In most cases, under Employment Practices Liability Insurance (EPLI), a charge from the U.S. Equal Employment Opportunity Commission (EEOC) (or similar state or local agency) will likely trigger coverage. It is vital that such charges are handled appropriately from the start as they may be followed by a lawsuit.
These are some guiding principles to review when an EEOC charge is received.
- Act Swiftly
Provide a copy of the charge to your insurance broker and insurance carriers as soon as possible. Be sure to review your defense provisions with your broker if you have questions on the selection of counsel and defense obligations. If your EPLI policy is written on a duty to defend basis, the insurance carrier’s claims adjuster will work with you to assign counsel to defend the charge. On the other hand, if your policy is written on a nonduty to defend basis, you will be responsible for choosing your defense counsel. After notifying the carrier, we recommend that you promptly have a conversation with the assigned claims adjuster to discuss the defense plan and engagement of counsel. - Avoid Retaliation and Maintain Confidentiality
Adhere to anti-retaliation policies. Employment laws prohibit retaliation against individuals who complain of violations. Also, employees who participate in an investigation of employment law violations are also protected from retaliation. Review these
issues with counsel before taking any employment actions involving any affected employees.Further, information about a charge should be kept confidential and only disseminated to appropriate parties to afford privacy to the affected individuals and to preserve attorney-client privilege. - Save Relevant Documents and Investigate the Charge
A charge is usually accompanied by a request from the EEOC or investigating agency for relevant policies, files, and internal data. You (the insured) have an obligation to comply. Review these requests with your assigned counsel so they can ascertain the accuracy and necessity of such requests. In conjunction with your assigned attorney, it may be necessary to issue a “litigation
hold” notice to appropriate personnel to preserve relevant documents, including electronic data. Do not destroy relevant documents or delete relevant emails. - Respond to the Charge and provide Grounds for Dismissal
After reviewing pertinent documents and conducting interviews, be prepared to explain the employment actions and defenses to the allegations. Your assigned attorney will work with you to prepare a written response to the charge, often referred to as
a position statement. The aim of the position statement is to refute the charge and help convince the agency that the charge should be dismissed.There is no standard EPLI insurance policy. Each EPLI insurance carrier has forms that differ from their competitors’, and most policies are generally the subject of extensive negotiations. In order for EPLI insurance buyers to be assured that they have the broadest available terms and conditions and appropriate insurance structure, it is critically important that they select a knowledgeable and experienced broker to assist in their acquisition of the insurance. The best brokers also have skilled and experienced claims advocates available to protect their clients’ interests in the event of a claim.
