Employers hit with exploding misconduct claims–and do a terrible job managing them
Reports of workplace misconduct have hit unprecedented levels over the past decade, even as most organizations are flying blind when it comes to data that could help them manage the problem.
Fresh research from HR Acuity reveals that discrimination, harassment and retaliation claims last year reached the highest rate ever recorded by the researchers: 14.7 incidents per 1,000 employees, vs. 11.9 in 2023. The most recent study tracked 284 organizations and 8.7 million employees globally. This is the ninth straight year HR Acuity has issued the report.
“Navigating today’s complex workplace dynamics with rising misconduct claims, mounting regulatory pressures and legal risks demands more than intuition. Data and insights are no longer optional,” said Deb Muller, founder and CEO of HR Acuity.
Employment law attorneys are witnessing this surge firsthand. “There is no question that during the last five years, the tensions between employees and employers have grown to unprecedented levels,” said Mark Kluger, a partner at the New Jersey employment law firm Kluger Healey. Kluger points to a combination of return-to-office (RTO) demands, generational differences regarding work-life balance and an avalanche of employees seeking leaves and accommodations under state and federal laws for anxiety, depression and other behavioral health issues.
The legal landscape has become increasingly complex. Kluger notes that employers now regularly face workplace retaliation claims stemming from RTO policies, work-life balance issues and performance management decisions.
Acuity HR’s findings come on the heels of the Ames decision (officially known as Ames v. Ohio Department of Youth Services), the U.S. Supreme Court’s unanimous ruling clarifying the application of Title VII of the Civil Rights Act to employment discrimination claims, particularly those involving “reverse discrimination.” In that case, the court held that majority-group plaintiffs (e.g., straight, white males) are not required to meet a higher evidentiary burden to establish a prima facie case of discrimination.
While misconduct claims are skyrocketing, most employers are making critical decisions based on incomplete information, according to the research. Nearly 7 in 10 organizations fail to track how many issues pile up by case, while nearly half are missing substantiation data entirely. That means they’re essentially clueless about investigation outcomes and what those may say about their workplace culture.
Furthermore, 7 in 10 employers can’t break down substantiation by issue type, missing the trends that could help them be more proactive regarding claims.
Meanwhile, even with all the legal and reputational risks, one-third of organizations don’t require structured investigation procedures. The companies that do have structured processes in place are twice as likely to use AI tools, though nearly half of companies studied don’t use AI for employee relations at all, per the report.
The challenge for HR professionals has become navigating what Kluger sees as a legal minefield. He suggests that HR professionals and employment lawyers carefully navigate the expanded definitions of retaliation, new state laws regarding leave, and the overwhelming number of requests for reasonable accommodations and leave while trying to maintain best practices and consistency.
With misconduct claims accelerating and regulatory scrutiny intensifying, companies sticking with the status quo could be playing Russian roulette with their reputations, legal exposure and employee trust. As Muller sees it, “In this new era of employee relations, organizations must embrace AI-driven analytics and structured processes to protect their people, safeguard their reputations and empower their teams to thrive with confidence.”