EEOC charges, emploement practices issues - chart

Employment Practices Coverage and Discrimination Suits

If you’re wondering if you have enough employment practices coverages, visit the home page of the U.S. Equal Employment Opportunity Commission’s website where you’ll find a frightening newsfeed that lists scores of employment practices and discrimination suit settlements. If you employ people, and you ever want a good scare, take a gander at the list, which today includes an internal medicine practice that’s paying $22,500 to settle a pregnancy discrimination and retaliation suit, a company in the foodservice industry in Chicago that is settling a disability discrimination suit for $80,000, and a fast food franchise that’s spending $100,000 to settle a pay discrimination lawsuit.

An employee can bring a discrimination suit on any of a dozen categories which include age, disability, equal compensation, harassment, national origin, pregnancy, race, religion, retaliation, sex, sexual harassment and genetic information.

As an employer, you set the standard, and you trust your managers to maintain a high level of professionalism. Many suits against employers are legitimate, and some probably originate from a single bad manager, or a good manager having a really bad day. Whatever the cause, the results can be costly and damaging.

Preventing lawsuits

Of course, your best defense against an employment practices suit is preventing them from happening in the first place. Weather you have an in-house human resources manager, or outsource to a team, it’s important to develop a set of guidelines and train your managers well. Equally important is the ability of your team to listen to employees to hear what’s going on in each department. Often, employees want to be heard and want to feel that leadership is doing something about the problem, so listening and taking positive action may solve the problem and prevent the situation from escalating to the next level.

Additional resources include the Society for Human Resource Management, which devotes an entire section of its site to employment law, and the U.S. Department of Labor’s compliance page, another good resource for answers.

Dealing with lawsuits – employment practices coverage can help

Entering into litigation over an employment suit has obvious financial costs, but your company also takes some hits on reputation – employees gossip, word gets around your industry – and if things get bad enough, the whole suit can take on a life of its own on social media channels.

Your employer’s liability coverage policy may cover you for many of the costs associated with a suit, but depending on the industry you’re in and the number of employees you have, you may want additional coverage – or you may want to be able to cover the costs of your deductibles if you ever face a suit, or a series of unrelated suits, or a class action suit.

Work with your insurance provider to be sure you have plenty of coverage in place. If you’d like to explore the additional options a captive insurance company can provide, please feel free to contact us.