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ARI Blog: Article

How To Protect Your Company From Employee Litigation

Employee Litigation

As employee-related litigation continues to rise, we thought it would be a good idea to show your contracting company where it is coming from and what you can do to prevent it.

In this post, we want to break down employee-related lawsuit statistics and show you how big of a problem it is becoming for employers here in the U.S.

We will then spend the next two posts focusing on what your restoration contracting company can do to prevent these types of claims from ever happening.

If you have any questions at all, please feel free to contact our agency.


Employment-related litigation remains a significant concern for employers as the number of employment-related cases filed yearly continues to soar. In 2010 alone, the Equal Employment Opportunity Commission (EEOC) obtained compensation and benefits for employees $319 million through litigation and an additional $271.6 million through the informal resolution of EEOC charges[1]. These statistics do not include any settlements, judgments, and litigation expenses for employment claims not within EEOC jurisdiction, such as wrongful discharge, family medical leave, wage and hour, violation of state discrimination laws, and contract actions.

According to Jury Verdicts Research 2007 edition of “Employment Practices Liability, Jury Award Trends, and Statistics:”[2]

  • Employee lawsuits have risen 400% in the past 20 years to 6.5 claims per 1,000 employees annually.

  • The most common targets for Federal discrimination claims are private employers with between 15 and 100 employees (41.5%).

  • In any employment case filed in federal court, there is a 16% chance the award will exceed $1 million and a 67% chance that the award will exceed $100,000; attorney fees are not included.

  • The average compensatory award in all federal court employment cases was $493,534, reflecting a 45% increase since 2000; compensatory prizes do not include punitive damages or attorney fees.

  • If an employment lawsuit goes to trial, plaintiffs win 67% of cases in State and 63% in federal court.

  • The cost to settle an employment lawsuit has grown significantly over the last five years, from an average of $130,476 in 2001 to $310,845 in 2006.

Types of Litigation

Employment-related litigation can come in a variety of ways, but the most common claims are:

  • Harassment

  • Discrimination

  • Unlawful Termination

  • Violation of the ADA (Americans with Disabilities Act).



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