If you are a business owner, employee issues are inevitable. At some point, you will receive an EEOC complaint (or the state equivalent) from a disgruntled employee. Because these types of charges can have serious repercussions, including the possibility for large damage awards against your business, it is important to know your options and to have a plan in place to deal with these types of EEOC claims.
First, do not ignore the charge – take immediate action. Burying your head in the sand won’t make it go away. The charge will include the deadline for your written response and, usually, a deadline to contact the agency to schedule a mediation. Make a note of both deadlines, calendar them, and take the steps in this blog quickly. Increasingly, the EEOC and similar agencies have been reluctant to grant extensions or grant only short extensions. Finally, make sure you give yourself and your attorney plenty of time to investigate the allegations and to put together a complete response.
Call your insurance agent to determine if your business carries Employment Practices Liability Insurance (EPLI) (if you’re not sure you have the coverage in the first place). EPLI coverage can cover a range of employment related claims, including EEOC claims. Most policies require that you inform your insurance carrier of the claim in a timely fashion or you waive coverage. Call them! If you invested in the premiums for the coverage, you should enjoy the benefit.
Depending on the terms of the policy, your carrier will either appoint an attorney to represent you or will work with you to select an attorney. If you want a particular attorney to represent you in responding to the claim, be sure to make this known to your carrier. Also, make sure you select an attorney with lots of experience investigating claims and responding to these types of charges.
In our experience, most charges are frivolous, but don’t give into the temptation of responding to the charge yourself to avoid paying your deductible and reporting the matter to your carrier in the hopes of putting off a rate hike. In most policies, you are required to timely report the claim to your carrier, or coverage is waived. Even if the allegations are frivolous, the claimant may still be able to find an attorney to take their case and file a lawsuit after the EEOC claims process ends. Our firm has seen many business owners attempt to handle the response themselves to avoid a rate hike, only to have to pay thousands of dollars in defense costs that would have been covered had they made a claim with their carrier.
So maybe you opted not to get EPLI coverage this year – you should still let a professional handle your response. Whether you have in-house counsel handle it, or you look to outside counsel, an experienced attorney is critical to help you quickly complete an investigation and preserve important evidence for your case. If you opt to engage in an EEOC-sponsored mediation to resolve the charge early, your attorney, armed with the information learned in the investigation, will be an indispensable advocate for your position.
If, on the other hand, you forgo mediation (or it isn’t an option), your attorney will need to prepare a strong position statement for you. An effective response requires both a factual and legal response to each and every allegation. Additionally, if the EEOC requests witness interviews or additional information, your attorney can protect your rights and push back against the EEOC demands if they overstep their bounds.
Remember, when you’re dealing with a charge of discrimination, time is of the essence. If you have any questions about this, or other employment issues, please feel free to call us. Michael Edgell, one of our firm’s partners, focuses the majority of his practice on these types of employment issues.
Our firm has helped hundreds of families just like yours handle a wide variety of business, estate planning, probate, and elder law issues. We can also handle any disputes and litigation related to your business, wills, trusts, guardianships, or conservatorships. Please give me a call, so that I can help you work through these difficult issues with confidence.