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MAJORITY OF FIRMS HIT BY EPL SUITS

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SAN DIEGO-Six out of 10 companies have been named as defendants in at least one employment-related lawsuit in the past five years, a new survey of human resources professionals finds.

In addition, 23% of respondents also say individuals at their organizations have been sued in connection with employment-related claims.

In spite of the level of litigation, most human resource professionals surveyed believe employment-related lawsuits are without merit, according to the survey of members of the Society for Human Resources Management.

When asked whether the "majority of employment-related litigation cases today are legitimate claims," nearly three-quarters, or 74%, said they disagreed or strongly disagreed.

"The employee rights revolution is alive and well," said Michael J. Lotito, managing partner of the San Francisco law firm Jackson, Lewis, Schnitzler & Krupman, at a press conference held during SHRM's 49th Annual Conference and Exposition, June 22-25 in San Diego. The "1997 Employment Litigation Survey" was conducted jointly by SHRM and the law firm.

"Employers must take preventive measures to avoid such lawsuits," he said.

For example, "firms must provide proper training and explore strategies such as alternative dispute resolution to resolve disputes before they become costly and time-consuming," Mr. Lotito said.

"And businesses must be alert for potential liability due to growing workplace privacy concerns," he said.

Mr. Lotito pointed out that 22% of respondents said their organizations had purchased employment practices liability insurance, though 31% did not know if they had such insurance.

"This underscores that HR may not be in communication with the risk side" on this important issue, he said.

The survey also found:

Nearly half of the 611 suits reported involved a discrimination claim of some sort, with the biggest sources of such claims being allegations of race or national origin discrimination and age discrimination.

One-third of the reported claims involved allegations of wrongful termination. That was followed by claims of sexual harassment, 14%; claims alleging a National Labor Relations Board charge or a Family and Medical Leave Act violation, 6%; workers compensation or wrongful death claims, 6%; and wrongful retaliation, 5%. Respondents in some cases cited multiple reasons for claims.

The majority-80%-of the 611 employment-related lawsuits were filed by former employees, while 14% were filed by current employees and 3% were brought by unsuccessful candidates for employment. The remainder of the respondents did not specify who brought the lawsuits.

Approximately 35% of the suits were resolved by reaching a settlement or private agreement, while 12% went to trial and 9% were dismissed. Twenty-five percent are still pending, according to the survey. The remainder did not specify how the cases were resolved.

Only 21% of employers said they use alternative dispute resolution techniques to resolve such claims. Of that 21%, ADR is used for some claims at 11% of the respondents' companies, while only 4% said they always use ADR. The remainder did not specify.

In some cases, ADR is mandated as part of employment agreements signed by employees when they begin work, respondents said. Twenty-nine percent of human resource managers said their organizations require employees to sign employment agreements as a condition of employment. Of those, 14% have mandatory ADR clauses.

The survey was based on 616 responses from the 4,900 randomly selected SHRM members who were mailed the survey in March.

Copies of the survey are available for $70 for non-members and $50 for members of the Society for Human Resource Management 606 N. Washington St., Alexandria, Va. 22314; 703-548-3440; fax: 703-836-0367.