The facts
John, an employee for a national health and research foundation, was working at a fundraising event alongside co-workers and volunteers. One of the volunteers at the event, Sarah, suffered a spinal cord injury when she was a child and is confined to a wheelchair. When the fundraising event was over, John took to a social media website to post his frustration about working alongside Sarah. John posted, “I can’t believe I had to work with someone in a wheelchair at the event today, why would they even let her volunteer.”
Sarah saw the social media post and brought it to the attention of the foundation’s executive director. When the executive director did nothing to remedy the situation or discipline the employee, Sarah filed suit against the foundation and the board of directors.
While most employers recognize they have a duty to maintain a workplace atmosphere free of harassment, they often don’t realize they may be held liable when employees use social media to make discriminatory statements directed at co-workers, volunteers, customers, or vendors. Since the foundation’s executive director failed to take action against the employee, he was held liable.
The result
Sarah sued the foundation and its board of directors for defamation and discrimination, seeking $2 million in compensatory damages. Following two years of litigation and $200,000 in defense costs, the parties reached a settlement and Sarah received $550,000.
Without proper directors & officers coverage, the foundation would have been responsible for paying the settlement out of pocket.
Risk factors
Risk factor #1
Employees voicing their opinions on social media sites and company websites can put organizations at risk of employment claims such as discrimination, harassment and defamation. It is extremely important for non-profit organizations to establish internal and external policies towards technology usage to protect against such claims.
Risk factor #2
Organizations need to address all discrimination allegations as quickly as possible. Ignoring complaints and prolonging the resolution will typically result in a larger payout. Companies should provide written procedures to all employees and volunteers addressing how to file and how to handle complaints.
*The claim scenario is strictly documented for illustrative purposes only and provides an example of what a policy could cover. It is intended to provide a general overview of the program described. Please remember only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions. Program availability and coverage are subject to individual underwriting criteria.
