We asked 195 CEOs of small companies to tell us about their experiences with employee lawsuits. Almost half had been sued. Legal or settlement costs averaged in excess of $40,000. But perhaps even more disturbing was that even the majority of those who said they hadn't been sued admitted that fear of litigation affects how they manage employees.

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To what extent does fear of employee litigation affect how you manage your business?

A great deal 13.4%

Somewhat 63.9%

Not at all 22.7%

Have you ever been sued by an employee?

Yes 46.1%

No 53.9%

If so, what was the charge?

Wrongful termination 33%

Age discrimination 12.3%

Racial discrimination 9%

Discrimination (unspecified) 9%

Sexual discrimination 5.6%

Sexual harassment 4.4%

Other 26.7%

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Source: Survey by TEC, in San Diego, and Inc. magazine, November 1995.

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