Changes, Challenges in EPL Arena Discussed at PLUS Symposium

June 28, 2001

Increased claims involving workplace violence, sexual harassment, identity theft and ADA issues are presenting many challenges to the Employment Practices Liability (EPL) marketplace, according to a panel of experts at the Professional Liability Underwriting Society (PLUS) LPL-EPL Insurance Issues Symposium, held in New York.

In his opening remarks, Jeffrey P. Klenk, senior vice president, Travelers Bond, and co-chair of the Symposium, said that changes in the EPL arena in the last several years have provided an interesting journey. According to Klenk, the new Bush administration will affect the enforcement of EEOC and how the courts operate, adding challenges to this arena.

Paul Siegel, employment law and litigation partner, Jackson, Lewis, Schnitzler & Krupman, and session moderator, said that EPL claims are becoming more mainstream and the number of such claims is continuing to grow. He attributed that growth, in part, to the use of non-federal forums and downsizing.

In the case of claims involving the Americans with Disabilities Act (ADA), Denise I. Murphy, counsel, Nelson, Kinder, Mosseau & Saturley, P.C., said that there are huge areas of ambiguity and the courts are not attempting to clear up this ambiguity. While Murphy suggests each claim be examined on a case-by-case basis, she explained that there are generalities an employer can apply overall.

All ADA claims create the need for an interactive process between employer and employee, according to Murphy. Murphy urged employers to engage in conversation with employees and try to clarify any ambiguities that may exist.

Murphy added that contrary to the claims of many management employment lawyers, the ADA is anything but dead. Recent cases demonstrate the willingness of the courts to continue to impose on employers significant burdens in accommodating employees with disabilities, she said. Companies should carefully consider whether current policies and practices, particularly in the areas of leave and reassignment, remain valid. Additional training of managers and supervisors also should be carefully considered, according to Murphy.

Michael J. Album, partner, Seyfarth Shaw, explained in underwriting EPL policies, there should be an understanding of the many loopholes. In addition, Album said that sexual harassment cases have been expanded to include Internet pornography and obscene electronic mail communications. He warned of the significant risks taken on by that risk managers who do not have an Internet policies in place.

Workplace violence presents a lot of complex issues; including exclusivity of workers comp laws, negligent hiring and/or supervision and intentional reckless acts. Album advised that underwriters to make sure they are covered in a well-defined way for non-workers comp exposures.

J. Randall Patterson of Baker, Donelson, Bearman & Caldwell, observed that the Supreme Court has provided attractive incentives along with guidelines by which an employer can avoid liability for punitive damages. Employers have an obligation to adopt, communicate and implement non-discrimination policies and complaint procedures, coupled with thorough supervisory and managerial training. The courts have created compellingly strong incentives for employers to exert “good faith efforts” to comply with the laws prohibiting employment discrimination, he said.

According to Patterson, this can be done by developing and implementing a zero tolerance policy prohibiting discrimination; disseminating the anti-discrimination policy; and training employees with respect to the policy, both as to its letter and to its spirit, requiring mandatory training sessions; familiarization with the pertinent laws prohibiting discrimination in the workplace; developing an understanding of the policy, and establishing a complaint mechanism.

PLUS is a not-for-profit organization with 4,000 members worldwide. The organization provides information and education on professional liability to its members and the professional liability community. For more information visit our web site at www.plusweb.org.

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