Hospitality Industry Employee Risks: Hotel Management Must Maintain "Employment Practices Liability Insurance" To Protect Against Expensive Litigation Defending "Frivolous" Employee Lawsuits; "Arbitration Agreements As Conditions Of Hiring" Also Helpful

“…based on the new case law, an employer that wins in court can’t even recover attorney fees for frivolous claims, if they overlap with other claims that are viewed as “non-frivolous.”

“…Employment Practices Liability Insurance (“EPLI”) can be purchased, but it often comes with a large deductible (up to $50,000 or more), so it is important to know what you are buying…”

“…Employers can also limit the impact of litigation by requiring new employees to sign arbitration agreements as a condition of being hired..”

That was the ruling last January in a federal court in California. The employer spent $315,000 in attorney fees, and prevailed on each of the ten claims in the lawsuit. The judge found that some of the claims were frivolous, and allocated $85,000 to the employer as reimbursement for the frivolous claims. The 9th Circuit (which also governs federal cases in Oregon) reversed on appeal because the employer didn’t prove that those fees were incurred solely in defense of the frivolous claims. This month, the U.S. Supreme Court made the same ruling in another civil rights case.

So what can employers do to minimize the risk of a devastating loss? Many employers are surprised to learn, after it’s too late to do anything about it, that general liability insurance does not cover discrimination claims. Employment Practices Liability Insurance (“EPLI”) can be purchased, but it often comes with a large deductible (up to $50,000 or more), so it is important to know what you are buying.

Employers can also limit the impact of litigation by requiring new employees to sign arbitration agreements as a condition of being hired. Under these agreements, both sides agree in advance that any employment-related claims will be resolved in arbitration rather than in court. Litigating before an arbitrator tends to be faster and less expensive than court trials. Currently, an Oregon statute requires an employer to tell an applicant about the arbitration agreement 14 days before hiring. A bill is making its way through the Oregon Legislature that would reduce this time period to 72 hours. These agreements need to be carefully drafted to be enforceable.

Read more: Protect against discrimination lawsuits – Oregon Business http://www.oregonbusiness.com/contributed-blogs/5451-changing-rules-for-discrimination-lawsuits#ixzz1Q6ve56Ao