Companies are facing a growing number of lawsuits related to discrimination, wages, hours and benefits – a trend that could both hurt and help workers. While employment-related lawsuits can lead to better worker protection, plus bring money for plaintiffs, they can also put downward pressure on compensation and promotions. With lawsuits expected to rise this year, employees, even those who will never take part in a claim, may be affected.
The weak economy is a factor in the growing number of lawsuits, but another reason filings are expected to rise this year: the Obama administration is likely to increase enforcement of anti-discrimination laws, according to a recent report on workplace class actions from law firm Seyfarth Shaw, which represents management in employment cases.
Discrimination-charge filings for private-sector workplaces were up 7% and lawsuits about wages and hours grew 10% in fiscal year 2010.
The weak economy is playing a role in the rising tide of lawsuits. With the persistently high unemployment rate, some jobless workers have focused on possible mistreatment by former employers. But do lawsuits benefit workers?
“Some suits can lead to fairer pay, but large suits that demand a firm’s time and money to defend can hurt employees,” said Jane McFetridge, a Chicago employment lawyer. “That is money that could have been spent on compensation. The cost of lawsuits, particularly in these difficult economic times, is going to leave less money to spend on other things.”
What can you do to protect your business from workplace lawsuits? Employment Practices Liability Insurance covers a company’s liability arising from employment related issues and is not included in basic liability insurance. This particular policy also includes coverage for defending allegations, regardless of merit. Without this type of coverage, your business could be exposed to financial loss if an employee files a lawsuit.
Contact a Hood Hargett and Associates agent to ensure you are properly protected from a workplace lawsuit. We offer our policyholders free access to an attorney-staffed helpline to assist with HR issues. This free service saves our policyholders legal costs and decreases their threat for lawsuit.
Source: MarketWatch