The State Bar Association of North Dakota Spring 2013 Gavel Magazine | Page 13

the employment relationship. Shortly thereafter, the associate filed suit alleging he was constructively discharged, discriminated against in salary and assignments, and that he was not considered for partnership, all due to race discrimination. The suit went to trial and the jury found in favor of the plaintiff on all counts. Although the associate had been employed with the firm for less than two years, the jury awarded him $1 million in compensatory damages and $1.5 million in punitive damages. After the case was reversed and remanded, it was settled for an undisclosed amount prior to a second trial. The Question: Could your firm survive an employee claim? The first line of defense is education of all employees (whether lawyer or non-lawyer) regarding proper interaction in the workplace. The firm should have education at least annually on these practices and procedures. Additionally, the firm must be vigilant in having policies and procedures to address these issues and should engage employment counsel to help keep the policies and the management current on employment law issues. Beyond these important steps, if a claim does arise, the final line of defense is EPLI coverage. The questions to ask are, “What are our risks from an employment perspective?” and “Could our firm financially survive an employment claim, even if it were just the defense costs alone?” As employment claims continue to increase, so does the likelihood that many small and mid-size firms will have to defend themselves from such a claim. An EPLI policy will help give you the peace of mind that your firm could survive a claim. General Coverage Information: EPLI provides protection for an employer against claims made by employees, former employees, or potential employees. It covers discrimination (such as age, sex, race, disability), wrongful termination of employment, sexual harassment, retaliation, wage and hour disputes and other employment-related allegations such as defamation, negligent hiring, supervision and promotion. EPLI policies generally operate on a claims-made basis. This means that a claim is covered under an

EPLI policy only if the incident related to the claim happens during the policy’s period of coverage, and only if the claim is made during the period. The limits of an EPLI policy are typically eroded by any defense costs. What’s Not Covered: Most, if not all,