5 Examples Of Employment Practice Liability Claims
Do you know of any scenarios which might arise in a liability claim from an employee? You could probably name a couple but there are most likely some you don’t know. Here are five examples of employment practice liability cases we’ve created for your benefit.
We’ve also added in a line to describe how a real case was settled for each scenario.
- Discrimination
An employee is requested to take a demotion after taking time off to grieve for lost family members due to cancer. The demotion is recommended so the employee can afford additional time to handle her recent loss and because the accounting department believes the employee’s recent medical tests are costing the organization’s benefits plan.
This scenario happened to a female employee of an agriculture co-op. Currently, the defense costs are $95,000.
- Wrongful Demotion
An employee is demoted from their position, with their salary cut without due process.
Two trade association employees had this happen to them. When they went to court they were awarded a combined total of $975,000 in compensation which was upheld at the state supreme court level. It was found that no formal process had been undertaken to demote or cut the wage of the employee.
- Whistleblower And Retaliation
You fire an employee who highlights practices within the company which are immoral, illegal or not socially acceptable or to hide a pattern of that behavior.
An employee with an exemplary record and good bonuses was fired from one organization so bosses could hide discrimination against women and minorities. There were also allegations of Age Discrimination. A jury awarded the former employee with $380,000 in combined damages.
- Sexual Harassment/Retaliation
An employee is subjected to inappropriate comments about their personal life as well as being excluded from organizational events (meetings, projects, etc.) based on gender/personal life.
A volunteer experienced this with a group of a non-profit’s employees. They settled out of court with a non-binding arbitration with an award amount of $300,000.
- Wrongful Termination
You fire an employee from their position without a justified reason or for stating the wrong reason.
An executive director of a charity was awarded compensation after he was fired from his role. The charity stated he was fired for performance related issues. The executive director claims it was because he had highlighted a former employee was incorrectly paid and was terminated when he complained. Defense costs and settlement exceeded $625,000.
Employees have rights, and these are sometimes overlooked. That is why it’s essential to have insurance, so that any claims made against you can be covered by your insurance. If you don’t have insurance, speak to a member of Protect Us Better and we’ll provide you with the best advice to ensure you get what you need to protect your business.
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