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Disgruntled Employee Lawsuits on the Rise

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By Laura Strachan, Esq. on January 20, 2011 5:46 AM

Bad news for business owners everywhere: disgruntled employees lawsuits are on the rise. The cause of the discontent varies but the end result is always the same -- a lawsuit that costs both time and money. According to the EEOC, the average discrimination lawsuit costs $235,000.

Employment practice liability claims can include: age discrimination, sexual harassment, gender discrimination, disability discrimination and retaliation. Racial discrimination comprises the majority of claims, 36% in total. The recession is the primary culprit for the rise in employment practice liability claims, according to Inc.

"There have been many layoffs and people have felt unfairly persecuted, so, based on that, this type of litigation is on the rise significantly. And you're going to see more of it if the economy keeps a heavy hand on the employment picture," Chris Cavallaro told Inc.

As a small business owner, the best way to combat the increase in lawsuits is to purchase EPL insurance as well as develop comprehensive internal policies to deal with discrimination and other workplace complaints by an employee.

As with any insurance policy, the lower the deductible and greater the scope of coverage, the more expensive the policy will be. However, with the rise in suits, purchasing some level of insurance is a sound financial investment and business protection mechanism.

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