Page 48 - Investment Advisor April 2021

WEALTH & RISK

By Steven F. Goldman

How Advisory Firms Can Avoid

Discrimination and Retaliation Claims

The number of lawsuits has risen annually over the past decade. It’s best

to train your team to follow the law.

mployers today face a myriad ties can lead to outsized demands, reflect-
of employment-related liability ing salary levels of wage earners within
Eexposures, the most prevalent the sector. Many organizations faced with
arising from heightened awareness to such claims have chosen to reach set-
issues of diversity, inclusion and, more tlement with claimants rather than face
recently, equity among peers. Last year’s backlash in today’s social media universe.
social unrest signaled a politicized cul- Many employers should focus on
ture shift, increasing the potential for incorporating best practices in the work
employers to face allegations of discrim- environment, striving for diversity,
ination and retaliation in the workplace. inclusion and equity. Many employers
Employee assertions of such claims may not realize they have an obligation
already were rising, however, as the pre- to promote equitable opportunity in the
dominance of retaliation and discrimi- Performance Report revealed a dramatic work environment.
nation lawsuits against employers has upsurge in monetary recoveries, increas- Due to raised awareness sparked by
increased annually over the past decade. ing from approximately $29.1 million in the #MeToo Movement, several states
Discrimination accusations can be 2019 to $106 million – the highest annu- now mandate annual sexual harassment
based on gender, sexual orientation/gen- al recovery dollar amount since 2004. training. Other states and regulatory enti-
der identity, race, religion and disability An Employment Practices Liability ties may require employers, particularly
among other factors. Any charge of ineq- (EPL) claim can include more than one public companies, to comply in meet-
uity or intolerance against an employer allegation, such as when an employee ing certain inclusion and diversity stan-
can fall within this broad-based category. asserts that retaliation was directly tied dards in the work environment including
Retaliation claims occur when an to an act of discrimination. EEOC annu- developing training for employees, man-
employee believes he/she has been pun- al statistics show that lawsuit retaliation agement and board members.
ished by his/her employer for participat- complaints for all applicable statutes Resources are available; EPL loss pre-
ing in legally protected activity, such as increased from approximately 27% of vention websites offer insight into the
reporting concerns of discrimination in cases filed in 2000 to more than 53.8% latest developments in employment liti-
the workplace. Equally important, preg- of all cases in 2019. gation, as well as guidelines for mitiga-
nancy and family leave issues interpreted No employer is immune. Two top com- tion best practices.
under the discrimination and retaliation plaints related to claims in the financial Many insurance carriers with dedi-
umbrella have been escalating more than services industry have to do with mater- cated expertise in EPL lines also provide
traditional liability exposures. nity/family leave and discrimination. clients with tools and materials that
The Equal Employment Opportunity can be invaluable in providing guidance
Commission’s (EEOC’s) fiscal year 2020 FINANCIAL SERVICES FIRMS HAVE for establishing, reviewing or updating
statistics, ending Sept. 30, 2020, reflect- HIGHER RISK employment practices. Lastly, employers
ed the agency filing of 93 merit lawsuits Unfortunately, financial services compa- should review their employment prac-
relating to discrimination, a decrease nies, asset managers and wealth manage- tices with legal counsel to ensure com-
from 144 such suits in the full year of ment firms face greater risk of significant pliance with state and federal laws.
2019. Primary areas of discrimination monetary loss from employee claims of sergign/Stock.adobe.com
were related to sexual orientation, dis- workplace inequalities. An employee alle- Steven F. Goldman is president of Chubb’s
ability and retaliation. Although cases gation of discrimination seeking pay parity North America Financial Lines division. He can
declined in 2020, the EEOC’s Annual and/or equality due to promotion dispari- be reached at: [email protected].

46 INVESTMENT ADVISOR APRIL 2021 | ThinkAdvisor.com