Top Trending EPLI Claims

Unpaid internships, illegal background checks, pregnancy and health-related employment discrimination continue to be the top trending employment practices litigation cases, according to industry experts.

Claims costs are rising, in part due to the length of time it takes to resolve an EPLI claim. According to an Advisen white paper released last month, defense costs can top out at $300,000 and the timeline for resolution can be anywhere from 18 to 24 months. The paper reported that multiple claimant disputes are on the rise. Federal, state and city regulators as well as plaintiff attorneys can file a claim on behalf of an employee or group of employees.

The Equal Employment Opportunity Commission has 53 regional offices throughout the country and as such can file an action within state and federal courts. According to Advisen, “For this reason, claim trends will vary by state, with certain states pursuing particular types of claims at any one time.”

The top four EPLI litigation generating states according to Advisen are:

1. New York
2. California
3. Texas
4. Florida

Though most discrimination claims arise from terminations, they can also arise from the hiring process or other adverse actions affecting employees, said David Peasall, SPHR, director of human resources at FrankCrum, a national professional employer organization that provides outsourced human resources, payroll, employee benefits, risk management and workers’ compensation.

Genetic Discrimination

GINA, the Genetic Information Nondiscrimination Information Act which took effect November 21, 2009, prohibits employers from using genetic information in employment related decisions, classifying employees based on genetic information or requesting genetic information from an employee.

According to Gail Gottehrer, a partner with the East Coast firm of Axinn, Veltrop & Harkrider who often represents insurers, GINA governs the privacy of a person’s genetic information which is sometimes released with family medical histories.

Gottehrer said the agency has implemented a strategic enforcement plan that includes a focus on preventing genetic discrimination.

“We’re seeing the EEOC bring class actions to enforce the Genetic Information Nondiscrimination Act. Employers should make sure that they are not requesting family medical history or other genetic information from job applicants or using that kind of information as part of their hiring process. Requesting family medical history from job applicants has been found to be a violation of GINA,” said Gottehrer.

She said the Act prevents employers from demanding that employees provide this kind of information when applying for a job or using the information in the hiring process. An employer could reason that an applicant is less desirable because of higher insurance costs or may be more likely to get sick.

According to EEOC statistics, GINA lawsuits began being filed by the government agency in 2010. So far, the agency has filed a couple of individual actions and a class action based on the law.

One recent case settled by the EEOC involved Founders Pavilion, a medical nursing and rehabilitation facility. The company had a policy that before employment began a medical exam was required and then would be required each year of employment, said Gottehrer.

During the medical examination, employees were asked about their family history.

The EEOC brought suit as a class action on behalf of 130 or so employees that were impacted by the exam. The agency alleged that the request for family history during the medical examination was a violation of GINA and Founders Pavilion agreed to pay $370K to settle the complaint.

Gottehrer emphasized that even an employer’s vendors or subcontractors that assist in the hiring process are bound by the Act.

“What you can’t do yourself you can’t ask others to do, but by the same token, I’m not sure how often people focus on exactly what the employment agencies or recruiters that they use exactly ask for. It’s a good reminder to look into that a little more carefully and check on that,” said Gottehrer.

Pregnancy Discrimination

The EEOC’s Strategic Enforcement Plan also included pregnancy-related discrimination as one of its top six priorities between 2013 and 2016.

The Pregnancy Discrimination Act was enacted in 1964 and requires employers to allow pregnant employees to work at their jobs as long they can perform their jobs and employers aren’t allowed to hold pregnancy against a prospective new hire.

“The EEOC’s been very focused on that, too, and they’ve issued guidance recently about that, about making sure that women are hired even though they’re pregnant or not discriminated against, or make it harder for them to get jobs because they’re pregnant,” said Gottehrer.

The U.S. Supreme Court is set to hear a case relating to pregnancy discrimination on December 3rd. Young v. United Parcel Service centers on whether an employer should give pregnant employees the same type of work limitations they do for other workers who are temporarily unable to complete their normal job duties.

Illegal Background Checks

Lawsuits resulting from illegal background checks are also on the rise, according to experts.

“Recent class actions have focused on the use of pre-hiring background checks,” said Gottehrer. “Employers who use background checks will want to make sure that they comply with the requirements of the Fair Credit Reporting Act and similar state laws and that they conduct the background checks uniformly, and not just for certain applicants or protected groups of applicants.”

According to Gottehrer, before a credit report can be requested as part of an application process, the potential employee must be notified in writing of the request and that it will be used as part of the employment decision. Written permission from the job applicant is required to obtain a credit report.

“There have been a couple of recent settlements this year on that in New Jersey,” said Gottehrer. There was one, where I think that settlement, it was against New England Motor Freight. It was for almost $900,000 and that was part of a class action too.”

She said that with credit reporting there’s always a concern that there could be an error or decisions could be made based on inaccurate information. While it might be relevant for some job categories, she said it’s not necessarily relevant to others.

Pearsell said that the EEOC has expressed concern that some employment screening tools could create a discriminatory impact based on race and national origin if decisions do not reflect job relevance or business necessity.

Advisen reported on a similar New York case that was certified as a class action, Houser et al v. Census Bureau that will likely result in more of these types of claims.

Unpaid Interns

The allegation that has been made in complaints is that interns are entry level employees who just don’t get paid, said Gottehrer.

“They’re essentially so much like employees, they should be under the protection of the Fair Labor Standards Act, which requires that they get paid at least minimum wage and also that they get paid overtime,” she said.

A case is pending in the Second Circuit of Appeals that will decide what the appropriate standard is for determining if interns are actually employees.

According to Gottehrer, the Department of Labor has perimeters that they use for determining if an intern is or isn’t an employee. Factors considered include whether there is an education component to the internship, benefits to the intern, an intern’s duties and whether they mirror an employee’s job duties.

Depending on how the Second Circuit decides, there could be a slew of unpaid interns coming out of the woodwork and filing class actions, she said.

“In light of the recent spate of unpaid intern class action filings and settlements, this is a good time for companies who have interns to review their internship programs, policies and practices,” said Gottehrer. “Companies that can show that their programs have educational value, do not give interns work that would otherwise be done by employees, and do not automatically entitle interns to paid jobs at the conclusion of the internship will be well positioned to argue that the participants are truly interns and not employees who are subject to the Fair Labor Standards Act.”

To keep up with EPLI trends, the East Coast attorney recommended keeping tabs on what types of discrimination are on the EEOC’s radar.

“Once it becomes one of their hot topics, it alerts plaintiff’s lawyers and alerts class action lawyers,” she said.