A visit to the online newsroom for the U.S. Equal Employment Opportunity Commission will confirm one thing clearly. This agency tasked with fighting instances of discrimination in the workplace is not shirking its responsibility. News releases announcing new suits or settlements of cases appear almost daily.
Settlements noted for most of July ranged from a low of $25,000 in one case, to several reaching more than $1 million. Employers ran the gamut from a collection agency and a couple of IHOP franchisees to cosmetics giant, Estée Lauder Companies.
Are you situationally aware?
What these facts provide in bold relief for every Colorado business owner are two messages.
- It’s important to have solid employment-related policies and procedures against discrimination in the workforce.
- No matter what size a company may be, the risk to operations from a possible discrimination claim is always present and paying for violations can be hugely expensive.
For some decades now, one means of mitigating the risk of discrimination cases has been through purchase of Employment Practices Liability Insurance (EPLI). In the early going, protection tended to be limited to covering the cost of defending wrongful termination claims. Today, with sexual harassment and discrimination a daily focus of media attention, the demand for EPLI is up, and the scope of coverage has broadened.
Is EPLI enough?
That there is value in having EPLI coverage is not in dispute. What is worth asking is whether a business employment plan defined solely by an EPLI policy is adequate, or whether the breadth of possible problems is such that comprehensive policies are required.
The way to make such a determination is by consulting with an experienced employment law attorney, but in addressing the core question, some make these observations to suggest EPLI is not enough:
- With awareness about the illegality of sexual harassment and discrimination rising, numbers of inquiries and actual complaints to the EEOC are increasing, too.
- Many employers mistakenly assume launching legal action costs so much that the risk of a lawsuit is low. The reality is that it costs nothing to file a complaint and trigger an investigation by regulators.
- EPLI doesn’t stop lawsuits. It only helps defray their costs.
One additional point is worth note here. That is that the greatest number of charges filed by regulators allege retaliation against employees who exercised their right to file complaints.
While EPLI can be useful, it’s apparent that it’s more important for businesses to build and maintain employment policies and procedure that minimize risks to begin with.