Less qualified hires = a higher lawsuit risk.

With the U.S. unemployment rate falling to 3.7% last month (a near 50-year low), it's getting harder to recruit qualified applicants. You may be forced to take a chance on hiring some candidates who don't have the exact experience or education you usually look for.

But be careful: You'll be wise to take some preventative action to avoid lawsuits down the road. Specifically, prepare to document any shortcomings of the new hires and any efforts you make to bring them up to speed and be successful in the job.

If you end up having to terminate the employee, you'll need to be prepared to show exactly why they weren't meeting your standards.

Recent case: Michael, who is black and originally from Trinidad, applied for a job at UPS as a computer technician. His previous jobs entailed very limited work with computers, but he had received a certification. UPS took a chance on him, hoping to train him into the job. But Michael struggled in the job and was fired.

He sued, alleging race and national origin...