Well-meaning leaders who are busy with the everyday operation of their business are not aware that the most vulnerable employees, who may be aware of misconduct, may not feel safe in reporting problems.  Even leaders who would unquestionably “do the right thing” if misconduct was reported to them often are surprised to find out when something bad happens that one or more of their rank-and-file employees was aware of but did not feel comfortable reporting the issue. 

Internal personnel (such as HR professionals) and outside legal counsel, no matter how good they are, often cannot protect the business adequately because they are viewed as biased by those who are subjected to or know of misconduct. 

• Fear of retaliation is natural for a whistleblower about workplace misconduct or unlawful behaviors.  Additionally, employees who are, or believe they have been, wronged at work are inherently distrustful of the employer’s resources for solving problems.  Employees often choose to sue their employers because they don’t trust internal reporting, investigation and disciplinary processes.
  
• Employers’ designated internal investigators commonly lack periodic training and utilization of uniform interview guidelines and investigation protocols.
  
• Particularly when defending claims of discrimination, retaliation or unfair work practices, employers are typically unable to show uniform interview and investigation processes.  Moreover, employees typically have a lack of understanding about the employer’s plan of action for investigating complaints of work-related misconduct.  In house or outside legal counsel can be perceived to be concerned primarily in protecting the legal liability interests of the employer, as opposed to the interests of the wronged employee.  Similarly, in-house human resources and upper level management may be perceived as too closely connected to high-profile employees if they are accused of misconduct.
  

At an alarming rate, former and current employees sue employers for harassment, discrimination, retaliation, wrongful termination, constructive discharge, failure to promote and wrongful demotion.  Most employee-driven lawsuits demand tens-of-thousands of dollars for damages, and the costs to defend these claims quickly skyrocket.

Employees often file and win lawsuits without complaining to the employer first.  After quitting, an employee may allege the “real reason” for the departure is the hostile work environment or other form of misconduct he or she was subjected to.   After termination, an employee may claim that performance declined because of unlawful or unfair work practices.

Former employees often can demonstrate that the employer did not have the policies and training that created sufficient protection and trust so that problems could be reported during the working relationship.  In litigation, internal leaders must overcome charges of bias when trying to defend the policies and procedures they put in place for internal reporting, investigation and resolution processes.  

Employers typically make the mistake of thinking they adequately protect their employees by publishing policies and reporting procedures.  All employers think they have an “open door” policy for employees to report workplace misconduct or problems.  The “open door,” however, is not as open as employers may believe.

After having prior EPL insurance claims, employers must demonstrate that improvements have been made to reduce the likelihood of future claims.  Proof of independent review and implementation of enhanced personnel policies and practices may be required to obtain or renew insurance coverage. 

EPL insurance premiums likely will increase even if past claimants were unsuccessful in litigation, because the employer was unable to deal with matters in-house rather than at the courthouse.  At a minimum, showing improvements to EPL risk management programs will be necessary to keep the costs of insurance premiums from increasing dramatically.