EMPLOYMENT PRACTICES LITIGATION HOW TO AVOID THE LAWSUIT Woodruff-Sawyer & Co. 1001 SW 5th Avenue, Suite 500 Portland, OR 97204 OR License 812979 CA License 0329598 An Assurex Global & IBN Partner www.wsandco.com May 1, 2007 Speaker Introductions Chrys Martin Attorney, Shareholder, Board of Directors, Bullivant Houser Bailey PC Leah M. Shearin Attorney at Law, Sole Practitioner Melissa Schellinkhout Underwriting Officer / Chubb Specialty Manager, Chubb Group of Insurance Companies Moderated by: Donna Ghiorso Vice President and Team Leader, Oregon Practice, Woodruff-Sawyer & Co. Employment Litigation Statistics • If an employer is sued by an employee there is a 63% chance that the employee will win • The number increases to 67% if the suit is brought in federal court • The number increases to 66% if sex discrimination is alleged • The average verdict in an employment suit is $603,376 • The number rises to $808,337 if the suit is brought in state court • For discrimination claims the average verdict is $656,072, and that number increases to $1,016,566 if the suit is brought in state court • For whistleblower claims the average verdict is $616,039 • There is a 33% chance of a verdict of $500,000 or more • There is a 55% chance of a verdict of $250,000 or more • Consider that these figures do not include defense costs Retaliation allegations continue to increase in the U.S. The EEOC received 22,740 charges of employer retaliation in 2005, representing approximately 25% of all workplace-related claims received Reported in Oregon Employment Jury Trials 2002-2007 • 2002-2007 –23 Reported jury trials involving employment claims in state and federal courts –14 Verdicts for plaintiffs –9 Verdicts for defendants • Approx. 60% win ratio overall for plaintiffs Oregon State Courts • 9 Plaintiff Verdicts • • • • 3 Defense Verdicts 75% Win ratio for plaintiffs Verdict Range:$10,758-$1,032,032 Average Verdict: $203,364 Federal Courts in Oregon • • • • • 5 Plaintiff Verdicts 6 Defense Verdicts 45% Win ratio for Plaintiffs Verdict Range: $16,000-$650,000 Average Verdict: $236,730 Reported in Washington Employment Jury Trials 2002-2007 • • • • 39 Reported jury trials involving employment claims in state & federal courts 16 Verdicts for plaintiffs 23 Verdicts for defendants Approximately 40% win ratio overall for plaintiffs Washington State Courts • • • • • • 13 Plaintiff Verdicts 16 Defense Verdicts 45% Win Ratio for Plaintiffs Verdict Range: $38,400-$4,000,000 Average Verdict: $507,309 Average Verdict without $4,000,000 Verdict: $216,252 Federal Courts in Washington • • • • • 3 Plaintiffs Verdicts 7 Defense Verdicts 30% Win Ratio for plaintiffs Verdict Range: $230,000-$5,051,001 Average Verdict: $2,084,667 Failure to Prevent and Respond Properly to Harassment and Discrimination Mishandling of Ill and Injured Workers Problem Policies and Procedures • • • • Selective enforcement No policies Ambiguous policies Clear policies that are not followed Untrained Supervisors Invasion of Privacy • • Access to employee desks, lockers, and cars on company premises Email and voicemail What happens when the “if” becomes the “when” – Employment Practices Liability Coverage • • • • • • • Types of allegations Who is covered? What is covered? What is a claim? Claims reporting Defense Loss prevention / Risk management Employment Practices Liability Coverage: Types of Allegations • • • • • • • • • • • Wrongful termination Discrimination Harassment Failure to employ or promote Employment related infliction of emotional distress Invasion of privacy Retaliation Negligent evaluation Wrongful deprivation of career opportunity Employment-related misrepresentation Pay equity Employment Practices Liability: Who is Covered? • • • • The Corporation and Subsidiaries All Directors & Officers All employees Former employees Employment Practices Liability: What is Covered? • • • • • • • Defense costs Loss or indemnity costs Back pay Front pay Compensation damages Plaintiff’s attorney fees Punitive damages Employment Practices Liability: What is a Claim? • • • • • Written demand for non/monetary damages; Civil proceedings (lawsuits); Arbitration proceedings; Administrative/regulatory proceedings (EEOC or OFCCP) Notice of potential claim Employment Practices Liability: Claims Reporting • What should you report? • When should you report? • Who within your organization should know? Employment Practices Liability: Defense – What happens? • • • • • Defense costs – in or out of your $ limit? Duty to defend Selection of counsel Control of defense Right to settle Employment Practices Liability: Loss Prevention & Risk Management • • • • • • • Employment loss prevention guidelines, newsletters, CD ROM's Toll-Free hotlines Web-based Applications Internet Reference Sites Audits Newsletters Loss prevention Consultant Services