Employers today must be aware that allegations of wrongful employment acts make it into headlines and U.S. courts every year. Even if allegations are false, defense costs alone can be exorbitant. Additionally, reputation damage, if charges are made public, could be severe.

Given the current economic environment and jobless rate, we expect a continued upward trend in the number of employment-related lawsuits. We expect a continued rise in defense costs, which will make those lawsuits more expensive.

EPLI is also global. Exposures are increasing in Europe and Asia, as well as other regions of the world. In addition, more North American companies are entering these new territories through internal growth or acquisition and face different and changing legal environments and expectations.

Employers don't have to face these risks alone. Employment Practices Liability Coverage will respond to these situations.

More than ever, Employment Practices exposures today require the specialized risk management expertise, information and resources of the Durham and Bates Professional Management Liability Team. Looking forward, Durham and Bates' Employment Team is also studying emerging new issues:

• Class and Mass Actions

  We have noted a recent rise in class and mass actions seeking redress for widespread discrimination, sexual harassment, unequal pay and other workplace wrongs. The suits against Wal-Mart for using and underpaying illegal aliens for custodial work is one well-publicized example, but there are many less-known suits in the courts. Often the individual damage amounts are small but the total loss can be substantial, particularly when punitive damages are involved.

• Benefits Discrimination

  The basis for many class and mass actions is discrimination against a certain segment of employees. While the early discrimination suits were brought along racial and gender lines, the more recent wave includes many claims linked to age and duration of employment. As more companies restructure benefits like retiree medical and pensions, there is a higher probability that some group of employees is adversely affected. Religious and national origin discrimination claims are also on the rise.

• Employee Privacy

  The expansion of statutory and common law privacy rights is playing out in the workplace. Employer access to employee email is one of the more visible tests of employer authority over conduct in the workplace, but there are also skirmishes involving drug/health testing and other information that employees may expect to be private.

• Whistleblower Actions

  The large corporate scandals of Enron and its progeny have focused more on corporate behavior than ever before. Laws in many states encourage employee disclosure of improprieties and protect the employee from retaliation. What in the past might have generated a wrongful termination suit for lost wages is now a retaliation suit with the potential for punitive damages. Moreover, the unwanted publicity of a whistleblower suit can lead to more claims, from shareholders as well as employees.

  There are many more EPLI issues on the horizon that did not exist a few years ago. Scientific developments, such as genetic testing, may prompt allegations of genetic discrimination. Greater corporate scrutiny of past and current employee activities may also give rise to more claim activity. Finally, the powerful trend toward outsourcing, particularly in the technology field, often means downsizing of certain departments. Where there are layoffs, there is the greater likelihood of EPLI claims.