Employement Practices Liability Coverage

EPL covers not only actual but also alleged acts of discrimination, harassment, retaliation, wrongful termination and other similar acts.

2. 3 out of 5 employers are sued by former employees every year.

3. Over 40% of EPL claims are against firms with fewer than 100 employees.

4. Some Federal and State employment laws apply to all employers – any size company has exposure!

5. The Equal Employment Opportunity Commission (EEOC) recorded nearly 100,000 charges in 2012 and obtained more than $365 million in settlements for claimants.

6. The financial ramifications of not having EPL insurance can be crippling, especially for small firms because they do not have the operating budgets to handle the defense costs, let alone settlements or judgments, of an uninsured claim.

7. The median compensatory award to plaintiffs is $325,000.

8. There is no EPL coverage under other insurance policies such as General Liability (GL). Any endorsement to another policy generally provides insufficient limits, does not provide the breadth of coverage of a separate EPL policy and erodes the limit available for the GL exposure.

9. Wage and hour litigation has quadrupled. More wage and hour collective/class actions have been filed in recent years than any other types of employment class actions combined.

10. Gender discrimination, age discrimination and retaliation claims are on the rise. There are more women and “baby boomers” in the workplace than ever before. Recent Supreme Court decisions have lowered the standard of what constitutes retaliatory treatment

The U.S. Department of Labor (DOL) estimates that as many as 70 percent of employers are not in compliance with the FLSA in some material way

FLSA Claim Examples

_ A mortgage company was sued by 54 of its loan officers for over $220,000 in unpaid overtime. The owner was under the impression that FLSA did not apply to highly compensated employees. Many of his staff members earned well over 150k per year with the average compensation being $105,000. There is an exception to the FLSA law for highly compensated individuals earning at $100,000 per year or more but the exception also stipulates that a minimum of $455 per week must be paid. These employees were not paid during weeks where they did not close loans.

_ 47 client technical support employees took legal action against a local community bank shortly after the bank reclassified these employees as non-exempt. The bank offered each employee two years of back pay for the unpaid overtime. The employees were unhappy with this decision and, in turn, sued and were granted 3 years of back overtime pay and liquidated damages for the intentional misclassification. The total payout was over $172,000.

_ An insurance agency settled for $80,000 with a Non-Exempt Customer Service Representative for unpaid overtime. The CSR was paid $20/hour by the agency and never complained about her workload. Frequently, she was asked to come in early for conference calls and to stay late at the end of the month to ensure that all policies were billed prior to month end close. Without having any knowledge of any wrongdoing, the owner was served with an FLSA lawsuit from the CSR who had been quietly tracking her hours worked. The agency had no way of knowing whether her calculations were accurate and was advised by counsel to immediately settle for the requested amount.

_ A grocery store was directed to pay over $52,000 in restitution to thirteen employees all under the age of sixteen for willful violations of the Fair Labor Standards Acts (FLSA) youth employment provisions. The market had minors working six consecutive hour shifts as well as performing such tasks as cleaning a meat slicer, loading a paper baler and operating the power driven baking machine. The FLSA’s youth employment provisions identify hazardous orders that prohibit these specific activities for workers under eighteen and limits the number of hours that minors can work on school days/weeks.

_ A laser machining plant was sued for unpaid overtime after firing an employee for what the company described as tardiness and an uncooperative attitude. The administrative assistant was listed as exempt although many of her job responsibilities are considered to be traits of a non-exempt classification. Her lawyer argued that she could not have been an exempt employee since she was docked pay for every hour that she did not work that was less than 38 in a week. The lawsuit settled for $73,000 in liquidated damages for intentional misclassificatio

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