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Supply-Chain Volatility Threatens Businesses
As the Trump administration returns to aggressive tariff strategies, business owners across the country are once again bracing for impact. On-again, off-again tariffs aimed at key trade partners like China, Mexico and Canada are creating a volatile environment where forecasting costs, securing materials and delivering products on time are increasingly difficult.
The unpredictability of these policies is creating ripple effects through global supply chains, threatening many businesses’ margins, operational stability and customer relationships.
Recent data show that U.S. companies have already lost more than $34 billion due to tariffs, whether from direct duties, lost sales or increased costs. Even businesses that don’t import directly from affected countries may face indirect impacts if their suppliers do.
A survey by Arthur J. Gallagher & Co. found that 90% of business owners are concerned about the effect tariffs are having on their operations — particularly in the form of:
- Supply chain disruptions due to changing routes and sourcing complications,
- Surging input costs that are difficult to pass on to customers,
- Manufacturing slowdowns driven by raw material delays or pricing volatility,
- Inventory hoarding to front-run new tariffs, which ties up working capital, and
- Dampened investment as companies adopt a wait-and-see approach.
What businesses can do
Large multinational corporations may have the resources to weather tariff swings — rerouting orders, renegotiating contracts and leveraging deep supplier networks. But for smaller businesses, limited buying power, narrower margins and lean supply chains mean there’s far less wiggle room.
Owners in industries like electronics, automotive parts, construction materials and apparel are especially exposed. Many of these businesses rely on components or raw materials from Asia, where even slight delays or cost increases can disrupt production and reduce profitability.
Despite the uncertainty, business owners can take proactive steps to reduce their exposure to tariff shocks and improve supply chain resilience:
- Audit your supply chain — Identify all products and components exposed to tariffs (directly or through suppliers) and calculate the potential financial impact.
- Diversify sourcing — Spread risk across multiple suppliers and consider partners in countries not subject to tariffs or have lower tariffs than those imposed on Chinese goods. Where possible, increase domestic sourcing to reduce exposure to geopolitical disruptions.
- Negotiate flexibly — Work with suppliers to explore cost-sharing options, volume-based discounts or adjusted contract terms to accommodate sudden tariff hikes.
- Use technology — Invest in supply chain and inventory management tools that help you track lead times, monitor pricing trends and adjust sourcing strategies in real time.
- Stay informed — Tariff regulations often appear in the Federal Register or through U.S. Customs announcements. Stay on top of updates and take part in comment periods to voice concerns before rules are finalized.
- Have a response plan — Meet with legal or financial advisors to build a tariff mitigation plan. This might include adjusting pricing models, altering stock keeping units or building a reserve of critical inventory.
Supply chain insurance
Many business owners wonder if supply chain disruption insurance could cover losses tied to tariffs. The answer is nuanced.
Standard supply chain policies typically cover physical interruptions — like natural disasters, factory fires or transportation breakdowns — that prevent a supplier from delivering goods. However, they usually do not cover economic disruptions, such as those caused by tariffs, trade sanctions or changes in government policy.
That said, some insurers are developing specialty coverage or endorsements that address trade disruption or political risk. These emerging trade disruption insurance policies may offer protection against losses stemming from sudden changes in tariff regimes or government-imposed import restrictions, even in the absence of physical loss or damage to the policyholder’s goods or assets.
However, these policies tend to be more common in large-scale international trade and are priced accordingly.
Business Growth Can Lead to Increased Risk
Growing companies often overlook the importance of properly managing their risk.
Increased activity can result in additional losses. For example, more trucks driving more miles may result in more accidents. However, other kinds of risk can increase more than the jump in business activity. We look at three such areas here.
Workplace safety
Typically, when employers expand their workforce to meet growing demand for their products and services, the number of workers’ compensation claims tends to rise disproportionately.
New employees with less experience are more likely to sustain a workplace injury and overworked experienced staff may also overlook safety or cut corners to get the job done.
What you can do: One option is to hire a temporary-staffing firm to fill positions. But under OSHA’s “dual employer doctrine” the hiring employer and the temp agency are both responsible for temporary workers’ safety.
Check to make sure the temp agency has workers’ compensation insurance.
Litigation
Your workers may be putting in extra hours due to production pressures, but fatigued workers are more prone to making mistakes that can injure third parties or result in shoddy workmanship. In both cases, that opens your firm up to being sued.
What you can do: Conduct thorough interviews, check references and carry out background investigations when appropriate to avoid hiring people with known problems. You are responsible for the actions of your employees.
Also, make sure to provide regular breaks, especially in jobs that require attention and strength.
Labor law violations
As you grow you have more employees to keep track of, which means a greater chance of failing to comply with labor laws. In addition, many state governments have cracked down on wage and hour law violations.
As well, some companies may try to add to their worker pool by using more independent contractors to avoid hiring new workers. You will need to ensure that you comply with the U.S. Department of Labor’s rules on independent contracors or with your state’s laws, if any.
What you can do: Pay close attention to your payment systems and audit them to make sure you comply with wage and hour laws as well as meal and rest break laws.
The takeaway
Growing companies need to be vigilant about managing risk and should review their existing risk management strategies for gaps due to business growth.
What you can do: Consider the following steps to reduce your chances of increased claims:
- Maintain high standards when hiring new employees, such as conducting thorough interviews, checking references and, where appropriate, investigating backgrounds;
- Properly train and supervise new employees during a growth phase;
- Consider your current policies on temporary workers and weigh the benefits of a flexible workforce against liability issues that temporary workers pose;
- Revisit your policies about independent contractors;
- Ensure you pay workers properly for overtime work to ensure compliance with the law; and
- Keep shareholders informed as much as possible about any mergers or acquisitions, including terms of the transaction.
Cal/OSHA Making Changes to Heat Illness Prevention Rules
Cal/OSHA has released draft language that would require employers of outside workers to take additional steps to ensure their safety when working in high heat conditions.
The proposed rules were written to implement legislation — AB 2243 — signed into law in 2022 to address heat and wildfire smoke protections for workers. The draft rules, which address only heat, will complement existing heat illness prevention regulations that employers of outdoor workers are already required to follow.
The draft would require some employers to implement extra high heat illness prevention steps when temperatures reach 80 degrees for both indoor and outdoor employers. Under current rules, employers must provide shade for outdoor workers when temperatures reach 80 degrees, but additional high heat protections aren’t required until the mercury reaches 95 degrees.
Acclimatization
One part of the draft heat rules revises acclimatization procedures. Under current rules, a supervisor or designee must closely observe all employees during a heat wave, and workers who are newly assigned to a high-heat area must be closely observed during their first 14 days on the job. The draft language changes the term “high heat area” with “an area where the temperature equals or exceeds 95 degrees Fahrenheit.”
The draft also would require employers to either implement high-heat procedures for five working days or adopt a proposed work schedule for new and returning employees assigned to an area where the temperature is at least 80 degrees.
If an employer chooses the work schedule option, an employee’s heat exposure would be restricted for the first four days as follows:
- 20% on day one,
- 40% on day two,
- 60% on day three, and
- 80% on day four.
Employers would not need to implement these acclimatization procedures if they can prove that the new employee has consistently worked under the same or similar conditions in the prior 14 days.
Additionally, the proposed rules would require employers to distribute a copy of their heat illness prevention plan:
- To new employees upon hire,
- During heat illness prevention training, and
- To every employee at least once a year.
At no time is an employer required to furnish a copy of the HIPP more than twice a year.
Current rules refresher
For outdoor workplaces, shade must be present when temperatures are greater than 80°F. When temperatures are less than 80°F, shade must be available upon request.
For indoor workplaces, provide access to at least one cool-down area that is kept at a temperature below 82°F and shielded from high-radiant heat sources.
Shade and cool-down areas must be:
- Blocked from direct sunlight.
- Large enough to accommodate the number of workers on rest breaks so they can sit comfortably without touching each other.
- As close as possible to the work areas.
Employers shall encourage workers to take preventative cool-down rest periods and allow those who ask for one to take it. Employers are also required to monitor workers during rest periods for symptoms of heat-related illness.
When the temperature reaches 95°F, employers are required to implement high-heat procedures which must include:
- Observing and communicating effectively with workers.
- Reminding workers to drink water and take cool-down rest breaks.
Employers are also required to:
- Establish, implement and maintain an effective written outdoor HIPP that includes procedures for providing drinking water, shade, preventative rest periods, close observation during acclimatization, high-heat procedures, training and prompt emergency response.
- Provide first aid or emergency response to any worker showing signs or symptoms of heat illness, including contacting emergency medical services.
- Closely observe new workers and newly assigned workers in hot areas during a 14-day acclimatization period, as well as all employees working during a heat wave.
- Provide training on the HIPP to both workers and supervisors.
How Tariffs Are Affecting Construction and Insurance Costs
President Trump’s far-reaching tariffs are starting to bleed into building costs as many of the main materials used in construction are now subject to import taxes.
And as construction costs increase due to tariffs, so does the cost of repairing or replacing materials if damage occurs during construction. Rising repair and replacement costs make claims more expensive, and, in turn drive up the cost of property and casualty insurance for contractors.
Inputs for construction have already been on the rise for the last six years — particularly in 2020-2022, when the COVID-19 pandemic devastated global supply chains — and now many materials used in building or to build equipment and tools have been hit with hefty tariffs:
- Aluminum — 25% tariff, effective March 12.
- Lumber and timber — There is a 14.58% tariff on Canadian lumber, a rate that could rise to nearly 35% in coming months. The administration is studying whether to impose a 25% tariff on lumber from all nations.
- Steel — 25%, effective March 12.
Prices for building inputs may rise even higher if tariffs start snarling supply chains, which is a possibility. Higher tariffs can make imported goods harder to source and more expensive, forcing contractors to find new suppliers or wait longer for deliveries.
That can slow down a construction project, which costs money and increases exposure to a number of risks, including:
- Fire,
- Weather damage,
- Theft, and
- Vandalism, among others.
Effects on insurance
Here’s a look at how these tariff-driven cost increases may affect two types of insurance used by construction firms.
Builder’s risk insurance — These policies’ premiums are tied to the cost of materials and the length of a project. If building materials like lumber and steel cost more due to tariffs, the insured value of the project increases.
Example: A contractor is constructing a $25 million office building. If the tariff on imported steel and lumber increases the project cost by 10%, the insured value would increase by $2.5 million. The insurer accounts for that higher replacement value in its premium calculation, which will result in a larger premium.
Another factor that could result in higher claims costs is snarled supply chains — builders will have to wait longer for materials. That, in turn, can increase the building timeline, and if that happens, the contractor will need to extend their builder’s risk policy.
That will cost more as well, as the insurer will charge for the extension due to the longer exposure it will face.
General liability coverage extension — If delays occur, so will the exposure to increased worksite injuries, damage or third party claims. If a project takes longer to complete, it will mean the extended presence of workers, subcontractors and equipment. For each additional day a project takes to complete, the risk of an accident also increases.
Example: If a project extends past its deadline, the general liability policy would need to be extended for the additional time. And it’s unlikely that extension will be priced at the same rate as the original liability policy. Insurers will often reprice the policy extension based on the extended exposure and the kinds of subcontractors or equipment that will be on site.
The insurer may also require additional documentation and/or endorsements for the policy extension.
The takeaway
Higher costs of materials and insurance will make their way into project budgets, bids and profit margins. Another risk is that insurance certificates are delayed or found to be noncompliant, which can delay payments, result in expensive work stoppages and breaches of contract.
With all this in mind, you will need to work closely with your broker well in advance of new projects to ensure your coverage reflects the reality of higher material costs, the possibility of delays due to procurement issues and more.
A Reminder of Your Workplace Violence Prevention Annual Obligations
As the one-year anniversary of California’s workplace violence prevention law approaches, employers will need to take steps to ensure their continued compliance.
The law requires all California employers with 10 or more staff to have a workplace violence prevention plan and to provide training to employees on the plan by July 1, 2024. It also requires employers to revisit the plan annually and conduct new training.
It’s important that employers comply with the law, as Cal/OSHA is actively enforcing all aspects of it during its standard workplace safety inspections. Noncompliance with SB 553 can result in fines ranging from $18,000 to $25,000 per violation.
Here’s what employers need to focus on:
Updating the plan
Employers should revisit their workplace violence prevention plan annually to make sure it’s up to date.
Under the law, an effective workplace violence prevention plan:
- Identifies who is responsible for implementing and managing the plan. This may need to be updated if a new person is assigned this responsibility.
- Includes details for how to accept and respond to reports of workplace violence. This may need to be changed if there is a new person to report incidents to.
- Prohibits retaliation against employees who report incidents of workplace violence.
- Includes details for communicating with employees regarding workplace violence matters, including how to report a violent incident, threat or other workplace violence concern; effective ways to alert employees to the presence of a workplace violence emergency; and how to obtain help from staff assigned to respond and/or law enforcement (personnel may have changed, so the plan may need updating).
- Lays out instructions for responding to actual and potential emergencies.
- Includes procedures for post-incident response and investigation.
- Requires the employer to provide effective training upon hire and once a year thereafter.
- Requires the employer to identify, evaluate and correct workplace violence hazards. This may need to be updated if a new hazard is identified.
- Requires the employer to post incident response and investigations.
Training
Employers are required to train their employees on the plan and provide training materials that are easy to understand. Training must be conducted upon hire and once a year thereafter.
Training must include:
- Familiarizing employees with the plan and how to participate in developing and implementing it.
- Definitions and requirements of California Labor Code Section 6401.9, which codifies the workplace violence prevention law.
- Information on how to report workplace violence incidents without fear of retaliation.
- Job-specific violence hazards and preventive measures.
- Explaining the purpose of the violent incident log and how to obtain related records.
- The opportunity for employees to ask questions and get more information about your plan.
Record-keeping
Employers are required to keep up-to-date records, including any incidents in the past year. Required records include:
- Workplace violence hazard identification, evaluations and any corrections made, which must be maintained for at least five years.
- Training, which must be kept for one year.
- Violent incidents, which must be kept for at least five years.
- Workplace violence incident investigations, which must be kept for at least five years.
A final word
While we are only one year into the law, it’s important that employers foster open communication and encourage employees to report potential hazards and concerns without fear of retaliation.
Also, regularly check for Cal/OSHA updates and other agencies to ensure you are compliant. If you need assistance, consider partnering with compliance experts to streamline the process.
Why Your Business May Need Pollution Insurance
Many businesses that produce some type of pollutant throughout the course of daily business operations don’t know they are doing so.
Others know they are producing pollutants and have processes and safeguards in place to reduce their release into the environment. A business can be held liable for some very costly damages when these byproducts pollute another property or harm another individual.
Pollution liability clauses were once part of general liability policies, but the extensive asbestos problems in the 1970s spurred most insurers to remove pollution protection from their general liability policies.
Today, pollution liability coverage is obtained through a separate pollution insurance policy. Pollution insurance policies are written for businesses of all sizes, shapes, and forms – from pig farms and printers to apartment complexes, salons, and dry-cleaning businesses.
Why pollution insurance?
Many businesses run the risk of creating pollution during normal daily operations.
There’s also a risk from any existing pollution already on a business’s site of operation. In either case, a business could be held liable if its pollution ends up on a third party’s property, causes damage to the property or harms an individual.
Without insurance, the business would be on the hook for paying for those damages out of pocket.
What do policies cover?
The basic premise of a pollution policy is that an insured party gets a claim related to damages caused by pollution it caused.
This insurance will protect your financial interests in the event a clean-up becomes necessary. Buying pollution liability insurance will cover your interests against lawsuits where a third party could be injured by a toxic substance produced as a result of your work.
Like most types of insurance, the specifics of a pollution policy can vary somewhat from insurer to insurer.
Depending on the insurer, a pollution policy will typically cover
- Damage to properties and individuals
- The cost of cleaning up pollution on a third party’s property
- Pollution incidents that occurred after the policy was
- Investigative, legal, and court costs should the claim enter the legal system.
Who needs coverage?
Businesses that have risks related to the handling of pollutants and hazardous materials, design professionals who work with projects where there are environmental issues as well as those who own and occupy premises that have environmental issues need pollution liability insurance.
This includes:
- Property owners and tenants whose buildings and land have a history of having pollutants on the property or premises. This would include a building on land that had an underground storage tank that leaked fuel oil before it was removed, contaminating the soil.
- Contractors such as roofers who handle pollutants like tar as a part of their operations need contractors pollution liability insurance to cover damage resulting from a pollution incident.
- Architects and engineers who are involved in projects that have issues related to pollutants need to add pollution liability to their errors and omissions insurance policy to manage the risk of making a mistake regarding the presence or absence of pollution issues as they plan and execute a project.
The takeaway
Don’t overlook pollution insurance as an important element of risk management. Should any questions or concerns about pollution insurance and insurance requirements arise, call us.
10 Tips for Dealing with OSHA
When OSHA shows up, it’s not the time to figure things out on the fly. Whether you’re in construction, manufacturing or any other field with safety exposure, knowing the ground rules can make all the difference between a successful visit or one where you leave yourself exposed to penalties and a drawn-out appeals process.
If you aren’t careful and prepared, fines can quickly pile up. Here’s a quick guide to help you handle inspections, citations and communication with OSHA before, during and after they step on site.
1. Ensure you have a walkaround rep
Under OSHA regulations, you are allowed to have someone represent you during an OSHA inspection — yes, even an attorney. It’s a smart move to assign someone in advance who knows your operations and safety protocols and can speak on your behalf.
2. Sit in on manager interviews
OSHA has the right to interview members of your team. If they interview one of your managers or supervisors, you have the right to be present. It’s a good idea to have a company rep or legal counsel there to help ensure the facts are clear and accurate
However, if they decide to interview a non-managerial employee, you do not have the right to have a manager present.
3. Employees have choices too
Non-supervisory employees can choose to speak with OSHA privately, but they don’t have to. They have the right to refuse to participate in an interview with OSHA and end an interview at any time. They can also refuse to allow OSHA to record the meeting.
Conversely, you cannot take retaliatory action against an employee who agrees to be interviewed.
4. There’s a six-month deadline for citations
OSHA can issue citations up to six months after a violation occurs. However, if it later learns you concealed a violation or misled them, the clock resets to when they learn of the subterfuge. If you don’t hear back in the first month or two after an inspection, you are not out of the woods for several more months.
5. You have 15 working days to respond
If you get a citation, the clock starts ticking. You have 15 business days to formally contest it. But you also have the option to negotiate a resolution before that deadline by requesting an informal conference, which can sometimes be a faster and less expensive option. Employers often use these informal conferences to negotiate the settlement of a citation before resorting to legal remedies in a formal contest.
6. No injury? You can still be cited
A workplace injury might bring OSHA in the door, but they can cite you for any unsafe condition they find during the inspection — even if no one was hurt or the issue wasn’t what prompted the visit.
7. “Not my worker” isn’t always a defense
On shared job sites, you can be cited for hazards affecting another company’s employees under OSHA’s multi-employer doctrine. If your team creates or controls a risk, such as the owner of a construction project, you’re potentially responsible — even if the injured worker is a subcontractor’s employee.
8. Hazards can be cited, even without a rule
Under OSHA’s general duty clause, it can cite you for a serious hazard even if no specific standard exists — if you haven’t taken reasonable steps to prevent or abate the risk.
9. Citations don’t have to be detailed
OSHA doesn’t need to spell out every detail in a citation. As long as you get fair notice of what’s being alleged, you’ll need to get further clarity through the legal or discovery process.
10. Request inspection records using a FOIA request
You can request OSHA’s inspection records using a Freedom of Information Act request. These files can provide insight into why OSHA took certain actions and help you better prepare for what comes next.
Stay proactive, not reactive
Having a game plan for an OSHA inspection is smart, especially for employers in higher-risk industries. Clear communication, proper documentation and knowing your rights can protect your company and your team.
Check Subcontractors’ Insurance Policies
Did you know your firm can be held liable under your own workers’ comp policy if a subcontractor’s employee is injured? Courts have ruled time and again that if a company hires a subcontractor without coverage and an employee gets hurt on the job, the injured worker can seek coverage under the hiring company’s policy.
In many cases, an injured worker may even be a third- of fourth-level contractor, but if none of your subcontractors are carrying workers’ comp, a claim can hit your own policy. This scenario is even more likely if your firm, as the main contractor, has substantial control over the sub’s employees.
To determine coverage, courts generally start with the sub whose employee was injured and move up the chain until they find a valid workers’ comp policy.
Protect yourself by requiring your subcontractors to have a certificate of insurance. But don’t stop there; you should call the insurance carrier to see if the certificate is valid.
You can check also with your state’s contractor licensing to see if your subcontractor has workers’ comp coverage.
FAIR Plan Commercial Property Coverage Limits to Rise
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.
If Your Firm Is Sued for Discrimination, Act Fast to Check EEOC Complaint
Employers that are hit with a discrimination complaint must act fast to compare the allegations in the lawsuit to the earlier complaint the worker filed to the Equal Employment Opportunity Commission.
If the employer can find that the allegations in the complaint filed with the EEOC do not match those in the subsequent lawsuit filed by the worker, it can quickly move to have the case dismissed, but if it waits too long, it loses the chance.
Under procedural rules, employees filing suit under Title VII Title VII of the Civil Rights Act of 1964 must first file a complaint with the EEOC.
The decision that paved the way for this new procedural rule was a unanimous U.S. Supreme Court ruling in the case of Fort Bend County vs. Lois M. Davis in 2019.
The ruling means that employers that are sued for discrimination under Title VII have a limited amount of time to challenge the lawsuit if the allegations differ in any way from the original EEOC complaint. If they act fast, then they stand a good chance of convincing the court to throw out the complaint.
However, if an employer dawdles and waits too long to challenge the case if they find a discrepancy, they may lose the opportunity.
If the employer in this case had acted quickly, it would never have gone to the Supreme Court, legal experts say.
The case details
An IT worker in Texas had reported that her director was sexually harassing her, and after an investigation he was fired. But after that, her supervisors began retaliating by cutting back on her work responsibilities. She filed a charge with the EEOC and, while the charge was pending, she was told to report to work on a Sunday. She refused and went to church instead.
She tried to supplement her allegations and wrote the word “religion” by hand on her EEOC intake questionnaire, but she didn’t change her formal charge document by adding that word.
The case went to trial and was appealed, and then it was sent back to the local U.S. District Court to decide the remaining charge of religious discrimination. The case had been in the courts for three years at that point.
That’s when her former employer asserted that the District Court didn’t have jurisdiction of the case because she had failed to state the claim in her EEOC charge papers. That issue was taken all the way to the Supreme court, which wrote in its decision that an objection to a charge because of a discrepancy may be forfeited “if the party asserting the rule waited too long to raise the point.”
The takeaway
If your organization is the target of a discrimination lawsuit, make sure to check the original EEOC charge for any discrepancies. If there are any, you can consult with your lawyers about filing a motion to have the complaint dismissed.