What Can Jewelers Do to Help Avoid a Wrongful Termination Lawsuit?
Employment-related lawsuits continue to rise and in order to be protected, a special type of coverage is needed: employment practices liability insurance (EPL).
The stats around EPL aren't pretty and give a powerful reason to have the coverage. In an article posted by Trusted Choice, employee lawsuits have risen 400% in the past 20 years!
There are many ways an employment-related lawsuit could come about, but one that jewelers should be particularly aware of is wrongful termination.
Why wrongful termination?
Well, first of all, those claims alone are up 260% according to the same Trusted Choice article. Secondly, due to the seasonal nature of jewelry sales, it's a common practice to seek out hired help for the holidays. When those temporary employees are released, there’s a risk of facing a lawsuit.
In fact, approximately 40% of Jewelers Mutual's EPL claims experience involves wrongful termination. Often times, these claims occur during the first quarter of a new year — when jewelers return to normal staffing levels.
2 tips for prevention
1. Ask an expert before terminating
Legal advice can be costly upfront, but it’s better than paying for a lawyer’s services when potential damages from a lawsuit are also on the line.
Consulting with a professional before making a decision could raise your awareness of laws that impact the termination of employees, effectively changing your actions and avoiding a potential lawsuit.
In addition to having an EPL policy with Jewelers Mutual, our customers have the peace of mind of using an employment-practices consultation hotline provided by Jackson-Lewis, LLP. Log in to JM University to learn how to access it.
2. Address expectations upon hiring
Make sure your applicants understand the scope of the position you’re hiring for. This includes the job duties that will be performed, as well as the nature of their employment status.
The sooner you start your hiring process for seasonal employees, the more prepared you’ll be to cover all the necessary groundwork so there’s a clear understanding between you and a potential employee.
In addition to helping avoid misunderstandings when seasonal employees are released, this type of preparation can also help avoid discrimination allegations during the hiring process. Having an EPL policy with Jewelers Mutual can aid in your preparation process.
Also available through JM University
Access an education and training website provided by The McCalmon Group, an authority in employment practices. Find resources ranging from:
— Model employment forms
Don't forget ...
There's no guarantee that an employment-related lawsuit won't happen because you followed procedures. Some people may still feel entitled to file a lawsuit, even if the allegations are unfounded. Even if your business doesn't incur damages, you could still face hefty legal fees to resolve the lawsuit
Thankfully, an EPL policy is designed to respond to both damages and legal fees. A general liability policy may not cover either of those expenses.
If you don't think it's worth the risk to be unprotected from a potential wrongful termination lawsuit or other employment-related liability, get in touch with a Jewelers Mutual agent.
They'll help find an EPL policy that meets the unique needs of your business.