The Reason for Rising EEOC Claims in the Small Business World

A study by Hiscox found that U.S.-based companies have at least an 11.7 percent chance of having an employment charge filed against them. Hiscox claims data for small and mid-sized businesses (under 500 employees) indicate that one in five will face employment charges with an average cost to defend of $125,000, which includes expenses such as attorney’s fees and settlement costs.

Specifically, retaliation cases have almost doubled in the last 10 years. Business owners very seldom end up winning those. Such unexpected expenses can make the whole difference between profits and losses, without considering the consequential frustrations and disappointments.

How can we explain this increasing trend? Here are some explanations:

(1)   Employees are becoming better educated about their rights under federal, state and local civil rights laws. The EEOC has made it easier and has expanded the protection employees receive after making a workplace complaint protected under Title VII.

(2)   The U.S. Supreme Court has clarified the requirements for individuals attempting to prove on-the-job discrimination. In doing so, the courts made it easier for plaintiffs to avoid summary judgment and having their case dismissed.

(3)   Jurors are more willing to accept the fact that an employee was treated differently due to his or her complaint of sexual harassment and discrimination.

(4)   Many small business Employers tend to ignore the specifics of the law – they are too busy handling the day-to-day emergencies and priorities. Many are not aware of the importance to respect the law simply because they are poorly if at all, educated on the anti-discrimination regulations. When an employee files a complaint, the business owner or executive has a natural reaction of retaliation – not aware of the consequences.

(5)   Some employees (a minority of them) might be tempted to abuse the fact that the law is naturally meant to protect their rights and to ensure they are not discriminated. Unfortunately, when monetary compensations are involved, it may be tempting to take full advantage of the juror’s tendency to be more on their side. I have witnessed quite a few occurrences where an employee was assisted by his/her lawyer to maximize the compensations – at the cost of the truth or the reality.

So, we are really witnessing two phenomena: (1) employers are not being well educated on HOW to avoid retaliation cases and (2) More disgruntled employees might be tempted to take advantage of the increasing willingness of the EEOC authorities to [sometimes blindly] trust the plaintiffs.

THE SOLUTION!

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Best,

Patrick Valtin,

Best-Selling Author of “No-Fail Hiring 2.0”

Simpson, Andrew, “What are Chances a U.S. Business will Face an Employee Lawsuit?” Insurance Journal. N.p., 28 October 2015. Web