What type of lawsuits are typically brought to a small business? A 2014 Equal Employment Opportunity Commission (EEOC) review states the percentage of each complain varies by category. The following are the top 10 categories of charges filed with the EEOC:
1. Retaliation under all statutes: 37,955 (42.8 percent of all charges filed)
2. Race (including racial harassment): 31,073 (35 percent)
3. Sex (including pregnancy and sexual harassment): 26,027 (29.3 percent)
4. Disability: 25,369 (28.6 percent)
5. Age: 20,588 (23.2 percent)
6. National Origin: 9,579 (10.8 percent)
7. Religion: 3,549 (4.0 percent)
8. Color: 2,756 (3.1 percent)
9. Equal Pay Act: 938 (1.1 percent) but note that sex-based wage discrimination can also be charged under Title VII’s sex discrimination provision
10. Genetic Information Non-Discrimination Act: 333 (0.4 percent)
This adds up to more than 100% due to some charges allege multiple bases, such as discrimination on the bases of race and color, or sex and retaliation.
“Hiscox USA claims data for small and mid-sized businesses (under 500 employees) indicate that one in five will face employment charges with an average cost to defend of $125,000, which includes expenses such as attorney’s fees and settlement costs. For those that did have insurance coverage, the average deductible cost was only $35,000, compared to the $90,000 balance paid out by their insurance company.” https://www.insurancejournal.com/news/national/2015/10/28/386321.htm
The best way to avoid ever seeing an employment lawsuit is prevention. Preventative measures such as written hiring procedures, keeping the employee handbook up-to-date, employee training on workplace harassment and discrimination and clear cut consequences for rule breakers are the best way to protect your business and minimize your risk of entering into a lawsuit.