Recently in employment law news, a medical transportation company became a cautionary tale to employers should they receive a claim against them. More specifically, a claim was filed with the EEOC against the company at the end of 2023 alleging discrimination based on race, national origin, and gender. The company promptly…ignored the EEOC’s requests for additional information. Now, as the company continues to ignore not only requests for information but court dates and subpoenas, the court has imposed contempt of court sanctions in the amount of $100 per day that the company remains out of compliance. That ruling was made on June 7, 2024, which means over $5,000 in penalties has amassed so far.
This is exactly what not to do if your company receives a legal claim or attorney letter. Here are some steps to take to both protect your company and not run afoul of the law:
Notify Your EPLI Carrier*
Employment Practices Liability Insurance, or EPLI, helps protect your company from employment-related claims, like discrimination, harassment, retaliation, and wrongful termination. When a claim is received, the EPLI carrier should be notified as soon as possible to ensure coverage is not jeopardized. EPLI will include a retention amount, similar to a deductible, that the employer pays, and once the retention amount is reached, the insurance carrier will pay for any further eligible costs. This can help minimize the amount a company pays out-of-pocket defending against a claim. Additionally, the carrier can also help with assigning legal counsel and reducing costs related to the claim in general.
Consult with an Attorney*
After notifying your EPLI carrier, the next step is consulting with an attorney. Many times, the first communication an employer receives regarding a claim is either a notice from the EEOC (or similar state or county-run agency) or an attorney letter from the employee’s counsel making the claim against the company. It is recommended that your attorney be the party to respond to these communications, especially when the employee is already utilizing legal counsel of their own. Until you retain representation for your company, opposing counsel has the ability to interview your employees, investigate your company’s perimeters, and more without your approval. However, once you have retained an attorney, the flow of this information can be controlled by your legal counsel on your company’s behalf. Retaining counsel will also help you avoid making statements or providing information that may not be relevant to the case or should not be disclosed but could ultimately be used against you. Additionally, an attorney would also be aware of what documents need to be maintained and can help you avoid violating record retention laws.
Respond in a Timely Manner
Whether you receive notice from a federal/state/county agency or a letter from an attorney, there will most likely be a request for information and a deadline provided on the document. If utilizing an attorney (which is recommended) you should keep your attorney updated with any deadlines you are given to allow enough time for them to respond. If you move forward without legal counsel, you should observe and follow these deadlines to avoid, at best, drawing out the situation for longer and upsetting the EEOC representative who decides if your company is at fault and, at worst, being found in contempt and fined or incarcerated.
Review Company Procedures
Once the claim is being handled appropriately, you should circle back and look into what may have led to the claim in the first place. Perhaps the incident had been reported to a manager in the company but was not handled appropriately. Or maybe the employee was terminated for ongoing performance issues that were never addressed previously, leading the employee to believe the termination was due to an unlawful reason. Investigate what may have led to the legal claim and determine ways to protect your company moving forward, such as providing sexual harassment training to employees, creating a defined progressive corrective action policy, implementing procedures for internally investigating claims of harassment or discrimination, and training managers on how to properly handle complaints they receive.
*Clients of FrankCrum who receive an employment-related claim should reach out to their FrankAdvice HR Consultant right away. We will assist with submitting your claim to the EPLI carrier, and as part of EPLI coverage, you are connected to experienced, knowledgeable attorneys who will work with you to defend your company.