The struggling economy has fueled a steep rise in employment practices liability [EPL] claims, says Jay Isaacson, director of product management, Credit Union Protection, for CUNA Mutual Group.
He says the company’s paid EPL claims jumped 35% during 2011, and that 65% of the claims on CUNA Mutual’s management professional liability policy are EPL-related.
“There’s a clear correlation between EPL claims and unemployment,” Isaacson says. “Unemployment remains at elevated levels today, and that’s causing challenges. As employees get displaced from their jobs, one avenue they sometimes take is to file EPL claims against their former employers.”
Falling under the EPL umbrella are claims for discrimination based on race or gender, sexual harassment, retaliation, and wrongful termination, he explains.
Credit unions aren’t the only businesses to face more EPL claims. The Equal Employment Opportunity Commission (EEOC), which tracks claims across all industries, reported record claims filed in 2011—after record claims were reported during 2010.
“We’re seeing roughly 100,000 charges coming through EEOC on an annual basis,” Isaacson says.
He says credit unions can reduce their exposure by:
Credit unions should work with legal counsel when implementing employment policies. Another resource for policyholders is CUNA Mutual’s risk management department, which has sample policies and procedures.