DISCRIMINATION LAW SUITS
They Are On The Rise?
Many of the lawsuits filed against
businesses every year are based on allegations of discrimination. Businesses can be sued by employees, customers, contractors,
and other third parties. Most businesses are insured for liability under a general liability policy. As the following
example demonstrates, however, general liability insurance isn't likely to cover a discrimination claim.
face a risk of accidental losses. While large businesses may have the financial wherewithal to absorb a big loss, small businesses
do not. One large loss may put a small company out of business. Thus, small business owners must ensure their company is adequately
1. Employment Discrimination and Wrongful Termination
Many lawsuits filed against businesses are based on allegations of discrimination (Note:
general liability insurance isn't likely to cover a discrimination claim), harassment, retaliation, or wrongful termination.
Most workers are protected from these acts by federal anti-discrimination laws. Some of the key acts are as follows:
- Title VII of the Civil Rights Act: Bars employers from discriminating against workers based
on sex, race, religion, color, or national origin.
- Pregnancy Discrimination Act: Prevents employers from discriminating against a woman because
of pregnancy or a related condition.
Pay Act: Requires employers to pay men and women the same wages if they perform equal work in the same workplace.
- Age Discrimination in Employment Act:
Prohibits employers from discriminating against employees ages 40 or older based on their age.
- Title I of Americans With Disabilities Act
(ADA): Prohibits discrimination against qualified employees who have a disability.
Many states have enacted their own anti-discrimination laws that protect workers.
It’s important to remember that state and federal laws apply to applicants for employment as well as employees. As far as applicants are concerned small business owners need to be careful even
when interviewing prospective employees. In other words, if you turn someone
down, you should state why you did not hire them and file it with their application
and keep their application on file.
In order to protect themselves
from employment-related suits, employers need to understand some basic concepts. Harassment and retaliation are types of discrimination.
Federal law defines harassment as unwelcome conduct based on race, color, religion, sex (including pregnancy),
national origin, age, disability, or genetic information. In a harassment claim, the alleged perpetrator is often a manager
or co-worker. The plaintiff claims that he or she reported the harassment to the employer, but the employer failed to stop
Retaliation basically means the firing,
demotion, harassment, or similar acts committed by an employer to punish an employee who has filed a discrimination complaint
or lawsuit. For example, an employee files a discrimination complaint and
then is fired by the employer. The worker sues the employer, alleging that the firing took place in retaliation for the discrimination
Wrongful termination means firing
an employee in violation of the law. Many wrongful termination claims against employers are based on allegations of discrimination.
For example, a 60-year-old worker is terminated, he then files a law suit alleging the he was terminated solely because of his age.
Small Businesses Vulnerable
Generally speaking, small businesses or usually more vulnerable to employment-related
lawsuits than their owners think. Most small companies do not employ a human resources professional. And often times owners
are unable to take steps to ensure the company is complying with federal and state laws, lawsuits because of time alone may
alleging discrimination and other employment-related acts may be insured under an employment practices liability (EPL) policy. But remember, once you file a claim you can almost always expect an increase in
your insurance protection rates.
Other Types of Discrimination Suits
businesses are sued for discrimination, the plaintiffs aren't always employees.
Law suits may be filed by customers, vendors, suppliers, patients, and other individuals who have a connection to the
For example, a customer sues a restaurant for discrimination
based on her national origin. Her suit alleges that staff personnel made derogatory remarks about her native country and then
refused to serve her. Some insurance policies may cover discrimination claims filed by individuals who aren't employees.
Wage Law Violations
Many lawsuits filed against employers are based on allegations that the
employer violated a federal, state, or local wage law. These laws are collectively called wage and hour laws.
The Federal Labor Standards Act (FLSA) sets the federal minimum wage standards.
It also governs child labor, record keeping, and overtime pay. Under the FLSA there are two categories of workers, exempt
and nonexempt. Generally, nonexempt employees are eligible for overtime pay while exempt workers are not. Many states and
municipalities have enacted their own laws regarding wages and overtime pay.
Wage and hour suits are often based on claims that the employer failed to pay either the minimum wage or overtime
pay. Workers may also contend that the employer avoided paying overtime by in appropriately classifying them as independent
contractors. Law suits based solely on allegations of wage and hour law violations
are not likely to be covered by insurance. Such suits aren't covered by general
liability policies and are specifically excluded under many employment practices and directors and officers policies.
Many suits filed against businesses by third parties are based on torts.
A tort is a violation of a person's civil rights. There are two types of torts that can lead to lawsuits against
businesses: unintentional torts (negligence) and intentional torts.
Negligence committed by a business owner or employee can cause an accident that injures someone or damages someone's
property. The injured party may sue the business or the employee for bodily injury or property damage. Intentional torts like
false arrest and wrongful eviction can also generate suits against businesses. Claims against a business for bodily injury
or property damage may be covered by a general liability policy. Claims based
on certain types of intentional torts are also covered by liability policies under personal and advertising liability
Breach of Contract
common against businesses are suits alleging breach of contract. A business owner breaches a contract
when the business fails to comply with the terms of the contract. Most
claims based solely on breach of contract aren't covered by liability policies.
Employment discrimination isn’t always illegal. In fact, you are free
to discriminate against people who come in late, people who are unqualified, and people who insist on wearing socks with sandals.
Illegal employment discrimination is limited in scope.
6. The Federal Civil Rights Law (Title VII) prohibits employment
discrimination on the basis of race, color, gender, religion or national origin.
Sexual orientation is not explicitly listed.
As of now the courts are divided
as to whether or not sexual orientation falls under gender discrimination, and some states and cities it clear that discrimination
on the basis of sexual orientation is illegal. However, it would be safer to consider discrimination on the basis of sexual
In addition to Title VII discrimination,
there are several areas listed. They are pregnancy, genetic information,
disability and association with someone who has a disability are all protected under federal law.
Employment Discrimination Lawsuits Are Rising Rapidly
The EEOC reported that employment discrimination lawsuits are on the
rise and that’s been the case for several years. Although 2017 figures are not yet available, one would not expect them to have dropped from 2016 figures, which are as follows:
- Retaliation: 42,018 (45.9 percent of all charges filed)
- Race: 32,309 (35.3 percent)
- Disability: 28,073 (30.7 percent)
- Sex: 26,934 (29.4 percent)
20,857 (22.8 percent)
Origin: 9,840 (10.8 percent)
3,825 (4.2 percent)
3,102 (3.4 percent)
- Equal Pay Act:
1,075 (1.2 percent)
- Genetic Information
Non-Discrimination Act: 238 (.3 percent)
So, why are employment discrimination cases increasing so rapidly? Here are
1. Employees are constantly
being educated - just as in the case of your rights, if you don’t
know them you don’t have them, If you don’t know something is illegal, you won’t file a legal complaint
Although the original discrimination laws were passed more
than 50 years ago, not everyone knows their rights. As more people learn, they can better recognize when a boss or coworker
As additional training programs by employers increase
with the intention of preventing discrimination and harassment increases, people become more aware harassment they faced in
This increased awareness doesn’t necessarily indicate an increase in bad behavior.
Often times it’s because of awareness. This is almost a double
edge sword … hopefully, more people will understand their responsibilities as well, and actual cases will decrease
This goes along with increased awareness. As people see reports of discrimination
in the news, they realize they are not alone, and there is something they can do about it. In 2017, the Washington post and
the New York Time combined had over 3500 articles that mentioned discrimination … As the song goes … "those
who own the airways owns the minds of the people."
If you are reading and hearing about law suits and the huge amonts of money
being paid out everyday … you can infer that discrimination is everywhere, and it brings up questions. If it’s
racial discrimination to have a certain dress code any place one may assume that to also true in an office setting.
Of course, to some winning a law suit conjures up the through of possible financial gains.
But you can rest assured that there are slip and fall chasers … and
a settlement of say $15,000 would make a lot of people very happy and especially because such cases real get further than
a quick settlement
In the past, you could complain to a few friends,
complain to HR but now-a-days people seems to thing of social media as their lawyer … complaints usually hit the web
even before lawyers are called. And if it goes viral … well, people
seem to feel like they have been Authenticated … and “the beat goes on!”
Business Owners Reactions
Employers are reading the same headlines and attending the same training classes
that employees do. The number one reason for a discrimination lawsuit in 2016 was “retaliation.”
Vengeance is Mine” … Not Yours!
that they can face serious consequences for violating discrimination laws. In an attempt to make the problem “go away”
they sometimes play like an ostrich or even worst … retaliate against employees by punishing them for complaining.
In almost all cases of retaliation. employers are hoping to shut up the complainer
so the problem will go away … sometimes it does and people will leave for another job, now-a-days more and more employees
decide to sue on a retaliation charge.
According to my research,
of those cases that make it to court, employers win 99% of the cases. But
remember: Most such cases settle out of court. Many are sealed, so you have
no idea how much money, if any, the employee received. But, huge sums are not common, but there are always lawyer fees.
Cases can also take years to work their way through the courts, during which
time you are under lots of stress. That’s another reason why most
business owners agree to settle out of court.
needs to make his or her own choice. But it does mean that you need to be careful how you act in the workplace. People won’t
stand for illegal discriminatory behavior anymore. And that’s a good thing.
On a personal note: Over the last several there have been three
different attempted lawsuits filed against me. Two were slip and fall related,
(I am a landlord) and one involved an auto accident. I walked away clean
on all three cases, BUT I am certain it was because I had strong lawyers in my corner in each case.
Leave Home Without Your Pocket Lawyer! He/she can be as close as the Red
Button on Your Phone!