1. Do High Unemployment + Expansion of Employees’ Rights = More Claims?

2. Singin’ The PL Blues MODERATOR: Aaron Stone, JD, Director, Employment Practice Liability Claims, Travelers PANELISTS: Constance Smith Barker, Esq., Commissioner, U.S. Equal Employment Opportunity Commission Robert Cap, Esq., CPCU, ASLI, RPLU, Managing Director, Markel Mercedes Colwin, Esq., Managing Partner, New York Offices, Gordon & Rees LLP Brett G. Rawitz, Esq., Managing Counsel, Global Labor & Employment Law, McDonald’s Corporation November 11-13, 2009 Chicago, IL

3. Agenda Overview of current EPL Landscape. Discuss why discrimination claims are related to the economy. Effects of recent Supreme Court cases and legislation. Discuss how the current environment has affected the EEOC’s investigations and processing of charges. November 11-13, 2009 Chicago, IL

4. What is driving the increase in claims? November 11-13, 2009 Chicago, IL

5. The Economy November 11-13, 2009 Chicago, IL

6. Increased Public Awareness Media Public Agency Advocacy Employer-mandated notices November 11-13, 2009 Chicago, IL

7. Employee-Friendly Supreme Court Decisions November 11-13, 2009 Chicago, IL

8. What type of claims are we seeing? November 11-13, 2009 Chicago, IL

9. #1 AGEISM November 11-13, 2009 Chicago, IL

10. # 2 RACISM November 11-13, 2009 Chicago, IL

11. #3 RETALIATION November 11-13, 2009 Chicago, IL

12. EEOC Charge Statistics (2007-2008) Source: Jury Verdict Research November 11-13, 2009 Chicago, IL 10,601 32,690 24,582 19,103 26,663 9,396 2,880 24,826 30,510 3,273 28,372 33,937 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 RaceSexNational OriginReligionRetaliation - All Statues Age Charges Filed 20072008

13. Median Award By Defendant Type for Discrimination Cases (2002-2008) TypeAward MedianTotal Range Government$235,000$1-$36,555,000 Entities Manufacturing/ $250,000$1-$25,700,000 Industrial Service/Retail$150,000$1-$11,600,000 Transportation$151,398$1-$53,885,000 Defendant Type,$200,000$1-$53,885,000 Overall Source: Jury Verdict Research

14. Award Trends Comparison for Federal v. State Cases (2002-2008) Source: Jury Verdict Research $381,100 $257,239 $252,184 $173,425 $276,711 $275,000 $150,000 $161,000 $192,381 $164,850 $80,332 $245,000 $231,044 $292,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 AgeDisabilityRaceSexDiscrimination, Other Discrimination, Overall Retaliation Federal State

15. Plaintiff Recovery Probability For State and Federal Cases (2002-2008 ) Source: Jury Verdict Research 62% 63% 60% 54% 57% 61% 56% 53% 59% 54% 58% 63% 01020304050607080 2002 2003 2004 2005 2006 2007 2008 Year Percent State Federal

16. Recent U.S. Supreme Court Rulings November 11-13, 2009 Chicago, IL

17. Gross v. FBL Financial Services Decided June 18, 2009 – Plaintiff bears the burden of proving that age was the “but for” cause of the challenged adverse action, when bringing a disparate treatment claim under ADEA. The Supreme Court based its decision on the plain language of the ADEA which differs from the language of Title VII. ADEA Title VII November 11-13, 2009 Chicago, IL

18. Ricci v. DeStefano Decided June 29, 2009 – Ruled that City could not “reverse- discriminate.” City could not invalidate firefighter promotion exams that had a disparate impact on minority test-takers, simply because the City feared that it would be sued by the minority test-takers who failed the exam. November 11-13, 2009 Chicago, IL

19. Meacham v. Knolls Atomic Power Laboratory Decided June 19, 2008. Reduction in force – 30 out of 31 in protected age class. Based on performance, flexibility and critical skills. Flexibility and criticality most discretionary and had firmest ties to outcomes. RFOA & BFOQ identified as affirmative defenses. Emphasis on plaintiff’s burden to identify discriminatory practice. November 11-13, 2009 Chicago, IL

20. CBOCS West Inc. v. Humphries Decided May 27, 2008. Permits a cause of action for retaliation pursuant to Section 1981. The decision brings Section 1981 into line with Title VII, which provides a cause of action of retaliation. No EEOC filing requirement with Section 1981 discrimination or retaliation claims. November 11-13, 2009 Chicago, IL

21. Future direction of Court? 5/4 Split - What Does That Mean for EPL Anticipated Retirements? November 11-13, 2009 Chicago, IL

22. Recent Legislation and Potential Future Legislation November 11-13, 2009 Chicago, IL

23. The Family Medical Leave Act (FMLA) Amendments Grants an employee up to 26 work weeks of leave to care for a “wounded warrior,” a military service member with a serious illness or injury incurred in the line of duty. Increases employer liability for failing to appropriately designate FMLA leave.

24. The Genetic Information Nondiscrimination Act of 2008 (GINA) Prohibits insurers from adjusting premiums or contribution amounts based on genetic information. Generally prohibits employers from requesting an employee’s genetic information.

25. The Americans with Disabilities Act Amendments (ADAAA) Signed into law by President George W. Bush on September 25, 2008. Took effect on January 1, 2009. Significantly expands the scope of protection available under the 1990 version of the Americans with Disabilities Act (ADA ). November 11-13, 2009 Chicago, IL

26. Lilly Ledbetter Fair Pair Restoration Act Signed into law by President Barack Obama. Permits an employee to recover up two years in back pay from the employer if the pattern of pay discrimination was similar prior to and after the filing of an EEOC charge. Expressly rejects a 2007 Supreme Court decision, Ledbetter v. Goodyear Tire & Rubber Co. November 11-13, 2009 Chicago, IL

27. The Employment Non-Discrimination Act (ENDA) (Pending) A proposed federal law to prohibit discrimination against employees on the basis of actual or perceived sexual orientation. 13 states have enacted laws prohibiting discrimination based on sexual orientations and gender identity.

28. Employee Free Choice Act (EFCA) (Pending) “Card check,” which could practically eliminate secret-ballot elections Union-friendly bargaining rules Increased penalties against employers More NLRB injunctions Would amend the NRLA to provide for:

29. Fair Pay Act of 2009 (Pending) Introduced April 28, 2009 by Sen. Tom Harkin. Amends the FLSA to prohibit payment of wages based on sex, race or natural origin. Different wages allowed only under  Merit Systems  Seniority Systems  Systems that increase earnings based on quality or quantity of production or  Based on bona fide factors the employer proves are job-related November 11-13, 2009 Chicago, IL

30. Equal Remedies Act (Pending) Introduced in 2007 by Sen. Edward Kennedy. Reintroduced to Congress- January 2008 as a section of the Civil Rights Act of 2008. Repeals provisions limiting the amount of compensatory and punitive damages that may be awarded in cases of intentional discrimination in employment. November 11-13, 2009 Chicago, IL

31. How are employers reacting? Participating in training through EEOC Outreach programs for employers. Expanding EPLI coverage. Implementing effective HR practices, to protect against predictions of incoming wave of lawsuits and pending “pro- employee” legislation. Mediating EEOC Charges to maintain confidentiality. November 11-13, 2009 Chicago, IL

32. How are insurers reacting? Providing additional risk management services under EPLI policy  Training  Attorney consultation Providing EPLI coverage specifically tailored to the needs of the business (insured). Exiting the marketplace entirely or certain segments. Greater scrutiny when assessing the risks. Consistently diversifying EPLI portfolio to keep up with demands. November 11-13, 2009 Chicago, IL

33. How is the EEOC reacting? Additional attorneys and investigators hired. Charge filing process made more accessible to the public through internet charge- initiation process. Continued outreach to employers and bar associations through EEOC – provided training. November 11-13, 2009 Chicago, IL

34. Predictions November 11-13, 2009 Chicago

35. Questions & Answers

36. Many thanks to … Aaron Stone Constance Smith Barker Robert Cap Mercedes Colwin Brett Rawitz