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CUNA Mutual Group Proprietary Reproduction, Adaptation or Distribution Prohibited © 2016 CUNA Mutual Group, All Rights Reserved.
Making a Case forSound Employment Practices
Jack Williams, Esq.Risk Management Senior Consultant
What’s In Store For Today• Key loss and risk trends
• Importance of employment practices
• Actual case study discussions
• Your questions
Jack Williams, Esq.Risk Management Senior Consultant
CUNA Mutual Group
Social Media
Legalized Marijuana
Employee Fraud
Lending Club
CFPB
Collection Letters
Litigation
Cybersecurity
Overdraft Fee
Litigation
Card Fraud
Interest Rate
So, what’s onyour radar?
RELEVANT risksSTRATEGIC decisions
Enforcement Activities
1 in 8 probabilityof having an employment charge
filed against a U.S. company
• Nearly 20% end with a settlement payment• 81% settlement payments less than deductible
Source: The 2015 Hiscox Guide to Employee Lawsuits
CA40%
NV47%
NM66%
AL41%
DC65%
Source: The 2015 Hiscox Guide to Employee Lawsuits
Highest employee lawsuit risk
275 days $125,000
average defense & settlement costs
Jury Awards• $87,975 - median award of employment matters (2014)
• $100,000 (2013) / $68,195 (2012) / $ 271,000 (2011)
• $318,032 – average award (2014)
• $272,032 (2013) / $463,022 (2012 / $471,509 (2011)
• $147,000 - Retaliation median award (2008-2014)
• $564,873 - average award (2008-2014)
51% probabilityof the plaintiff winning a case at trial
Source: The 2015 Hiscox Guide to Employee LawsuitsEmployment Practices Liability: Jury Award Trends and Statistics (2015 Edition)
0.05.0
10.015.020.025.030.035.040.045.0
2013 EEOC Charges 2014 EEOC Charges 2015 EEOC Charges
Source: EEOC Enforcement and Litigation Statistics (2013-15)
Source: 2009-2014 CUNA Mutual Group internal claims data
36% frequency claim count
50% severity claim dollars
52% EPL payments related to claim defense
Only one way to win…avoid a claim
• Easy to file • Hard to get dismissed• Plaintiff can recover attorneys’
fees • Take a lot of your time
2. When I was told by XXXX XXXXXXXX Chief Executive Officer, that I was not selected for the position and I asked why, his reply was because of “my medical condition” and “what if I have another episode”? (Yet, it was acceptable to have my XXXXXXXX XX XXX XXXXXX…)
3. I believe that I have been discriminated against because of my disability in violation of the Americans with Disabilities Act (ADAAA) of 2008, and my age, 54, in violation of the Age Discrimination in Employment Act of 1967, as amended, in that, I have provided the respondent with the notice of the need for a reasonable accommodation. My request was denied. The respondent hired a significantly younger non-disabled individual XXXXXX XXXXXXXXX for the Loan Processor position.
But if you can’t avoid a claim…1. Up-to-date policies and procedures2. Regular training3. Regular and consistent reviews, personal improvement
plans (PIPs) & discipline4. Proper documentation
The Plan• Review a real-life fact pattern • You may ask any questions or clarifications you may need
• Discuss• What’s the most likely claim(s)?• What advice would you give? • What risk mitigation tips would you offer?
Analyzing fact patterns1. What does the credit union want to do?
A. Don’t assume – ask
2. Can the credit union do it?
A. Does credit union have a policy that addresses the issue?
B. Any laws or regulations that govern the issue?
3. Should the credit union do it?
A. How risky is the issue?
B. How likely is there going to be a claim?
Is there a claim?
Case Study #1Jim regularly uses a belligerent & argumentative tone with co-workers.
When his supervisor tells him to act more professionally, Jim tells him he would “never back down if he felt he was defending himself” and, in another instance, emails a co-worker “You’re my b***h.” He also tells his boss that there better be “no more of this nonsense” in his performance evaluation.
After repeated warnings about inappropriate communications, Jim emails a co-worker, warning him “to refrain from any sarcasm towards me as you do not have the mental ability to handle any sarcasm that is returned to you.”
After this last email, Jim was terminated. Even after termination, Jim had to be escorted out by the police, shouting “You haven’t heard the last of me!”
Now anyone see a claim?
Case Study #1During the time Jim was engaged in this behavior, Jim requested leave to care for his son who was suffering from serious mental health issues.
Jim’s supervisor responded to Jim:
The Company paid for your insuranceand thus expects you to be at work.
Family Medical Leave ActAllows eligible employees of covered employers to take unpaid, job protected leave for specified family and medical reasons
Claims:• Interference (to take leave)• Retaliation (for taking leave)
Risk Mitigation Tips• Written policies and procedures
• Train employees and managers
• Think and act proactively
• Terminate carefully
• Consult Human Resources / Employment attorney
Case Study #2While preparing for a staff meeting with the payroll provider, Sally is alerted to an issue on Facebook. A current employee, Jill, updated her status to read:
Maybe someone should do the owners of ABC Inc. a favor and buy it from them. They can't even do the tax paperwork correctly!!! Now I OWE money...WTF!!!
Many commented and “liked” the status update, including four co-workers:
• I F***ING OWE MONEY TOO• It's all Ralph’s fault• Hahahaha. He's such a shady little man. He prolly pocketed it.• I owe too. Such an a**hole
Case Study #2Sally shows the owner, Ralph, these comments. Ralph, who is now irate, demands Sally immediately fire Jill and her 4 co-workers. However, before doing that, Sally reviews ABC’s social media policy which reads:
ABC supports the free exchange of information and supports camaraderie among its employees. However, when blogging, chat room discussions, social media posts (e.g. Facebook, Twitter), text messages, or other forms of electronic communication extend to employees revealing confidential and proprietary information about the Company, or engaging in inappropriate discussions about the Company, management and/or coworkers, the employee may be violating the law and is subject to disciplinary action, up to and including termination of employment.
What should Sally do?
Social Media and NLRAEmployers that discipline employees for social media activity that constitutes protected activity likely will be found to have violated the National Labor Relations Act (NLRA).Claims:
• Wrongful Termination• RetaliationNLRA applies to union and non-union employers
NLRB is currently avery employee-friendly forum
National Labor Relations Act• Section 7:
Employees shall have the right…to engage in other concerted activities for the purpose of...mutual aid or protection.
• Section 8: Employers cannot interfere with the exercise of this right.
Social Media and NLRASocial Media Policy• Avoid undefined, broad terms• Provide specific examples of the kind
of behavior the policy aims to prevent
• Make it clear that the policy is not intended to target NLRA rights (“Nothing in this policy is intended to limit or interfere with…”)
• Avoid policies that appear to workers to prohibit protected activities, such as talking about pay, benefits and working conditions
• Consult an employment attorney
Risk Mitigation Tips• Review Social Media Policy• Train employees and managers• Terminate carefully
Case Study #3Eve Palmer works as teller for Badger State FCU, a job she has had since 2009. She is well liked and good at her job.
Recently Ms. Palmer became pregnant. As soon as she found out, Ms. Palmer informed her co-workers and manager. Her manager was supportive of Ms. Palmer, but worried she may have to stop working as the pregnancy progressed.
As Ms. Palmer’s pregnancy advanced, unfortunate complication arose. As a result, her doctor recommended she sit rather than stand, drink two cups of water and eat a light snack every hour, and take periodic rests if she felt light headed. She requested these recommendations from her manager.
Case Study #3However, Ms. Palmer’s job required her to stand at the teller line, provide backup at the drive-up windows during busy times, lift and carry up to 20 pounds, and provide general office maintenance as required.
Badger State has a policy of allowing light duty work but limited it to two situations: when the worker suffered an on-the-job injury or when the worker qualified for a “reasonable accommodation” under the Americans With Disabilities Act.
Pregnancy discrimination & accommodation obligations
Safest course: • Accommodate pregnancy
whenever possible • Let pregnant employees qualify for
light duty if the employer offers light duty to other employees.
• Failure to accommodate could give rise to an inference of intentional discrimination.
EEOC continues to advocate strong, pro-accommodation stance.
Pregnancy accommodations: • Sitting, instead of standing, during
the workday• Carrying a water bottle• Taking more frequent breaks to
use the restroom, to have a snack, or to rest
• Receiving assistance with heavy lifting
• Working a modified or part time schedule
• Taking leave
Well managed credit union +Communication with EmployeesHelps avoid the claim &Puts credit union in best position to defend a claim
Thank you for the opportunity to partner on managing risk.
Session Wrap
• Check out www.epl-risk.com
• Access Protection Resource Center for RISK Alerts, white papers/checklists, webinars, and online risk assessments @ www.cunamutual.com
• Complete Ask a Risk Manager
• Contact a CUNA Mutual GroupRisk Management Consultant at800.637.2676
Looking for assistance?
This presentation was created by the CUNA Mutual Group based on our experience in the credit union and insurance market. It is intended to be used only as a guide, not as legal advice. Anyexamples provided have been simplified to give you an overview of the importance of selecting appropriate coverage limits, insuring-to-value and implementing loss prevention techniques. Nocoverage is provided by this presentation/ publication, nor does it replace any provisions of any insurance policy or bond.
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Insurance products offered to financialinstitutions and their affiliates are underwritten by CUMIS Insurance Society, Inc. or CUMIS Specialty Insurance Company, members of the CUNA Mutual Group. Some coverages may not beavailable in all states. If a coverage is not available from one of our member companies, CUNA Mutual Insurance Agency, Inc., our insurance producer affiliate, may assist us in placing coveragewith other insurance carriers in order to serve our customers’ needs. For example, the Workers’ Compensation Policy is underwritten by non-affiliated admitted carriers. CUMIS SpecialtyInsurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market. Data breach services are offered by Kroll, a member of the Altegrityfamily of businesses. Cyber liability may be underwritten by Beazley Insurance Group.
This summary is not a contract and no coverage is provided by this publication, nor does it replace any provisions of any insurance policy or bond. Please read the actual policy for specific coverage,terms, conditions, and exclusions.
©CUNA Mutual Group 2016 All Rights Reserved.
