Employment practices liability and workplace risk management

Published April 22, 2019

Boss gesturing in front of colleagues during a meeting

Sylvia Group Relationship Manager

While workplace harassment and the #MeToo movement may not be quite as prominent in the news as they were a year ago, the issues of employment practices liability (EPL) and workplace risk management have only grown in relevance, importance ... and cost.

By the middle of Fiscal Year 2019, the Equal Employment Opportunity Commission (EEOC) had filed fewer lawsuits but collected more money through out-of-court settlements than in FY 2018. According to Bloomberg Law, "The agency has filed 24 new lawsuits and collected more than $21 million in settlements from Oct. 1, 2018, through March 31."

And this is a fiscal year in which the EEOC scaled back operations during the 35-day government shutdown in December and January.

Settlement totals during the fiscal year's first six months included:

  • $5.3 million for cases in which race discrimination was among the allegations;
  • $4.9 million for cases involving allegations of religious bias;
  • $4.3 million for cases in which disability discrimination was alleged.

And in EEOC cases related to the women-driven #MeToo movement, according to Bloomberg Law:

  • Nine sexual harassment settlements netted $2.1 million.
  • Four cases of alleged pregnancy bias resulted in $2.3 million in settlements.
  • $3.8 million went to litigants alleging sex discrimination other than sexual harassment, pregnancy bias or unequal pay.

Speaking of unequal pay, four such EEOC cases yielded $237,302 in settlements.

Clearly, workplace harassment and discrimination aren't merely wrong; they also can be very expensive.

Proposed legislation

Just as high-profile sexual harassment cases involving celebrities and moguls such as Bill Cosby, Harvey Weinstein, Matt Lauer, Steve Wynn, Roger Ailes and many more spurred the #MeToo movement, heightened attention and activism have led to proposed state and federal legislation.

And with Democratic presidential candidates Cory Booker, Kirsten Gillibrand, Kamala Harris, Amy Klobuchar, Bernie Sanders and Elizabeth Warren among the sponsors of the legislation — titled the "BE HEARD in the Workplace Act" — it's certain to get a loud airing on the campaign trail. 

Employee practices liability and your business

While harassment and discrimination allegations involving celebrities and large corporations get the most media coverage, most employment practices liability cases draw little attention, and many involve smaller businesses.

Nor are harassment or discrimination the only claims in EPL cases. Others include:

  • wrongful termination
  • failure to employ or promote
  • wrongful infliction of emotional distress
  • retaliation
  • breach of employment contract
  • negligent evaluation
  • age
  • wrongful discipline
  • mismanagement of employee benefits.

Wrongful termination is atop that list by design. According to the International Risk Management Institute (IRMI), wrongful termination is the most frequent type of claim among employment practices liability cases, topping discrimination and sexual harassment. 

Just last week, a California School district, while still denying wrongful termination, settled for $850,000 with a teacher who said the district had retaliated against her for siding with LGBT students.

Employment practices liability in Massachusetts

As summarized by SHRM, Massachusetts' Fair Employment Practices Law prohibits employers with more than five employees from "discriminating against current and prospective employees on the basis of protected characteristics including:

  • race
  • color
  • religious creed
  • national origin
  • ancestry
  • sex (including pregnancy, childbirth and related medical issues)
  • age (over 40)
  • criminal record (inquiries only)
  • disability
  • sexual orientation
  • gender identity
  • qualified handicap
  • genetics
  • military/veteran status."

Given all that — and the fact that almost every business at some point has to fire someone — the inescapable conclusion is this: If you're an employer, you're at risk of an employment practices liability lawsuit.

How to mitigate the risk of an EPL lawsuit

As the Insurance Information Institute notes: "To prevent employee lawsuits, educate your managers and employees so that you minimize problems in the first place."

To provide assistance with that, Sylvia Group hosts periodic webinars featuring guest presenter Scott Farrell, President of ARC Excess & Surplus New England and a specialist in management and professional liability for all industries. During his presentation, Scott:

  • explains what kind of behavior may be deemed inappropriate in relation to the workplace;
  • provides guidance on creating and maintaining a harassment-free work environment;
  • delivers information on what protection is available to your business should an alleged case of inappropriate behavior occur, including Employment Practices Liability Insurance (EPLI).

Sylvia Group works with Scott and the team at ARC to provide insurance and other risk management solutions for all kinds of businesses. Whether you have concerns regarding employment practices liability or any other manner of business risk, we'd be happy to work with you, as well.


About Jerry Mizner and Sylvia Group

Jerry Mizner croppedIn his role as Relationship Manager at Sylvia Group, Jerry Mizner specializes in providing solutions for businesses of all sizes through a process of identifying areas of need and matching them with Sylvia Group experts in performance-based insurance, employee benefits and financial services. With a background including work in accounting, project management, real estate, and product integration in addition to his more recent focus on 401k and profit-sharing plans, tax savings and employee benefits, Jerry has a broad range of business knowledge and experience from which to draw.

A repeat winner as "Best Insurance Agency" in the SouthCoast Media Best of the Best Awards program, Sylvia Group helps businesses and individuals protect their future by designing customized programs of performance-based insurancebenefits and financial planning. We’re a locally owned agency known for our commitment to our clients and our community, as well for our industry expertise. Founded in 1950, Sylvia Group is certified as a Women Business Enterprise with the Massachusetts Supplier Diversity Office and has the distinction of being the first six-time recipient of the Five Star designation awarded by the Massachusetts Association of Insurance Agents (MAIA) for all-around agency excellence. 

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