Creating a Risk Management Program to
Minimize Exposure to Employment Litigation
In recent years, we have seen the cost of employment litigation skyrocket. Under these circumstances, we firmly believe that the best result is the lawsuit that does not happen in the first place. We recommend that employers examine their possible exposure to employment litigation and adopt a program to minimize their exposure to such litigation The elements of a risk management program should include the following:
1. EPLI INSURANCE: It is worthwhile for companies to explore obtaining such coverage.. However, employers must remember these policies do not cover punitive damages or intentional violations and there may be other exclusions as well. Even with such exclusions, a policy can do much to substantially reduce the exposure to employment discrimination litigation.
2. ADOPTION OF ANTI-DISCRIMINATION AND ANTI-HARASSMENT POLICIES: An employer is liable for the sexually harassing conduct of its supervisors unless the employer can show that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the victimized employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.
Under these circumstances, there can no longer be any excuse for any employer not to have such policies in effect. It is essential that these policies be promulgated to employees periodically so that there can be no question that employees were aware of their existence.
3. EMPLOYEE HANDBOOKS: Employers can reduce the threat of employment litigation by putting their policies in writing and promulgating them to all employees. Employees will be less likely to be able to show discrimination when policies are applied on a consistent basis and there is no question that the policies exist. Such handbooks must contain the anti-discrimination and anti-harassment policies discussed above.
4. PROMPT AND THOROUGH INVESTIGATION OF COMPLAINTS: Employers must conduct a thorough, impartial and prompt investigation of harassment and discrimination complaints pursuant to their procedures without any threat of retaliation to complaining employees.
5. PROGRESSIVE DISCIPLINE AND DOCUMENTATION: Supervisors must be trained how to progressively discipline employees and document disciplinary incidents on a consistent basis so that the company will be able to effectively respond to EEOC charges and employment discrimination lawsuits.
6. TRAINING SESSIONS FOR SUPERVISORS: The benefits of such seminars are two-fold: (1) They educate supervisory and management staff how to avoid such conduct; and (2) The existence of such seminars for managerial and supervisory staff constitutes evidence that the employer has met its burdens of showing it exercised reasonable care to prevent sexually harassing behavior..
7. MANDATORY ARBITRATION: Employers may include in their employment agreements with employees provisions mandating compulsory arbitration of employment claims.
Arbitration of employment discrimination claims is preferable because of the reduced legal fees involved in defending such claims in arbitration as opposed to court. Moreover, arbitration eliminates the threat of excessive jury verdicts.
8. WAGE AND HOUR COMPLIANCE: The fastest growing area of employment litigation is wage and hour litigation. Plaintiff’s lawyers are working “overtime” in bringing these lawsuits, often on a class action basis, which can result in double damages and awards of attorneys’ fees to plaintiffs. Employers must be certain that there is a legal basis for not paying time and half to employees who work over 40 hours per week.
9. FAMILY AND MEDICAL LEAVE ACT COMPLIANCE: Companies with more than fifty employees within a seventy-five mile radius must provide its employees with twelve weeks of unpaid leave who have a serious health condition, who have to care for a member of the immediate family with a serious health condition, or to provide child care for a newborn or adopted baby. Record-keeping procedures must be in place to track which absences qualify for such leave and to notify employees of their usage of this leave.
10. FAMILY AND MEDICAL LEAVE ACT COMPLIANCE: Companies with more than fifty employees within a seventy-five mile radius must provide its employees with twelve weeks of unpaid leave who have a serious health condition, who have to care for a member of the immediate family with a serious health condition, or to provide child care for a newborn or adopted baby. Record-keeping procedures must be in place to track which absences qualify for such leave and to notify employees of their usage of this leave.
11. COMPLIANCE WITH OTHER LAWS:
a. USERRA (Military Leave)
b. I-9 Forms (Authorization to work in the
c.
CONCLUSION:
We understand how easy it is for companies to continue putting off the adoption of such a comprehensive program. However, we have also witnessed what happens when a company is faced for the first time with the expense and exposure of an employment lawsuit. It has been our experience that the adoption of such measures can reduce the risk of a lawsuit happening in the first place, and minimize exposure if one is ever filed.
