Creating a Risk Management Program to Minimize Exposure to Employment Discrimination Cases

It is essential for employers to examine their possible exposure to employment discrimination litigation and adopt a program to minimize their exposure to such litigation. We have seen the cost of such litigation skyrocket in recent years as employees have become more aware of their rights. We firmly believe that the best result is the lawsuit that never happens. The elements of a risk management program should include the following:

1. EPLI INSURANCE: The costs of employment practices liability insurance (EPLI) designed to cover employers for the costs of defending employment discrimination lawsuits and the damages or settlement expenses incurred in such lawsuits have dropped significantly. It is worthwhile for companies to at least look at the cost of obtaining such coverage. However, employers must remember these policies do not cover punitive damages or intentional violations and there may be other exclusions as well.

2. ADOPTION OF ANTI-DISCRIMINATION AND ANTI-HARASSMENT POLICIES: The Supreme Court of the United States has held that an employer is liable for the sexually harassing conduct of its supervisors unless the employer can show that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior and that the victimized employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.

Under these circumstances, there can no longer be any excuse for any employer not to have such policies in effect. If you do not have an employee handbook, this is a good time to develop one that contains such policies. If you have a handbook, review it to make sure it contains adequate policies dealing with these areas.

3. PROMPT AND THOROUGH INVESTIGATION OF COMPLAINTS: It is not enough to create a policy and have it sit in your desk drawer. It is essential that the policies be promulgated to employees periodically so that there can be no question that employees were aware of their existence. In addition, employers must conduct a thorough, impartial and prompt investigation of complaints pursuant to their procedures without any threat of retaliation to complaining employees.

4. PROGRESSIVE DISCIPLINE AND DOCUMENTATION: Supervisors must be trained how to progressively discipline employees and document disciplinary incidents so that the company will be able to respond effectively to EEOC charges and employment discrimination lawsuits.

5. TRAINING SESSIONS FOR SUPERVISORS: We have created for our clients a training seminar for supervisors entitled “Sexual Harassment: How to Avoid Charges.” This preventive seminar conducted by our attorneys at your clients’ places of business for their supervisory and managerial personnel teaches: What is sexual harassment, What are the potential liabilities, and how to avoid it. All attendees receive a certification of attendance at the seminar.

This article has been provided by Glenn Franklin and Martin Gringer of the law firm of Franklin Gringer & Lipp, LLC, Garden City. Glenn Franklin and Martin Gringer have been members of the National Network of Accountants Preferred Provider Network for more than a year and are recognized leaders in the area of employment law. If you would like additional information on this issue or to speak with Glenn Franklin or Martin Gringer please call (516) 228-3131 or go to

You may like these other stories...

A recent study of lateral hiring trends in the accounting industry by the Chicago-based executive search practice the Koltin Consulting Group (KCG) has found that in the first half of 2014 firms continue to lure top talent...
Without getting into all that's been written about the jobless recovery and record high corporate profits without the accompanying hiring, there has indeed been a fundamental shift in how corporate America is working...
Read more by Rita Keller here.I recently read a tweet by my music-teacher son regarding his fifth-grade musicians: “My fifth-grade flutes and clarinets just exhaust me. They have so much energy and ask sooooo many...

Already a member? log in here.

Upcoming CPE Webinars

Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.
Aug 26
This webcast will include discussions of recently issued, commonly-applicable Accounting Standards Updates for non-public, non-governmental entities.
Aug 28
Excel spreadsheets are often akin to the American Wild West, where users can input anything they want into any worksheet cell. Excel's Data Validation feature allows you to restrict user inputs to selected choices, but there are many nuances to the feature that often trip users up.
Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.