Employment Practices Liability: Examples of Claims Scenarios


Hiring qualified employees to work for you can be challenging enough; however, it becomes even more frustrating when you hire people only to realize later they are not the right match for your company. From poor attendance to lousy work habits, there is any number of reasons why you would need to fire your people.

However, no matter how legitimate your reasons are, every termination could result in a lawsuit. For this reason, many companies protect themselves from potential lawsuits with Employment Practices Liability (EPLI) insurance. As a business owner, EPL insurance provides you coverage from claims made by employees accusing you of wrongful termination, harassment, and discrimination based on race, sex, age, disability, religion, and so on. Here are few examples of EPL claims scenarios:

Sexual Harassment

Sexual harassment in the workplace is any advances or conduct that are sexual and most importantly, unwelcomed. It can create an intimidating and unsafe work environment for the harassed person.

An example of a claim would be an employee who is the only female in her department. She could be sexually harassed by her male co-workers on varying degrees – from inappropriate touching to asking her personal questions about her sex life. When she complains to leadership about what is happening, the men retaliate and start to exclude her, affecting her performance at work.

Wrongful Termination

Wrongful termination can take various forms. It includes firing someone based on medical history, discrimination, breach of employment contract, or even personal reasons. While many employment relationships are “at-will,” meaning the employer or employee can terminate the relationship at any time without cause, if the reason for the termination violates federal or provincial laws or anti-discrimination laws, it’s still illegal.

An example of wrongful termination claims is an employee fired after filing a complaint against the company. It is a scenario where the employer retaliates against the employee. Another example is an employee who is terminated because they are susceptible to a particular illness or medical condition. The wrongful termination doesn’t necessarily have to be discrimination-based; it can occur when an employer ends a contract of employment to open the position for someone else.


According to the Ontario Human Rights Commission, discrimination takes place when people are specifically excluded “without a legitimate or bona fide reason.” Discrimination is often based on “negative attitudes, stereotypes, and bias.”

An example of a discrimination claim would be someone who alleges a firing for their sexual orientation. It is against the law for maltreatment or termination because they are gay.

Many employers don’t realize that they are at risk of an employment claim from the very moment they interview a job candidate. Should you decide not to hire the individual, they may allege that you based your decision on their gender, ethnicity, or even the university they attended.

To lower your risk for employment practices liability, know the law. Develop a clearly defined employee handbook that details your workplace policies and procedures. Enforce zero tolerance policy on all forms of discrimination and harassment. Protect yourself with Employment Practices Liability insurance coverage.