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Employment Practices Liability
What is it?
Why obtain it?
How can I get the best price?

 What Is It?

Employment Practices Liability Insurance (EPLI) protects your company and personnel lawsuits due to employment-related issues, errors and omissions or alleged mismanagement in the course of their daily responsibilities as fiduciaries, directors, officers or managers regarding:

General Employment Liability
Sexual Harassment and Discrimination
Benefits Management
Director and Officers Duties
Employee Theft/Dishonesty

 Why Obtain It?

Complaints and litigation regarding employment and workplace practices continue to grow, with over 200,000 current complaints filed at local and state Equal Employment Opportunity Commissions (EEOC). Judgments against employers are at an all-time high, with an average award  of $650,000*.
HR Consult can ensure that your management is well trained in all aspects of employment loss prevention and develop sound preventative administrative and policy practices to significantly reduce exposure that can result in increased Employment Practices Liability Insurance (EPLI) rates.  HR Consult can also assist in or conduct complaint investigations internally and prepare written responses to formal charges of discrimination in preparation for final review by counsel (with significant cost savings).   If you don't have EPLI coverage (or don't know) contact your insurance agent to determine if you are protected in the event of employment related litigation or contact us and we will be glad to show you how HR Consult's services can assist in lowering your premiums .

Some sample employment related cases:  

Race Discrimination
Sexual Harassment
Age, Race and Disability Discrimination
Hostile Work Environment
Whistle-Blower and Retaliation
Wrongful Demotion
Age Discrimination

Race Discrimination 
Class Action

Several African-American employees sued a petroleum company alleging that African-Amercian employees had been denied jobs and promotions at the company.  The petroleum company agreed to settle the race discrimination and retaliation lawsuit for a record $176 million.  According to the settlement, the company agreed to pay $115 million in damages and, over a 5 year period, $26.1 million in pay increases.  In addition, the company agreed to spend $35 million to implement  program changes throughout the company to foster equal opportunity efforts.    

Settlement:  $176,000,000

Sexual Harassment 
Single Plaintiff

A female plant supervisor left her job because of intolerable sexual harassment form male subordinates at a company's tobacco plant.  The female supervisor alleged that she was forced form her job because of the sexual harassment,  She made claims of quid-pro-quo sexual harassment, hostile work environment harassment and constructive discharge.  A jury found that she had been constructively discharged and awarded her $2 million in damages for embarrassment, humiliation and mental anguish.

Jury Award:  $2,000,000

Age, Race and Disability Discrimination 
43 Employees and the EEOC

An agricultural chemical company purchased a division form another agricultural chemical company.  The selling company terminated all the division's employees, and the acquiring company only rehired about 75% of the division's workforce.  The sales force of the acquired division was not rehired and sued the selling company and the acquiring company, alleging that they were discriminated against in violation of the Age Discrimination Employment Act (ADEA), Title VII of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA).  The Equal Employment Opportunity Commission (EEOC) joined the plaintiffs in their action against the two companies, alleging that the companies destroyed employment records that contained relevant hiring information.  The two chemical companies reached a settlement with the 43 plaintiffs and the EEOC for $18.25 million.  The settlement was designed to compensate the former employees for back pay, other lost earnings and tort-like damages, including emotional distress.

Settlement: $18,250,000

Hostile Work Environment 
Single Plaintiff

An African-American man quit his job at a television sales and repair store.  Then he sued alleging a racially hostile environment was created by his white supervisor and by the African-American executive who outranked the white supervisor to thoroughly investigate his repeated complaints of racial bias.  The African-American man alleged the defendants violated the Civil Rights Act of 1866 and Title VII of the 1964 Civil Rights Act.  A jury awarded the plaintiff $41,000 in back pay, $100,000 for mental anguish and $1.5 million in punitive damages. The punitive damages were permitted under the 1866 Civil Rights Act.

Jury Award: $1,600,000

Whistle-Blower and Retaliation 
Single Plaintiff

A 62 year old white male employee with a positive performance record and favorable bonuses was terminated by a company.  He sued, alleging he was terminated form his job so that the employer could hide a pattern of discrimination against women and minorities.  The employee further Alleged violations of the ADEA, Title VII, the Virginia Human Rights Act, and the Fairfax County, Virginia Human Rights Ordinance.  A jury awarded the employee $65,000 in compensatory damages and $400,000 in punitive damages.  The punitive damages were reduced to $350,000 to conform with the state cap

Jury Award: $465,000

Wrongful Demotion 
Two Plaintiffs

Two engineers were demoted and had their salary cut by 25%.  They sued their company, alleging the company failed to follow its personnel policy when it demoted them and cut their salaries without good cause.  A jury awarded one engineer $700,000 and the other $625,000 in economic damages.  In addition, the jury also awarded each $75,000 in non economic damages for their emotional distress.  This unanimous jury award of $1.325 million was upheld at the state supreme court level.

Upheld Jury Award: $1,325,000

Age Discrimination 
Single Plaintiff

A television station fired a 53 year old television sportscaster based on viewer research surveys that described him as not impressive and an underperformed.  The sportscaster sued alleging the workplace reflected a corporate atmosphere aimed at systematically ridding itself of older employees.  The sportscaster further alleged that the television station had violated the ADEA.  A jury awarded the sportscaster $1.2 million, and the eight circuit US Court of Appeals affirmed the award.

Affirmed Jury Award: $1,200,000

*According to Haynsworth, Baldwin, Johnson & Harper

 How Can I Get The Best Price?

Many Employment Practices Liability  Insurance (EPLI) carriers will reimburse a portion of the cost of HRC's services that directly relate to the coverage under your EPLI Policy. You determine your need for assistance on any employment matter such as training, updating/creating your employment handbook, putting together an affirmative action plan, assessing pay-equity exposure, establishing grievance programs, employment practices, termination procedures, ect.  (HRC can also assist you with a cost effective practices audit to help you determine needs). We also are expert at workers compensation, injury and unemployment loss control!
Once our services are delivered and an invoice is issued, your carrier may reimburse you for some, or all, of the cost of our services.  Services available can include:

Compliance audits of human resources/employment policies and practices.
Development or updating of human resources/employment policies and practices.
Training program design and implementation on topics such as employment discrimination laws, equal employment opportunity obligations, maintaining hostile-free work environments, interviewing skills, managing diversity, and handling corrective action and discharge issues, all with a focus on loss prevention.
Professional counsel on employment issues.
Statistical analyses on workforce and employment practices to detect trends or patterns that could lead to regulatory problems, lawsuits or employee allegations.
Any other employment practices loss prevention service, subject to your carrier's approval.

We will be glad to assist you in determining if your particular carrier provides reimbursement our services.


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