According to the EEOC, employment discrimination lawsuits are on the rise. While this can be alarming to a cannabis business owner I should point out that not all discrimination is illegal and worthy of a lawsuit. An employer can “discriminate” against and fire an employee that doesn’t show up to work on time, an employee that consistently makes mistakes, people who are not qualified, or employees that wear see through shirts. Illegal employment discrimination is limited to a few specific issues, some more prominent than others. Title VII is the Federal Civil Rights Law that prohibits employment discrimination on the basis of race, color, gender, national origin, and religion. Sexual harassment falls under Title VII as well and connections for sexual harassment and employment discrimination are typically tied to gender.
Why is employment discrimination rising and what can cannabis businesses do about it? There are multiple reasons why there are increased law suits. One of the main reasons is awareness. Title VII is more than 50 years old, and many people are just unaware of what the laws mean or say. As information spreads about what employees rights actually are, the employees ability to recognize discrimination past and present increases. What this also means is that there may not be an increase in bad behavior, but just better acknowledgment of a consistent level of bad behavior. There is also increased coverage of employment discrimination in the news media. The news is on a 24 hour cycle that must be filled with information. News outlets are reporting more on the outcomes of not only major corporations but also government entities, and sometimes even small businesses as well. More coverage brings more awareness, see previous statement on awareness.
A 2017 survey by New Frontier Data that explores gender and racial diversity suggests the cannabis industry is better poised than others to tackle issues like gender disparity and sexual harassment head-on, due in no small part to the higher-than-average ratio of women in leadership positions.
The survey results revealed 27 percent of respondents had witnessed sexual harassment within the cannabis industry. And nearly 18 percent had personally experienced harassment. When the information was filtered to reflect the opinions of only women in non-leadership positions, that number rose to about 49 percent, however.
Kveton was accused of sexual harassment in a series of civil suits, which were resolved under undisclosed terms. Kveton never faced criminal harassment charges. He resigned from MassRoots two months after taking the position with 1.55 million shares of stock, $20,000 for his term and a $25,000 severance.
We know the problem and risk, which is rising employment discrimination, so how do cannabis business owners protect their companies and investments? Employment Protection Liability (EPLI) is how businesses protect themselves when a situation with an employee goes wrong and the business must protect themselves. “As you hire more employees, your risk of discrimination and sexual harassment increases, an EPLI policy can help your legal defense and settlement of such claims” – Eric Rahn of S2S Insurance. EPLI is a type of insurance aimed at protected companies and employers from legal action that arises out of employment practices. EPLI covers judgments, settlements, and defense expenses up to the specified policy limits for a company. With the climate of increased awareness and information cannabis business owners should reach out to S2S Insurance today to discuss risk management tools and options to protect their business.