The upshot of a Lexus Nexis article which cited a study in the NY Times purporting that “employment cases are tough” and ”it’s true that defendants who refuse to settle and lose average about a $1.1 million loss for their error”1
An extra 1.1 million dollars on average? Those are huge stakes and could require a very large check for a defendant to write. And it might be fair to assume most employers are likely to become defendants in employment situations. Claims that arise in this area can be very emotional, expensive, complicated and punishing.
You may have heard workplace claims and wrongful acts like allegations of Wrongful Termination, Discrimination, Workplace Harassment and Retaliation and such are contemplated on a Employment Practices Liability Insurance (EPLI) type policy. There are others claims and policies possible so please use common sense on courses of action and claims contemplated herein.
Large claims do happen and unfortunately frequently. Any employment claim can take up an incredible amount of time and cause huge amounts of research, copying, paperwork and meetings. It also can be draining physically and financially. Its small solace to be ready and to be able to blunt those allegations where you believe were wronged or incorrectly accused. It’s been said, “Nobody wins a lawsuit.” But it may mitigate fair amount of the agony of a legal battle to find there was no injury after feeling the sting of the plaintiff’s insult either.
Employers should have strategies to understand this area and avoid its pitfalls as best as practical. Below are SOME not ALL ideas of things to do to be better prepared.
Your insurance providers should be able to handle these questions and other areas. It is not uncommon for an agent or broker to have relationships with people who are experts in these matters. That can help. Try to talk to them and share your concerns, questions, gaps etc. Remember, coverage for these areas could be contested or difficult to find. Have a complete strategy and meet with your providers.
No matter how many times one has been through the process of being involved in a complaint, it is never a good feeling for the defendant. There are any number of accusations about the employer and they may seem personal and untrue and unfair. Be ready in case of a claim, you may need support from forensic accounting down to private detectives.
This article includes a disclaimer. Use professional assistance. This information is not intended to represent legal advice and has been prepared solely for educational and reminder purposes. You should consult your attorney regarding any issues due to the fact the text of this article is similar to ordinary telephone or face-to-face conversations and in no way reflects the level of factual or legal inquiry or analysis which would be applied in the case of a formal legal opinion.
Remember preparation may bring you luck plan to organize not agonize.
Source Exhibit 1 https://www.lexisnexis.com/LegalNewsRoom/labor-employment/b/labor-employment-top-blogs/posts/top-13-things-not-to-say-to-an-employment-lawyer – (Study Finds Settling Is Better Than Going to Trial By Jonathan D. Glate NY Times)