1. Best Practices to Protect Your Company Against Employment-Related Exposures & Liability April 14, 2015

2. REDEMPTION MERCHANDISING STRATEGIES INTERNATIONAL ASSOCIATION OF AMUSEMENT PARKS AND ATTRACTIONS WEBINAR DISCLAIMER IAAPA makes no representations or warranties about the accuracy or suitability of any information in the webinars and related materials; all such content is provided on an “as is” basis. IAAPA HEREBY DISCLAIMS ALL WARRANTIES REGARDING THE CONTENTS OF THESE MATERIALS, INCLUDING WITHOUT LIMITATION ALL WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IAAPA hereby disclaims all liability for any claims, losses, or damages in connection with use or application of these materials. IAAPA does not guarantee, warrant or endorse the products or services of any firm, organization or person. The information contained in these webinars and related materials has been prepared, compiled or provided by IAAPA as a service to its members and is not intended to constitute legal advice or the rendering of legal, consulting or other professional services of any kind. Users of these materials should not in any manner rely upon or construe the information or resource materials in these materials as legal or other professional advice, and should not act or fail to act based upon the information in these materials without seeking the services of a competent legal or other professional.

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5. Best Practices to Protect Your Company Against Employment-Related Exposures & Liability April 14, 2015

7. Presenter Drew Tewksbury, Senior Vice President and Director of Amusement Insurance Resources, a division of Britton Gallagher Over 17 years of risk management and insurance experience. Holds a National Association of Amusement Ride Safety Officials (NAARSO) Level 1 Ride Inspection License Nationally recognized speaker on safety and risk management for the amusements industry

8. Agenda  Increasing monetary exposures  Employment Practices Liability (EPL) insurance specifications, coverage and exclusions  EPL insurance policies  Limiting exposures

9. Increasing Monetary Exposures There were 99,412 charges filed for discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) in 2012.* * Per 2012 data from EEOC (Equal Employment Opportunity Commission) Charge Data System. Includes race, sex, national origin, religion, retaliation, age, disability, and equal pay act harassment

10. EPL By the Numbers 27 % of all winning plaintiffs in EPL* cases are awarded punitive damages averaging just under $3,000,000. 10% of the federal court docket is now comprised of employment law cases. There are over 200,000 EEOC or State Agency Charges per year. Over 20,000 employment related charges go to litigation each year resulting in an average award of $167,000 with average legal fees in excess of $100,000 It is statistically more likely to have an EPL claim than it is a Property or General Liability Claim * EPL = Employment Practices Liability

11. Claims Discrimination claims: –Average Award:Over $490,000 –High Award:Over $12,000,000 Retaliation Claims: –Average Award:Over $494,000 Wrongful Termination Claims: –Average Award:Over $519,000 Sexual Harassment Claims: –Average Award:$350,000

12. Claim Examples Discrimination: ADA* –$3,500,000 jury verdict imposed on a national retail chain after denying a paraplegic job applicant. The individual had been told that the store “had no openings for a person in a wheelchair.” Sexual Harassment: –$900,000 awarded to a female employee in response to a claim that her supervisor sexually harassed her and others and that she was retaliated against when she complained. National Origin Discrimination: –$250,000 awarded plaintiff after alleging he was wrongfully terminated when he complained to his supervisors that co-workers had made disparaging remarks relating to his ethnic background. * ADA = American with Disabilities Act

13. Strategies to Reduce Exposures  As litigation and damage awards costs continue to rise, experts predict that employment liability will only become more complex.  Employers must limit their exposure by focusing on:  Desirable Human Resources policies and practices  EPL insurance coverage

14. Human Resources Policies and Practices

15. Conduct an HR audit to review:  Employee handbook  Recruitment and hiring practices  Disciplinary and termination practices  Performance review requirements  Promotion and demotion procedures  Workplace rules  Training and supervision of employees Limiting HR Exposures

16.  Establish solid recruitment and hiring processes that stress a ‘zero-tolerance’ policy for discrimination and/or harassment.  Institute proper employee orientation.  Establish standard disciplinary action and termination plans.  Keep records and remain consistent throughout all hiring processes. HR Strategies

17.  Job interviews pose additional liabilities if interviewers are not aware of the laws.  All employees involved in supervisory positions should receive additional training, particularly in interview skills.  Educate supervisors/interviewers through periodic training to avoid questions pertaining to the following: ▪Age ▪Religion ▪Race ▪National Origin Recruitment

18.  At-will agreement  EEO statement  Authorizations to verify information  Perform due diligence  Contact references  Check school records  Verify degrees earned  Conduct aptitude testing  Explain and conduct drug/alcohol testing Application of Employment

19. At-Will Employment: Make a job offer in writing – specify position, duties, salary, vacation accrual and stipulations of any bonus or incentive pay. Contract employees:  Be aware of contract breaches  Outline salary in bi-weekly or monthly increments  If stated as annual, may be misconstrued as contract for a year Employment Offers

20. Orient all new hires on the following:  Review employee handbook  Explain all workplace policies and rules  Explain grievance procedure  Require employee to sign and acknowledge information was reviewed and understood Employee Orientation

21. When conducting annual reviews:  Be specific about criticisms, goals for the future, etc.  Be objective versus subjective  Offer positive criticism  Set performance-based criteria Require employees to conduct self-assessments to:  Be part of goal-setting process  Write comments  Sign performance-based criteria Annual Reviews

22.  If an employee’s performance is sub-par:  Outline areas of improvement in writing  Set timelines for improvement  Explain consequences, if no improvement  Institute uniform disciplinary actions:  Actions should be equitable for similar infractions  Review policies and consequences  Increase action in severity  Document all occurrences:  Indicate action taken  Specify employee and results of your actions Enforcing Performance Policies

23. In order to investigate all complaints thoroughly:  Give employees options for reporting grievances, and communicate procedure effectively  Document all phases in writing  File initial report, including date and details  Conduct follow-up conversations  Decide course of action Investigate Complaints

24. Courses of action may include:  Disciplinary  Training  Reassignment of duties  Restructure workplace  Periodic review for employees and supervisors  Workplace polices and rules  Employee handbook  Performance management Courses of Action

25. After failed attempts:  Conduct a review of employee’s personnel file with a labor attorney or legal counsel to identify possible legal ramifications  Proceed with termination or review the disciplinary process Present termination notice calmly and concisely:  Inform employee in person in a private manner  HR representative should be present, as a witness, and present continuing benefit options, such as COBRA  Also consider having security personnel escort the employee out of the building, if necessary. Handling Terminations

26. Reduce your liability by putting the proper procedures in place, communicating them to management and employees and promptly addressing all complaints.  Consider additional employee/supervisor training stressing a zero-tolerance policy for discrimination and harassment.  Utilize written employment policies and best practices.  Thoroughly investigate every incident of harassment; give employees options for reporting grievances.  Conduct objective annual reviews and have employees participate in review process via a self-assessment.  Document all occurrences and remain consistent. Review

27. EPL Insurance Coverage

28. Three main categories of exposure:  Discrimination – age, gender, race, religion  Harassment, including sexual harassment  Wrongful termination  Third-Party Coverage Exposures may also include:  Libel and slander  Defamation of character  Invasion of privacy  Wrongful failure to promote  Numerous others Employment Practices Exposures

29.  Assumptions of coverage  Commercial General Liability (CGL)  Most CGL policies do not cover EPL exposures Are You Covered?

30. A separate EPL insurance policy will protect against the actions of:  Employees  Directors and officers  Volunteers  Corporate entity EPL Insurance Coverage

31. Exclusions include but are not limited to:  Failure to comply with the law  Dishonest acts  Prior knowledge Keep in mind:  Terms vary  Conditions, exclusions and inclusions vary  Review all available options EPL Insurance

32. Claims made policy covers: Any claim defined by coverage that occurs and is reported during the policy period. Occurrence Policy: Coverage reverts back to the policy in which occurrence took place. Claims Made vs. Occurrence

33.  Duty to defend  Selection of defense  Settlement authorization  Binding arbitration Control Litigation Expenses

34. Consider enhancing coverage for:  Automatic subsidiary coverage  ERP-Extended Reporting Periods Typical exclusions:  Prior Acts  Bodily Injury  Intentional Acts Additional Considerations

35. What can we do?

36. Take the first step in reducing your employment practices liability. We can help you:  Secure custom EPL insurance coverage  Conduct an HR audit  Establish loss control procedures & policies  Avoid litigation Working together to reduce employment-related risks! Content © 2007-2012 Zywave, Inc. All rights reserved. Working Together

37. INTERNATIONAL ASSOCIATION OF AMUSEMENT PARKS AND ATTRACTIONS WEBINAR DISCLAIMER IAAPA makes no representations or warranties about the accuracy or suitability of any information in the webinars and related materials; all such content is provided on an “as is” basis. IAAPA HEREBY DISCLAIMS ALL WARRANTIES REGARDING THE CONTENTS OF THESE MATERIALS, INCLUDING WITHOUT LIMITATION ALL WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IAAPA hereby disclaims all liability for any claims, losses, or damages in connection with use or application of these materials. IAAPA does not guarantee, warrant or endorse the products or services of any firm, organization or person. The information contained in these webinars and related materials has been prepared, compiled or provided by IAAPA as a service to its members and is not intended to constitute legal advice or the rendering of legal, consulting or other professional services of any kind. Users of these materials should not in any manner rely upon or construe the information or resource materials in these materials as legal or other professional advice, and should not act or fail to act based upon the information in these materials without seeking the services of a competent legal or other professional.

38. Best Practices to Protect Your Company Against Employment-Related Exposures & Liability

39. Questions? Drew Tewksbury, Sr. VP | Director Amusement Insurance Resources Drew@BrittonGallagher.com (216) 658-7844