Lawsuits claiming wrongful employment practices have increased by more than 400% over the past 20 years. Despite your efforts to promote a safe and fair workplace, you can’t always control how employees react to your actions and policies.
Some employees may consider standard business practices unfair even if they are otherwise treated fairly and without discrimination. In some cases, this could place you on the receiving end of a lawsuit.
As a business owner, your best protection against such claims is employment practices liability insurance (EPLI). These insurance plans could help protect your business from lengthy and potentially expensive legal battles.
Making the most of EPLI requires some familiarity with the most common employment liability claims. Here are some employment practices and scenarios you should avoid or at least try to control:
In the United States, laws protect employees from mistreatment based on physical disability, color, religion, and sex. Employees who feel that they have been passed over for hiring or promotion because of these factors may file suit against their employers.
As a business owner, you have a responsibility to ensure that all workers have equal access to promotion and hiring opportunities. Implementing a consistent standard for these practices will help reduce your risk of being sued for unfair treatment.
It is also advisable to give your workers the opportunity to be heard. This could be crucial if they feel that they have been treated unfairly by managers or other employees.
Unfair treatment and discrimination in the workplace frequently overlap. Claims against perceived discrimination often involve issues with age, gender, or race. Employees who feel that they have significant disadvantages because of their age or ethnicity may be compelled to file such claims.
Over the past several years, there has been a decrease in the number of cases involving age-related discrimination. However, the continued increase in the number of older workers makes such claims a real possibility.
Retaliation in response to staff complaints
Some employers may seek revenge on employees who file complaints against them. In some cases, the retaliatory action could take the form of a demotion, reduced hours, decreased pay, or verbal abuse.
Not all retaliatory action is readily apparent. Some employers may resort to more subtle or indirect means of getting revenge. For example, they may constantly ignore the ‘offending’ worker or exclude them from company activities.
As an employer, any action you take toward an employee who has filed a complaint against you can be construed as retaliation. Maintaining professional conduct and obtaining EPLI will provide some degree of protection against such claims.
Sexual, physical, or emotional harassment
Unfortunately, bullying and harassment are a reality in many workplaces. These incidents may take place between superiors and subordinates and even between coworkers with equal ranks.
Harassment can be sexual, physical, or emotional. When these incidents occur between employers, the victim can seek recourse with the employer or HR personnel.
Employees do not usually have that option when they come in conflict with their employer. Instead of bringing their grievances to another superior or the HR department, they may opt to file a harassment claim instead.
As an employer, you are responsible for implementing a strict anti-harassment policy in your workplace. You should also be vigilant to these incidents and ensure that your actions are above reproach. Even so, obtaining EPLI will provide the best protection against such claims.
Wrongful termination is one of the most common reasons for employee-initiated lawsuits. These cases may stem from unfair employment practices, but they could just as often result from misunderstandings or ignorance of company policies regarding termination.
Regardless of the reason, these incidents could place an employer at risk for employment practices liability claims. However, you could avoid these risks by maintaining a clear-cut policy regarding employee termination. These policies should be detailed in the employee handbook, which should be distributed to all personnel.
Knowing all the possible reasons for employee-initiated lawsuits is the first step toward avoiding potential liability claims. It is also crucial to maintain a policy of fairness, propriety, and accountability in the workplace and keep abreast of the latest developments in workers’ rights.
Even so, due diligence won’t guarantee total protection against liability claims. To ensure that you are covered for any eventuality, getting adequate employment practices liability insurance is a must.
About Arroyo Insurance Services
Arroyo Insurance Services was officially established in 1986, but we have roots dating back to before 1950. One of California’s leading client-oriented and independently owned agencies, we have over 140 employees with a combined experience of over 450 years, spread across 11 locations. We are committed to providing the best insurance and risk management services at the most competitive premiums, and backing it with hands-on service tailored to our customers’ needs. For more information on how we can mitigate your risks, contact us today at (877) 220-4769.