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HR Horror Stories for Small Business Owners

Horror Stories: Small Business Edition

Running a small business is tough. In addition to endless paperwork, long hours, and minimal sleep, entrepreneurs are also responsible for managing employees. But, even with good intentions, things don’t always go as planned. In this blog, we’ll share some outrageous HR horror stories from small business owners, from nosy coworkers to sticky theft accusations, you won’t believe these tales of woe.

No Boundaries

A small business owner was blindsided by a “360 review”, where everyone from the CEO to the entry-level employees weighed in on their management skills. This led to a difficult and uncomfortable discussion where their hard work was questioned in front of the entire staff.

Sticky Fingers

For small businesses, theft can be a devastating blow to the bottom line. That’s why it’s essential to have policies and procedures in place-which unfortunately didn’t work out in one company’s favor. After noticing a discrepancy in the cash register tallies, the owner of a small bookstore installed security cameras. Despite waving signs declaring that the premises were under surveillance, an employee still thought it was a good idea to help herself to the cash on hand. When confronted with the evidence, she not only denied involvement but also filed a wrongful termination claim.

Family Ties

Small businesses often operate like a tight-knit family-but what happens when that dynamic veers into inappropriate territory? That’s what one small business owner found out when his receptionist started flirting with him, making suggestive comments, and even asking him out on a date. After politely declining, the owner was mortified to hear her boastful account of their “date” to her coworkers the next day. Not only did the innuendos make everyone uncomfortable, but tensions also ran high when her performance began to suffer.

Office Politics

Most small businesses have at least one employee who seems to make waves wherever they go. In this case, a small software company experienced a toxic coworker who went out of their way to make personal phone calls, chat on social media, and take excessively long breaks. Despite numerous warnings, the employee continued to goof off and eventually lost their job. However, they didn’t go down without a fight: the employee proceeded to email the entire staff, blasting the company’s management team, accusing them of unjust termination. To this day, the company owner still receives threatening messages from the ex-employee.

Work vs. Home

Particularly in remote working situations, it can be hard to separate home life from work-life. However, one small business owner was floored when an employee refused to attend video meetings due to her “baby on lap” policy. Despite the owner’s insistence that the meetings were essential to team cohesion, the employee refused to budge. Soon, the other team members followed suit, making excuses left and right to avoid video calls. Before the manager knew it, the once-tight team was barely communicating and productivity had plummeted.


Running a small business can be daunting. However, having HR protocols in place can help protect you and your team. Whether it’s conflict resolution or theft prevention, setting expectations and dealing with issues proactively can go a long way. These HR horror stories prove you’re not alone and that perseverance can overcome even the most frightful workplace problems.

Contact HR Business Partners a Minneapolis, MN-based HR Consulting firm specializing in small business today to discuss your individual HR needs, or take a look at our short explainer video