Statistics and anecdotal information continue to show that discrimination and retaliation claims are on the rise. Verdicts are larger than ever as juries lose patience with companies unable to reign in managers who engage in questionable conduct. Legal costs rise, and delays in the courts and administrative agencies cause discrimination claims to linger unresolved.

Even a surface examination of the nature of claims being filed demonstrates that mid-level managers and line supervisors tend to be the point from which claims of discrimination, retaliation, and even wage and hour violations originate.

The most well-meaning C-suite residents and experienced human resource managers cannot be everywhere, and they are left to rely on the managers who interact on a daily basis with the vast majority of employees going to work every day on construction sites, in manufacturing plants, in high-tech start-ups and in professional services businesses.

A review of recent statistics from state and federal agencies shows that enforcement efforts continue to be aggressive, and claims filed directly by employees continue to rise.

The EEOC, for example, reported that almost 100,000 private sector claims were filed in fiscal year 2012. Areas that saw increases included retaliation, disability, sex and equal pay. Retaliation claims under all statutes (37,836) again topped the list of claims followed by race (33,512), sex (30,356) and disability (26,379).

That should operate as a warning to employers. Despite the monumental strides companies have made in adopting anti-discrimination and anti-harassment policies and training, there is still much work to be done in eradicating illegal activity in the trenches.

A company’s objectives should be twofold: end the behavior that will get you into trouble and protect yourself from being sued even if you do everything right.

When litigation ensues, a business needs to be able, at a minimum, to show that it has adopted workplace policies against discrimination, retaliation and other inappropriate behavior and that it has in place a clear and effective process for reporting and investigating complaints.

Most companies have at least these measures in place. They hang the mandatory posters in conspicuous places and have sexual harassment, discrimination and retaliation policies in their employee handbooks along with a protocol for reporting allegations.

Is that enough? Hundreds of state, federal and U.S. Supreme Court cases and decades of EEOC guidance say it is not.

In order to manage risk and to reduce liability, it is critical to make sure that all workers, supervisors, and managers in particular, receiving training designed to educate them on their rights and responsibilities under state and federal employment laws.

Perhaps more importantly, training helps to create and maintain a workplace where employees are treated fairly. That invariably leads to improved morale, better production, less distraction, and the ability to recruit and retain the best talent.

Proactive risk management measures that can shield a company from liability include:

• Clear policies against discrimination and retaliation regularly updated and disseminated to employees. Handing out the employee manual at the time of hire is not sufficient; employees need to be reminded of their rights and obligations. Policies should also be reviewed and updated regularly. In light of recent highly publicized incidents of workplace violence, it would be prudent to review weapons policies, update them if necessary, and then remind employees of their existence.

• Regular training on appropriate workplace behavior including a review of the most basic rules against harassment, discrimination and retaliation. Training should be in a group setting and interactive. It should be interesting, meaningful and tailored to the company at which it is being presented. Consider bringing in an outside consultant or an attorney to drive home the message that the company takes these matters seriously rather than bringing in the group for pizza and a meeting with the HR assistant who does the training every year. And lose the video or web training except as a stop gap for new employees or those who were absent on training day.

• A clear and effective process for reporting and investigating complaints. Offer a number of alternatives for reporting so that employees can talk to someone with whom they are comfortable. Does a multi-state employer really expect a plant worker in Indiana to contact a nameless, faceless HR manager in San Diego to report the fact that she has been having an affair with her supervisor for fear of being fired? If companies want employees to report bad behavior, it has to be easier for them to do so. The policy should also give the employee at least some idea of what will happen when a complaint is made. There is nothing that will lead to litigation faster than an employee who makes a complaint and then hears nothing for months about how the matter is being investigated.

• Manager/supervisor training on how the Americans with Disabilities Act and the Family and Medical Leave Act intersect and what rights employees have. Consider a case from the Central District of Illinois in which the EEOC was successful in winning significant damages for an employee with a disability claiming that the employer discriminated against him by forcing him to perform work that was outside of his medical restrictions and causing an exacerbation of his medical problems. In that case, it was the employee’s direct supervisor who took the action that resulted in the claim by pressuring him to perform tasks his physician recommended against.

• Managers and forepersons should fully understand state and federal laws regarding meal breaks, recordkeeping and overtime. The current wave of wage and hour class action litigation can at least in part be attributed to managers attempting to stay on budget while maintaining production goals or quotas. They are told to do more with less and either subtly or overtly suggest to employees that they work off the clock or not submit time sheets for work over a certain number of hours. Accurate records of time worked are not kept, and employers lose credibility during an audit or in litigation.

• Managers must be aware of and understand a company’s policy on hiring and how to properly interview and screen job applicants and assess qualifications. The EEOC recently filed suit against a national chain alleging that the company systematically rejected all female applicants for a variety of positions that were considered traditionally male. The complaint alleged that there was only one female employee out of 800 in those roles although a review of the existing employment applications showed many females with objectively better qualifications than the men who were hired. Was the apparent discrimination the result of a top-down policy against hiring women, or were individual store managers responsible for perpetuating longstanding stereotypes?

• Hold managers accountable and evaluate them not only on their production but on how they manage and evaluate their own employees. Consider allowing subordinates to give feedback on how their managers manage. What better way to determine whether you have a fox in the hen house?

A supervisor who does not know and understand basic employment laws from wage and hour and discrimination to whistleblower and retaliation can lead a company into litigation, and lack of a record of adequate training and documentation can make it very difficult for a company to defend itself.

The Supreme Court stated unequivocally in 1998 that employers are liable under Title VII for the acts of their agents, and cases that have followed have emphasized that point repeatedly and expanded that to liability under other workplace laws.

Although the CEO is the company’s public face, the face of the company for the employee is his or her direct supervisor. If that supervisor is a problem employee or is simply poorly trained in how to manage or to comply with the myriad of workplace laws, he puts an otherwise excellent company at great risk of costly and intrusive litigation, not to mention loss of credibility as a workplace of choice.

Partner with your Employee Assistance Plan and your employment attorney to address issues before they become big problems.