Top Trends in Employment Practices Liability Claims

By | January 12, 2015

Unpaid internships, illegal background checks, pregnancy and health-related employment discrimination continue to be the top trending employment practices litigation cases, according to industry experts.

Claims costs are rising, in part due to the length of time it takes to resolve an EPLI claim. According to an Advisen white paper released recently, defense costs can top out at $300,000 and the timeline for resolution can be anywhere from 18 to 24 months. The paper reported that multiple claimant disputes are on the rise. Federal, state and city regulators as well as plaintiff attorneys can file a claim on behalf of an employee or group of employees.

The U.S. Equal Employment Opportunity Commission has 53 regional offices throughout the country and as such can file an action within state and federal courts. According to Advisen, “For this reason, claim trends will vary by state, with certain states pursuing particular types of claims at any one time.”

The top four EPLI litigation generating states, according to Advisen, are:

  • New York
  • California
  • Texas
  • Florida

Genetic Discrimination

GINA, the Genetic Information Nondiscrimination Information Act which took effect Nov. 21, 2009, prohibits employers from using genetic information in employment-related decisions, classifying employees based on genetic information or requesting genetic information from an employee.

According to Gail Gottehrer, a partner with the East Coast firm of Axinn, Veltrop & Harkrider who often represents insurers, GINA governs the privacy of a person’s genetic information which is sometimes released with family medical histories.

Gottehrer said the agency has implemented a strategic enforcement plan that includes a focus on preventing genetic discrimination.

“We’re seeing the EEOC bring class actions to enforce the Genetic Information Nondiscrimination Act. Employers should make sure that they are not requesting family medical history or other genetic information from job applicants or using that kind of information as part of their hiring process. Requesting family medical history from job applicants has been found to be a violation of GINA,” said Gottehrer.

According to EEOC statistics, GINA lawsuits began being filed by the government agency in 2010. So far, the agency has filed a couple of individual actions and a class action based on the law.

Pregnancy Discrimination

The EEOC’s Strategic Enforcement Plan also included pregnancy-related discrimination as one of its top six priorities between 2013 and 2016.

The Pregnancy Discrimination Act was enacted in 1964 and requires employers to allow pregnant employees to work at their jobs as long they can perform their jobs and employers aren’t allowed to hold pregnancy against a prospective new hire.

“The EEOC’s been very focused on that, too, and they’ve issued guidance recently about that, about making sure that women are hired even though they’re pregnant or not discriminated against, or make it harder for them to get jobs because they’re pregnant,” said Gottehrer.

Illegal Background Checks

Lawsuits resulting from illegal background checks are also on the rise, according to experts.

“Recent class actions have focused on the use of pre-hiring background checks,” said Gottehrer. “Employers who use background checks will want to make sure that they comply with the requirements of the Fair Credit Reporting Act and similar state laws and that they conduct the background checks uniformly, and not just for certain applicants or protected groups of applicants.”

According to Gottehrer, before a credit report can be requested as part of an application process, the potential employee must be notified in writing of the request and that it will be used as part of the employment decision. Written permission from the job applicant is required to obtain a credit report.

Gottehrer said that with credit reporting there’s always a concern that there could be an error or decisions could be made based on inaccurate information. While it might be relevant for some job categories, she said it’s not necessarily relevant to others.

Unpaid Interns

The Department of Labor has perimeters that they use for determining if an intern is or isn’t an employee, according to Gottehrer. Factors considered include whether there is an education component to the internship, benefits to the intern, an intern’s duties and whether they mirror an employee’s job duties.

“In light of the recent spate of unpaid intern class action filings and settlements, this is a good time for companies who have interns to review their internship programs, policies and practices,” said Gottehrer. “Companies that can show that their programs have educational value, do not give interns work that would otherwise be done by employees, and do not automatically entitle interns to paid jobs at the conclusion of the internship will be well-positioned to argue that the participants are truly interns and not employees who are subject to the Fair Labor Standards Act.”

About Denise Johnson

Denise Johnson is editor of claimsjournal.com. More from Denise Johnson

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Insurance Journal West January 12, 2015
January 12, 2015
Insurance Journal West Magazine

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