An Article by Maryellen Alvarez, MBA
Employment related practices liability is one of the hottest issues affecting employers today, involving issues such as sexual harassment, wrongful termination, and discrimination.
To err is human. Unfortunately, so is to sue!The employer-employee relationship is undergoing great legal scrutiny and employment related claims are escalating in areas such as sexual harassment, wrongful termination, discrimination, etc. These claims can come from both current and former employees, as well as job applicants!The procedures that employers do and don’t use in hiring, firing, and managing their employees can translate into huge price tags for defense costs and legal awards to plaintiffs for errors that are inadvertently made.Employment related practices lawsuits have escalated substantially in the last few years. You can find news articles on a daily basis regarding discrimination (related to sex, age, race, religion, etc.), harassment, wrongful termination, failure to promote, failure to employ, and violations of the Americans With Disabilities Act (ADA) at the workplace. Indeed, lawsuits are everywhere. The amounts being awarded are staggering. Attorneys unfamiliar with this type of litigation are attending seminars to learn how to successfully win these cases! It’s the wave of the future.One of the primary reasons for the increase in employment related suits is that in 1992 these suits were changed to decision by “jury.. Prior to 1992, these cases were decided by a judge. Interpretation — “trial by employees”!There are many things which you may do to decrease your chances of this type of lawsuit or to improve your portion if the suit is decided in your favor.Some of these items are an employee manual drafted by an employment related practices attorney, an employment-at-will statement, a formal harassment policy, knowledge of ADA laws, annual employee reviews, and good employment documentation, just to name a few.You need to educate your staff about the do’s and don’ts. No one is immune. Suits are being brought against small family owned businesses as well as the giant corporations.As this coverage is typically excluded from your general liability policy, the insurance industry has responded to a need for employer protection and has created an insurance policy designed to respond to employment related practices claims. There are several different policies on the market with different terms and conditions. The employer who exercises the tightest control of his/her office procedures will find the broadest coverage available.This coverage is affordable for all employers, big or small. Different limits, deductibles, and copayments are offered to enable the employer to choose something they can be comfortable with.Many lawsuits are brought about by situations you wouldn’t imagine. Here is just one example: A woman working at her desk overhears two young men in her department swapping stories about their “conquest” of the weekend. Several weeks go by and the same thing happens every Monday. One day the woman quits and hires an attorney. She files a suit against the employer citing a hostile work environment. Why didn’t she complain before that — who knows? A formal harassment policy however, would have given her no choice but to complain.Remember, defense costs alone can range from $50,000 to $300,000 or more. Defense costs are included in the new employment related practice liability programs available from most insurers.These suits have become a trend that’s only going to get worse!