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Do High Unemployment + Expansion of Employees’ Rights = More Claims?

Do High Unemployment + Expansion of Employees’ Rights = More Claims?. Singin’ The PL Blues. MODERATOR: Aaron Stone, JD, Director, Employment Practice Liability Claims, Travelers PANELISTS: Constance Smith Barker, Esq., Commissioner, U.S. Equal Employment Opportunity Commission

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Do High Unemployment + Expansion of Employees’ Rights = More Claims?

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  1. Do High Unemployment + Expansion of Employees’ Rights = More Claims?

  2. Singin’ The PL Blues MODERATOR: • Aaron Stone, JD, Director, Employment Practice Liability Claims, Travelers PANELISTS: • Constance Smith Barker, Esq., Commissioner, U.S. Equal Employment Opportunity Commission • Robert Cap, Esq., CPCU, ASLI, RPLU, ManagingDirector, Markel • Mercedes Colwin, Esq., Managing Partner, New YorkOffices, Gordon & Rees LLP • Brett G. Rawitz, Esq., Managing Counsel, Global Labor& Employment Law, McDonald’s Corporation November 11-13, 2009 • Chicago, IL

  3. Agenda • Overview of current EPL Landscape. • Discuss why discrimination claims are relatedto the economy. • Effects of recent Supreme Court cases and legislation. • Discuss how the current environment hasaffected the EEOC’s investigations andprocessing of charges. November 11-13, 2009 • Chicago, IL

  4. What is driving the increase in claims? November 11-13, 2009 • Chicago, IL

  5. The Economy November 11-13, 2009 • Chicago, IL

  6. Increased Public Awareness • Media • Public Agency Advocacy • Employer-mandated notices November 11-13, 2009 • Chicago, IL

  7. Employee-Friendly Supreme Court Decisions November 11-13, 2009 • Chicago, IL

  8. What type of claims are we seeing? November 11-13, 2009 • Chicago, IL

  9. #1 AGEISM November 11-13, 2009 • Chicago, IL

  10. # 2 RACISM November 11-13, 2009 • Chicago, IL

  11. #3 RETALIATION November 11-13, 2009 • Chicago, IL

  12. EEOC Charge Statistics (2007-2008) 40,000 33,937 35,000 32,690 30,510 28,372 30,000 26,663 24,826 24,582 25,000 Charges Filed 19,103 20,000 15,000 10,601 9,396 10,000 5,000 2,880 3,273 0 Race Sex National Origin Religion Retaliation - All Age Statues 2007 2008 Source: Jury Verdict Research November 11-13, 2009 • Chicago, IL

  13. Median Award By Defendant Type for Discrimination Cases (2002-2008) TypeAward MedianTotal Range Government $235,000 $1-$36,555,000 Entities Manufacturing/ $250,000 $1-$25,700,000 Industrial Service/Retail $150,000 $1-$11,600,000 Transportation $151,398 $1-$53,885,000 Defendant Type, $200,000 $1-$53,885,000 Overall Source: Jury Verdict Research

  14. Award Trends Comparison for Federal v. State Cases (2002-2008) $450,000 $400,000 $381,100 $350,000 $292,000 $300,000 $276,711 $275,000 $257,239 $252,184 $245,000 $250,000 $231,044 Federal State $192,381 $200,000 $173,425 $164,850 $161,000 $150,000 $150,000 $100,000 $80,332 $50,000 $0 Age Disability Race Sex Discrimination, Discrimination, Retaliation Other Overall Source: Jury Verdict Research

  15. 63% 2008 57% 58% 2007 54% 54% 2006 54% State Federal 59% Year 2005 60% 53% 2004 63% 56% 2003 62% 61% 2002 62% 0 10 20 30 40 50 60 70 80 Percent Plaintiff Recovery Probability For State and Federal Cases (2002-2008) Source: Jury Verdict Research

  16. Recent U.S. Supreme Court Rulings November 11-13, 2009 • Chicago, IL

  17. Gross v. FBL Financial Services • Decided June 18, 2009 – Plaintiff bears the burden of proving that age was the “but for” cause of the challenged adverse action, when bringing a disparate treatment claim under ADEA. • The Supreme Court based its decision on the plain language of the ADEA which differs from the language of Title VII. ADEA Title VII November 11-13, 2009 • Chicago, IL

  18. Ricci v. DeStefano • Decided June 29, 2009 – Ruled that City could not “reverse-discriminate.” • City could not invalidate firefighter promotion exams that had a disparate impact on minority test-takers, simply because the City feared that it would be sued by the minority test-takers who failedthe exam. November 11-13, 2009 • Chicago, IL

  19. Meacham v. Knolls Atomic Power Laboratory • Decided June 19, 2008. • Reduction in force – 30 out of 31 in protected age class. • Based on performance, flexibility and critical skills. • Flexibility and criticality most discretionary and had firmest ties to outcomes. • RFOA & BFOQ identified as affirmative defenses. • Emphasis on plaintiff’s burden to identify discriminatory practice. November 11-13, 2009 • Chicago, IL

  20. CBOCS West Inc. v. Humphries • Decided May 27, 2008. • Permits a cause of action for retaliation pursuant to Section 1981. • The decision brings Section 1981 into line with Title VII, which provides a cause of action of retaliation. • No EEOC filing requirement with Section 1981 discrimination or retaliation claims. November 11-13, 2009 • Chicago, IL

  21. Future direction of Court? 5/4 Split - What Does That Mean for EPL Anticipated Retirements? November 11-13, 2009 • Chicago, IL

  22. Recent Legislation and Potential Future Legislation November 11-13, 2009 • Chicago, IL

  23. The Family Medical Leave Act (FMLA) Amendments • Grants an employee up to 26 work weeks of leave to care for a “wounded warrior,” a military service member with a serious illness or injury incurred in the line of duty. • Increases employer liability for failing to appropriately designate FMLA leave.

  24. The Genetic Information Nondiscrimination Act of 2008 (GINA) • Prohibits insurers from adjusting premiums or contribution amounts based on genetic information. • Generally prohibits employers from requesting an employee’s genetic information.

  25. The Americans with Disabilities Act Amendments (ADAAA) • Signed into law by President George W. Bush on September 25, 2008. Took effect on January 1, 2009. • Significantly expands the scope of protection available under the 1990 version of the Americans with Disabilities Act (ADA). November 11-13, 2009 • Chicago, IL

  26. Lilly Ledbetter Fair Pair Restoration Act • Signed into law by President Barack Obama. • Permits an employee to recover up two years in back pay from the employer if the pattern of pay discrimination was similar prior to and after the filing of an EEOC charge. • Expressly rejects a 2007 Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Co. November 11-13, 2009 • Chicago, IL

  27. The Employment Non-Discrimination Act (ENDA) (Pending) • A proposed federal law to prohibit discrimination against employees on the basis of actual or perceived sexual orientation. • 13 states have enacted laws prohibiting discrimination based on sexual orientations and gender identity.

  28. Employee Free Choice Act(EFCA) (Pending) Would amend the NRLA toprovide for: • “Card check,” which could practically eliminate secret-ballot elections • Union-friendly bargaining rules • Increased penalties against employers • More NLRB injunctions

  29. Fair Pay Act of 2009 (Pending) • Introduced April 28, 2009 by Sen. Tom Harkin. • Amends the FLSA to prohibit payment of wages based on sex, race or natural origin. • Different wages allowed only under • Merit Systems • Seniority Systems • Systems that increase earnings based on quality or quantity of production or • Based on bona fide factors the employer proves are job-related November 11-13, 2009 • Chicago, IL

  30. Equal Remedies Act(Pending) • Introduced in 2007 by Sen. Edward Kennedy. • Reintroduced to Congress- January 2008 as a section of the Civil Rights Act of 2008. • Repeals provisions limiting the amount of compensatory and punitive damages that may be awarded in cases of intentional discrimination in employment. November 11-13, 2009 • Chicago, IL

  31. How are employers reacting? • Participating in training through EEOC Outreach programs for employers. • Expanding EPLI coverage. • Implementing effective HR practices, to protect against predictions of incoming wave of lawsuits and pending “pro-employee” legislation. • Mediating EEOC Charges to maintain confidentiality. November 11-13, 2009 • Chicago, IL

  32. How are insurers reacting? • Providing additional risk management services under EPLI policy • Training • Attorney consultation • Providing EPLI coverage specifically tailored to the needs of the business (insured). • Exiting the marketplace entirely or certain segments. • Greater scrutiny when assessing the risks. • Consistently diversifying EPLI portfolio tokeep up with demands. November 11-13, 2009 • Chicago, IL

  33. How is the EEOC reacting? • Additional attorneys and investigators hired. • Charge filing process made more accessible to the public through internet charge-initiation process. • Continued outreach to employers and bar associations through EEOC – provided training. November 11-13, 2009 • Chicago, IL

  34. Predictions November 11-13, 2009 • Chicago

  35. Questions&Answers

  36. Many thanks to … • Aaron Stone • Constance Smith Barker • Robert Cap • Mercedes Colwin • Brett Rawitz

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