Employment Practices Liability Insurance Recent Claims

Employment Practices Liability Insurance can be crucial for everyone. Below is an overview of recent claims involving various insured entities, detailing the nature of each claim, the fact summary, and the associated defense expenses and settlement amounts. The cases span a range of issues, including wage and hour violations, third-party discrimination, wrongful termination and disability discrimination. Understanding the nature and outcomes of these claims helps businesses identify potential risks and implement measures to mitigate them. This can help prevent future legal issues and financial losses.

1. Insured: Hospitality

Nature of Claim: Wage and Hour Violations

Fact Summary: The plaintiff, a former employee of the insured, filed a class action civil complaint in state court on behalf of herself and others similarly situated. The class action alleged that the insured failed to pay employees for all hours worked, failed to pay minimum wages, failed to pay overtime wages, failed to provide meal and rest breaks, failed to provide accurate wage statements, and failed to pay all wages earned during employment. While the insured believed the necessary paperwork was in place to defend the underlying matter, defense counsel was assigned to review those documents based on what was required of employers. Unfortunately, defense counsel quickly recognized that the insured was not compliant with wage and hour laws due to certain recordkeeping issues. As a result, the parties worked together to obtain a list of affected individuals, determined the amount of wages that remained due and owing, and were able to reach an amicable resolution after identifying the necessary parties.

Defense Expenses: Approximately $35,000

2. Insured: Hospitality / Hotel

Nature of Claim: Third Party Discrimination / Access Barriers

Fact Summary: The plaintiff, a paraplegic who requires the use of a wheelchair for mobility, attempted to visit a hotel owned by the insured. The plaintiff alleged he was unable to patronize the hotel due to several access barriers, including improper parking spots and ramps, and the height of the beds in the hotel’s ADA accessible rooms being too high. Defense counsel was assigned and immediately confirmed that the hotel location violated the ADA in several ways and recommended immediate remediation. The remediation was completed by the insured, and the parties were able to reach an amicable resolution.

Settlement Amount: $7,500

Defense Expenses: Approximately $14,000

3. Insured: Retailer

Nature of Claim: Third Party Discrimination / Web Access Issues

Fact Summary: The plaintiff, a visually impaired and legally blind individual who requires screen-reading software to read website content, attempted to access a website owned and operated by an insured who specializes in crafting and shipping specialty chocolates. The plaintiff alleged he was denied a shopping experience due to the website’s lack of features and accommodations, which barred him from determining what specific products were offered for sale. Defense counsel was assigned and later retained an expert to examine the website. The expert confirmed there were issues with the website consistent with the plaintiff’s allegations. The insured made the necessary changes to bring the website into ADA compliance. Due to the issues surrounding the website, the parties discussed and were able to reach an early resolution.

Settlement Amount: $11,000

Defense Expenses: Approximately $3,000

4. Insured: Manufacturer

Nature of Claim: Wrongful Termination / Retaliation

Fact Summary: Over several years, the insured’s productivity on the floor of its manufacturing plant had decreased significantly. As a result, a change in management occurred. The change was not well received by long-term employees who had grown accustomed to coming in late and working unapproved overtime. After certain changes were implemented, two established employees issued formal complaints concerning working conditions. They were subsequently terminated for unrelated reasons. Following their termination, the employees each filed separate complaints with the National Labor Relations Board for retaliatory discharge for complaining about workplace conditions. Despite attempting to resolve the matter early, the NLRB investigated the allegations and found there was retaliatory action committed by the insured. Although there was an adverse ruling, the parties were able to reach an amicable resolution early.

Settlement Amount: $50,000

Defense Expenses: Approximately $15,000

5. Insured: Construction

Nature of Claim: Disability Discrimination, Failure to Accommodate, Wrongful Termination

Fact Summary: The plaintiff was employed by the insured as a project manager for over 15 years until his abrupt termination in late 2022. In late 2022, the plaintiff suffered a stroke. The plaintiff’s wife advised the insured of her husband’s condition, and two weeks later, the plaintiff’s supervisor terminated his employment via text message. The insured’s position was that the plaintiff’s wife indicated he would not be returning to work in the near future and that a termination would help the plaintiff obtain long-term disability insurance. Despite the insured’s intentions, the insured failed to provide necessary FMLA paperwork to the plaintiff, did not work through the interactive process to determine the extent of the disability and an appropriate return date, and terminated the plaintiff’s employment via text message. Defense counsel was retained, confirmed the existence of the text message terminating the plaintiff’s employment, and recognized significant liability concerns despite the insured’s best intentions. An early mediation was scheduled, and the parties were able to reach an amicable resolution.

Settlement Amount: $80,000

Defense Expenses: Approximately $20,000

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