The Average Employee Lawsuit costs $250,000…How Safe is your Company?

Employment claims and lawsuits are among the most costly and time-consuming losses facing corporations. In fact, there were 99,922 EEOC charges filed in Florida during 2010, according to Enterprise Florida, the official economic development organization of the state of Florida.

But, is your company really at risk for employee lawsuits?

The answer? Absolutely. During the past five years, 6 out of 10 employers have faced an employee lawsuit. The EEOC secures about $404 million dollars from employers each year.

The Cost to your Company

Employee lawsuits are expensive. An average out of court settlement is about $40,000. In addition, 10 percent of wrongful termination and discrimination cases result in a $1 million dollar settlement. The majority of cases, about 67 percent, are ruled in the plaintiff’s favor when taken to litigation.

Plus, litigation costs are on the rise. During 2008, the average cost of litigation was $115 million. This is up 73 percent from $66 million in 2000, according to a litigation cost survey of major companies, prepared by the Layers for Civil Justice Group, Civil Justice Reform Group and U.S. Chamber Institute for Legal Reform. This is an average increase of 9 percent each year.

Types of Employment Claims

You might wonder, what types of claims might affect your company? The majority of cases are wrongful termination. Here’s a quick breakdown of the most common types of cases:

  • Discrimination (based on race, sex, age, religion or other factors)
  • Sexual Harassment
  • Retaliation
  • Whistleblower
  • Negligent Hiring, Supervision, Promotion and Retention
  • Disabilities
  • Breach of Contract
  • Emotional Distress & Mental Anguish
  • Invasion of Privacy

Plus, here’s something else to consider. Retaliation has become the #1 most frequently cited form of discrimination, beating out race discrimination. Do you need help safeguarding your company from risk? Contact CERS, we can help!

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References 

Libel & Slander

*Retaliation has become the #1 most frequently cited form of discrimination, edging out race discrimination.

Enterprise Florida. Knowledge Center. Retrieved 7/31/12

Layers for Civil Justice, Civil Justice Reform Group and U.S. Chamber Institute for Legal Reform. Litigation Cost Survey of Major Companies. Retrieved 7/31/12 from http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/Duke%20Materials/Library/Litigation%20Cost%20Survey%20of%20Major%20Companies.pdf