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URGENT
NOTICE Employment
Practices Liability Insurance (EPLI) provides legal defense
and judgment coverage (to the extent legally permitted) for
the following allegations:
Most
policies afford coverage for wrongful termination and/or discrimination
to an employee when not related to a Workers' Compensation claim
however, specific petitions can be made by an injured employee
for substantial benefits and, therefore, coverage must
recognize an act of discrimination resulting from a Workers
Compensation claim. An
employee may file a petition alleging the employer has
discriminated against him/her as a result of his/her Workers'
Compensation claim, in violation of Section 132A of the Labor
Code. Workers' Compensation coverage excludes this as a
non-insurable loss and does not impose a duty to defend a
claim, proceeding or suit. Labor Code Section 132a
prohibits employers from discriminating against employees who
are injured in the course and scope of employment, When
an injury of this kind results in disability, the courts have
held that section 132a prohibits discrimination based on the
disability. An
employer violating Section 132a is guilty of a misdemeanor and
the employee's compensation shall be increased by one-half,
but in no event more than 10,000., together with costs and
expenses not in excess of $250. The employee may also be
entitles to reimbursement for lost wages, work benefits and
reinstatement. Prior
to 1998, Section 132a was the exclusive remedy for an
employee. A case involving the City of Moorpark held
that Section 132a does not provide exclusive remedy and does
not preclude an employee from pursuing Federal Employment and
Housing Administration (FEHA) and common law wrongful discharge remedies. FEHA
includes detailed definitions of "physical
disability" and "mental disability" that make
no reference to Workers' Compensation law. The
litigation costs to defend FEHA claims are significantly
higher than actions brought under 132a. The California Manufactures
and Technology Association (CMTA) issued a warning to
employers on July 31, 2006 to be aware of potential lawsuits
under the Fair Employment and Housing Act. "The
California Applicants Attorney Association" (CAAA), the attorneys who represent injured workers, have
begun to focus on the FEHA in their search to recoup lost
income from reforms in Workers' Compensation", CMTA lobbyist,
Jason Schmelzer, said in a "Capitol Update" posted
on the associations website. Schmelzer
said FEHA cases could involve return-to-work issues for
injured workers who cannot return to their normal jobs.
Once an injured worker is told by his doctor that he cannot
return to his usual and customary job duties, the employer is
obligated to engage in an interactive process to determine when
the worker can return to a modified position.
Applicants' attorneys ha e identified this process as a
potential strategy for additional litigation in Workers'
Compensation claims during multiple public forums.
Schmelzer concluded saying "as the Workers' Compensation
reforms continue to take hold, and costs continue to decrease,
those that benefited from the inefficiencies of the old system
will be looking for new ways to profit from the new one.
FEHA lawsuits are one method that may be used to accomplish
this goal". Workers'
Compensation policies do not provide coverage for Section
132a, FEHA and common law wrongful discharge and
discrimination claims. We recommend you obtain confirmation
of coverage for actions brought against
dealership arising from injured workers filing petitions for
Section 132a and FEHA claims from the insurance carrier
providing your EPLI policy. Please
contact our office if you have any questions or would like
assistance with a comprehensive evaluation of your current
Employment Practices Liability Insurance coverage.  
OR Call
Randy Foster (800) 936-7837
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EMPLOYMENT
PRACTICES
LIABILITY
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