It’s vital to protect your restaurant business — you’ve worked hard in a tough industry and built a successful operation you’re proud of. You don’t want your livelihood threatened by legal actions, so it makes sense to get the right type of insurance.
That’s where Employee Practices Liability Insurance (EPLI) comes in. It’s a specialized type of insurance, designed to protect you and your business from wrongful acts in the employment process.
Simply put, EPLI is designed to protect you, your business, and your employees from:
- Wrongful termination.
- Sexual harassment.
- Invasion of privacy.
- Work and career related legal action.
You might wonder why you need EPLI — you treat your employees well, give them the right training, encourage them to succeed, and provide a good environment. Unfortunately, that’s not always enough. Over the last ten years, lawsuits relating to wages in the restaurant industry have more than doubled nationally, with some states like New York seeing a threefold increase.
As Trusted Choice says, “Over the last 20 years, employee lawsuits have risen roughly 400%, with wrongful termination suits jumping up more than 260%. Oddly enough, you are more likely to be sued by an employee these days than to have a fire at your facility.”
The restaurant industry has a large proportion of legal claims made against it. Here’s a selection of successfully prosecuted cases, where EPLI could shield restauranteurs from the full force of fines and damages made against them.
- April 2016 — The U.S. Equal Employment Opportunity Commission (EEOC) successfully sued Achiote Restaurant for $27,500 for sexual harassment and retaliation charges.
- February 2016 — The EEOC bought a case against Mint Julep Restaurants. They were fined $450,000 as a result of restaurant managers harassing 15 female employees.
- April 2015 — The EEOC reached a $160,000 settlement with Red Lobster after a manager sexually harassed three female employees.
- There are many more examples of the EEOC successfully winning lawsuits for victims of sexual harassment here.
- August 2016 — A jury in Washington, D.C. awarded $550,000 in damages against Chipotle after an employee was discriminated against and wrongfully terminated for being pregnant.
- September 2015 — Roscoe’s House of Chicken and Waffles was ordered to pay $1.6 million in damages due to racial discrimination and wrongful termination of a black employee.
- May 2015 — Ruby Tuesday settled a $100,000 sexual discrimination lawsuit with the EEOC after only female employees were chosen for summer jobs with company supplied housing and a chance for greater pay.
- April 2016 — Three employees have filed a lawsuit against Calavera restaurant alleging a failure to pay wages or overtime and that they did not receive breaks or final pay after they were dismissed.
- Summer 2015 — Per Se restaurants paid out $500,000 after they were charged by the New York Attorney General’s office because they failed to pay out tips to employees.
- January 2015 — Ten former McDonald’s workers are suing the restaurant for racial discrimination, harassment, and wrongful termination.
The EEOC is there to protect workers’ rights, and has an excellent record of filing and winning lawsuits against employers across all industries:
- Disability discrimination — Between 2011 and 2015, the EEOC filed over 200 lawsuits and won over $52 million in damages for discrimination against employees with disabilities.
- Religious discrimination — Between 2010 and 2015, they filed 68 lawsuits because employees were discriminated against on the basis of religion.
- They have also been involved in many lawsuits against age discrimination and LGBT discrimination.
Across employees as a whole, there was a 12% chance an employer would face a lawsuit in 2015. Costs and damages can be very high too, with one in five lawsuits having an average cost of $125,000 (including attorney fees and compensation costs). Cases that go to trial are even more expensive, with settlements of between $200,000 and $500,000.
Against this background, it just makes sense to protect your business. At The Horton Group, we specialize in your peace of mind. We help businesses like yours lower the true cost of their risk by focusing on risk management, supported by the best claims advocacy, loss control and core insurance services available.
Perhaps it’s time to look at your current risk management portfolio to ensure you have the processes in place to avoid the EEOC” successfully prosecuted” List. If by chance you do get sued, we want to make sure you have the proper insurance to cover the expense.
© 2016 Zywave, Inc. All rights reserved.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.