This article originally appeared in Anderson Kill's Hospitality Alert (September 2014).
While no employer is immune from employment-related lawsuits, particularly in a sluggish economy, the hospitality industry faces unique, yet recurring, challenges in terms of employment-based claims – and thus is particularly reliant on employment practices liability insurance (EPLI). Because the hospitality industry is among the leaders in workplace diversity, discrimination claims based on race, gender, religious beliefs and sexual orientation are commonplace. Further complicating matters for hospitality employers, employment suits arising out of employees’ use of social media are burgeoning. Additionally, wage and hour class-action lawsuits continue to proliferate, particularly for the restaurant industry, and carry with them the potential for hundreds of millions of dollars in liability. Consequently, prudent companies seeking to minimize exposure for employment-related lawsuits should appreciate the nature of employment practices liability insurance, and how it applies to the emerging trends in hospitality-based employment litigation.