I was recently intrigued by a question in a marketing piece fromone of the major carriers for employment practices liability: "Whois Lilly Ledbetter and how is she helping you sell EPLI?"

For those who don't know,Ledbetter worked as a supervisor for Goodyear Tire from 1979 until1998. Just before retirement, someone anonymously gave herinformation that compared her salary with salaries of three maleco-workers.

Ensuing developments revealed that at retirement she was earning$3,727 monthly compared to 15 male co-workers who earned between$4,286 and $5,236. She sued, claiming pay discrimination underTitle VII of the Civil Rights Act of 1964 and the Equal Pay Act of1963.

In the ensuing court cases, Ledbetter won her case in districtcourt and was awarded $3 million (later reduced to $300,000). Butas anticipated, Goodyear appealed, and the Court of Appeals for theEleventh Circuit overturned the lower court ruling. The U.S.Supreme Court in 2008 ruled in favor of Goodyear as well.

At issue in the ruling was the 180-day statute of limitationsapplicable "after the alleged unlawful employment practiceoccurred"—in this case discrimination as respects compensationbased on gender. Ledbetter had claimed that each check issued is anact of discrimination; the court held that the statute oflimitations for presenting an equal-pay lawsuit begins at the datethe pay was agreed upon, not at the date of the most recentpaycheck.

Authors of the minority opinion felt, however, that compensationamounts are nearly always confidential—not available for comparisonamong employees, difficult to determine and occurring in smallincrements over long periods of time. Thus, they concluded that the180-day statute should not apply in the Ledbetter case.

Enter the Lilly Ledbetter Fair Pay Restoration Act of 2009,signed into law by President Obama in one of his first officialacts [Ledbetter is standing over Obama's right shoulder in thephoto]. The law restarts the statute of limitations with each checkissued on a discriminatory basis. The impact of this legislation issure to be felt for years to come.

Unknown Perils

One concern is simply the degree to which small and midsizebusiness owners and nonprofit entities are aware of the aboveexample and other such changes in local, state or federal lawsenhancing the rights of their employees within the legal system—onesuspects that most are not.

So now more than ever, there is a need to promote the purchaseof EPLI for an employer's protection. It could be the mostimportant insurance purchase a business owner makes today.

Even though employers today are many times more conscientiousthan in the past when it comes to employee policies such as genderand diversity issues, sexual harassment, and discrimination, theyshould also realize that:

• Employees are increasingly aware of their rightsunder the law.

• Even when an employee's case might seem to begroundless and without merit, lawsuits can be quite expensive andtime-consuming for smaller business owners.

When agents and brokers take the time to explain the risks andcoverages of EPLI, they are very likely to bind the policy. Andthey have plenty of options to sell as more and more carriers areexpanding the availability of this class of business.

Market Movers

To help with marketing the value of the policy, most majorcarriers can provide examples of prior claims and the amounts paidfor either defense, settlement or both. Or they can provide equallyimportant examples where the employer won his or her case but stillhad a large legal bill.

Such material can be a real asset in getting an insured'sattention. The key is to approach clients with enough examples sothat they say, "This might happen to me!"

If feasible, remind a client that uncovered employment claimscan severely damage a firm—especially if several employees areinvolved—and such financial situations can make future operationsdifficult at best. And if possible, have the client's HRrepresentative present during the sales call, as they are advocatesof EPLI.

A final word to any and all prospects for EPLI coverage—considerthe form being purchased. In particular, beware of purchasingsolely on premium. For example, it pays to see if the carrieroffers a helpline for employment issues. This service can beinvaluable in navigating the legal minefield of employmentrelations.

As we saw in the case of Lilly Ledbetter, employment law iscontinually evolving. What appears a non-issue today might not betomorrow—so explain to your clients they can prepare for theunexpected with EPLI coverage.