In today’s increasingly complex and litigious environment, even the most conscientious business owners can find themselves in a situation where an employee feels his or her legal rights have been violated. You make decisions everyday that impact your employees: hiring, compensation, promotions, accommodating disabilities, terminations and more. Each of these can lead to a claim for a wrongful employment practice if not handled correctly. It can happen in any industry or business size. Even if you are not found liable, the costs to defend an employment practices claim can be financially overwhelming. Defending your business against an employment practices claim can cost you time, money, and emotional distress. Some examples provided by Travelers Insurance are listed below:
- Discrimination and harassment- $120,000
The plaintiff, a graphic designer, resigned her employment claiming that she had been subjected to sexual harassment and gender discrimination by two managers. The insured performed a thorough investigation and terminated one of the two managers involved. The evidence collected included a long
series of sexually explicit emails, jokes and comments in the workplace. The claimant was making $40,000 per year. Travelers paid $50,000 to defend the case before settling for $70,000.
• Sexual harassment – $95,000
A receptionist sued the company she worked for, alleging sexual harassment and retaliation. Specifically, she claimed that her supervisor had sexually harassed her and that, after she complained, she was moved to a less-desirable position and ultimately terminated. Other employees confirmed the supervisor had a tendency to make inappropriate and lewd remarks. Travelers paid $65,000 to settle the case, but only after paying $30,000 in defense expenses.
• Discrimination – $140,000
The Equal Employment Opportunity Commission (EEOC) filed a civil complaint against the insured on behalf of two former employees. The EEOC found each party’s charge credible. Specifically,the claimants alleged that they were retaliated against and/or demoted for reporting, protesting and/or objecting to discriminatory treatment. In addition, one claimant alleged her disability was the subject of inappropriate jokes and conversations. Travelers paid $50,000 in legal fees and settled the case for $90,000.
• Discrimination and retaliation- $100,000
Three certified nursing assistants filed EEOC charges and later a lawsuit alleging harassment, race discrimination, retaliation and wrongful termination in violation of public policy. They alleged that their supervisor had made inappropriate comments relating to race and that after complaining about the comments they were terminated. All three claims settled during a mediation
for a total of $100,000.
• Unlawful termination – $135,000
A former employee sued a manufacturer. The plaintiff, an employee of 5 years, claimed that his job was terminated without warning following a vacation and subsequent illness. The plaintiff further claimed he was terminated because the insured disliked minorities. Travelers paid $45,000 in defense fees before settling the case for $90,000.
• Sexual harassment – $70,000
An applicant sued the owner-operator of a franchised restaurant, alleging that while she was at the establishment, and after completing her application, she was harassed by the employees and managers. The matter was tried in front of
a jury,who found in favor of the insured. Legal fees paid by
Travelers exceeded $70,000.
If you are interested in protecting your business against Employment Practice Liability claims, give Moran Insurance a call at 410-544-3422.