Employees Suing Employers At An Alarming Rate

Employee lawsuits are threatening companies of all sizes. The new wave of employee lawsuits is being brought on by government regulations, laws, and trial lawyers representing employees who take advantage of the system's weaknesses, says Richard Rupp, VP of Risk

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Employee lawsuits are threatening companies of all sizes.

The new wave of employee lawsuits is being brought on by government regulations, laws, and trial lawyers representing employees who take advantage of the system’s weaknesses, says Richard Rupp, VP of Risk Mgmt for Calco Insurance Brokers & Agents, Inc. From October 1, 1993 through September 30, 1994, the EEOC and related state and local agencies received 156 discrimination complaints. As of May 1, 2003, the EEOC had a backlog of over 100,000 complaints and the average complaint took more than a year to handle. In 2002 over 13,000 complaints of sexual harassment were file with the EEOC. Settlements for cases in 2003 exceeded $50 million. Defense costs were several times this number.

Rupp states: “. . .as our 62 Employment Practice Liability Insurance policyholders have proven, small or medium sized businesses are also targets.” He continues: “Our largest policyholder has 400 employees and our smallest has 13 and in the past two years they have had nineteen employment practices claims. The largest clam settlement to date has been in excess of$250,000. And four out of five pending lawsuits targets small or medium sized businesses.”

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