ERPL: Looking Beyond The Loss Ratio (excerpted & heavily edited)

Note: This is an article excerpt of an interview with Joanna Grossman, an associate professor of law at Hofstra Law School in Hempstead, New York. Previously, Professor Grossman taught at Tulane Law School. She graduated with distinction from Stanford Law School. She has served as a staff attorney at the National Women's Law Center in Washington, D.C., where she litigated cases involving sexual harassment in schools, employment, and prisons. She has written about sexual harassment, race discrimination in employment, women's jury service, and the history of marriage, guardianship, annulment, and adoption. Her other research interests include sex-based discrimination, trusts and estates, and legal history.

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When defending an ERPL claim, insurers prefer a defendant who has attempted to address adverse workplace issues. Therefore, it is appropriate that insurers step outside of their focus upon loss ratios. They must understand workplace issues from the standpoint of employers as well as providers of ERPL protection.

RN:How has the workplace environment changed over the last few years?

Grossman:Almost all employers now have written policies and grievance procedures designed to deal with the problem of harassment. Many also offer anti-harassment training or take other preventive measures. Unfortunately, one of the lessons for researchers in this area is that despite increased precautions and awareness, the actual level and frequency of sexual harassment has not changed much over time.

RN:What are some of the consequences of sexual harassment?

Grossman:Studies and surveys show that many victims experience physical effects such as headaches, weight gain, insomnia, lethargy, panic attacks, and stomach problems. Many also experience emotional effects including depression, anxiety, insecurity, confusion, low self-esteem, guilt, isolation, anger, fear, thoughts of suicide, and post-traumatic stress disorder.

RN:What mistakes do employers sometimes make in their efforts to address harassment problems?

Grossman:There are many mistakes employers make in dealing with the problem of harassment that may create or increase their liability. An extremely common mistake is for employers to focus only on sexual harassment and ignore other illegal conduct like harassment on the basis of race. The rules of liability discussed in this interview apply with equal force to any type of harassment on the basis of a prohibited characteristic, which, under Title VII, includes race, color, national origin, sex, and religion.
Many employers conduct inadequate investigations, a mistake that will haunt them in lawsuits

RN:Does it make sense for an insurer or risk manager to have a goal beyond encouraging the client or employer to establish an affirmative defense?

Grossman:Insurers should encourage employers to undertake measures that are encouraged, but not required by law. For example, studies show that anti-harassment training has the potential to affect both attitudes and behavior in the area of harassment. It is thus sensible for employers to offer such training to their employees, particularly to those in supervisory positions.

RN:Do you see how insurance companies might help improve employer involvement in creating harassment-free workplaces?

Grossman:Insurance companies issuing EPRL policies should insist that employers not only take the basic steps required by law to sustain the affirmative defense, but also that they think self-critically and creatively about what might be necessary to really squelch harassment in their workplaces.

RN:Considering that harassment issues are dominated by various Acts (ADA, EEOC, Equal Rights, etc.), is it realistic to expect employers/insurers to be concerned beyond creating procedures denoting compliance?

Grossman:Although employers do have to comply with a variety of federal and state anti-discrimination laws, they should not focus only on minimum compliance but also on setting higher standards for themselves. Treating employees fairly and decently, even where the law does not require it, can help employers in tangible ways beyond simply the avoidance of lawsuits.

RN:Is there a profile of a company or industry where sexual harassment is more likely to occur?

Grossman:Harassment is everywhere. Recent cases in the news have revealed terrible problems of harassment in a wide range of industries, from car manufacturers and pharmaceutical companies to cruise lines. My hope is that employers will look beyond mere compliance with the law and really tackle the tough questions about why harassment persists despite their efforts.