By Justin Boron
Riverdale is in a vulnerable position, a city council member said, after the city's insurance carrier earlier this month dropped the portion of its liability coverage protecting the government against discrimination lawsuits.
"If this city gets hit with an (Equal Employment Opportunity Commission) claim, it's on the taxpayers," said Council member Wanda Wallace at a recent council meeting.
At the beginning of April, Diamond States Insurance Co., a subsidiary of United National Group in Bala Cynwyd, Pa., did not renew the city's liability policy for directors and officials because discrimination suits had become too common in the city over the past five years, said City Manager Iris Jessie.
Fifteen discrimination claims have been filed against the city in the past five years, she said.
Riverdale battled racial tension last year when several black police officers made discrimination complaints. Police Chief Mike Edwards, who is white, later resigned.
Now, Wallace, who has been actively searching for a new carrier, said the city is struggling to be taken on by another company.
"Some of the companies won't even give us a quote," she said.
While city officials insist the insurance problem has culminated over time, Wallace blames Mayor Phaedra Graham for fueling concerns of political instability last year when the racial conflict reached its peak in May.
Wallace said Graham's media interviews and her appearance at a protest rally for the contentious firing of a black police officer damaged the city's ability to find a new insurance carrier.
Graham said Wallace's comments are baseless.
"This is a routine matter taken under consideration by any governmental entity," she said.
The city has two EEOC claims pending, which would still be covered by the Diamond States policy, Jessie said.
But any additional claims that come before the city finds a new carrier would not likely be covered by insurance, she said.
Title seven discrimination, which includes age and employment claims, can result in compensatory damages from $50,000 to $300,000.
Constitutional claims have no settlement cap and can easily escalate into the millions, said Ed Buckley, a labor attorney for Buckley & Klein of Atlanta.
Once attorney fees are added, the burden can be unbearable for a small city that is uninsured, he said.
"It's really kind of foolish for a city not to have insurance," Buckley said.
The county government, which has insurance, is already bracing for the impact of the discrimination suits stemming from Sheriff Victor Hill's personnel actions, with talk of settlement amounts in the neighborhood of $30 million for the 27 employees, county officials have said.
Another major concern in Riverdale are frivolous lawsuits filed and subsequently lost by the plaintiff, said Council member Rick Scoggins.
To curb the problem, Scoggins has proposed a resolution that would make city employees pay for filing frivolous suits.
If a city employee lost a suit, he or she would have to cover the city's burden for defending itself, he said.
But Jessie said the level of restriction placed on an employees right to make claims is a fine line, that if crossed, could place the city in a precarious position.
Scoggins said he didn't think the law would unfairly chill people's inclination to make claims.
"We're not trying to prevent anyone from filing (a lawsuit), (who) has a legitimate claim," he said.
Scoggins also said his proposal was not brought on by the city's lack of discrimination insurance.
Regardless of the city's coverage, Jessie said she wants to create a workplace in which aggrieved employees feel comfortable pursuing an internal resolution to their complaint through the city's grievance procedure.
"You want to create a work environment where people feel they can get their grievances redressed," she said.