1.  Mind your tongue.  Racial slurs and comments are never appropriate in the workplace and never when used by the boss.  Failing to take action when you learn of employees at any level using racial or ethnic slurs undermines efforts to create a harassment free environment and opens the door to serious liability.

2.  Pay people fairly.  If you have hourly employees with vastly different pay rates for the same job, you likely have a problem, especially if it appears that those in protected categories are paid less than others.   Regular audits of employee pay and bonuses are a good practice.

3.  Always be on your best behavior.  Anyone can be offended by bad behavior, even if you and the offended person are the same color or gender.  The whistleblower and plaintiff in the Deen lawsuit is a Caucasian woman who was a manager at one of Deen’s restaurants.  The manager alleges she could no longer tolerate Deen’s racist comments and those of Deen’s brother, among other things.  Although Deen’s legal team has filed a motion to dismiss the lawsuit on the ground that the manager could not have suffered any harm from Deen’s alleged use of the N-word because the manager is not African-American, the outcome of that motion remains to be seen.  If the manager lost her job in retaliation for objecting to the behavior or the hostile environment caused her emotional distress, other legal claims not reliant upon the plaintiff’s race may be harder to avoid.

4.  Litigation is public. Accusations make headlines.  Denials look defensive (or worse).  By the time the case is actually resolved, the media has moved on and the damage done.  While your business may not be a household name like Paula Deen’s, once a lawsuit is filed ANYONE can read it and distribute it because it is a public record.  More and more courthouses are putting their records on-line so your clients, prospective employees and competitors can easily access cases filed against you from the comfort of their own offices, homes and iPhones.    While arbitration agreements requiring employees to pursue most employment-related claims in private arbitration proceedings instead of court can minimize such publicity, employees often ignore them, file in court, and make the employer move to compel arbitration, all the while basking in the publicity.  Because the legal technicalities of these agreements vary from state to state and arbitration has some unique risks, consult counsel before implementing an arbitration agreement.

5.   Lawsuits drain your resources.  Paula Deen has reportedly lost more than $12 million as a result of this lawsuit and that is not including her legal fees and any amounts she may ultimately have to pay if she loses the case. Through social media, cases can take on a viral life of their own both inside and outside your company.  The cost of litigation (even if you have EPLI coverage) extends beyond legal fees and court costs.  It is distracting for those involved and for those who gossip about it.  Your team will have to spend time gathering documents and information, meeting with lawyers and perhaps even testifying at depositions and/or in court.  Train all employees regarding your policies against workplace discrimination and harassment with an emphasis on your internal reporting procedures and be sure to practice what you preach.   If you suspect a problem, act early.