Workers’ compensation refers to the state-mandated insurance program which provides compensation to employees who suffer job-related injuries and illnesses. Each state has its own laws and programs governing workers’ compensation, although the federal government administers its own workers’ comp program for federal and certain other employees.

Small businesses are just as much at risk as larger companies for potential lawsuits from unhappy employees, although the cost can sometimes be much higher for companies with fewer resources to absorb large monetary losses.

James Markels discusses covenants not to compete, provisions in an employment contract that an employer will have with its employees to prevent the employee from hurting the employer’s business.