- Being sued by an employee can be a very expensive proposition. How expensive? According to a recent report, the average cost is about $125,000 for settled cases, while the median judgment in recent discrimination lawsuits is roughly $200,000 (and one quarter exceeds $500,000).
- Bermuda-based business insurance provider Hiscox, in its "Employee Charge Trends Across the United States: The Hiscox 2015 Guide to Employee Lawsuits," studied data from 446 claims affecting small- to medium-sized employers with 500 employees or less.
- Hiscox does report that 19% of the claims it studied reached settlement and defense payment, while more than than 4 out of every 5 claims resulted in no awards to employees who sue.
Hiscox compiled its report using the latest data on employment charge activity from the Equal Employment Opportunity Commission (EEOC) and its state counterparts across the US.
"Employment charges are often the first step towards employment suits," the report said. "Understanding the true exposure companies of all sizes face, and implementing effective risk prevention, mitigation and transfer techniques, can help minimize the total impact of employee charges against your organization."
Hiscox listed high-risk states when it comes to employee lawsuits (percentages are for states where employers are more likely to receive a discrimination charge based on the national average): New Mexico (66%), Nevada (47%), Alabama (41%), California (40%) and Mississippi (39%). A free copy of the report is available.