Employment Practices Liability Insurance – Protection from Litigious Employees

The area of employees’ rights has been a bubbling caldron since the passage of Title VII of the Civil Rights Act of 1964. This federal law prohibits intentional employment discrimination by employers who are engaged in interstate commerce. It also prohibits practices that have the effect of discriminating against individuals.

As new workplace laws have been enacted, the possibility of employers finding themselves on the business end of a lawsuit has increased, especially when it comes to issues regarding discrimination.  It isn’t just about ensuring that all employees have the same rights and opportunities to job access, job security, working conditions and advancement, it also means creating a workplace in compliance with federal guidelines for the employment of disabled and mature workers. According to statistics compiled by the Equal Employment Opportunity Commission, from 1992 to 2004, the total number of individual charges of discrimination increased from 72,302 to 79,432 per year. These figures included filings for all types of discrimination.

Of course, it stands to reason that the more personnel policies employers have in place, the fewer the lawsuits filed against them, especially if these policies are outlined in a handbook provided to new employees. Even with the most careful interpretation of the law, however, there can still be instances when an employee can allege discrimination. That’s when an employer will be thankful and reassured they have Employment Practices Liability Insurance (EPLI).

How important is this type of coverage? The answer to that question lies in an examination of the workplace itself. The changing ethnic and racial composition of the workforce mirrors the changing demographics of America itself. Despite the fact that the U.S. workforce on average has a higher educational level than anytime in its history, some problems evolving in the workplace have discrimination at their root. Cultural differences have become an area ripe for discrimination lawsuits. Add to that sexual harassment, age discrimination and bias against the abilities of handicapped workers and employers can find themselves swimming in a sea of legal proceedings.

The focus on workplace litigation has steadily increased as workers have been awarded large damages in lawsuits against companies; human rights organizations have become more vigilant in reporting the actions of multinational companies; and the greater availability of information has provided more awareness of discriminatory activities that might have gone unnoticed in the past. Even the press closely examines the practices of large corporations in this post-Enron society. With all of these preventative measures in place, an employer needs the protection of Employment Practices Liability Insurance for those times when the best laid plans for a non-discriminatory workplace go awry.

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