Employment practice liability-retaliation claims continue to grow

The Equal Employment Opportunity Commission (EEOC) has released its enforcement and litigation data from the 2020 fiscal year.

According to the agency, they resolved 70,804 charges in 2020 and secured $439.2 million for victims of employment discrimination. EEOC employees fielded over 470,000 phone calls and responded to more than 187,000 field office inquiries, including 122,775 online submissions.

Despite the challenges of the COVID-19 pandemic, the EEOC increased its merit factor resolution rate to 17.4%, nearly 2% higher than the previous year. Merit factor resolutions include settlements, withdrawals with benefits, successful conciliations, and unsuccessful conciliations.

Retaliation was the most common claim in the 2020 fiscal year, as it has been in years past, amounting to 55.8% of all charges filed. Other charges received by the EEOC include:

  • Retaliation: 37,632 (55.8%)
  • Disability: 24,324 (36.1%)
  • Race: 22,064 (32.7%)
  • Sex: 21,398 (31.7%)
  • Age: 14,183 (21.0%)
  • National Origin: 6,377 (9.5%)
  • Color: 3,562 (5.3%)
  • Religion: 2,404 (3.6%)
  • Equal Pay Act: 980 (1.5%)
  • Genetic Information: 440 (0.7%)

About 56% of the 67,448 charges received by the commission during the year included retaliation claims, setting a record and continuing a steady upward trend that has persisted for more than two decades, according to data released by the EEOC. That is an increase of 2% from the fiscal year 2019 (53.8%) and 4.2% from the fiscal year 2018 (51.6%).

Retaliation is one of the most common employment claims pursued in court today and businesses need to take heed, as it indeed has become the #1 claim individuals make at the EEOC.

The same laws that prohibit discrimination (Title VII, Americans with Disabilities Act, Age Discrimination in Employment Act, Equal Pay Act, and their state equivalents) also prohibit retaliating against employees and job applicants who assert their rights under the law or participate in a proceeding where discrimination is alleged.

It is not uncommon for a claim alleging discrimination based on a protected classification (race, age, disability, sex/gender, etc.) to also include an allegation of retaliation.

Retaliation is, unfortunately, easy to commit and easy to prove, even if the underlying protected activity is not and it can be very costly to employers. According to the EEOC, they obtained $214.9 million in monetary benefits for retaliation charges in 2020. For that reason, it is important that managers and supervisors understand their obligations under the law to not only not discriminate based on race, color, sex, religion, national origin, age, disability, and genetic information, but also not to retaliate when an employee makes such an allegation. That can be particularly hard for supervisors and managers to avoid when the allegation is perceived as false or unjustified.

A retaliation claim consists of three elements: (1) a protected activity; (2) materially-adverse employment action; and (3) a nexus between them. An employee engages in “protected activity” when s/he complains of an employment practice that s/he “reasonably believes” violates the anti-discrimination laws.

The EEO laws prohibit punishing job applicants or employees for asserting their rights to be free from employment discrimination including harassment. Asserting these EEO rights is called “protected activity,” and it can take many forms. For example, it is unlawful to retaliate against applicants or employees for:

  • filing or being a witness in an EEO charge, complaint, investigation, or lawsuit
    communicating with a supervisor or manager about employment discrimination, including harassment
  • reporting an employer’s potentially unlawful activity to law enforcement
  • answering questions during an employer investigation of alleged harassment
  • refusing to follow orders that would result in discrimination
  • resisting sexual advances, or intervening to protect others
  • requesting accommodation of a disability or for a religious practice
  • asking managers or co-workers about salary information to uncover potentially discriminatory wages
  • speaking out against sexual harassment or some other form of employment discrimination in the workplace
  • filing a worker’s compensation claim
  • engaging in certain political activities or
  • questioning the employer’s immigration policies.

These types of employment-related lawsuits are a growing concern for employers of all sizes, including home-based businesses. As litigation and damage awards costs continue to rise, experts predict that employment liability will only become more complex in the future.

As an employer, you care about making your workforce feel valued and managing your organization successfully. However, even if you do everything you can to ensure smooth relationships with your staff, employment practices liability (EPL) risks remain.  That’s why your organization must have EPL coverage. Such a policy can offer protection for claims that result from employees alleging various employment-related issues—such as discrimination, harassment, and wrongful termination.

The costs associated with employment practice-related claims can be staggering and are on the rise. Employers may face a number of claims and lawsuits over wrongful termination, discrimination, workplace harassment and retaliation. And a business owner does not even have to be in the wrong to be sued.

Employment practices liability (EPL) insurance can cover defense costs and damages related to various employment-related claims and will be critically important to help protect business assets.

Employment practices liability (EPL) insurance is a policy used to cover your risks due to some of the most common employment-related lawsuits, including wrongful termination, discrimination, and sexual harassment.

EPL works to provide the necessary resources to defend your company against a lawsuit or to pay for a claim. To best understand how to cover your EPL risks, it is important to know the potential sources: recruitment practices, employment applications, employment offers, employee orientation process, annual conduct reviews, enforcing performance policies, and termination. 

As costs for litigation and damage awards climb, experts predict that employment liability will only become more complex. As a result, business owners must understand their exposures and options for managing risks and need to review their risk tolerances with their insurance broker. 

This article was written by Keven Moore.

 

Keven has a bachelor’s degree from the University of Kentucky, a master’s from Eastern Kentucky University and 25-plus years of experience in the safety and insurance profession. He is also an expert witness. He lives in Lexington with his family and works out of both Lexington and Northern Kentucky.