Hiscox recently released “The 2015 Hiscox Guide to Employee Lawsuits”. I would recommend reading this very short, concise, and eye-opening report. Some of the highlights:
- Nationally, “US companies had at least an 11.7% chance of having an employment charge filed against them.” Alabama employers are 41% more likely to have a charge filed against them than the average, ranking 3rd behind New Mexico (66% more likely) and Nevada, (47% more likely).
- For small to medium size employers, the average time to resolve an employment dispute was 275 days.
- For the 19% of employment charges that resulted in defense and settlement costs, the average cost of defense and settlement payments totaled $125,000.
- 81% of charges resulted in no payments by the insurance company, meaning any costs were covered by the amount of the employer's deductible/self-insured retention, which averaged $35,000.
- The median verdict for those cases that went to trial was $200,000. This does not include defense costs. Approximately 25% of the verdicts were in excess of $500,000.
- The Hiscox report also highlighted several points that I have been talking and writing about for years, such as:
- A claim for discrimination is a major distraction in the workplace.
- Bad publicity is destructive to an employer. With more and more employees (and their attorneys) going public with their complaints, the risk continues to grow.
- Anytime a case goes to a jury, there are no guarantees as to what will happen, no matter how strong the employer feels about the case.
- Prevention is much easier and less costly than reaction. Effective policies, training and documentation will significantly reduce the risk of having a claim brought, and will help provide a defense should the case go to trial.
When reviewing the Hiscox report, recent statements by David Lopez, General Counsel of the EEOC need to be taken into consideration. Robin Shea recently attended the annual North Carolina/South Carolina Labor and Employment Law conference where Mr. Lopez spoke, and wrote a blog article entitled “Straight from the source: EEOC's 10 hottest litigation trends.” In deference to David Letterman's Top 10 list, here are the Top 10 hottest litigation trends for the EEOC from Mr. Lopez, from least to most significant, although they are all significant.
- Racial Harassment
- Use of background screens in hiring.
- Sex discrimination in hiring.
- Retaliation: preservation of access to the legal system, aka retaliation.
- Immigration/migrant/”vulnerable” workers.
- Americans with Disabilities Act/reasonable accommodation
- LGBT rights
- Conciliation requirement.
- Religious accommodation.
Practice pointers. As we approach the end of 2015, and enter into 2016, Employers have the opportunity to be proactive in reviewing and revising their policies and procedures. Now is the time to review handbooks, policies, procedures and your employees. In light of the various changes in the law, recent court decisions, agency regulations, guidelines and recommendations, and the ever-changing landscape or employment practices, employers have the opportunity to be proactive, reduce exposure, and ensure compliance with the law. Not doing so can be very costly, resulting in litigation costs, payment of settlements/judgments, distractions in the work place and bad publicity.