Cracker Barrel, the employer in the underlying case, was sued by an assistant manager. The employee alleged he was terminated because of his race and because he complained to supervisors about the termination of other employees, which he thought was racially motivated.

According to Russell Adler, an associate in the New York office of WolfBlock, what the Supreme Court decision does is broaden an avenue for filing suit.

To file a complaint under Title VII of the Civil Rights Act of 1964, which is more common, he said an employee was required to first go through an Equal Employment Opportunity Commission administrative procedure and obtain a “right to sue” letter before filing the case in federal court.

Additionally, the complaint would have to be brought within 180 or 300 days of the action, depending on the state where the employee resides, with most states using the 300-day rule.

In contrast, under Section 1981, an employee has four years from the date of discrimination to file a claim, said Lucy Ann Galioto, vice president for National Union, an AIG member company in New York.

Also, you need 15 employees to come under Title VII, but there's no such requirement under Section 1981, she said.

The decision “puts another arrow in the quiver of the employee,” Mr. Mickey said.

Mr. Adler noted, however, that Section 1981 has always been an option. “A good lawyer would sue under all these statutes,” he said, adding that an attorney would also likely include any state or local laws to the complaint as well.

Although many lawyers would not have filed the Section 1981 claim as well, he said, “They're more likely to do it now because it's in their minds” in the wake of the Supreme Court's decision.

Mr. Mickey agreed that it is “less common, but not uncommon” for complaints citing both statutes to be filed simultaneously, depending on the circumstances of the case at hand.

From an employment practices liability insurance perspective, an increase in claims filed under the older law could also mean more exposure in terms of severity. All three experts noted there are no caps on punitive damages or pain and suffering under Section 1981, while there are caps under Title VII.

That means the Supreme Court's ruling “creates a more powerful economic weapon” for plaintiffs, Mr. Mickey said.

Both Mr. Adler and Mr. Mickey noted that retaliation claims can be problematic for employers because fact-finders–judges or juries–would naturally make an assumption of causation should an adverse act, such as an unusually bad review, follow a complaint of bias by an employee.

Mr. Adler also noted, however, that since the court only broadened the avenue for plaintiffs somewhat rather than creating new liability, the ruling's effect would not be as earth-moving as it has been depicted.

“I don't think this decision is as significant as the press is making it out to be,” he said. “People could always sue for retaliation.”

Ms. Galioto noted, however, that retaliation charges filed with the EEOC jumped 18 percent in 2007–the highest annual jump on record. That was the effect of White vs. Burlington Northern, she said, referring to a 2006 case which lowered the threshold for bringing a retaliation claim. (See NU July 17, 2006, for more details.)

She said that her firm has also seen an uptick in claims that have a retaliation component. “Now in light of Cracker Barrel and Potter, you're going to see even more retaliation claims,” she said.

On the same day the Supreme Court decide the Cracker Barrel case, it also decided Gomez- Perez vs. Potter, finding that federal employees who complain about age discrimination in the workplace under the Age Discrimination Employment Act are protected from retaliation by their employers, she noted.

In that case, a postal worker filed an age discrimination claim with the EEOC and after that, she alleged she had suffered a series of reprisals from her supervisors. The part of the ADEA that applies to the private sector bars retaliation against workers who complain, but the part applicable to federal workers was silent, Ms. Galioto said.

She confirmed that EPLI policies typically do cover retaliation claims. In fact, even if the underlying claim giving rise to retaliation is not covered, like workers' compensation claims, EPLI policies carve out retaliation from the exclusions, she said.

Like Ms. Galioto, Peter Taffae, managing director of Executive Perils, a Los Angeles-based wholesale brokerage, sees more retaliation claims on the horizon. In particular, he predicted an upsurge in claims brought by workers who feel their employment is threatened–not because of anything they've done, but because of the economic environment.

“A very simplistic and common scenario” might involve a female employee who tells a superior that a co-worker is making her feel uncomfortable without formally filing any charges against him.

“There's no proof, no evidence, nothing,” Mr. Taffae said. Two months later, there's a downsizing and the female worker alleges she's being fired because she complained about her co-worker. “He's been here 20 years and you're all buddies, so now you are retaliating,” Mr. Taffae imagined her saying.

“How do you prove that wasn't retaliation? How do you prove one doesn't have anything to do with the other?”

“Retaliation is a nightmare,” he said, suggesting that employers have no defense in such a situation. “And there's no way to stop Mary from coming in at the beginning and even making that comment. How do you do loss control on somebody coming in and just saying casually somebody did something or didn't do something?”

Mr. Taffae went on to suggest that it could be argued that everyone in corporate America “should go into their boss and go on record” with this kind of comment. “You don't have to file a report, you don't have to go to the EEOC. You just have to have a paper trail that you brought something to management's attention, and then they later took action in a retaliatory way,” he said.

“It's scary,” he said. “It's really not a good situation” for EPL insurers.

See also, related article on the June 19 High Court ruling in Meacham v. Knolls Atomic Power, previewed in last month's edition of E&S/Specialty Lines Extra.