Alaska Employment Law

If an employer has an Employment Practices Liability Insurance policy, what event triggers the employer’s duty to notify the insurance company - an oral complaint, an internal grievance, notice of a charge with the EEOC, receipt of a Complaint?

The answer is that it depends on the definition of “claim” in the policy.  In a recent case, that meant that the employer should have notified the carrier of receipt of an EEOC notice that it could participate in mediation of a recently-filed charge.  The employer, instead, declined mediation, filed a position statement with the EEOC, and told the carrier about the claim only two years later, when it was served with a summons and Title VII Complaint in federal court.  The District Court entered judgment for the carrier, finding that the employer had breached its duty of cooperation under the policy, which defined a claim to include a “formal administrative or regulatory proceeding commenced by the filing of a notice of charges, formal investigative order or similar document.”  The Court held that an EEOC offer of mediation triggered the duty of notification, given the possible prejudice to the carrier from rejecting the opportunity to mediate.

American Center for International Labor Solidarity v. Federal Insurance Company, 2007 WL 2985006 (D.D.C. Oct. 15, 2007).

H/T: Connecticut Employment Law Blog