Risk & Business Magazine Benson Kearley Risk & Business Magazine Summer | Page 30

Employment Practices
Liability > Reducing Your Risk
D
id you witness how quickly
the #MeToo movement
swept through the country? It
seemed as if no sectors were
left untouched, and everyone
has become hyper aware of potential
harassment concerns. It has triggered
many companies to increase their efforts in
preventing harassment and discrimination
in the workplace. However regardless
of those efforts sexual harassment and
discrimination claims against a company
can still occur. Having an Employment
Practices Liability policy in place can
eliminate the financial consequences of
those allegations.
Even before the #MeToo movement began
unfolding in late 2017, employee lawsuits
were on the rise due to an increasing
awareness of current laws and regulations.
Research shows that 33% of employers
have experienced an employment related
allegation in the past three years.
Employees can file claims for all sorts
of reasons, and the employer may be
liable under a huge—and downright
intimidating—range of potential offenses.
It is important to understand the risks
associated and how these allegations can
spiral due to the effortless access to social
media. A simple offhand comment or
unintended bias in an interview, can be
held against you and place your company at
significant risk. Areas of potential liability
for employers include the following:
•
•
•
Wrongful termination
Wrongful discipline
Discrimination based on race, age, sex,
gender, religion
• Sexual or workplace harassment
• Breach of employment contract
• Employment-related misrepresentation
• Failure to employ or promote
• Invasion of privacy
• Negligent evaluation
• Emotional distress or mental anguish
These claim types may seem
straightforward, but you may be surprised
at the scope of claims that can be filed in
any one of these areas, which suggests that
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no company is resistant to these types of
lawsuits. Here are a few examples that may
just provide a wake-up call to how serious—
and common—these exposures can be:
•
an employee vandalizes your bathroom
by writing offensive or crude comments
on a stall wall and another employee is
offended
• you offer early retirement packages
to certain employees with differing
benefits according to age
• you are deciding between two female
employees for promotion and select the
one who is not pregnant
• you prohibit an employee from
returning after a medical leave unless
the employee has full clearance to
perform all job duties
• an employee has filed a harassment
lawsuit and doesn’t get a raise during
a performance review when other
similarly classified employees receive
them
The tricky thing about employment claims,
and the reason it can be so hard to protect
against them, is that you never know when
or from whom they may originate. And
according to industry statistics, the average
court costs and legal fees for claims that
are dismissed can top out at $15,000 or
more. Cases that are settled out of court
can set you back $75,000, while those that
go to trial can carry a whopping $300,000
price tag or more. It’s enough to bankrupt a
company.
To help avoid these complaints and
lawsuits to the greatest extent possible,
your company should follow some simple
common-sense practices. While a few
of these recommendations may require
additional resources, some are fairly simple
and inexpensive to implement and will help
improve your work environment and clarify
expectations for everyone. Also, if you do
face an employee complaint, these actions
will demonstrate that you have made
good-faith efforts to establish an open and
welcoming work environment.
•
Document employee issues with as
much detail as possible from the earliest
BY: KAYLA BUNNETT,
BENSON KEARLEY IFG
point possible.
Develop job descriptions for every
position so expectations and
responsibilities are clear for each
individual.
• Create an employee handbook that
spells out conduct policies and company
procedures. Include rules against
harassment with specific detail about
what constitutes harassment.
• Offer mandatory training sessions to
managers and staff to review policies
in person and provide an opportunity
for Q&A.
• Scrutinize your employment
application to ensure that there are
no questions related to a candidate’s
age or disclosure of other identifying
information.
Of course, the best way to safeguard
your business against these claims is by
purchas