SW Legal studies in Business

Formal EEO Process Begins When Notice of Claim Given to EEOC
Description

Appeals court held that formal process under Title VII begins when an employee files notice of a claim with the EEOC as required. Since the employer waited until the employee filed suit to inform its liability insurer of the employee’s action, the employer lost the right to have the insurer defend the suit.

Topic Employment Discrimination
Key Words

Notice; Claim; Insurance

C A S E   S U M M A R Y
Facts

An employee of the American Center for International Labor Solidarity (ACILS) took a claim of employment discrimination to the EEOC and received a right-to-sue letter. ACILS notified its insurer, Federal Insurance, of the pending suit. Federal denied coverage, asserting that the policy required ACILS to inform Federal as soon as it knew charges had been filed with the EEOC rather than wait for the start of litigation. ACILS settled with the employee then sued Federal for reimbursement. The district court held for Federal, agreeing that notice at the time of suit was too late under the terms of the policy. ACILS appealed.

Decision

Affirmed. Under EEO law, the employee’s filing of a charge with the EEOC began formal proceedings and, thus, a claim under the employer’s liability policy should have been made at that time. ACILS contends that no formal proceedings began until suit was filed, but that is not correct. Procedure requires the employee to seek a right-to-sue letter from the EEOC, so the formal process begins when the employee states a claim to the EEOC. ACILS violated the insurance contract by waiting for suit to be filed, thereby damaging Federal’s right of defense.

Citation American Center for International Labor Solidarity v. Federal Insurance Co., 548 F.3d 1103 (D.C. Cir., 2008)

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