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Why Employment Practices Liability is More Important Than Ever
(Source: Swett & Crawford)
Employment Practices Liability (EPL) Insurance can provide you with valuable protection from claims relating to:
• Wrongful Termination
• Workplace Harassment
• Retaliation
• Discrimination
• Costs of defense for these and other workplace “wrongful acts”
The costs of a single EPL claim can be devastating
• In 2007, the median discrimination verdict rose 70% to $252,000. Employers won only 38% of discrimination cases.1
• The average cost to defend a single plaintiff EPL claim to the summary judgment stage can easily reach six figures; if a case goes to trial, that amount can double; if appealed, that amount can increase even further; if it is a more complex multi- party or wage & hour claim, defense costs can easily reach seven figures!
• A California jury awarded $19.1 million in damages to a female college coach who claimed she was discriminated against because of her gender and that her employer retailiated when she complained.2
• A California state court jury awarded $61 million to two FedEx drivers of Lebanese descent who claimed a manager harassed them with racial slurs over a two-year period.3
• An EPL claim can happen to any employer
• The Equal Employment Opportunity Commission (EEOC) recorded nearly 83,000 charges in 2007 alone.
• Private businesses with 100 or fewer employees are the most often sued for federal discrimination claims.
• Roughly half of all lawsuits filed against employers are employment-related.
• Any stage of employment can give rise to an EPL claim – interviewing, hiring, evaluating, disciplining, promoting and terminating.
With the economy in the doldrums, EPL claims will increase
• During these difficult economic times, many companies are faced with tough downsizing decisions.
• Even companies that have good procedures may face wrongful discharge and related claims.
• Employees that could quickly find another job in a better economy may be more likely to seek the advice of counsel and pursue a claim.
• On January 1, 2009, pro-employee changes were made to the Americans with Disabilities Act - additional legislative changes are expected this year.
1 Employment Practice Liability: Jury Award Trends and Statistics, 2008 report by Jury Verdict Research.
2 Johnson-Klein v. State Univ., Fresno (Cal. Super. Ct. 2007).
3 WSJ.com, June 5, 2006.