No Surprises
Every good employer understands one hard truth: it doesn’t matter what you say; it matters what you can prove.
David broke it down simply:
- Document the conversations that matter
- Treat similar situations consistently
- Eliminate surprises
When employees know where they stand, one of two things happens: they improve, or they move on. Either outcome is better than a termination followed by litigation.
Litigation Is a Losing Game
Here’s a number every CEO should remember: $250,000 to $500,000.
That’s the average cost just to get to trial in an employment case, not counting time, distraction, or emotional toll. Litigation can take two to four years, pulling leaders away from running the business.
Even when companies win, they still lose. That’s why many are turning to mandatory arbitration agreements to reduce jury risk, maintain privacy, and avoid class-action exposure.
AI Is Already Creating Legal Risk
AI isn’t creeping into employment law; it’s already here.
Companies are using AI to recruit, screen resumes, and target candidates. The risk? AI reflects the biases of its data and prompts. If leaders aren’t intentional, discrimination can happen fast, and lawsuits are already following.
AI doesn’t eliminate responsibility. It amplifies it.
The Biggest Leadership Blind Spot
After advising leaders every day, David sees the same blind spot repeatedly: forgetting that people are the business.
When people trust leadership, they raise issues early before they become lawsuits. When managers trust senior leaders, problems get addressed instead of being buried.
And the single best thing any CEO can do to protect their company? Treat HR like a business partner, not a cost center.
When HR is empowered to protect both the company and the employee, culture strengthens, risk drops, and the business wins.
What I Learned
You don’t need to be a lawyer to lead legally, but you do need values, alignment, and discipline.
When leadership, HR, and legal work together with training managers, documenting clearly, and acting consistently, you stay out of court and focus on what matters most: growing the business.
Watch the entire conversation with David on C-Suite TV.
