Notebook: No Size Advantage
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Notebook: No Size Advantage

When it comes to employment-related lawsuits, small companies are not immune to these costly claims.

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Often the smallest of small businesses operate under the false assumption they are immune to the problems and internal workplace turmoil that challenge larger-sized companies with more expansive staffs. However, a recent legal trend with employment-related claims renders small businesses just as vulnerable to this costly litigation.

ASCA legal eagle Josh Ferguson says prior to the COVID-19 pandemic the legal world was seeing a significant increase in lawsuits filed by employees alleging sexual harassment, age and disability discrimination in the workplace. While the pandemic and societal shutdown temporarily cooled this trend, Ferguson says as more and more people return to the work environment, the legal community is starting to see these employment-related claims make a comeback.

And company size, he says, doesn’t matter.

“The statistics bear out that a business is likely to get an employment claim once every three years,” says Ferguson, the ASCA’s general counsel and Partner and Co-chair of Freeman, Mathis & Gary LLP’s Philadelphia office. “And that’s for an average-sized business of 10-20 employees. This increases dramatically as you go up from there [in the number of employees].”

And employment-related claims can be expensive to resolve, which could be devastating to a smaller-sized snow-and-ice operation. The potential exposure on an employment claim is even greater than on a negligent slip-and-fall, Ferguson says.

“You could have a $5,000 resolution to the plaintiff on a small failure-to-promote claim, but then you have to pay their attorney $20,000 and your loss runs reflect a $25,000 claim,” he says. “Or it may be even more because you could potentially have to pay your defense attorney. And that’s even if you have the proper [Employment Practices Liability Insurance (EPLI)] policies … If you don’t, then you’re looking at some serious out-of-pocket expenses down the line.”

So how do businesses – large and small – best defend against these claims? Documentation. Just like in safeguarding against culpability in slip-and-fall lawsuits, Ferguson says the same strategy is true for employment-related claims.

“You need documentation to protect yourself,” he says. “As we learned with slip-and-fall claims, to protect yourself, your insurance provider and your business you need documentation.”

Ferguson is a featured speaker at the 2021 Executive Summit Aug. 2-4 at the Omni Amelia Island Resort, and will be addressing this topic along with a number of other critical legal issues impacting the professional snow and ice management community. CLICK HERE for further details on attending this year’s Executive Summit.

Mike Zawacki is editor of Snow Magazine.