In my experience, almost all agents offering Employment Practices Liability Insurance (“EPLI”) to their clients correctly advise their insureds on this type of coverage. They will generally state an EPLI policy will defend and indemnify an employer against lawsuits filed by employees alleging:
- wrongful termination,
- hostile work environment,
- failure to promote,
- and other employment-related issues.
Many agents wrongly focus only on lawsuits in advising clients to purchase EPLI coverage
Agents offering EPLI to their clients may want to focus their explanations on the benefits provided by EPLI policies less on the protection from lawsuits and more on the risks covered in the more common case of proceedings before the Massachusetts Commission Against Discrimination (“MCAD”).
The MCAD is a Massachusetts administrative agency that has a significant, if not premier, role in many employment claims against employers.
The following five points relating to the role of the MCAD in Massachusetts employment claims may assist agents in giving their employer-clients trusted advice on the benefits of purchasing EPLI coverage.
First point: The MCAD gets 3000 complaints a year and 80% of the complaints are employment-related complaints
The graph entitled, “Complaints Filed Annually,” represents all employment, housing, education, credit, and public accommodation complaints filed in 2015 and the preceding five years. In 2015, the MCAD received 3,042 new complaints.
Second point: The MCAD has jurisdiction over most employers and enforces a number of laws affecting employers
Most employers in Massachusetts are subject to the jurisdiction of the MCAD. Any employer that employs at least six part- or full-time employees, at a workplace, comes with the statutory jurisdiction of the MCAD with regard to the statutes .
The MCAD is an administrative agency responsible for enforcing the Commonwealth’s anti-discrimination laws. Applicable laws include, M.G.L. 151B, the state’s primary civil rights law regarding discrimination in employment, housing, credit and mortgage lending, M.G.L. 272, Section 92A, Section 98 and Section 98A ,the public accommodations civil rights law, M.G.L. 151B Sec. 3A, the sexual harassment law, M.G.L. 149 Sec 105D, the Parental Leave law, M.G.L. 151C, the civil rights and education law, and M.G.L. 111 Sec. 199A, the lead paint law.
In the employment context, the MCAD has broad jurisdiction over “adverse employment actions” that hurt an employee. The adverse employment actions by an employer may be terminating an employee, not selecting the employee for a promotion, giving the employee a poor evaluation, harassing the employee with derogatory remarks or behaviors, or denying the employee’s request for an accommodation where the adverse employment action is discriminatory based on the employee personal characteristics, including, but not limited to:
- national origin,
- gender identity,
- criminal record inquiries
- sexual orientation,
- active military personnel,
- or past involvement in a discrimination complaint.
Third point: Employees alleging discrimination cannot sue unless they file first with the MCAD
In Massachusetts, employees filing discrimination claims against their employers, must first file a complaint with the MCAD. The provisions of the MCAD’s enabling act do allow for the employee to bring a lawsuit but as the Supreme Judicial Court has said a person claiming discrimination “may maintain a civil action only if she [or he] has previously filed a timely complaint with the [MCAD].”
While an employee alleging discrimination or other violations with the jurisdiction of the MCAD can sue after having made a complaint to the MCAD, “resort to the courts is not available for a complaint of discrimination within the jurisdiction of the MCAD unless the person claiming to have been the object of unlawful discrimination first makes a timely complaint to that agency.”
In the case of employment discrimination claims, a timely complaint to the MCAD means a complaint filed within 300 days of the last discriminatory act or omission.
Fourth point: The MCAD can award monetary damages and other financial relief against an employer
The MCAD can award successful complainant in employment cases attorney’s fees, back pay, front pay, emotional distress damages, or interest. Payments can range from hundreds of dollars to hundreds of thousands of dollars. (See selected cases from the MCAD’s 2015 Annual report below.
Fifth point: Actual decision summaries abstracted from the MCAD’s annual report show that employers need EPLI policies to protect their assets.
The following summaries provide agents some concrete examples from proceedings at the MCAD that resulted in agreed settlements or awards. In many cases, the employers involved, besides paying the complaining employee or former employee, had to undergo training sessions to sensitize their managers or supervisory personnel to diversity or disability issues.
These summaries do not take into account the legal defense costs that an uninsured employer would have to bear in defending against an employee’s MCAD complaint. Those costs can easily run from the tens of thousands of dollars up to several hundred thousand dollars for a full-blown MCAD public hearing and administrative appeal to the Superior Court of an adverse award.
Selected abridged MCAD case summaries from the agency’s 2015 Annual Report:
- Transgender discrimination. Complainant charged that his employer, a fitness center, discriminated against her on the basis of gender (transgender) when it terminated her employment as a fitness instructor. Complainant was originally hired as an individual presenting as a male. During the course of her employment as a trainer, she became a transgender female. Respondent’s owner believed that Complainant was a gay male upon hire and told Complainant to “tone down” the wearing of makeup and jewelry. Complainant was awarded $154,850 in lost wages and $25,000 in emotional distress damages.
- An employee alleged that his employer unlawfully terminated him based on his disability. As part of the settlement, the employer agreed to pay Complainant $70,000 for claimed back pay and emotional distress damages and provide disability discrimination training to all of the employer’s human resources managers.
- An employee alleged that she was discriminated against by her employer, a social service agency, on the basis of disability, race, color, and retaliation, when she was subject to different work standards than white coworkers. Complainant also claimed that her request for an ergonomic chair was not addressed and her request to use sick time for tardiness related to her disability was denied. The matter was settled for $35,000.
- An employee alleged that he was discriminated against based upon his religion (Rastafarian) when his employer subjected him to comments about the length of his hair and subsequently terminated his employment without cause. Respondent agreed to allow the MCAD to review its grooming policy to ensure compliance with M.G.L. c. 151B. Complainant was paid $12,500 for alleged compensatory damages.
- An employee alleged that her employer failed to reasonably accommodate her migraine headaches and other disabilities by terminating her employment for “excessive absenteeism.” Respondent agreed to resolve the matter with payment of $10,000 to Complainant and receipt of training on the fair employment laws of the Commonwealth.
- A teacher at a vocational learning institute alleged that she was denied a reasonable accommodation for her disability, environmental allergies and chemical sensitivities, and was ultimately terminated from her teaching position. The matter settled for $50,000 and anti-discrimination training.
- An employee who was hired alleged that on the second day of employment his employer subjected him to impermissible verbal inquiries regarding his criminal record and subsequently terminated for being “too ghetto.” He claimed discrimination based on his race, religious creed and criminal record. Respondent’s job application contained an inappropriate inquiry into the criminal record of applicants. Respondent agreed to send its Massachusetts’ managers and supervisors to a training session on anti-discrimination in employment. Respondent also paid complainant $30,000 in compensatory damages.
- Disability discrimination. Complainant was classified as legally blind for his lack of peripheral vision. However, he was certified as a barber and had been working successfully for a number of years as a barber for another employer. He chose to leave his job and go to work for Respondent because the business was in his home town and closer to his residence. He was performing his job adequately at Respondent. When Respondent discovered that Complainant was legally blind after two minor mishaps where he tripped in the shop, but was not injured. Respondent disparaged his disability with epithets and ordered him to leave and not return to work. Complainant was unable to find employment for several years. He was awarded $75,000 for lost wages and $25,000 for disability discrimination
- A male employee of a business specializing in waxing and other spa treatments was terminated after internally complaining to the regional manager about sexually-charged comments and behavior of employees at the salon. Complainant had sought advice of counsel and complained to the area manager about other employees inappropriate behavior. He was terminated the day after he made his complaint to the regional manager. The Complainant was awarded $150,000 in damages for emotional distress and $41,645 in damages for lost wages. In addition, the Hearing Officer assessed a civil penalty of $50,000 against the owner and CEO of the spa chain. In addition, the Full Commission awarded attorney fees to be paid to the Commonwealth in the amount of $18,187 for the work of Commission Counsel in successfully prosecuting the case at a public hearing.
- A temporary employee, after seven months of successful contract employment, was offered a permanent job, conditioned upon his passing a post-offer physical examination. At the physical, he disclosed that he was blind in his left eye. Based on the employer believing that the temporary employee was not qualified because of his blind eye, the employer revoked the offer of a permanent position and fired the employee from his temporary position. The MCAD found that the employer failed to conduct an individualized assessment of the Complainant’s ability to safely perform the essential functions of the job, or to consider the imminence of the risk and severity of any potential harm that would result. The MCAD found the employer liable for employment discrimination and awarded the former temporary employee $45,000 in back pay, $75,000 for emotional distress, and $79,000 in attorneys’ fees. The MCAD also affirmed a training order against the company.