Employment Practice Liability Part II: Invasion of Privacy

Invasion of Privacy - TJ Woods Insurance - Worcester MAAs a business, your general liability insurance does not protect you from claims against your professional negligence or the correct performance of your professional duties. A different type of insurance known as Employment Practices Liability Insurance (or EPLI) protects businesses against claims by workers in which they feel their rights have been violated by the company which employees them. Recently, there have been an increasing number of law suits filed against corporations in this category. While large corporations are the most frequent target, smaller companies are also vulnerable to these claims. In this series, we will cover some of the most common specific EPLI claims.

For a more general understanding on employment practice liability, click here; to learn about breach of contract claims, click here.

What is Invasion of Privacy?

Companies are increasingly finding themselves faced with the proposition of claims from employees about illegal invasion of privacy. To understand what invasion of privacy is in a general sense, imagine you left a personal letter on a public bench by accident. If someone picked it up and read it, and returned it to you, it would not be an invasion of privacy. You are in a public place and their actions are in line with what a reasonable person might do. However, if in returning the letter to you, they recorded a conversation with a hidden electrical device without your knowledge or consent, all while in the privacy of your home, that would likely be considered an unreasonable invasion of privacy.

An Employer’s Invasion of Privacy

In an employer-employee relation, the definition of privacy becomes much less clear. An employer must have access to very personal information which few other people, even close friends would have access to. Because of this, the court systems are trying to balance two things at once: the employer has a certain justification for taking the action on one hand and the worker’s reasonable expectations of privacy on the other.

Protecting Your Company from Invasion of Privacy Claims

Because the courts have a unique balancing act on their hands, they look for certain things in these cases. The plaintiff’s legal team will likely try to prove one or more of the four following factors: deception, violation of confidentiality, secret, intrusive monitoring, and intrusion on someone’s private life.

Deception: for instance, if an employee submits to a medical examination, and a urine sample is drug tested without prior disclosure, it would be deceptive to use that as grounds for termination.

Violation of confidentiality: if an employee is told their information will be used for one purpose only, it cannot later be used for other purposes. New information must be obtained.   

Secret, intrusive monitoring: illegal and undisclosed audio or video recordings are the most common examples.

Intrusion on your private life: an extreme example of this would be the hiring of a private detective to follow an employee after work hours.

Obviously, do not practice any of these illegal actions and keep a close paper trail to document everything you do with employee’s information.

Privacy Invasion Insurance

Defense costs and ultimate liability can make invasion of privacy cases very expensive for policyholders. In order to insure yourself, first look at your errors and omissions (E&O) liability insurance policies. They will often provide some coverage. However, if that is not enough, you need to strongly consider EPLI insurance.

Any kind of lawsuits can devastate a company’s finances and morale. Other things EPLI covers are front/back pay, legal fees, compensatory damages, emotional distress, and many others. Since the incidence rate of employee lawsuits is growing, many businesses are adding this coverage. If you have questions about employment practices liability or the insurance that covers it, contact the experienced professionals at TJ Woods Insurance Agency today.