Categorized | Insurance

Retaliation Suits

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If you are a small business owner, two recent decisions by the U.S. Supreme Court should make you smile. Why should you care about a Supreme Court Ruling? These decisions are important because they will make it harder for your employees to file retaliation suits against you or your supervisory employees.

Law Book and Gavel

Maybe you are thinking, “I own a small business. Why should I worry about retaliation suits?” There are several reasons why you should be concerned. First, if you employ 20 or more workers, you are subject to federal anti-discrimination laws. Secondly, consider these statistics reported by the Miami Herald:

  1. Six out of ten employers have been sued by an employee within the last five years.
  2. Employers that are most vulnerable to discrimination suits are private companies with 15 to 100 employees.
  3. Retaliation claims have more than doubled since 2000.

Retaliation claims can cost you a lot of money. Defense costs alone can add up to $150,000. Settlements can range between $5,000 and $1 million.

What exactly is retaliation? It is a form of discrimination. The U.S. Equal Employment Opportunity Commission (EEOC) defines retaliation as an adverse action taken against an employee to try to prevent him or her from opposing a discriminatory practice.

For example, suppose that Sue, one of your employees, files a discrimination suit against you. Sue claims that you discriminated against her based on her age (60), her sex (female) and her disability (Sue uses a wheelchair) when you passed her over for a promotion. Instead of Sue, you promoted a 35-year-old male employee , even though Sue has twice his experience. Six months after filing the discrimination suit Sue sues you for retaliation. She claims that you tried to get her to drop her discrimination suit by demoting her and making derogatory remarks about you to other employees.

What can you do to avoid retaliation suits? This article written by a law firm lists several things you can do to protect your firm. The first step is to create a retaliation policy so employees know you won’t engage in retaliatory behavior or tolerate it from supervisors. Take complaints seriously and keep them confidential. Finally, document all complaints and related events.

You can have the best retaliation policy and still be hit with a claim. Fortunately, retaliation claims are insurable under employment practices liability (EPL) coverage. Many EPL policies include a list of covered employment practices, such as discrimination, sexual harassment (also a form of discrimination) and wrongful termination. Policies vary widely. Retaliation may or may not be listed a covered offense. If it is not mentioned specifically, it should be covered under discrimination.

Image courtesy of [nirots] / FreeDigitalPhotos.net

Source: About.com
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