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Employment Practices Disputes Among Most Common Litigation Issues for Firms


Employment Practices Disputes Among Most Common Litigation Issues for FirmsEmployment Matters, Regulatory Actions, Privacy All Top Litigation Trends

This year’s Norton Rose Fulbright’s Annual Litigation Trends Survey was just released, indicating that employment disputes and contract matters once again were the most common litigation issues facing companies in the United States. A total of 48% of respondents said that labor and employment issues topped the number of cases their organizations faced in 2013, and 36% said contract issues were most numerous. This is Norton Rose Fulbright’s 10th annual litigation trends survey of corporate law departments in the U.S. Senior corporate counsel executives representing a broad range of industries from large, medium and small-sized companies, including technology/communication, financial services, healthcare, and insurance firms, responded to the survey. Norton Rose Fulbright, a global legal practice, conducted the survey in late 2013/early 2014.

The survey cited that the technology and communications industry reported the most significant increase in labor and employment matters, with 65% of respondents in 2013 including labor and employment among the most frequent types of litigation, compared to 52% 2012 and 40% in 2011.

A huge concern for companies is a stricter regulatory environment and increased scrutiny from a broad range of state and federal agencies. Close to 20% of survey respondents said their companies had faced a regulatory/investigation matter in 2013, up from 9% in 2012. “We continue to see the scope and frequency of regulatory investigation matters increase in the U.S., as government agencies take a more proactive approach in determining compliance. Stricter regulations governing financial, environmental and workplace issues create a more complex environment for businesses, and these results show that a serious regulatory investigation is a reality for a growing number of companies each year,” said Otway Denny, U.S. Disputes Head, Norton Rose Fulbright.

The regulatory bodies most actively involved in investigations vary by industry, not surprisingly. For instance, 48% of energy companies involved in a regulatory matter were investigated by the EPA and 34% by the DOJ; for financial services firms, the SEC (54%) and FINRA (44%) were most involved; for healthcare, the DOJ (50%) was a primary investigator; for engineering/ construction, it was split between the DOJ (36%) and OSHA (36%). For many companies, state regulators played a major role, as well, especially state attorneys general offices.

Privacy & Data Protection: A Top Concern

The rapid growth in electronic data, mobile computing and wireless communication is also creating significant legal issues for companies. According to the survey, 43% of this year’s respondents said their firms had encountered issues with privacy/data protection in a dispute or investigation during 2013, up from 31% in 2012 and just 25% in 2011. This was most prevalent in healthcare, with 67% of respondents reporting their companies had faced a privacy/data protection issue, along with technology/communications at 60%. The top concern, cited by 55% of respondents, was the search for or collection of data from company equipment used by employees. The second challenge involved third-party vendors collecting and processing data on behalf of respondents’ companies.

Axis Insurance Services, LLC specializes in key coverages to protect companies from lawsuits involving employment practices, directors and officers liability, and privacy and data breaches. We also specialize in several key industries, including insurance, real estate, healthcare, and technology companies/consultants. We can help design insurance solutions that address the legal and regulatory exposures companies face involving employee disputes, allegations of wrongdoing, and cyber liability/network security incidents. Please give us a call at (877) 787-5258 to discuss your firm’s needs.

Source: Business Wire, Norton Rose Fulbright

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Blogged on: April 25, 2014 by Mike Smith
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