Employers today face a myriad of employment-related liability exposures, the most prevalentarising from heightened awareness toissues of diversity, inclusion and, morerecently, equity among peers. Last year’ssocial unrest signaled a politicized culture shift, increasing the potential foremployers to face allegations of discrimination and retaliation in the workplace.
Employee assertions of such claimsalready were rising, however, as the predominance of retaliation and discrimination lawsuits against employers hasincreased annually over the past decade.
Discrimination accusations can bebased on gender, sexual orientation/gen-der identity, race, religion and disabilityamong other factors. Any charge of inequity or intolerance against an employercan fall within this broad-based category.
Retaliation claims occur when anemployee believes he/she has been punished by his/her employer for participating in legally protected activity, such asreporting concerns of discrimination inthe workplace. Equally important, pregnancy and family leave issues interpretedunder the discrimination and retaliationumbrella have been escalating more thantraditional liability exposures.
The Equal Employment Opportunity
Commission’s (EEOC’s) fiscal year 2020
statistics, ending Sept. 30, 2020, reflect-
ed the agency filing of 93 merit lawsuits
relating to discrimination, a decrease
from 144 such suits in the full year of
2019. Primary areas of discrimination
were related to sexual orientation, dis-
ability and retaliation. Although cases
declined in 2020, the EEOC’s Annual
Performance Report revealed a dramatic
upsurge in monetary recoveries, increas-
ing from approximately $29.1 million in
2019 to $106 million – the highest annu-
al recovery dollar amount since 2004.
An Employment Practices Liability(EPL) claim can include more than oneallegation, such as when an employeeasserts that retaliation was directly tiedto an act of discrimination. EEOC annual statistics show that lawsuit retaliationcomplaints for all applicable statutesincreased from approximately 27% ofcases filed in 2000 to more than 53.8%of all cases in 2019.
No employer is immune. Two top complaints related to claims in the financialservices industry have to do with mater-nity/family leave and discrimination.
FINANCIAL SERVICES FIRMS HAVE
Unfortunately, financial services compa-
nies, asset managers and wealth manage-
ment firms face greater risk of significant
monetary loss from employee claims of
workplace inequalities. An employee alle-
gation of discrimination seeking pay parity
and/or equality due to promotion dispari-
ties can lead to outsized demands, reflect-
ing salary levels of wage earners within
the sector. Many organizations faced with
such claims have chosen to reach set-
tlement with claimants rather than face
backlash in today’s social media universe.
Many employers should focus on
incorporating best practices in the work
environment, striving for diversity,
inclusion and equity. Many employers
may not realize they have an obligation
to promote equitable opportunity in the
Due to raised awareness sparked by
the #MeToo Movement, several states
now mandate annual sexual harassment
training. Other states and regulatory enti-
ties may require employers, particularly
public companies, to comply in meet-
ing certain inclusion and diversity stan-
dards in the work environment including
developing training for employees, man-
agement and board members.
Resources are available; EPL loss prevention websites offer insight into thelatest developments in employment litigation, as well as guidelines for mitigation best practices.
Many insurance carriers with dedicated expertise in EPL lines also provideclients with tools and materials thatcan be invaluable in providing guidancefor establishing, reviewing or updatingemployment practices. Lastly, employersshould review their employment practices with legal counsel to ensure compliance with state and federal laws.
Steven F. Goldman is president of Chubb’sNorth America Financial Lines division. He canbe reached at: firstname.lastname@example.org.
WEALTH & RISK
By Steven F. Goldman
How Advisory Firms Can Avoid
Discrimination and Retaliation Claims
The number of lawsuits has risen annually over the past decade. It’s best
to train your team to follow the law.