Jonathan Ingber - Employment Law Update

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When ( a ) an applicant is a member of a protected class and is denied employment, or ( b ) a current employee who is a member of a protected class is terminated, denied promotion, suffers a decrease in compensation or benefits, or is demoted, the applicant or employee may file a complaint with the EEOC or equivalent state agencies seeking damages for denial of employment or other adverse actions. In general, an applicant denied employment must show that he or she was at least as well qualified as the least qualified successful applicant who is not a member of the protected class.

A well-run employer will know that dealing with members of a protected class requires the employer to exercise “special care.” This does not mean that the employer cannot fire or take adverse employment action against members of a protected class, but doing so can involve an increased risk of claims or allegations that the employer may encounter — especially if the employer or supervisor mishandles the situation.

1 Willful or deliberate acts of an employer may entitle a former employee to recoverStatutory damages.Compensatory damages.Lost pay.Punitive damages.

1 A member of a protected class is protected fromEmployer discrimination onlyEmployer discrimination and harassment.Employer discrimination and retaliation.Adverse employment action.

The U.S. EEOC issued a press release on January 25, 2018, that included fiscal 2016 data on the numbers and types of discrimination charges filed by employees of private employers as well as federal, state, and local governments in 2017. Information for 2000, 2005, and 2010 is presented for purposes of comparison. 10 Note in particular the dramatic increase in all retaliation claims over the periods presented and the continuing increases in disability claims.

According to a study announced by Hiscox, an international specialist insurer, in March 2015 the average U.S. employer with at least 10 employees has an 11.7% chance of being named as a defendant in an employment liability claim. The study's results also found that employers in certain states, such as New Mexico, Nevada, and California, are significantly more likely to face employment liability claims than the national average, and employers in other states are far less likely to be named in employment claims. 11

The EEOC reported the following in fiscal year 2017:

The Chubb 2013 private company risk survey 13 contained the following statistics concerning employment practices liability (EPL) for private companies:

	of those surveyed had an EPL-related event in the past three years.
	are concerned about alawsuit for wrongful termination, sexual harassment, discrimination, or retaliation.
	said an EPL lawsuit would cause the most financial damage to the company.
	have policies against hiring employees with criminalbackgrounds (such policies can unfairly target minority candidates).

Average total costs associated with an EPL event:

$70,267

> Among reported losses:

$4 MILLION

by a large company (250+ employees)

$600,000

by a midsized company (100–249 employees)

What types of claims are expected to be most common in future employment suits? Although predictions are inherently uncertain, the following types of claims were expected to feature prominently in 2018 and 2019:

> Classification and pay of workers in “on-demand” or temporary positions, e.g., Uber, Lyft, and similar demand-driven businesses

> Use of staffing agencies and “complex employment structures”

> Gender-based pay disparities and salary history questions

> Immigrant, migrant, and other vulnerable workers

> Inflexible leave policies that have a discriminatory effect on disabled persons

> “Off-the-clock” uncompensated work

> Criminal background checks

> Denials of rest or meal breaks, leave, or related pay

> Misclassification of employees as independent contractors

According to the 2016 edition of Jury Award Trends and Statistics, 14 the median jury award for discrimination between 2009 and 2015 was $113,200, with a probable range of $25,000 to $350,000. The median disclosed settlement of a discrimination suit was $73,750 from 2009 to 2015, with a probable range of $135,500 to $335,000.

Exhibit 1-3 as follows sets forth the types of discrimination alleged in 2016 suits in which verdicts were rendered or settlements were reached.

Source: Employment Practice Liability: Jury Award Trends and Statistics , 2016 edition.

Has your business experienced an employment claim in the last three years?

What was the type of claim?

Did your business settle the claim or was it litigated?

If the result was not confidential, what was the cost of resolving the claim?

To those who might consider employment liability claims to be nothing more than a minor nuisance, the following table will be an eye-opener. The table summarizes the three largest 2016 settlements and verdicts in employment cases. The table does not reflect a reported total of $45 million paid out in 2016 and the first quarter of 2017 by 21st Century Fox in sexual harassment settlements. As you can see, the amounts involved in these cases are anything but minor.