- Employment Discrimination
- Sexual Harassment
- Wrongful Termination
Why are there more employment practice lawsuits?
Discrimination lawsuits have risen dramatically over the past twenty years and are expected to increase steadily over the next 5 years, with three of every five employers predicted to face a discrimination or wrongful discharge claim. In fact, discrimination lawsuits now make up almost 20% of all civil lawsuits filed in U.S. courts. The EEOC expects some 80,000 discrimination charges to be filed in the current fiscal year and claims filed are expected to rise 2% to 3% each year for the foreseeable future.
Why these dramatic increases? Reasons cited include changes in federal discrimination laws in 1991, which allowed employees to have their cases heard by juries rather than by judges.
These changes in the law also expanded the scope and amount of available damages to include back pay, reinstatement costs, attorney’s fees, and compensatory and punitive damages for flagrant conduct, ranging from $50,000 to $300,000. Erosion of the employment-at-will doctrine also resulted in an expansion of state and local laws governing employment.
These changes have attracted skilled lawyers who know how to aggressively plead an employee’s case to a jury - and win!
Claims of job discrimination, sexual harassment and wrongful termination are increasing at an explosive pace. They are being filed by current employees, former employees and job applicants. Even the best managed companies are being hit.
Although staggering claims against large companies have been given the headlines, the majority of claims are filed against medium and small-sized firms. These firms make up the majority of United’s insureds.
Prospects for the future are more frightening. Juries are becoming more sympathetic toward employees, and evolving case law is creating a more perilous legal climate for employers.
Publicity about staggering awards for damages is encouraging more claims - many having little or no validity. Costs of defending employment suits - even baseless suits - are rising at an unprecedented rate.
Employment Practices Liability Insurance
Employment practices liability insurance is excluded from most general liability policies. Therefore, employers are turning to a specialized type of insurance to cover the cost of defending these suits and indemnifying them for costs and damages.
While several insurance companies have developed employment practices coverage, only one, United Insurance Company Limited, has designed a plan for companies in the graphic arts and communications industry. United’s Employment Practices Liability Insurance (EPLI) provides the type of protection most needed by the printing industry, and is available in affordable cost ranges for small family-owned firms through companies of 200 or more employees.
You are protected from claims for...
- Wrongful Discrimination against employees, former employees or applicants for employment
- Sexual Harassment against employees, former employees or applicants for employment
- Wrongful Termination of employees
Losses are covered, up to limits of liability specified in your certificate of insurance, for...
- Defense Costs for the investigation and settlement of a claim,
including attorney’s fees and associated expenses - Losses, including judgements, damages, awards, settlements,
pre and post-judgement interest and punitive damages
Outstanding features of United’s EPL Insurance include:
- Coverage for punitive damages - not found in employment
practices policies offered by most other carriers - Coverage for claims brought by past, present or prospective employees
- Insurance is available in all 50 United States and the
District of Columbia - Ability to choose your own lawyer
Your cost control options are...
- Amount of Coverage from $25,000 to $1 million
- Amount of Deductible from $2,500 to $10,000
Your premiums will be determined by the amount of coverage you request and by the amount of deductible you absorb before benefits are paid. The premium for a typical printing company with 15 employees, $50,000 coverage and $5,000 deductible would be less than $100 per month. A typical company with 150 employees, $300,000 coverage and $10,000 deductible would be less than $500 per month.
United will compute your premium from information supplied on the application form. This information is held in strict confidence.
Services for UIC insureds include...
- Articles of interest on employment related practices including sexual harassment, English only policies, company internet policies, and federal discrimination law regulations
- UIC H/R hotline: 1-800-825-1527
- One-on-one consultation with UIC’s risk management consultants
- Employee Briefs monthly newsletter outlining recent legal decisions by the NLRB and courts in the areas of industrial and human relations
What is a “wrongful act”?
United Insurance Company Limited’s EPL Insurance covers you for a claimed “wrongful act” of employment discrimination or termination in violation of one of the federal anti-discrimination statutes or an identical state or local statute.
A wrongful act is any action alleging discrimination on the basis of race, color, religion, sex (including sexual harassment), national origin, pregnancy, age (40 or older) and disability or handicap.
A wrongful act also includes employment related libel, slander, defamation, invasion of privacy, false arrest or imprisonment, wrongful eviction, demotion or negligent evaluation.
Federal laws governing discrimination are Title VII of the Civil Rights Act of 1964 as amended, the Age Discrimination in Employment Act, the Americans with Disabilities Act. Most states and many local governments have adopted identical anti-discrimination laws.
Some Examples of UIC Employment Practices Liability Insurance
Claims and Settlements
Defamation
A male employee sued a company in the Superior Court of the State of California alleging five causes of action plus damages including punitive damages. In the defamation cause of action the employee asserted that he was defamed by the company when the company constructively discharged him and told members in the community that he was unprofessional at his job, was uncooperative, had created a mess in his job and was responsible for billing problems with two of the insured’s public company customers. Following extended negotiations, the parties reached an out of court settlement.
Settlement and Legal Fees: $93,425.00
Hostile Environment, Racial Harassment and Discrimination, Denial of Promotion Based on Race
A male employee filed a charge of discrimination based on race with the EEOC, Miami District Office, Miami, Florida. The employee claimed he was denied use of his cell phone during working hours, denied incentive pay and passed over for promotion by less qualified white employees. The employee also stated that the company’s behavior created a hostile work environment and caused him to suffer economic loss and mental anguish and harm.
Following investigation, the EEOC issued a “No Finding of Discrimination” determination stating it was unable to conclude the information submitted by the employee established a violation of any statutes. The EEOC gave the employee a “Dismissal and Notice of Rights” letter informing him of his right to commence a civil action alleging a violation of Title VII of the Civil Rights Act of 1964 within ninety days. The employee filed a complaint in the Circuit Court of the Fifth Judicial Circuit, Marion County, Florida alleging causes of action as noted above. Following court ordered mediation, the employee and company settled the claim.
Settlement and Legal Fees: $39,400.00
Sex Harassment and Discrimination, Hostile Work Environment
A midwest printer faced charges filed by two female employees with the State Civil Rights Commission. The women alleged they were discriminated against because they observed salacious material in the printer tray of a company desktop computer.
The company entered into extended mediation with both former employees eventually reaching a $500.00 settlement with one former employee. Following a Commission hearing on the complaint of the other employee the charge was dismissed.
No appeal was filed and no lawsuit was filed within the required statutory period.
Settlement and Legal Fees: $103,460.00
Age Discrimination, Sex Harassment, Hostile Working Environment and Retaliation
A 63 year old woman filed charges with the New York State Commission Against Human Rights alleging age discrimination, sex harassment, hostile environment and retaliation. She claimed that she was docked for lateness, had her telephone calls screened, and had overtime and pay raises withheld. She alleged the company’s behavior forced her to resign involuntarily from employment. Following mediation the parties settled this claim.
Settlement and Legal Fees: $10,150.00
Disability Discrimination and Retaliation for Filing Disability Discrimination Claim
In Kentucky, a male employee filed a discrimination charge with the Lexington County Human Rights Commission for disability discrimination based on a back injury and retaliatory discrimination.
The County Commission made a probable cause finding that the discrimination was likely to have occurred and ordered the parties to mediation. Following mediation the parties settled the claim.
Settlement and Legal Fees: $6,662.00
Sex Discrimination and Retaliation
A northeast printer faced sex discrimination, harassment and retaliation claims following termination of a long term
female employee. After long and intensive negotiations, a settlement was reached.
Settlement and Legal Fees: $52,450.00