Can A Disgruntled Employee Sue Your Title Agency for Discrimination?

The short answer, as many attorneys well know, is “Of course.”

This is America. And as wonderful as it is to live and work in this country, it is also an easy place to be sued. For example, we all know about frivolous lawsuits connected to closed real estate transactions. A party to this type of transaction dislikes their present situation, finds a willing attorney, and sues every party involved in the transaction, including the title or closing agency (sues them for what?). My personal rule of thumb is to celebrate anytime one of these suits can be dismissed for less than $10,000 in attorney fees—because most of the time it ends up costing quite a bit more.

Unfortunately, a disgruntled current employee, former employee, or rejected job applicant does not even need to find a willing attorney. They can report the alleged discrimination, based on race, gender, age, or any other federally protected status, to the Equal Employment Opportunity Commission (EEOC). If the EEOC finds cause for a lawsuit during their preliminary investigation, as it seems they frequently do, they will sue your company. Keep in mind that many states, such as New York, have additional protected statuses.

While your company may not have experienced such a suit in the past, I urge you to prepare. The old guard of experienced title professionals are retiring, and growing title companies frequently turn to new and non-traditional hires to fill out their workforce. While many of these newer hires will be great contributors, others will almost certainly be unhappy. Younger employees typically do not hold their employers in as high regard as older generations, making the possibility of a lawsuit from a disgruntled person very real.

There is insurance for this very risk. Purchasing Employment Practices Liability coverage should be strongly considered. In addition, the quote process will help you better assess your current vulnerabilities. Most importantly, I encourage each of you to consider the following steps to better understand and manage your risk.

  1. Review your employee handbook. Is it in compliance with current Federal and State law? It should be updated yearly, if not more often, as the law changes.
  2. Review your actual hiring, firing, and discipline practices. Now that you know what the handbook says, what actually happens in practical situations?
  3. Train your managers. While I do not appreciate the government forcing businesses into a particular action, New York State’s mandatory Sexual Harassment Training is a good example of what business leaders need to proactively teach their managers. Identifying and properly handling discrimination is not an innate skill. You must teach your team, or they will make it up as they go along.

While I am not an HR professional or an attorney, I would be happy to provide readers of this article with some high-level feedback on their current exposure to this risk. These lawsuits can absolutely be prevented and controlled for minimal impact when they do occur. But proactive action is required and today is a good day to start. Contact us today to learn more.

James Dick, CPCU, AAI