63% of the Time Employees Win!

63% of the Time Employees Win!

Many small employers do not believe they need to carry Employment Related Practices Liability Insurance (EPLI) . Why? ” Ah my employees are good people and this would never happen to me. ” Really? Let me paint you a picture of an all too common story.

Your a small business owner, you run a small office cleaning business. Your employee Sally was picking up trash and emptying the trash bins into a dumpster outside of the clients commercial building. As she was pitching a box full of old office manuals up over her head into the bin, her back tighten up and she groaned in pain. The next day she couldn’t get out of bed. She went to the doctor and now she is told to go home lay flat on her back for the balance of the week and file a worker’s compensation claim. She hurt her back on the job. No problem you file the claim with your workers compensation insurer.

Worker”s Compensation Claim

After being out two weeks the doctor releases Sally to come back to work on light duty. You need some paper work and data entry work done in the office. You talk to Sally and she assures you she can preform the tasks.  Great you think, now I have Sally back to work and she can help my wife out in the office. After a month your wife fires Sally. When you ask her why she shows you the mess she has made of the data base. In fact your wife has been spending hours of her time fixing the errors she has made and she has had enough.


A couple weeks go by and you get a summons in the mail, you’re being sued for wrongful termination. Sally is alleging that the only reason she was fired was because she filed a Worker’s Compensation Claim. In fact in her statement she talks about over hearing your wife tell your insurance agent. that the “Workers Comp premium was high because of people like Sally. As far as she could tell Sally should be able to work, she seemed okay to her. “

When you and your wife sit down with the lawyer you find out Sally knew about Employer Related Practices Liability because she had won a case against her prior employer two years ago. Sally knew exactly what she was doing and how to work the system. But as your lawyer put it. The burden of proof is on you. You need to to prove that Sally was fired because of poor performance not because she filed a Worker’s Compensation Claim.  Did your wife follow due process and document the conversations about Sally’s work and how she could improve etc.  Yes, Oregon  is a Work at Will State, but you the employer still need to follow due process before you fire someone and in this case you need to make it perfectly clear the Worker’s Compensation Claim had nothing to do with your decision to terminate this employee.

63% of the Time Employees Win Their Case Against the Employer

Employment related practices cases are hard for an employer to win. According to the Independent Insurance Agents of  America wrongful termination lawsuits like the one I have described above have increase more then 260%. The average cost to settle the case out of court is $75,000. If your case goes to trail the average jury award is $217,000.

EPLI insurance will provide compensation for losses caused by employee lawsuits, including all incurred court costs and legal fees.

  • Wrongful termination: This is the most common claim brought against employers in lawsuits. The EEOC states that is it illegal to fire an employee on the basis of their age, race, national origin, sex, or because of a disability. It is also illegal to terminate employment because an employee did any of the following:
    • Took a leave of absence under the Family Medical and Leave Act (FMLA).
    • Reported wrongdoings to authorities, as dictated by the Whistleblower Protection Act.

Even if an employee’s termination had nothing to do with any of these situations, if a judge is convinced otherwise, your company may be held liable for lost wages and punitive costs.

  • Harassment: These lawsuits most frequently involve sexual harassment, but can also include cases of workplace violence or bullying. The harassment may come from senior administrators, supervisors or co-workers. If the employee can prove that the company was aware of the problem and did nothing or made inadequate attempts to remedy it, the company may face fines and penalties if the case is brought to trial.
  • Discrimination: These cases involve situations where an employee is turned down for promotions or advancement opportunities on the basis of age, sex, race, national origin or disability. Employees typically win these cases when they are able to show a trend toward discrimination within the company.
  • Breach of contract: If your company has a contract with an employee and you violate the terms of that contract, the employee may file a claim against you. An employee who can prove that damages resulted from this breach is likely to win.
  • Emotional distress: Employees who feel that your company fosters a hostile work environment or who feel subjected to overly stressful situations in the workplace may file a lawsuit against your company. These cases are more difficult to prove in a court of law, but the resulting legal fees may still prove burdensome.
  • Other violations: Some other potential employee lawsuits that EPLI insurance can protect you from include wrongful denials of workman’s compensation, statute violations, wage and hour violations, loss of consortium, drug-testing false-positives, libel and slander.

EPLI is not an overly expensive policy to purchase. It is rated on the number of employees you have, and weather or not you use risk avoidance tools like an employee manual and have  clear guidelines  that must be followed before an employee is fired or what happens if you need to reprimand that employee for poor work performance.

I recommend every employer who hires employees, even if it is only one person buy an EPLI policy. If you would like more information please do not hesitate to give me a call 800-452-6826

Have a great day

Rex Lesueur


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