As a Board member, part of your due diligence includes risk management at your school and making sure you have insurance to cover employment practices liability. While the School Head and Management Team ensure that policies and procedures are in place and implemented, the Board is ultimately responsible for any legal costs that may incur if a case is brought against the school.
The financial impact of a typical claim can be significant for a private school. In addition to the expense of litigation and compensatory damages, these claims can involve punitive damages totaling two or three times the amount of the compensatory award. Even if your school is innocent of any wrongdoing, you can still be sued, and the defense costs can be well over $100,000.
When a school faces an employment practices lawsuit, the problem often is not what the school has done, but what it hasn't. Common-sense employment practices and a comprehensive employee relations plan can make all the difference if you find yourself facing an EPL claim. This plan should include the following elements.
- Clear lines of communication. Develop a personnel manual that encompasses or addresses employment laws. Have outside legal counsel, experienced in employment law, review and update the manual periodically.
- Detailed personnel records. Thorough personnel records can help you prove you have acted responsibly and in good faith with employees. Document all instances of improper conduct, including when the incidents occurred and the disciplinary action taken.
- Fair employee policies. Discrimination claims often arise when employees are treated differently from each other. Adhering to standardized hiring, firing, and promotion procedures can reduce your school’s exposure to EPL claims.
- A system for monitoring any legislative changes. Pay attention to changes in the law concerning employment practices, and make sure the Head and his/her Management Team are aware of any compliance issues. Seek advice from your school’s legal counsel is necessary.
- Insurance. Despite your best efforts to reduce EPL exposures, you may still be sued. EPL insurance can cover such situations.
If your employee relations plan includes these elements, your school will be well prepared for any eventuality involving employment practices liability.
