In Gresham, Oregon, a former Del Taco employee is seeking $242,000 in damages from the company for firing her after she was noticeably pregnant, according to The Oregonian. Claudia Melesio-Rojas claims in fall 2013, the restaurant managers allegedly told employees they weren’t allowed to become pregnant. Melesio-Rojas filed a pregnancy discrimination complaint with the Oregon Bureau of Labor and Industries.
Whether this is a legitimate case of discrimination or an unfounded claim, Del Taco now faces a pricey lawsuit. And even small businesses can find themselves in the crosshairs of a similar type of legal mess. Keep in mind that even if a business is not found liable, it must defend itself in court. And that costs money – lots of it.
How Does Employment Practices Liability Insurance Protect Your Business?
Say you’re interviewing applicants for an open position at your IT consulting firm, and you decide to hire a qualified young professional straight out of school. Another applicant, an older man with less IT security experience, files a lawsuit against your business, citing discrimination based on age.
Employment Practices Liability Insurance can cover legal costs when such a lawsuit is brought by prospective, current, or former employees. EPLI coverage can help pay for settlements or judgments and lawyer fees, which can snowball even if you aren’t liable for the claim.
Think of EPLI as a necessary safety net for employers. It can cover a wealth of managerial mistakes, including allegations of…
- Mismanagement of employee benefits.
- Sexual harassment.
- Wrongful termination.
- Discrimination based on age, gender, religion, nationality, or race.
- Privacy invasion.
- Emotional or mental distress.
Of course, you should always try to do everything in your power to create a safe and fair workplace. That may mean brushing up on federal legislature governing U.S. employment practices, such as the Equal Employment Opportunity Act and the Family Medical Leave Act.
For example, EEO laws prohibit employment discrimination based on gender, which includes pregnancy status. To learn more, check out the U.S. Equal Employment Opportunity Commission’s site.
3 Ways to Minimize Your Risk of Employment Practices Lawsuits
The most even-handed small-business owners may still face an employment discrimination lawsuit at some point in their careers. That’s why you should…
- Establish and document comprehensive employee policies and practices. Write guidelines for worker practices, and review them frequently with your team.
- Keep an “open door” policy. Tell your employees they can share their concerns regarding work practices without fear of reprimand. All questions and activities should be fairly investigated.
- Don’t cancel your EPLI coverage. Employment Practices Liability Insurance is issued on a “claims-made” basis. A claim will only be covered if the incident in question occurred while your insurance policy was active and your policy is still in force when the claim is reported.
To learn more about workplace discrimination, check out our EPLI blog series.