Proposed Bills Highlight Legal Risks of Sexual Misconduct Claims

In the current climate of sexual harassment incidents being reported in a variety of industries across the country, organizations and their legal departments should be reviewing legislation and considering their legal risks, should they need to defend against sexual harassment or misconduct allegations.

Just this month, in fact, legislation was proposed at state and federal levels to keep employers from trying to silence accusers following mediation and settlements. The

Sen. Kirsten Gillibrand (D-N.Y.)

Huffington Post reported that the bipartisan legislation from Sen. Kirsten Gillibrand (D-N.Y.) and Rep. Cheri Bustos (D-Ill.) would ban employers from holding employees to forced arbitration clauses, which often prevent sexual misconduct survivors from speaking publicly about abuses in the workplace.

Similarly, legislation targeting nondisclosure agreements was recently introduced by state officials in New Jersey, California, New York and Pennsylvania to their respective legislatures. These involve standard confidentiality contracts that companies use in the event of a lawsuit so that the terms of a settlement do not become public knowledge. Depending on if, and with what wording, these bills are passed it will almost certainly affect companies’ and leaders’ policies and behaviors.

Linda B. Hollinshead, a partner in the employment law practice of Duane Morris told Risk Management Monitor that if confidentiality cannot be guaranteed during a settlement, there could be less mediation and arbitration and more courtroom battles as a result.

“If these bills are passed into law, I will be curious to see how employers change the way they handle these issues—because one of the things you hope to buy when you settle, is quiet,” said Hollinshead. “I would presume that if this is the direction in which things are going, employers may become increasingly more vigilant on preventing [misconduct] in the first place.”

Regarding the New Jersey legislation, advocates seem to be pleased with the bill’s introduction but do not disregard the value confidentiality can provide for a victim of sexual misconduct.

“While we are in favor of the intent of the bill, we do want to make sure survivors have the option to confidentiality,” said Patricia Teffenhart, executive director of the New Jersey Coalition Against Sexual Assault. “Many survivors might wish to engage in a nondisclosure agreement, and we need to expand the opportunity for them to have the option to pursue nondisclosure.”

According to XpertHR’s Top 15 Most Challenging HR Compliance Issues for 2018  small, medium and large employers across the country expect sexual harassment to be a top matter of urgency moving forward. The report reminds that misconduct can occur between co-workers, both in and out of the workplace:

Harassment also may involve a wide variety of conduct—physical, written or verbal, as well as conduct over the internet and social media including cyberbullying.

For more legal risks to consider, visit to download the new RIMS Professional Report, The Top 8 Legal Developments You Need to Know About in 2017.

If Passed, Calif. Law Would Oversee Pet Insurance

Consumer complaints about pet insurance to the California Department of Insurance have prompted a new look at setting guidelines to regulate the coverage.

If passed by the Senate and signed into law by the governor, California would be the first state to impose requirements on this line of insurance. Assembly Bill 2056, introduced by Rep. Matt Dababneh, D-Los Angeles, would make policies more transparent, with disclosure requirements and a 30-day trial period for policyholders.

In support of the legislation, Rep. Dababneh stated, “Pet health policies are similar to other insurance policies; typically they have premiums, deductibles, co-pays, coverage limits and benefit schedules.” He added, however, that “policyholders have difficulty ascertaining the coverage limits, benefit schedules, preexisting conditions and other limitations of pet insurance policies, and can receive less for their claims than they expect.”

Under the legislation, pet insurance would be defined as a separate line within the insurance code, distinct from other miscellaneous lines. If passed, the law would establish required policy terms for all pet insurance policies serving California residents, and it would add clarity for consumers on what their policy covers.

Insurers would be required to disclose all exemptions up-front. Currently there are 21 exemptions, including neutering, hereditary diseases and treatment of fleas and worms, the Sacramento Bee reported.

The legislation would also:

• Require a pet insurer to disclose, in the policy and on the main page of its website, whether the policy excludes coverage due to preexisting conditions, hereditary disorders, or congenital anomalies or disorders.

• Require a pet insurer to reasonably disclose any policy provision that limits coverage through a deductible.

• Mandate a waiting period, coinsurance, or annual or lifetime policy limits.

• Require a pet insurer to reasonably disclose wither it varies coverage or premiums based on claims experience during the preceding policy period.

• Require a pet insurer that bases claim payments on usual and customary fees, or other limitations based on prevailing veterinary service provider charges, to include a provision in the policy that clearly explains how the claim will be calculated and disclose this information via a link of the main page of its website.

The pet insurance industry, made up of about 10 primary providers, has not taken a position on the potential legislation. Supporters of the new disclosure requirements, however, say they have a key endorsement from Veterinary Pet Insurance, the largest provider in the U.S., the Bee reported.