RESTAURANTS ON TRIAL
A white paper by Scott Cooper, CRA member and guest lecturer specializing in restaurant risk Management

More employees are taking sexual harassment cases to court than ever before and winning BIG! Restaurants are paying the price. It doesn’t matter how many employees you have, how broad your benefit plan is or how long your employees have remained loyal. You are a potential target for an employment related claim.

Groping and grabbing in the workplace is as common today as it was before Anita Hill brought sexual harassment to the forefront. But the difference is what’s at stake. Today people claiming they’ve been harassed are going to court and winning huge jury awards at a record pace. Many employers are settling sexual harassment lawsuits before they come to trial for fear that a trial will be more costly for their bottom line, and public image.

Five years ago plaintiffs were limited to monetary awards for wages lost, but in 1991 an amendment to the Civil Rights Act changed that, allowing juries to award money to punish employers for their tolerance of sexual harass­ment, and to compensate employees for pain and suffering. That change lured personal injury attorneys into action. Employment lawyers who had typically handled harassment cases say these personal injury attorneys who won big settlements for accident victims want to do the same for sexual harassment cases.

With more employees aware of their rights and more attorneys eager to represent them, restaurants of all sizes are vulnerable to sexual harassment lawsuits. A single plaintiff sexual harassment case can cost $150,000 or more to defend. The average verdict in favor of an employee is $350,000. Settlements in excess of two million dollars is not unusual.

Small restaurants often ignore the issue of sexual harassment until a problem creeps up. They say “We operate like a family. We are good to our employees and allow them latitude”. These restaurants get into the worst trouble because they didn’t adhere to a strict policy or worse, didn’t even have a sexual harassment policy! They are learning that they need to have standards, and enforce those standards to avoid problems as if they were a restaurant chain.

About sexual harassment:

• Approximately 56% of American men & women claim to have witnessed uninvited and unwanted sexual teasing.

• 82.2% of complaints are women harassed by men, 17% arc men harassed by women and 14% are same sex harassment.

• In more than half of the incidents a settlement is reached before the case goes to an administrative or judicial forum.

• In LOS ANGELES COUNTY sexual harassment and wrongful termination suits are being filed at the rate of 300 per month.

Tips to kelp avoid sexual harassment cases and resolve issues quickly, companies should:

1. Develop a strong policy against sexual ha­rassment.

2. Create a clear awareness of your policy and post in prominent locations.

3. Train personnel (using video tapes, train­ing material, etc.)

4. Keep policy current - update as needed.

5. Monitor compliance to your policy with a proactive program.

6. SECURE AN EMPLOYMENT PRACTICE LIABILITY INSURANCE POLICY! Even with all the above steps, you could be involved in a lawsuit regarding sexual harass­ment, or one of the other situations covered by such a policy. Don’t risk losing your business!

 
What EMPLOYMENT PRACTICES LIABILITY Insurance Covers:
- Sexual Harrasment
- Discrimination
- Wrongful Termination
- Americans With Disabilities Act
- Whistleblower Claims

Discrimination:
On April 2, 1996 the Wall Street Journal head­lined a Supreme Court decision, “Supreme Court Expands Scope of Law on Age Discrimination in Employment”. It was a rare unanimous decision expanding the scope of the Age Discrimination Employment Act, a federal law that has been used frequently by older workers who lose their job or are demoted as corn-panics shrink their work force. The act bans unfavorable treatment based on an employees age, and protects people who are age 40 and older.

• In 1993 - 1994 there were 156,000 discrimination complaints to the Equal Opportunities Employment Commission.

• The complaints: Discrimination due to race, color, creed, national origin, gender, pregnancy, sexual orientation, marital status, religion, age, disability or handicap.

Wrongful Termination:
An employee had a case of Chronic Fatigue Syndrome plus other problems and asked for a leave of absence. After she returned the res­taurant let her go. The result -- a Wrongful Termination suit and a nearly $200,000 settlement! Does your employment manual state your right to terminate employment at will?

TRUE CASE: A lawsuit was filed in Los Angeles Superior Court in early 1997 against a prominent Los Ange­les restaurant. The reason: A waitress asked for one month off but did not state a reason. Upon return the res­taurant did not offer her job back. She is suing the restaurant for physical disability discrimination, retaliatory discharge, violation of Family Care and Medical Leave Act, and inten­tional inflection of emotional distress. Could this happen to you?

Americans With Disabilities Act / Family Medical Leave Act:
Some prohibited questions are:

1. If an applicant voluntarily discloses a dis­ability before being offered a job, the employer may not ask the applicant about the voluntarily disclosed disability.

2. An employer may not ask, at the pre-offer stage, whether an applicant has a disability even if the disability would bar the applicant from the particular position at a later stage of the job application process.

3. At the pre-offer stage, an employer may not ask an applicant if they would need reason­able accommodation to perform a particular job, even if the applicant has voluntarily disclosed that he/she will need a reasonable accommodation to perform the job function.

3. As a general rule, employers cannot ask about current or prior lawful drug use be­cause these types of questions are likely to elicit information about a disability.

Special note: The Skyline Insurance Agency can help you by providing Employment Practices Liability Prevention training, free video tape and policy forms, an Employee Handbook and personal Consulting.

Return to main resource page