Employment Practices Liability

Did You Know?

Now more than at any time in history, employee lawsuits are increasing at an alarming rate and American businesses face serious financial consequences. With court awards soaring, it’s important for businesses to protect themselves from this increasing exposure.

Dinner with friends in NapaBetween 2004 and 2011, sexual harassment claims paid against employers jumped from $37 million to $52 million.*

It is common for legal fees associated with winning an employment lawsuit to exceed $250,000; in fact, the national jury-award median for employment practice liability claims was $326,000 in 2008, up 60% from 2007.**

ADA (American with Disabilities Act of 1990) and Equal Pay Act claims against employers jumped from 17,721 to 26,661 (an over 50% increase) between 2001 and 2011. During the same period, the monetary payouts to employees surged from $53 million to $126 million.***

* U.S. EEOC Sexual Harassment Charges EEOC & FEPAs Combined FY 1997-FY 2011 report
** According to Jury Verdict Research
*** U.S. EEOC ADA & Equal Pay Act Charges Combined FY 1997-FY 2011 report

The five most frequently occurring employment practices liability cases as reported to the Equal Employment Opportunity Commission for FY 2013* were:

  1. Retaliation (38,539 cases)
  2. Race (33,068 cases)
  3. Sex/Gender (27,687 cases)
  4. Disability ((225,957 cases)
  5. Age (21,396 cases)

* EEOC website. http://www.eeoc.gov/eeoc/statistics/enforcement/charges.cfm

Employment Practices Liability PLUS+

Employment Practices Liability (EPL) PLUS+℠ helps protect your organization from paying extensive defense costs and damage awards from employee lawsuits alleging discrimination or wrongful termination based on race, gender, age and other “protected status” characteristics.

EPL PLUS+℠ covers lawsuits arising from alleged wrongful termination, sexual harassment and discrimination exposures including:

  • Protected Status Harassment
  • Retaliation
  • Wrongful Discipline
  • Wrongful Deprivation of Career Opportunity
  • Wrongful Failure to Promote
  • Wrongful Denial of Training
  • Wrongful Evaluation
  • Employment Related Defamation
  • And more

Risk Management PLUS+

When you purchase an Employment Practices Liability PLUS+℠ policy, you will receive Risk Management PLUS+℠, a loss control program designed to help decrease your organization’s exposure to costly litigation and claims while reducing your risk of employee theft, workers compensation fraud and workplace violence.

Risk Management PLUS+℠ is a flexible, comprehensive program designed to work within your existing Human Resources management structure by providing several individual risk management programs such as:

  • Training for Front-Line Managers
  • Sample Employee Handbook Policies
  • Educational Videos
  • Sample Personnel Forms
  • Quarterly Risk Management Newsletter

Dedicated professionals are critical to a successful implementation of the Risk Management PLUS+℠ program. With EPL PLUS+℠, you also have access to one of the premier employment consulting firms in the country, Labor Consultants of America.

Employment Practices Liability Case Examples**

Allegation: termination based on race
Outcome: jury award
Damages: compensatory damages of $249,000

Allegation: retaliation for sexual harassment allegation
Outcome: jury award
$ 210,000 mental anguish
$ 330,600 lost income
$ 1,956,240 attorney fees
$2,496,840 total damages

Allegation: ADA violation – specifically, firing for voluntary admission of substance abuse problem
Outcome: jury award
Damages: $455,564

Allegation: Discrimination based on hearing disability
Outcome: jury award
$ 10,000 invasion of privacy
$ 100,000 slander
$ 250,000 breach of covenants of employment
$ 75,000 intentional infliction of emotional distress
$ 25,000 attorney fees
$ 460,000 total damages

** These are only examples of lawsuits brought against various companies. Insurance policy coverage ultimately depends on the facts of each case and the terms, conditions, exclusions and limitations of each policy.