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Who could be sued for violating an employee’s rights? Just about anyone who employs another person! Discrimination, paying incorrect overtime amounts and sexual harassment are just three of many workplace situations that could lead to a lawsuit. Some actions result from the employer being unaware of applicable laws while others arise out of cultural differences and misunderstandings. Still others are the result of harmful intentional acts. An employer may be aware of the actions and condone them. In many cases, they are not aware and frequently fail to stop them due to a lack of adequate supervision.
It is also important to note that some actions are totally unfounded and are heavily affected by perceptions and misinterpretations. False accusations made may be difficult to refute due to poor record keeping and lack of adequate procedural guidelines.
Employment-related practices liability can provide more than just monetary coverage. Most specialists provide loss prevention techniques that could help an employer avoid being sued, if properly utilized. More importantly, they can protect employees from abuse. |
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Here's an interesting possible claim scenario.
At the age of 18, Millie is working at her very first job. She is the department “gofer.” She distributes mail, makes photocopies, files and performs numerous other clerical duties for a department of 30 people. Egan is the 30-year-old department jokester. He enjoys surprising Millie while she makes her rounds. He once popped out from under a desk just to see her reaction. On many occasions, while walking past a group of men including Egan, Millie heard her name used in conjunction with sexually suggestive comments.
While Millie laughs it off, she becomes increasingly anxious. She really needs the job but wonders if this is standard office practice. An older woman who works in a different department notices her crying on the bus on their way home after work one day. She approaches Millie, they talk and Millie explains the situation in detail. The woman explains to Millie that Egan’s behavior is unacceptable and that she must take a stand by telling either her immediate supervisor or human resources.
Millie waits a week and decides to talk to her supervisor. He tells her that Egan is harmless and that he will eventually stop if Millie just goes along with the joke for a while. He also implies that she should probably not work in an office if she can't handle it. Millie is stuck. She continues to work but her smile disappears and her work deteriorates. She receives a poor performance appraisal at a later date and is terminated.
On her way out of the building she encounters the woman who suggested that she talk with her supervisor and animatedly explains the entire situation. The woman gives Millie the name and telephone number of a lawyer who can help her file a claim for sexual harassment, retaliation and wrongful termination. |
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Employment-related practices losses are a broad category of claims that Commercial General Liability coverage forms specifically exclude. They include discrimination cases where one individual is treated differently than another because of race, gender, age or other factors that should not affect one's ability to perform a particular task. Sexual harassment cases arise from a work environment that becomes unbearable because of a requirement to engage in sexual activities in order to keep a job or be subject or a party to sexually suggestive situations unrelated to job requirements.
Wage and hour disputes are a current major cause of action. This could be considered cheating an employee out of earned compensation and revolves around both overtime and working hours without compensation. Some cases involve individuals placed in “salaried” positions and exempt from overtime pay who are then forced to work additional hours to accomplish their assigned tasks. Other cases involve hourly employees who work extra time and “choose” not to report it for a number of reasons.
The EPLI marketplace has many companies willing to write the coverage. Our experts listed AIG, CNA, Zurich, USLI, Admiral, Monitor, Chubb, ACE, Berkley Companies, Colony, Markel, Essex, Travelers, Hartford, Houston Casualty, Evanston, Crum & Forster, Lloyds, Darwin and Ironshore as just a few of the companies actively writing this coverage at the present time. Darryl A. McCallin, vice president of Rockwood Programs estimates the number at between 50 and 55 different carriers.
Who should buy EPLI coverage? According to Marla Donovan, vice president, product development at Burns & Wilcox, “Anybody who has at least one employee should consider buying this coverage.” The experts all echoed this response. Ms. Donovan continues, “Given the current social and political climate, it behooves all employers, not just businesses, but schools churches and other non-profits to consider this coverage.”
According to Robert Cap, products line leader, EPLI, non-profit D&O, tenant discrimination at Markel, the key exposures EPLI covers are wrongful termination, discrimination (race, gender, sex, pregnancy, disability) and failure to pay overtime wages. Linda Deiss, vice president, AVRECO, adds harassment to the list. Ms. Donovan includes permitting an offensive and/or hostile work environment and retaliation to round out the list.
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