Management Liability Insights for 2025: The changing landscape of employment claims

By Angela Roberts

The post-pandemic workplace has brought significant changes to the employment liability landscape. Disability discrimination and retaliation claims have emerged as some of the most complex and frequent issues, often stemming from evolving workplace dynamics, heightened regulatory expectations, and procedural missteps.

In fact, the U.S. Equal Employment Opportunity Commission (EEOC) received over 81,000 new discrimination charges last year—a 10.3% increase from the previous year—securing more than $665 million in monetary relief for victims. While gender discrimination and sexual harassment claims have declined since their peak several years ago, they continue to pose risks, especially as employees return to in-person work environments.

Disability claims require employers to navigate the broad legal definitions of "disability" and comply with intricate processes for accommodations. Questions such as “What constitutes a reasonable accommodation?” or “How long should a position remain open for extended leave?” can leave employers vulnerable to liability if not addressed thoroughly. Missing even a single step—such as failing to document restrictions or communicate updates—can quickly escalate into costly legal disputes.

Retaliation claims, often accompanying discrimination and harassment allegations, further complicate the landscape. Poorly timed actions, such as altering job duties or terminating an employee after they raise a workplace concern, can create the appearance of retaliation, even when based on legitimate performance issues. These claims are particularly challenging to resolve early in litigation and can significantly increase financial exposure.

Businesses navigating these challenges must balance operational demands with legal compliance. Proactive strategies, including clear documentation, effective training programs, and tailored EPLI coverage, are critical to minimizing risks and fostering a compliant workplace culture.

Proactive strategies for managing employment risks

Managing employment liability risks requires a proactive and strategic approach. By focusing on strengthening internal processes, investing in employee education and leveraging the protections offered by EPLI, businesses can reduce their exposure to costly claims while fostering a culture of compliance.

     1. Build a foundation of documentation

Thorough documentation is the cornerstone of defending against employment claims. Without detailed records of performance issues, accommodation requests and decision-making processes, disputes often favor employees. For example, in states with stricter leave and accommodation laws, such as California, insufficient documentation can attract heightened scrutiny from plaintiff attorneys and undermine defense efforts.

Employers should implement standardized practices to document all employee interactions consistently and securely. Proper documentation not only protects against potential claims but also supports informed decision-making, ensuring organizations are well-prepared for potential legal challenges, whenever they arise.

     2. Train to prevent

Knowledge gaps among employees and managers often lead to costly missteps. Training programs addressing disability accommodations, workplace harassment and wage and hour compliance can empower employees at all levels to handle complex workplace issues effectively.

For instance, training on navigating leave laws and proactive communication can prevent accommodation requests from escalating into disputes. By regularly educating staff, businesses foster a culture of awareness and accountability while reducing the likelihood of claims. A well-trained workforce builds resilience and compliance, ensuring better outcomes for organizations.

     3. EPLI and panel firms

Selecting the right legal counsel is crucial when managing employment claims. Law firms with expertise in employment practices liability and insurance defense can significantly improve outcomes by aligning with a business's resolution strategies. Experienced panel attorneys understand the nuances of employment law, the risks associated with fee-shifting statutes, and the importance of early resolution to avoid prolonged litigation and excessive costs.
Employers should work closely with their insurance providers to identify panel attorneys who share a commitment to efficient, cost-effective claim resolution. This strategic choice can streamline the defense process and provide businesses with a greater chance of favorable outcomes.

     4. Leverage EPLI for comprehensive protection

EPLI provides a safety net for businesses facing the financial and reputational risks of workplace claims. A robust policy covers defense costs, settlements and damages tied to allegations such as discrimination, retaliation, wrongful termination and harassment.
Additionally, EPLI can cover ancillary costs, such as investigative expenses, offering businesses the resources needed to manage claims efficiently. For companies operating in high-risk industries or regions, tailored policies provide essential protection against unpredictable challenges. Businesses that prioritize understanding and leveraging their EPLI coverage ensure they are prepared for unforeseen liabilities.

Take charge of employment risks

Employment-related claims, particularly those involving disability and retaliation, are increasingly costly and complex for businesses across industries. However, with proactive risk management strategies, comprehensive insurance coverage and ongoing employee training, employers can reduce their exposure and foster a compliant workplace environment.
To dive deeper into these challenges and strategies, listen to IAT’s What’s Brewing episode on Management Liability Insights here.