Most small businesses consider their employees ‘family’, but if you’ve watched any reality TV then you know that even the closest families can come to blows over disagreements. Over the past couple of years, there have been a significant increase in claims brought against club owners for sexual harassment and discrimination. According to the EEOC (U.S. Equal Employment Opportunity Commission),over 97 million dollars in monetary benefits were awarded in 2013 in the United States.
Wrongful termination, discrimination, invasion of privacy, and sexual harassment all fall under the category of Employment Practices Liability. Up until a few years ago, most business owners never worried about this exposure. Even today, the vast majority of club owners don’t understand the ramifications of what an employment related lawsuit could do to their business. Frequently, these lawsuits are accompanied by a complaint filed with the Equal Employment Opportunity Commission (EEOC). This is not an agency that you want to have a play date with. Even if a claim is completely without merit, employment related litigation is costly, time consuming, and emotionally draining.
Set the Tone
Does your club have Anti Sexual Harassment and Anti Discrimination Guidelines posted in your office? Do you have an Employee Manual? The courts have made it very clear that the “employer” is held accountable for the actions of their employees. For example, if you have a manager or trainer who tends to be a little too “friendly” with your female staff, you could be held liable for that employee’s inappropriate actions. If you allow this type of behavior to exist in your club, you better be prepared to hire an attorney. Again, this type of claim is not covered by your general liability or workers compensation policies.
Set the Expectations
The most effective thing you can do to protect yourself is to develop, update, or purchase an Employee Manual. I highly recommend that you purchase this through the NFBA (National Fitness Business Alliance.) An Employee Manual details what is expected of your managers and employees and will also provide you with anti discrimination and anti sexual harassment policies.
Set the Plan in Place
Once you have an employee manual that establishes appropriate boundaries with your staff, you should consider purchasing Employment Practices Liability Insurance (EPLI). EPLI is a separate distinct policy that is designed to protect the club owner from employee litigation associated with discrimination, sexual harassment, and wrongful termination.
Health club owners need to take employment practices very seriously. Business is tough enough without the added distraction of dealing with the EEOC and your ex-employee’s attorney. You can avoid a lot of headaches if you and your management team treat all employees the same and practice zero tolerance regarding any form of harassment or discrimination.
