These strategies can prevent claims and promote a safe, inclusive workplace.

By Michele McDermott

Over the past three years, Google, Ford Motor Company, 21st Century Fox, Bank of America, and the New York Knicks are among an exhausted list of companies that have experienced employment practice liability (EPL) lawsuits due to sexual harassment claims. Companies of all sizes can experience harassment or employment practice-related claims. Employees at every level, as well as vendors and customers, can perpetrate a claim.

Could the increase in claims be driven by the #MeToo movement? Absolutely. Proactive organizations are looking to EPL insurance, intensifying their company policies, and implementing risk management programs to prevent offenses from occurring.

In an era of transparency and change, company policies can provide leaders with a playbook on what is considered workplace harassment and how to respond. As a best practice, these policies should be reviewed with the company’s employment attorney to ensure they’re comprehensive and address both state and federal considerations for the jurisdictions in which the company operates.

But a policy is only as good as its execution. HR needs to take the necessary steps to be prepared to comply with and execute the policy when required. Policies should take into account:

  • how employees are informed of the rules and regulations;
  • how managers respond when notified of an incident;
  • how employees can confidentially submit a complaint;
  • how the privacy of the accused and accuser will be maintained during and after investigation;
  • how the investigation will be conducted and then communicated back;
  • what safeguards will be in place during the investigation to protect both parties; and
  • what disciplinary measures are in place to address founded complaints.

In the age of rising claims, it is imperative that companies develop not just a policy, but an entire program focused on mitigating harassment in the workplace. Here are a few best practices to consider in a program:

  • Evaluate policies, procedures, and expectations as a company.
  • Provide additional training for HR staff on how to adequately deal with complaints or harassment claims.
  • Utilize the EEOC’s “Respectful Workplaces” and other outside training programs.
  • Enforce zero tolerance by making sure all employees are aware of the anti-harassment policy.
  • Educate employees about harassment through seminars, webinars, mandatory trainings, and sections within the employee handbook upon hire or an annual all-staff refresh meeting.
  • Create a top-down inclusion effect that promotes an anti-harassment culture for everyone.
  • Put the company policy in writing and make employees sign the document.
  • Revamp reporting resources, like incorporating a hotline for employees.
  • Detect and understand that harassment can take place at any time and in any industry.
  • Watch for behavioral patterns, address any allegations, and conduct anonymous surveys.

But what can HR do when claims seem inevitable? While many suits are groundless, defending against them is costly and time-consuming. In 2018, the EEOC retrieved roughly $70 million for the victims of sexual harassment through litigation and administrative prosecutions. Recovered claims increased by $22.5 million from the 2017 fiscal year. The #MeToo and #TimesUp movements have brought harassment to the forefront of unspoken issues in the workplace. In a time where Twitter alerts, real-time videos, and news stories are just a click away, individuals in the workforce are more confident when it comes to reporting sexual harassment to their employer or even the police.

While an EPL policy can provide the ability to defend against an allegation or complaint, it will not prevent allegations. When reviewing coverage options, take into account why companies obtain EPL insurance:

  • Employee lawsuits and discrimination allegations are excluded under standard general liability coverage. So, without an EPL insurance policy in place, organizations are 100 percent self-insuring the risk.
  • According to Travelers, even with good employment practices in place, it is not uncommon for legal fees associated with winning an employment lawsuit to be in excess of $250,000.
  • Since 2010, employers have paid an additional $700 million for harassment allegations made through the U.S. Equal Employment Opportunity Commission, according to i-sight.
  • In a litigious society, every employer, no matter how small or large, is vulnerable to legal action from past, present, and prospective employees. In fact, employees can easily file a lawsuit at no cost or risk to them. The truth is, organizations are now more likely to have an employment practices claim than a property claim, according to Insurance Journal.
  • Outside of defense costs, if the case goes to trial, statistics show the average award amount is nearly $218,000, according to a whitepaper from Total HR.
  • Not only will the suit cost money, productivity will be down due to the distraction of the claim, damage to company morale, and bad publicity.

Being able to maintain a safe, respectful, and happy environment is of utmost importance.

Michele McDermott is senior vice president of human resources of Assurance.

Tags: Risk and Compliance, Workforce Management

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