2005 PLUS International Conference The New Face of Employment Litigation: Class Actions and Beyond Lucy Ann Galioto VP - National Union/AIG David Keenan VP – EPL Claim Manager, Chubb John Lozada Chief of Enforcement, Mass. Comm. Against Discrim. Jack McCalmon, Esq. Partner: Titus, Hillis, Reynolds, Dickman & McCalmon Philip R. Voluck, Esq. Partner: Kaufman, Schneider & Bianco, LLP Lucy Ann Galioto VP - National Union/AIG David Keenan VP – EPL Claim Manager, Chubb John Lozada Chief of Enforcement, Mass. Comm. Against Discrim. Jack McCalmon, Esq. Partner: Titus, Hillis, Reynolds, Dickman & McCalmon Philip R. Voluck, Esq. Partner: Kaufman, Schneider & Bianco, LLP

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND AGENDAAGENDA  Explore Current Trends In Employment Litigation (Lucy)  Impact of Class Actions (Dave)  State and Federal Protections in the Workplace (John)  Loss Prevention Strategies (Philip)  Explore Current Trends In Employment Litigation (Lucy)  Impact of Class Actions (Dave)  State and Federal Protections in the Workplace (John)  Loss Prevention Strategies (Philip) Jack McCalmon, Esq. – Titus, Hillis, Reynolds, Dickman & McCalmon

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Overview of 2004 EEOC EPLI Statistics  Employees filed 79,432 charges in FY  This presents a decrease in the number of charges filed when compared to those filed in FY 2002: 84,442 and 2003: 81,293.  This decrease is the result of more plaintiffs filing state charges where there are no caps on punitive damages.  During 2004 the EEOC recovered a record $419 M in compensatory damages for employees.  $251 M was recovered through pre-litigation resolutions and $168 M was recovered through lawsuits filed in federal district court.  Employees filed 79,432 charges in FY  This presents a decrease in the number of charges filed when compared to those filed in FY 2002: 84,442 and 2003: 81,293.  This decrease is the result of more plaintiffs filing state charges where there are no caps on punitive damages.  During 2004 the EEOC recovered a record $419 M in compensatory damages for employees.  $251 M was recovered through pre-litigation resolutions and $168 M was recovered through lawsuits filed in federal district court.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND EEOC EPLI Statistics  RACE DISCRIMINATION: Employees filed 27,696 charges; EEOC recovered $61 M for these complainants.  SEX DISCRIMINATION: Employees filed 24,000 charges; EEOC recovered $100 M for these complainants.  AGE DISCRIMINATION: Employees filed 17,837 charges; EEOC recovered $69 M for these complainants.  DISABILITY DISCRIMINATION: Employees filed 15,000 charges; EEOC recovered $47 M for these complainants.  RACE DISCRIMINATION: Employees filed 27,696 charges; EEOC recovered $61 M for these complainants.  SEX DISCRIMINATION: Employees filed 24,000 charges; EEOC recovered $100 M for these complainants.  AGE DISCRIMINATION: Employees filed 17,837 charges; EEOC recovered $69 M for these complainants.  DISABILITY DISCRIMINATION: Employees filed 15,000 charges; EEOC recovered $47 M for these complainants.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND EEOC EPLI Statistics  SEXUAL HARASSMENT: Employees filed 13,000 charges; EEOC recovered $37 M for these complainants. 15% of the sexual harassment charges were filed by males.  NATIONAL ORIGIN: Employees filed 8,000 charges; EEOC recovered $22 M for these complainants.  RELIGION: Employees filed 2,500 charges; EEOC recovered $6 M for these complainants.  PREGNANCY DISCRIMINATION: Employees filed 4,500 charges; EEOC recovered $11 M for these complainants.  SEXUAL HARASSMENT: Employees filed 13,000 charges; EEOC recovered $37 M for these complainants. 15% of the sexual harassment charges were filed by males.  NATIONAL ORIGIN: Employees filed 8,000 charges; EEOC recovered $22 M for these complainants.  RELIGION: Employees filed 2,500 charges; EEOC recovered $6 M for these complainants.  PREGNANCY DISCRIMINATION: Employees filed 4,500 charges; EEOC recovered $11 M for these complainants.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND EEOC Litigation Against Small and Mid-Size Employers  Since 2002 the EEOC has aggressively pursued small and mid- sized companies who have allegedly engaged in discriminatory practices.  Many of these settlements have been in excess of $1 M.  Since 2002 the EEOC has aggressively pursued small and mid- sized companies who have allegedly engaged in discriminatory practices.  Many of these settlements have been in excess of $1 M.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Examples of EEOC Litigation Against Small and Mid-Size Employers  Apollo Colors: Apollo Colors, a Chicago paint manufacturer with 200 employees, settled a racial harassment action brought by the EEOC on behalf of African American employees of Apollo Colors for $1.8 M.  NY Lutheran Medical Center at Brooklyn: Hospital settled a sexual harassment suit brought by the EEOC on behalf of female employees for $5 M.  Long Prairie Packing: A Minneapolis packing company with 235 workers settled a male-on-male sexual harassment matter brought by the EEOC on behalf of male employees for $1.9 M.  Apollo Colors: Apollo Colors, a Chicago paint manufacturer with 200 employees, settled a racial harassment action brought by the EEOC on behalf of African American employees of Apollo Colors for $1.8 M.  NY Lutheran Medical Center at Brooklyn: Hospital settled a sexual harassment suit brought by the EEOC on behalf of female employees for $5 M.  Long Prairie Packing: A Minneapolis packing company with 235 workers settled a male-on-male sexual harassment matter brought by the EEOC on behalf of male employees for $1.9 M.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Employment Litigation Statistics  Today 1/5 of the employment practice matters brought to trial result in a plaintiff’s award of $1 M or more.  More than 1 in 5 Americans have experienced employment discrimination according to a FindLaw Survey released July  The 2004 Jackson Lewis Workplace Survey revealed that respondent employers experience an increase in gender discrimination and sexual harassment complaints filed against them:  In % of respondents defended gender discrimination complaints compared to 48% in  In % of respondents defended sexual harassment matters compared to 57% in  Today 1/5 of the employment practice matters brought to trial result in a plaintiff’s award of $1 M or more.  More than 1 in 5 Americans have experienced employment discrimination according to a FindLaw Survey released July  The 2004 Jackson Lewis Workplace Survey revealed that respondent employers experience an increase in gender discrimination and sexual harassment complaints filed against them:  In % of respondents defended gender discrimination complaints compared to 48% in  In % of respondents defended sexual harassment matters compared to 57% in 2003.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Employment Litigation Statistics (cont.)  According to USA Today, an estimated 550 employment lawsuits are filed in the United States every day.  57% of the Retaliation claims brought in Federal Court are won by Plaintiffs.  The National Compensatory Jury Award Median for Employment Practices Liability in 2003 was $250 K. That same award in 2001 was $168 K. (Jury Verdict Research 2004)  According to USA Today, an estimated 550 employment lawsuits are filed in the United States every day.  57% of the Retaliation claims brought in Federal Court are won by Plaintiffs.  The National Compensatory Jury Award Median for Employment Practices Liability in 2003 was $250 K. That same award in 2001 was $168 K. (Jury Verdict Research 2004)

JURY AWARDS National Compensatory Jury Award Median for Discrimination Cases ( ): National Compensatory Jury Award Median for Discrimination Cases ( ): 2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Age $255,143 Disability $210,000 Sex $151,625 Race$150,000

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND CLASS ACTIONS

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Mass. General Law 151B: Employment Engaging in harassment and other employment actions based on these factors is unlawful:  Age  Color/Genetics  National origin or ancestry  Disability  Religion  Retaliation  Criminal records (applications only)  Race  Sexual Orientation  Active Military Status  Sex/Gender Engaging in harassment and other employment actions based on these factors is unlawful:  Age  Color/Genetics  National origin or ancestry  Disability  Religion  Retaliation  Criminal records (applications only)  Race  Sexual Orientation  Active Military Status  Sex/Gender

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Complaints by Type Employment 85% Housing 9% Public Accommodation 5% Other 1%

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Sex 24% Race/Color 22% Sexual Orientation 2% Age 11% Children 1% Creed 2% Disability 20% Family 1% Other 8% National Origin 8% Public Assistance 1% Bases of Complaints (100% = 4,323)

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Loss Control  Employee Handbooks  Training  Arbitration Agreements  Audit Pay Classifications and Payroll Products and Policies  Recruit and Maintain a Diverse Workforce  Hold Managers Accountable  CONSULT EMPLOYMENT COUNSEL BEFORE THE DECISION!  Employee Handbooks  Training  Arbitration Agreements  Audit Pay Classifications and Payroll Products and Policies  Recruit and Maintain a Diverse Workforce  Hold Managers Accountable  CONSULT EMPLOYMENT COUNSEL BEFORE THE DECISION!

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND What the Future Holds  Chief Justice Roberts  Justice ___________?  Partnering of Govt. Agencies  More Claims  More Defense Costs  More Settlements  Chief Justice Roberts  Justice ___________?  Partnering of Govt. Agencies  More Claims  More Defense Costs  More Settlements

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Emerging Issues The smoke bomb:  Weyco Inc. terminated four employees because they smoked…on their own time.  21 states do not protect the rights of smokers, including Michigan.  Estimated $157 billion spent annually on medical expenses related to smoking and lost productivity.  Michigan courts do not view nicotine addiction as a disability. The smoke bomb:  Weyco Inc. terminated four employees because they smoked…on their own time.  21 states do not protect the rights of smokers, including Michigan.  Estimated $157 billion spent annually on medical expenses related to smoking and lost productivity.  Michigan courts do not view nicotine addiction as a disability. Jack McCalmon, Esq. – Titus, Hillis, Reynolds, Dickman & McCalmon

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Emerging Issues The obesity bomb:  New Stanford study shows that obese employees earn $3.41 less than non-obese counterparts.  One possible reason: Employers believe obese workers cost more than non-obese in health care costs.  90% of American men and 70% of American women become overweight at some point in their life.  31% of U.S. adults are obese.  Obesity is claimed to increase health care spending by 10x.  Costs $1244 more per year to treat an obese person.  Obesity tied to a 64% increase in diabetes.  Fraser v. Goodale, 342 F.3d 1032 (9th Cir. 2003), eating is declared a major life activity. The obesity bomb:  New Stanford study shows that obese employees earn $3.41 less than non-obese counterparts.  One possible reason: Employers believe obese workers cost more than non-obese in health care costs.  90% of American men and 70% of American women become overweight at some point in their life.  31% of U.S. adults are obese.  Obesity is claimed to increase health care spending by 10x.  Costs $1244 more per year to treat an obese person.  Obesity tied to a 64% increase in diabetes.  Fraser v. Goodale, 342 F.3d 1032 (9th Cir. 2003), eating is declared a major life activity.

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Emerging Issues The chicken bomb:  When the Asian bird flu crosses over, how will employers react to employees afflicted? The chicken bomb:  When the Asian bird flu crosses over, how will employers react to employees afflicted? Jack McCalmon, Esq. – Titus, Hillis, Reynolds, Dickman & McCalmon

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Questions & Answers Jack McCalmon, Esq. – Titus, Hillis, Reynolds, Dickman & McCalmon

2005 PLUS International Conference THE NEW FACE OF EMPLOYMENT LITIGATION: CLASS ACTIONS AND BEYOND Thank You!  Lucy Ann Galioto  Vice President, National Union/AIG  David Keenan  VP – EPL Claim Manager, Chubb  John Lozada  Chief of Enforcement, Mass. Comm. Against Discrim.  Jack McCalmon, Esq.  Partner: Titus, Hillis, Reynolds, Dickman & McCalmon  Philip R. Voluck, Esq.  Partner: Kaufman, Schneider & Bianco, LLP  Lucy Ann Galioto  Vice President, National Union/AIG  David Keenan  VP – EPL Claim Manager, Chubb  John Lozada  Chief of Enforcement, Mass. Comm. Against Discrim.  Jack McCalmon, Esq.  Partner: Titus, Hillis, Reynolds, Dickman & McCalmon  Philip R. Voluck, Esq.  Partner: Kaufman, Schneider & Bianco, LLP