Vol. 32, No. 4, 9. When Employee Relations Turn Sour Insurance coverage for employment-related claims can soften the blow.

• Author: By Mary Scott

Wyoming Bar Journal

2009.

Vol. 32, No. 4, 9.

When Employee Relations Turn Sour Insurance coverage for employment-related claims can soften the blow

Wyoming LawyerIssue: August, 2009When Employee Relations Turn SourBy Mary Scott A number of sensational cases around the country illustrate the apparent trend toward more employee claims of discrimination, sexual harassment and wrongful termination against employers. In response, the insurance industry now offers employment practices liability insurance (EPLI), but many carriers consider law firms to be at high risk for employment-related claims. As a result, the already complex process of selecting EPLI coverage becomes an even more difficult task.

Traditional law practice structure, growing diversity in the profession, and pressures on firms to operate more profitably all contribute to increased employment practices liability.

Moreover, law firms generally have individuals involved in the recruitment process who are not trained in employment law, creating a high risk that someone will ask illegal questions regarding a prospective employee's age, marital status, living arrangements or availability for weekend work.

Work assignments also are sensitive because courts have held that law firms cannot acquiesce to clients' discriminatory preferences. This is a problem with both negative preferences and positive preferences, which may set up claims of reverse discrimination.

When it comes to career advancement, the basis for appropriate decisions is performance evaluations done according to established criteria that have been communicated to candidates.

But often law firm partners do not carefully document their advancement decisions. A claim by an attorney disgruntled at not receiving the partnership nod is notoriously difficult to defend because the decision-making process is so subjective and because each unsuccessful associate will likely have supporters as well as detractors.

Then, too, law firms may seek to remove less-productive senior partners, which can lead to age discrimination charges. Bona fide partners are not employees for the purpose of statutory federal discrimination protections, but if an older partner is first marginalized (losing a say in management, and receiving a share of the firm's compensation partially based on individual performance), employee status may be...