Since new legislation is passed affecting employment practices liability yearly, we can only broadly describe areas of concern:
- Discrimination Claims come in three forms: overt discrimination, disparate treatment, and disparate impact. Overt discrimination is purposeful and observable behavior, like firing all employees of one sex, age limit, or race. Disparate treatment concerns disciplinary actions for the same behavior. Perhaps women are written up if they’re late to work but men are not. The treatment is unequal and prevents moving upwards in the organization. Disparate impacts involves creating rules or conditions that affect one group more than others. For example, the men’s locker room is located within the confines of the plant while the women’s is a quarter mile away; then allowing only five minutes for bathroom breaks, or not allowing people in to change until fifteen minutes before the shift. The more subtle forms of disparate impacts include height and weight limits. For example only hiring people above six-feet tall or below five feet five inches. Certainly the pool of candidates would show sexual preference. Unless there is an excellent reason why height is a factor, this is discrimination. What’s the cost? About $500,000 per settlement.
- Wrongful Terminations. For cause terminations and strategic layoffs aside, firing employees has become a difficult process for employers. Even in at will states, employers cannot be arbitrary or capricious in firing individuals. Courts have upheld the doctrine that an implied contract of employment exists and must have cause for termination. Document and write-up employee behavior.
- Sexual Harassment. Unwelcome sexual advances, explicit or implicit, is unlawful discrimination. Disparate treatment and impact cover this form of discrimination too. Interesting in these cases, discomfort, not dismissal is all that is required for sexual harassment to occur. And, neither party involved directly needs to bring the action, just a bystander who objects to the behavior can make a claim. Keep sex out of the workplace.
- Retaliation Claims. Legitimate actions by an employee are punished with dismissal, wage freeze, or some other retaliatory act.
Other disagreements over such things as overtime wages, improper distribution of email content (if you wouldn’t want to see it on the evening news, don’t send it), or even mass layoffs can start discrimination suits.
Employment Practices Liability is fast becoming a leading cause of claims. Remember, you don’t need to be guilty in order to require legal defense. Fitts Insurance provides Employment Related Practices Insurance for many types of businesses. Protect yourself with the right coverage that pays to defend you and if you are found negligent, pays damages as well. Contact us today to learn how easily you can add this coverage to your current commercial insurance portfolio.