Learn About Employment Practices Liability and EPL Claims

According to the most recent Equal Employment Opportunity Commission (EEOC) report, 2010 had a record number of all types of employment practices liability (EPL) filings. Discrimination was a substantial problem for employers, and for the first time in history, retaliation claims surpassed race as the most frequently filed charge. And the EPL problem continues to grow.

First of all, what is EPL?

From the moment that you start the pre-hiring process until the exit interview, you are vulnerable for a lawsuit or an EPL claim. As a result, your business should take a hard look at whether it can afford to defend itself against alleged wrongful employment practices accusations. If not, there is an insurance solution called Employment Practices Liability that protects against wrongful termination, discrimination (age, sex, race, disability, etc.) or sexual harassment suits from your current, prospective or former employees. This coverage applies to directors, officers and employees, and can sometimes extend to third party liabilities.

Why Choose Employment Practices Liability Insurance?

According to researchers, three out of five employers will be sued by a prospective, current or former employee while they are in business. While many suits are groundless, defending against them is costly and time-consuming.

Concerns for Employers

A recent U.S. Supreme Court ruling determined that employers can be held liable for discriminatory conduct even if the person who made the decisions was not biased, but relied upon people who were. The ruling means that relying on a personnel file or a supervisor’s report is not sufficient grounds for termination. Although employees must prove they were terminated for an unlawful reason, they can now refer to any point in the chain of command for discrimination.

Further, the rise of retaliation claims is of concern for employers. If an employee files a discrimination claim, fails to win the case, remains on the job, and then is later terminated for another reason, that employee may decide to pursue a retaliation claim. The problem with retaliation claims is that many legal observers believe that the burden of proof in a retaliation claim is lower than in the initial charge of discrimination. More and more, retaliation claims have been successful after a lost discrimination claim.

Consequentially, to minimize potential liability, it is more important than ever for employers to:

1. Establish proactive loss mitigation strategies
2. Perform thorough investigations before taking adverse job actions, ensuring that no one involved had a discriminatory motive.

When following the recommendation of a lower-level supervisor, employers should be cautious and diligent to ensure that there is no potential basis for a discrimination claim. And of course, to prevent this type of conduct in supervisors in the first place, thorough supervisor training is indispensable.

To review your EPL policy or discuss more ways of mitigating your risk of employment-related claims, This e-mail address is being protected from spambots. You need JavaScript enabled to view it .