Employee relations can be challenging for staffing agencies because they have such a unique situation. This is due to the fact that their candidates are being placed under the direction of their clients, rather than being directly supervised by the agency itself. This means that technically, when an employee files an employment practices liability claim, the temporary staffing agency and the company where the employee works (or worked) both can be sued.
There is a type of insurance that any business concerned with lawsuits for discrimination, harrassment and the like should have, and it’s called employment practices liability insurance (EPLI or EPL), which is intended to cover most employment-related lawsuits that companies often face.
Common reasons why EPL suits are filed
The list of reasons why an employee might decide to sue the company they work for is a long one. If someone feels unduly harassed by an officer of the company or even another employee, and they feel that the company isn’t doing anything about the situation, then this type of behavior often triggers a claim. In addition, discrimination, whether sexual, racial, or of another nature can lead to a lawsuit as well. People who feel they were passed over for a promotion (this is often the case when someone else is promoted that they feel is “less qualified” for that same position) will want to be compensated for what they feel is an unfair business practice.
Lawsuits also stem from new candidates who aren’t offered a job, employees who believe they were wrongfully demoted or given a negative evaluation, or those who feel they were a victim of libel, slander, had their privacy invaded, or were simply misrepresented in some way. In an environment where so many people come together for a common cause, personality clashes can lead to misunderstandings, or petty mistreatment. EPL has even been the result of telling inappropriate jokes at work or looking at photos or websites deemed lascivious and not proper in a working environment.
If you own or manage a staffing agency odds are you will need employment practices liability insurance. Lawsuits are often filed in situations that seemingly are just fine, and that’s due to the fact that those in charge don’t realize that these tensions even exist.