I have some bad news club owners. The next claim or lawsuit you will experience will very likely come from your own employee. The new hot issue for attorneys this year is “employment” related law. Now for the really bad news; your workers compensation and liability insurance won’t protect you.
If you have read any of my previous articles, you already know that I am not a big fan of the Trial Lawyers Association. Litigation in this country is running rampant and too many people have adopted the battle cry, “It’s not my fault”. Whether it involves a member who falls on a treadmill, or an aerobics instructor who has been fired because of frequent tardiness, we are forced to deal with the backlash of these individuals who refuse to admit accountability. Your liability insurance policy is designed to protect you from a member suing you, but club owners are wide open to litigation involving their employees and independent contractors. If you don’t think that it could ever happen to you, think again. All it takes is just one disgruntled employee to ruin your day or worse yet, your business.
Over the past couple of years, we have seen a significant increase in claims brought against club owners for sexual harassment and discrimination. How many of you have Anti Sexual Harassment and Anti Discrimination Guidelines posted in your office? How many of 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 pervert employee’s 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.
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 and even today, the vast majority of club owners don’t understand the ramifications of what an employment related lawsuit can do to their business. Frequently, these lawsuits are accompanied by a complaint filed with the Equal Employment Opportunity Commission (EEOC). This bureaucratic agency tends to take the attitude that you are guilty until proven innocent. They are not nice people to deal with. Even if a claim is completely without merit, employment related litigation can be costly, time consuming, and emotionally draining.
There are two steps that you can take to address this problem. The first and most important step would be to develop, update, or purchase an Employee Manual. I HIGHLY recommend that you purchase this through the NFBA. The manual outlines in detail what is expected of your managers and employees and will also provide you with anti discrimination and anti sexual harassment policies.
Now that you have an employee manual and have established good controls 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.
In summary, 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. Here is a little hint; don’t date your staff!
Please contact Jillian at jillian@teamnfba.com for the latest version of the Employee Manual System and contact Jennifer Dangar at jldangar@clubinsurance.com if you would like information about Employment Practices Liability Insurance.
