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Business Protection Bulletin


By February 1, 2009No Comments

Employers in today’s marketplace face many formidable competitive and legal pressures. In addition to holding onto market share, they must comply with environmental, safety and trade practice regulations. Increasingly, they must also worry about legal challenges from their own employees. The job security that employers offered for decades has given way to a dynamic and sometimes unsettling work environment. Rising job insecurity has brought with it more frequent lawsuits from employees sensitive to perceived discrimination. Several trends in the workplace indicate that this will continue.

The baby boomer generation is reaching retirement age in rapidly increasing numbers; the youngest boomers are now in their mid-forties. The sheer size of this aging portion of the workforce, coupled with increased corporate downsizing, is producing accelerating numbers of age discrimination claims. The Equal Employment Opportunity Commission reported that the number of age discrimination complaints increased 15% in 2007. Employers that focus on hiring and promoting young people to keep themselves innovative could become targets for discrimination lawsuits from older workers.

The U.S. economy lost 1.2 million jobs in the first 10 months of 2008, and economists expect the job market to remain weak for the foreseeable future. The end of a recession does not necessarily mean a return to a strong job market; job losses continued for almost two years after the 2001 recession ended. Mass layoffs invariably produce lawsuits from workers who feel they were treated unfairly. A sustained period of falling employment should increase the number of such actions.

Computer technology and Internet applications have had major positive effects on firms’ productivity. They have also created new ways for employees to suffer harassment (sexual and otherwise), privacy invasions, discrimination, and hostile work environments. Uncontrolled Internet access can allow workers to download offensive material that’s then used to harass colleagues. Vulnerable computer networks can permit unauthorized access to private employee information. Modern software and equipment can allow employers to monitor virtually every move employees make. As a result, more workers will take legal action against their employers when they feel their privacy has been invaded or when they believe that technology was used to discriminate against them.

In recent years, gay and lesbian workers have sought increased protections against workplace discrimination. Newly enacted state and federal laws and local ordinances have made it easier for these workers to pursue claims against employers. At least 17 states have statutes or court precedents that prohibit discrimination in private workplaces on the basis of sexual orientation. Continuing success in the legislatures and the courts will encourage more discrimination suits.

In 2007, the EEOC issued guidance on how federal laws apply to workers with caregiving responsibilities. Working parents might be subject to a variety of unfair treatments, including assumptions about pregnant employees; discrimination against working fathers and mothers; and sex-based stereotyping about working mothers. The agency and courts expect employers to make reasonable accommodations for working parents. Perceived failures to do so or perceived discrimination in hiring and promotions might cause affected employees to take legal action.

To reduce the likelihood of employee lawsuits, employers must implement policies and enforced procedures to prevent unfair discrimination. Another essential component is Employment Practices Liability insurance (EPLI) from a financially sound insurance company. Employers face enormous challenges to survival and prosperity in the modern economy. With careful attention to their employment practices and the right insurance products, you can make those challenges a little more manageable. Contact us for a thorough review of your specific EPLI needs.