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Employment Practices Liability Insurance: Is Your Company Prepared for a Wrongful Termination Lawsuit?

Is Your Company Prepared for a Wrongful Termination Lawsuit?
When employees must be fired or laid off, there is always a chance they will try to file a lawsuit. For employers, the problem is that they are always the responsible parties for dealing with any allegations.

 

“…employment practices liability insurance is not something all businesses have enough of.
This coverage keeps employers from having to pay out of pocket for expensive legal fees and substantial judgments. Having insufficient coverage could result in the need to come up with millions of dollars or close the business. EMPLI covers judgments, court costs and legal representation.”

In the following case, employers thought they were terminating a worker for not appearing on the job, but the jury decided otherwise. 

A truck driver filed a lawsuit against his employer after refusing to return to work while a severe thunderstorm was in effect. The employer did not acknowledge any wrongdoing in firing the truck driver for his refusal and claimed the employee was only embellishing details to avoid work. The plaintiff worked as a hazardous materials tanker truck driver, delivering gasoline and diesel to many commercial businesses in California and Nevada. His duties included filling generators and vehicles from the tanker.

On the day the incident happened, there was a severe thunderstorm in the area where the truck driver was working. During the storm, the driver made several deliveries. However, he also contacted dispatch multiple times to complain about the hazardous weather. He requested to return back to base, and he had to work for eight hours before being allowed to clock out and leave. Three hours after leaving, he was contacted by representatives from his workplace who said he had to return to work.

Reiterating the threat of inclement weather, the driver refused. He also said that he had been drinking after work, so returning to the job to drive was dangerous. On the following morning, the driver was fired after 13 years of employment. He filed a lawsuit citing violations of his rights and asking for damages. Before the trial, an offer of $100,000 was made. During the trial, there were several witnesses and experts called in to analyze the severe weather conditions described by the truck driver.

The company that fired the driver argued that it was right to dismiss him, and representatives claimed that he fabricated events to prevent himself from returning to work to do his job during the storm. They also claimed that he made unreasonable complaints about his driving route and did not believe he had really been drinking after work. Although the company claimed the driver did not complete his deliveries, they failed to show documentation to back their claim. Within one month of the worker’s termination, personnel had destroyed a considerable portion of his records. One record did show that the plaintiff called and stated he had been drinking. 

In the end, the jury decided unanimously that the company was at fault for wrongful termination. The plaintiff was awarded over $160,000 for past damages and $2.5 million for mental suffering and non-economic damages. On the following day, the jury returned and awarded the driver well over $3.5 million in punitive damages. The total verdict was more than $6.2 million and included all fees and awards.

These types of cases are certainly not something any employer wants to deal with, but they are a very real possibility. In addition to this, many employers do not know which attorneys are best to hire, and employment practices liability insurance is not something all businesses have enough of. This coverage keeps employers from having to pay out of pocket for expensive legal fees and substantial judgments. Having insufficient coverage could result in the need to come up with millions of dollars or close the business. EMPLI covers judgments, court costs and legal representation.

 

To learn more about this type of coverage or to review an existing policy, contact G.R. Reid Insurance Services.

 

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