Employee Lawsuits are On the Rise

TheAtlanta Business Chronicle reports that U.S. Equal Employment Opportunity Commission filings are at record highs with local attorneys seeing a marked rise in employee lawsuits against employers.

Part of the problem is the high rate of joblessness resulting from the previous recession. Layoffs and terminations have been common over the past seven years with businesses remaining reluctant to hire even after the height of the recession passed. People frustrated with the lack of jobs and continued hiring reluctance are turning to EEOC lawsuits as an option available to them.

The article states that EEOC filings increased by 6,645 between 2009 and 2010 and by over 19,000 compared to the year 1997. Most of the complaints are based on either discrimination or retaliation.

Find Law’s Small Business Law Blog,Free Enterprise reports that the cost of discrimination lawsuits averages out to approximately $235,000. They recommend, first, that small business owners protect themselves by purchasing employment practices liability (EPL) insurance with a relatively low deductible. The article goes on to recommend that business develop policies that address and manage employee complaints of discrimination and other issues within the organization.

What Types of Lawsuits are Being Filed?

The most common, by far is racial discrimination, comprising36% of total claims. That’s not the only claim being made on behalf of former employees, however. The following are just a few of the claims being filed in courts today.

  • Age discrimination
  • Sexual harassment
  • Gender discrimination
  • Disability discrimination
  • Retaliation
  • Wrongful termination
  • Wage and hour lawsuits

Know the law. Understand the law. Figure out what it means for your business and what efforts you can take to ensure that discrimination is not a factor in your workplace.

Avoiding Employee Lawsuits

You’ve probably heard that prevention is the best cure. That’s why it’s so important to avoid all appearances of discriminatory hiring and firing processes. Tips to reduce employment practices liability claims include creating clear policies and practices, in writing, for hiring and terminating employees and train your management staff accordingly.

Then, document everything. Keep records of every step in the hiring and employment process from application to termination (and any post-termination communication). Every complaint, commendation, absence, and reprimand needs to be kept on file even after the employee is no longer with the business.

The problem with these lawsuits is that even the ones that are frivolous are costly to defend in court – especially the court of public opinion where things like facts aren’t always accurately presented.

Take steps now to be proactive in your defense against discrimination-based lawsuits by practicing fair hiring and promotion standards throughout your organization. At the same time, take action to protect your business from these suits, frivolous or not, by investing in sufficient business insurance, including employment practices liability insurance (EPLI) coverage.