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EPLI: Avoid Common Mistakes that Can Lead to Employment Lawsuits


EPLI Avoid Common Mistakes that Can Lead to Employment LawsuitsEPLI: Shore Up Your Employment Practices Strategy

We often write about employment practices and how new rulings and federal legislation, along with a proactive stance by the EEOC to ensure companies are in compliance with employment laws, have made this area a top concern of all employers. In fact, in a survey conducted by HR Specialists, HR professionals say that “staying abreast of employment laws and regulations” is their biggest challenge of the workday.

In addition to keeping updated on employment laws and ensuring that management consults with an attorney on how any new legislation can affect employment practices (such as the DOMA ruling), be sure to avoid certain common mistakes that could lead to an employee lawsuit. These include:

  • Sloppy documentation. All managers need to write – even when writing an email – as if a jury could potentially review all of their documentation.
  • Lack of knowledge regarding a company’s policies, procedures. A jury could well interpret ignorance as purposeful and disingenuous, so make sure management thoroughly understands all policies and procedures regarding employment issues.
  • Providing appraisals during performance reviews that are over the top. If later, one of your managers cites poor performance for an employee’s termination, you’ll have a credibility gap based on what was previously stated to the employee.
  • Dismissing employees’ complaints. Take all complaints seriously, even those you may feel are meritless.
  • Errors during the interview process. As basic as it may seen, when hiring be sure to stay away from questions regarding age, race, religion, political affiliation. Keep on point during the interview, which involves questions that determine how well the potential candidate can perform on the job.
  • Changing your reasoning for a firing or discipline. Be straight with employees. Don’t try and sugarcoat comments.
  • “Papering” an employee’s file. The court will see through a rush of disciplinary actions cited in the days before a termination.
  • Careless and inconsistent responses to federal agencies. Be sure your story is always consistent when filing position statements filed with the EEOC or state agency.
  • Dictating accommodations for disabled workers. Companies must go through a give-and-take process to find “reasonable” workplace accommodations for disabled employees. Managers too often try to dictate the solution.
  • Firing employees too hastily. Managers who fire without first trying to improve the worker’s performance can appear insensitive and potentially discriminatory in court.

Go over these and other important issues with your management team to make sure everyone is on the same page and be sure that your employee handbook is updated with the latest policies and procedures. Moreover, a sound Employment Practices Liability Insurance policy should be in place to protect your company in the event of a lawsuit. This policy can cover you against allegations of wrongful termination, disciplinary issues, discrimination, sexual harassment, failure to promote, and more. You will have coverage to defend against a lawsuit and indemnification should you be found legally liable.

Axis Insurance Services is a leading professional and management liability insurance specialist, and offers employers Employment Practices Liability Insurance (EPLI) coverage, including to large corporations and small businesses. Give us a call at (877) 787-5258 to discuss our insurance programs.

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Blogged on: September 12, 2013 by Mike Smith
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