Systemic Cases Dominate EEOC Enforcement

The Equal Employment Opportunity Commission achieved record enforcement results in 2015 and shows no signs of letting up this year. The good news is that employers now have a leg up in defending EEOC claims where they had little to no leverage before.

Over the past year, the EEOC aggressively continued to implement its strategic enforcement plan (SEP), which the agency first adopted in 2012 as a blueprint of its highest enforcement priorities for the next four fiscal years. That plan has recently been extended through fiscal year 2018.

The SEP builds upon the priorities of the EEOC’s Systemic Task Force, a program adopted in 2006 with the goal of focusing more on systemic investigations and cases—those that address patterns or practices of widespread discrimination on a region, industry, or a group of employees or job applicants—rather than devoting limited resources to specific individual complaints.

“The EEOC’s focus on systemic investigations is the most significant trend for employers to monitor,” says Barry Hartstein, co-chair of the EEOC and diversity practice group at law firm Littler. What’s especially disconcerting to employers is the significantly higher likelihood of the EEOC issuing a reasonable cause finding in a systemic investigation, as opposed to individual complaints filed with the agency, he says.

For example, the EEOC found sufficient evidence of discrimination in 99 of the 268 systemic investigations (36 percent) in fiscal year 2015, compared to EEOC data showing reasonable cause findings in less than five percent of all complaints filed with the agency, according to analysis conducted by Littler.

Furthermore, the volume of systemic investigations continue to rise. The EEOC resolved 268 systemic investigations in fiscal year 2015, compared to 260 the previous year. The agency also recovered more than double the remedies in 2015—$33.5 million compared to $13 million in 2014.

Another area of concern for employers is the EEOC’s increasingly expansive use of its subpoena powers, which the EEOC now uses regularly as part of its investigation process. If the employer does not comply with an EEOC request for information, the EEOC will file a subpoena, “and it’s doing that at a much higher rate than it did in the past,” says Gerald Maatman, a partner with law firm Seyfarth Shaw.

Conciliation Efforts

Further adding to the EEOC’s success with systemic investigations, and causing more legal headaches for companies, is the amount of leverage the EEOC has during the conciliation process. Under Title VII of the Civil Rights Act, if the EEOC finds “reasonable cause” to believe a violation of the Act occurred, the agency must first “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.”

“The EEOC’s focus on systemic investigations is the most significant trend for employers to monitor.”
Barry Hartstein, Co-Chair, EEOC

The EEOC’s 2015 Performance Accountability Report describing EEOC charge activity and litigation over the past fiscal year (ending Sept. 30, 2015) highlights just how successful the conciliation process has been for the EEOC. According to that report, the EEOC trumpeted “record success” in conciliation of private-sector charges, with 44 percent of conciliations successfully resolved and 64 percent of systemic investigations resulting in voluntary resolutions.

Unlike employers, who often have little to no leverage to dispute an EEOC claim, the EEOC has nearly unfettered discretion to file a lawsuit against a company, sometimes as soon as 30 days after beginning conciliation if it’s not happy with the outcome of the process. Citing language in Title VII, the EEOC has argued that it may file a complaint if the EEOC “has been unable to secure from respondent a conciliation agreement acceptable to the Commission.”

In the past, the EEOC has further argued that courts do not have the authority to review whether the agency has fulfilled its statutory duty to attempt to conciliate charges of discrimination prior to filing a lawsuit, which poses obvious concerns for employers. “If the EEOC knows that no one can review what it does, it can act anyway it wants,” says Maatman.

In an important case for employers, the scope of the EEOC’s enforcement powers recently was put to the test in a U.S. Supreme Court case, Mach Mining v. EEOC. In that case, the question before the court was whether the EEOC’s conciliation efforts are judicially reviewable and, if so, to what extent?

EEOC KEY STATISTICS

Below are Equal Employment Opportunity Commission stats for Fiscal Year 2015.
On November 19, 2015, the EEOC issued its annual Performance and Accountability Report (referred to as the EEOC’s “PAR”) for Fiscal Year 2015. The PAR reviews the agency’s achievements over the past fiscal year, and includes statistics relating to EEOC charge activity and litigation.
According to the FY 2015 PAR, there was a minor increase in the number of discrimination charges compared to those led in FY 2014 (89,895 in FY 2015 compared to 88,878 in FY 2014). Even so, the level of charge activity has decreased over the past few years. There were 4,000 fewer charges led in FY 2015 compared to FY 2013 (93,727 charges) and an approximate 10,000-charge decrease from FY 2011 (99,947 charges).
Despite the general decrease in the number of charges led with the agency over the past couple of years, the EEOC’s backlog of private-sector charges (referred to by the agency as the “Private Sector Charge Inventory”) has continued to increase. During FY 2015, the backlog increased to 76,408, increasing slightly from 75,935 charges in FY 2014. While this inventory increase was modest, the EEOC had already raised concerns at the end of FY 2014 based on the “major challenge” of its charge inventory, which had increased 7.28% from 70,781 charges to 75,935 between FY 2013 and FY 2014. The backlog increased despite hiring 90 investigators. Even with turnover, the net increase in investigators was approximately 60. The EEOC attempted to explain the backlog challenge by referring to the impact of “losing experienced investigators” and the need “to ensure high-quality standards for charge processing,” but acknowledged, “As it does each year, the EEOC faces a fundamental challenge in efficiently processing the pending inventory of private-sector discrimination charges while improving the quality of charge processing.”
Even so, the most significant trend to closely monitor from an employer’s perspective is the EEOC’s focus on systemic investigations. During FY 2015, there was a slight increase in the number of systemic investigations completed by the EEOC, and more importantly, in the total monetary recovery based on the resolution of systemic investigations. The EEOC completed 268 systemic investigations in FY 2015, compared to 260 in FY 2014, but the amount obtained in resolving systemic charges increased dramatically from $13 million to $33.5 million. While this increase at first blush may be alarming, it is more in line with the amounts recovered in FY 2012 and FY 2013 when the EEOC obtained $36.2 million and $40 million, respectively, through the resolution of systemic investigations. More troublesome, however, is the continued increased likelihood of a reasonable cause finding based on a systemic investigation. The EEOC made a reasonable cause finding in 99 out of the 268 systemic investigations completed in FY 2015 (36.0%),19 which is in a range similar to the number of reasonable cause findings in FY 2014 and FY 2013 (45% and 35%, respectively). This number is in stark contrast to the EEOC’s published statistics showing that historically, the EEOC has issued reasonable cause findings in less than five percent (5%) of the charges led with the agency.
Next, turning to litigation, the EEOC has continued its “new normal” by decreasing the number of lawsuits it files. In FY 2015, the agency led only 142 merits lawsuits. While this was a slight increase from the 133 lawsuits led in FY 2014, this trend is similar to the number led in FY 2013 (131 merits lawsuits) and FY 2012 (122 merits lawsuits), and in sharp contrast to the number of suits led in prior years (250 or more).
Among the 142 lawsuits led in FY 2015, a total of 42 involved “multiple victims,” which included 16 systemic lawsuits (i.e., impacting 20 or more individuals). While this number may not appear to be significant, a review of the EEOC’s cases on its active docket at the end of FY 2015 shows that approximately 40% of the EEOC’s active docket (88 out of 218 cases) involves multiple-victim lawsuits, which includes 48 pending lawsuits involving challenges to alleged systemic discrimination (22%). Also worth noting is that among the 142 lawsuits led by the agency during FY 2015, the largest number of lawsuits involved claims under the ADA—37% (53 lawsuits).
Source: Littler

The case arose from a lawsuit filed by a job applicant in 2011 who alleged Mach Mining denied her a job because of her gender. The EEOC found reasonable cause to believe Mach Mining had discriminated against female applicants and began conciliation. When the parties couldn’t agree, the EEOC filed a complaint on behalf of the female applicants.

In the case, Mach Mining argued that the EEOC did not conciliate in good faith, and the EEOC moved for summary judgment on whether failure to conciliate in good faith is a viable defense to its lawsuit for unlawful discrimination. In its April 2015 decision, the U.S. Supreme Court ultimately held that the EEOC must inform employers about the specific discrimination allegations.

“Such notice must describe what the employer has done and which employees (or class of employees) have suffered,” the court said. “And the EEOC must try to engage the employer in a discussion in order to give the employer a chance to remedy the allegedly discriminatory practice.”

“This is a groundbreaking decision, because it means that the EEOC can no longer file suit against employers without engaging in a meaningful process of conciliation,” says Maatman. The decision also gives employers a chance to resolve claims before they are brought in federal court, he says.

High Priorities

The EEOC has indicated that its interim goals through fiscal year 2018 generally will remain on par with its current SEP. For example, the EEOC said it aims to have systemic cases represent up to 22 percent of cases on its docket. The EEOC also said it intends to have up to 70 percent of its administrative and legal claims be resolved in a manner that includes targeted, equitable relief.

Specifically, the EEOC said it will continue to focus on the following six national enforcement priorities:

Eliminating barriers in recruitment and hiring practices that discriminate against racial, ethnic and religious groups, older workers, women, and people with disabilities;

Protecting immigrant, migrant, and other vulnerable workers who may be unaware of their rights under the equal employment laws, or reluctant or unable to exercise them;

Addressing emerging and developing issues in equal employment law;

Enforcing equal pay laws targeting compensation systems and practices that discriminate based on gender;

Preserving access to the legal system by targeting policies and practices that discourage or prohibit individuals from exercising their rights under employment discrimination statutes, or that impede the EEOC’s investigative or enforcement efforts; and

Preventing harassment through systemic enforcement and a targeted outreach campaign to deter harassment in the workplace.

Several other issues remain high on the EEOC’s list of enforcement priorities. These include enforcement of the American with Disabilities Act, equal pay, reasonable accommodations for pregnant employees, and LGBT (lesbian, gay, bisexual, and transgender individuals) rights under the sex discrimination provisions of Title VII.

As with the 2012 SEP, a comment period is expected to follow the next draft strategic enforcement plan. At that point, Maatman says, employers will have the next best opportunity to offer their input as to how the EEOC can better balance its enforcement goals with the legitimate concerns of the business community.