The headlines pile up daily. NBC’s Today host Matt Lauer, Sen. Al Franken, Rep. John Conyers and others are part of the fallout from charges of sexual harassment by movie mogul Harvey Weinstein’s.
More — no doubt — will come.
These allegations also have insurance implications because sexual harassment also impacts non-celebrities as well. David Thomas of Blank Rome said all businesses — insurance included — need to make sure they do what is necessary to avoid a big hit if there is an accusation.
That means dotting Is and crossing Ts with EPLI policy forms and coverages. Insurance agencies, companies and their clients all need to be aware of the implications, variations and legal requirements.
In an interview with Insurance Business America, Thomas said, “There are a couple of ways in which there may be variations in EPLI coverage. I have seen policy forms in which the right to select defense council against an [EPLI] claim may be implicated by the nature of the claim asserted. Others require the use of panel [defense] counsel for claims that assert harassment or other misconduct by managing directors or high-level officers of the company — but don’t require a panel counsel for claims that do not.”
And then there is this.
“Variation might also be seen in certain aspects of the coverage based on the rank of individuals named in the claims. These variations are very policy specific, which really underscores the need for brokers to get down into the weeds of the language used in the policy forms,” Thomas added.
Some EPLI policies do not cover the defense costs. “It’s important for insurance brokers to discuss these matters thoroughly with their clients and to go through the pros and cons of a duty to defend policy versus a duty to pay defense costs policy,” Thomas said.
“They should also find out what the insurance carrier typically pays panel counsel within that particular locality and/or find out what rates the insurance carrier is typically willing to reimburse counsel that are retained by the policyholder. It’s worth exploring the rates that are paid first and foremost at the operational center or headquarters of the client, but then also in other locations where the client may have operations, because the insurance carrier may deem a particular rate to be appropriate in one jurisdiction but not in a different one,” Thomas added.
Transparency — he said — is key. “Insurance carriers are sometimes resistant to elaborate on the rates they’re willing to pay, which simply underscores the prudence of brokers raising the issue up front and in a cooperative fashion to get a good sense of what carriers do in this arena. The policyholder will then be better equipped to deal with a claim, and will know what to expect in terms of defense counsel and rates that might need to be paid.”
Once you’re properly insured the best thing to do is review what you need to do to help your employees — and yourself — to avoid a sexual harassment accusation. Attorney Jonathan Segal is involved in human resources consulting for a Philadelphia law firm. He does a seminar on sexual harassment and calls it the 5 Rs.
R#1 — Refrain: Supervisors and managers need to be an example to the staff and refrain from:
• Unlawful discrimination, harassment and retaliation against anyone in a protected group.
• Any unacceptable conduct even if it is lawful to do so
R # 2 — Report: All complaints filed with managers and supervisors must be reported to human resources. These complaints would be about discrimination, harassment, retaliation or any other inappropriate conduct. And this is true even if the employee:
• Requests nothing be done
• Asks for absolute confidentiality
• Does not have the correct legal terms to describe the problem
And even if the supervisor or manager does not believe the complaint is merited, a report must be filed with human resources.
R#3 — Respond: A proactive response to possible unlawful discrimination, harassment or retaliation or other appropriate conduct must be made. Supervisors and managers must do this even if there hasn’t been a formal complaint. Segal said to remember:
• Silence says you condone the behavior
• That you cannot tolerate — ever — unacceptable conduct even if there is no complaint
• To consult with HR about the appropriate action
R#4 — Remedy: Managers and supervisors must take steps to remedy unlawful discrimination, harassment and retaliation and other inappropriate conduct even if it is lawful.
• Focus on what is inappropriate and not necessarily what is legal.
• Segal says behavior is often inappropriate before it is illegal
• The time to act is when it is inappropriate
• And always consult with human resources about how to take corrective action
Managers and supervisors must take steps to remedy unlawful discrimination, harassment, and retaliation and other inappropriate conduct (even if not unlawful).
R#5 — Don’t Retaliate: Avoid retaliation or the appearance of retaliation. Prohibition against retaliation does not just apply to the person filing the complaint. It also applies to:
• Other investigators
• Those associated with the person filing the complaint
The prohibition for retaliation also applies to:
• Material terms and conditions of employment
• Retaliation outside of the workplace
• Exclusion or ignoring
And the fact that the complaint lacks legal merit is not a defense for retaliation.
Source links: Insurance Business America, HR Advisor