Employment Practices Liability Claims Scenarios

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Discrimination

A long standing agriculture co-op in a small town allowed one of its female employees to take a paid leave of absence following the deaths of her mother and sister only a few weeks apart, both from breast cancer. The employee was diligent about her medical care and after having certain tests, was considering breast removal surgery. During an annual review of the nonprofit’s benefit plans, the human resource director noted to the executive director that the nonprofit’s health insurance costs had risen quite dramatically and speculated that the increase was because of the female employee’s extensive medical testing. When the employee returned from her leave of absence, the executive director recommended that she take a demotion to afford her additional time to handle her loss and allow flexibility in her schedule. The employee filed a complaint with the EEOC against the nonprofit and the executive director for discrimination on the basis of genetic information. She subsequently amended her complaint to add a count for discrimination under Section 510 of ERISA. Defense costs to date: $95,000.

Wrongful Demotion

Two trade association employees were demoted and had their salary cut by 25%. They sued the association, alleging the association failed to follow its personnel policy when it demoted them and cut their salaries without good cause. A jury awarded one employee $500,000 and the other $375,000 in economic damages. In addition, the jury also awarded each $50,000 in non-economic damages for their emotional distress. This unanimous jury award of $975,000 was upheld at the state supreme court level.

Whistleblower & Retaliation

A 62-year-old white male employee with a positive performance record and favorable bonuses was terminated by a foundation. He sued the foundation, alleging he was terminated from his job so that the employer could hide a pattern of discrimination against women and minorities. The employee further alleged violations of the Age Discrimination in Employment Act (ADEA) and Title VII of the 1964 Civil Rights Act. A jury awarded the employee $55,000 in compensatory damages and $325,000 in punitive damages.

Sexual Harassment/Retaliation

female volunteer alleged that several of a nonprofit’s employees made inappropriate sexual comments towards her, including suggestions that she was having a sexual relationship with another volunteer. In addition, she went on to claim that they also asked her inappropriate questions concerning her personal life. The volunteer alleged that after she complained, the employees engaged in a practice of retaliation. She contends that she was excluded from certain meetings, taken off certain projects and assignments, and treated rudely. The parties participated in non-binding arbitration and consented to a settlement of $300,000.

Wrongful Termination

An executive director of a charity filed suit against a charity for wrongful termination and intentional infliction of emotional distress. The executive director made statements that the nonprofit improperly failed to pay another employee overtime and terminated the employee for filing a complaint. The executive director alleged that although the charity advised him that his termination was due to performance problems, he was actually terminated in retaliation for the honest statements he made in connection with a fellow employee’s termination. Total defense costs and settlement exceeded $625,000.


Any examples in this article are for illustrative purposes only and any similarity to actual individuals, entities, places or situations is unintentional and purely coincidental. This material is not intended to establish any standards of care or to serve as legal advice appropriate for any particular factual situations. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions or an insured. 

Underwriting Contact

Jessica Smith
301-951-6916
Jessica.Smith@victorinsurance.com

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