CPCUs Warned About EPL Risks

By Gary Mogel

NU Online News Service, Oct. 15, 3 :17 p.m. EDT?Changes in the U.S. economy promise to send employment practices liability claims surging, a legal expert warned an insurance industry conference.

The cautioning words came from Ronald L. Adler, an employment law expert who led an EPLI seminar at the annual meeting of the Chartered Property Casualty Underwriters Society this week in New Orleans.

Mr. Adler, president of Laurdan Associates Inc., a Potomac, Md.-based human resources management consulting firm, said that employment-related risks are constant and one of the most contentious and costliest issues employers face because of basic structural changes taking place in the U.S. workplace.

"Jobs are being lost, and they will not be reappearing," Mr. Adler noted. "Companies are going out of business, and many jobs have been moved overseas. This is not like past recessions--people who have been laid off will not be returning to their old jobs. As this turnover increases, so will claims." He referred to this phenomenon as the "jobless recovery."

Mr. Adler pointed as an example to Syracuse, N.Y.-based Carrier Corp., which recently announced that it is moving 1,500 jobs from upstate New York to China. "Carrier's component suppliers are in China, so it cost less to move the jobs there than to ship the components to the U.S.," he explained.

The telemarketing jobs that are being lost due to the "do not call" laws are going to India, and many are already there, Mr. Adler added.

Mr. Adler said that claims that can result from job displacement may include age discrimination related to selecting which employees would be laid off, as well as race, national origin and disability as well as sexual harassment, and other claims that were not pursued while the employees were still working and feared retaliation if they complained.

With so many people looking for jobs, one of the thorniest issues for employers has become what to do with the hundreds or sometimes thousands of unsolicited resumes they receive. This is important, Mr. Adler noted, because employers have federally mandated recordkeeping and reporting obligations for everyone who is considered a "job applicant."

The solution, according to Mr. Adler, is to notify those individuals that your policy is that they must fill out your company's job application in order to be considered an applicant.

"With a resume, the Equal Employment Opportunity Commission might say that you must consider that individual for every job that opens in the future. On the other hand, the application form can state that it is valid only for a specific period of time."

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CPCUs Warned About EPL Risks

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