Most companies realize the critical need of implementing HR policies & procedures, trainings and establishing an employee handbook. However, many still seem to be somewhat **blind** to the fact that even with these HR controls in place, they are not excluded from the risk of lawsuits.
Even though a Maryland company may exercise the ‘employment at will clause’ for termination – it does NOT mean that an employee cannot nor will not turn to an employment law attorney to allege wrongful termination. When this happens, companies suddenly see themselves facing thousands of $$$ for defense costs and potentially a monetary benefit to the ex-employee.
Yes, having company policies and procedures in place can ultimately be the saving grace to paying out thousands- but no matter what, once a lawsuit is presented, there are costs associated. Employment Practices Liability is a specialized policy that is written solely for the protection of companies in this instance. Whether the lawsuit is coming from a former employee or even a potential or current employee, an EPL policy is there to protect your company from employment related allegations.
Word of advice: Documentation is your best defense! If an employment related lawsuit goes to court, it is up to your company to prove there was no negligence. Documentation that’s helpful when defending the company includes:
- Employee handbook acknowledgement
- Disciplinary actions
- Work evaluations, etc.
Owners and officers of companies have a distinct role in supervising their employees and ensuring continued proper behavior within the workplace.
In Summary – Even if your company has above adequate HR controls in place, these controls mitigate the risk of employment related lawsuits– but do not eliminate the exposure. To properly cover your company against the potential financial impact of defense cost, litigation and settlements, make sure you have Employment Practices Liability Insurance!
Which HR risk reduction strategies are YOU taking to protect your company from employment related lawsuits?