News

Employees who allege employer discrimination are becoming more common.  More than 150,000 discrimination claims against employers were filed by last year by employees.  Over 75% of these claims were found to be groundless.  These lawsuits arise from disgruntled current or former employees.  About 21% of all claims go to trial.  The jury awards in many situations have been in excess of $1,000,000.  The complaints can state that there was age, sexual, ethnic, race, religion, sexual orientation, or any other discrimination.  Federal laws starting with Civil Rights Act of 1964 Title VII gave current and former employees the right to sue their employers for discrimination.  This right to sue has been expanded by the enactment of:

• Equal Pay Act of 1964
• Family Medical Leave Act of 1993
• Americans with Disabilities Act of 1992
• Age Discrimination in Employment Act of 1967
• Pregnancy Discrimination Act of 1978
• Civil Rights Act of 1991
• Family Medical Leave Act of 1993

In order to properly defend themselves, employers should have in writing:

• Clear and uniform disciplinary standards
• Uniform job standards
• Standard pay scales
• Employment at will policy
• Telephone and electronic communication systems policy
• Probationary period
• Zero tolerance statement

All of these items must be included in your employee handbook.  Every employee should sign a handbook acknowledgement form. (If your business does not have an employee handbook, please obtain one at your earliest convenience.  At Lawley Insurance, we have the capability to provide you one at no cost.) 

Your individual employee file should document all issues that arise, even those that appear to be frivolous.  Without a well-documented employee file, defense of a discrimination claim is very difficult.

An Employment Practices Liability Insurance Policy (EPLI) will provide indemnification and legal defense coverage for almost any employee lawsuit that allege violation of the above federal laws. This coverage usually provides full legal defense coverage for the lawsuit, even for those cases that have no basis or validity.  Costs for legal defense can begin at $25,000.  The cost for EPLI is in the range of $2000 to $5000.  It is based on the total number of employees that a business has.

Please contact me at 716-849-8258, or sjacbos@lawleyinsurance.com if I can be of assistance.

-Steve Jacobs