I had a realization the other day that a lot of the TV shows and movies we watch can teach you something about protecting your small business. Particularly, how to protect it from employment practice liability lawsuits.
[Tweet “Over 40% of employment practice claims are against businesses with fewer than 100 employees”]
So what kinds of things fall under the category of employment practice liabilities?
- Wrongful termination
- Retaliation deriving from the employer/employee relationship
- Invasion of privacy
Let’s look at some examples:
1. The Mad Men Effect
If you’ve ever seen the television show Mad Men, which depicts the struggles of an advertisement agency in the 1960s, you have noticed that it portrays a world that operates a lot differently than the one we live in now.
The more I watch that show, the more I see how their daily operations have so many things that wouldn’t be allowed today. Aside from the smoking and drinking in the office, there is a lot of inappropriate behavior in regards to female employees. Not an episode goes by where one of the women in the office (especially the head secretary manager) is not sexually harassed.
But you don’t just see examples of sexual harassment; there is also discrimination against the handicapped. One employee, who has lost his leg in a horrible lawn mower accident, was going to get fired because those in charge did not think he could do his job as a copywriter without both legs.
(Side note: Don’t ever let anyone tell you that riding a lawn mower at an office party, where most of the people have been heavily drinking, is a good idea…)
2. Handling Horrible Bosses
In 2011 the film Horrible Bosses came out, and became and instant favorite of mine. It depicts three guys who have to deal with three absurdly bad bosses. One boss promises his employee a promotion, making him jump through every hoop, only to pass him up on the promotion he was promised.
Another boss sexually harasses one of her male employees (yes, men can be sexually harassed too), and at one point even tries to blackmail him in front of his fiancé.
The third boss is bent on running the business into the ground, while trying to suck as much profit out of the company before he does so. He makes his employee fire a man just because he is in a wheelchair, and fire a woman because she is fat (turns out she was actually pregnant, but he still wanted her fired).
3. Mishaps In The Office
This witty show features Michael Scott, the manager of a the paper company Dunder Mifflin. If you haven’t seen this show, you must have been living under a rock for the past decade. Aside from all the pranks, parties and unprofessional meetings, Michael Scott can be horribly offensive.
In one episode, he violated most of the office’s privacy by taking the HR box of confidential complaints, and read them aloud in front of the whole office, calling out individual employees. It was painful (and hilarious) for everyone, including Michael Scott.
What can we conclude?
These examples over exaggerate real life instances, but we can still learn from them. What if someone, maybe one of your employees, claimed that they were sexually harassed? Fired because they are physically handicapped? Felt they were working in a hostile work environment?
Most small business owners are unaware that their business is not covered for employment practice claims under a General Liability Policy. If you are sued by a current or former employee, and you don’t have the correct coverage, you’ll be paying out of pocket.
Employment Practices Liability Insurance (EPLI) is coverage for defense and damages related to various employment-related claims. EPLI was created to keep your business safe from these types of lawsuits that could devastate your reputation and your bank account.
What have you witnessed in your own company that could be classified as EPLI? How did you handle it? Let me know in the comments section below!