By Rebecca Bromet, Christopher DeGroff and Gerald L. Maatman, Jr.

On May 10, 2013, the EEOC released its Quality Control Plan (“QCP”) draft principles.  In an accompanying press release, the EEOC said that the “[Quality Control Plan] will revise criteria to measure the quality of agency investigations and conciliations throughout the nation.” 

If the Plan is a “blueprint” for the EEOC’s enforcement activity, the “draft principles” could only be called a rough and high-level sketch of the ultimate structure. The EEOC’s Strategic Enforcement Plan for Fiscal Years 2012 - 2016 requires the EEOC to develop a QCP that “establishes criteria for evaluating the quality of its investigations and conciliations and a peer review system to conduct assessments of investigations and conciliations.” The draft principles are intended to address “issues of quality and timeliness.”

The EEOC set a short window for public input on the draft principles. Today, Seyfarth Shaw submitted its recommendations to the Commission for ways in which it can meaningfully evaluate its investigation and conciliation functions without losing sight of its mission: “to encourage voluntary compliance with anti-discrimination laws and to assist employers, employees and stakeholder groups to understand and prevent discrimination.”

Seyfarth Shaw’s recommendations include:

Measurable criteria: The EEOC has touted a commitment to a “national law firm” model, but employers still confront “consistent inconsistency” with the agency characterized by wide variation among the procedures used by EEOC’s District, Field, Area, and Local offices. In an effort to standardize EEOC’s practices, the draft principles outline the criteria for “quality” investigations and conciliations. Unfortunately, the principles are too general. Seyfarth’s submission expresses encouragement for the EEOC’s move in the right direction, but observes that the devil will be in the details. Seyfarth suggests that measurable criteria are necessary to give true incentive to the EEOC’s definition of “quality” and to ensure “timeliness.”   

Separation of fact-finding and litigation functions: Seyfarth has consistently expressed concerns with the blurring of the line between the EEOC’s purportedly “neutral” fact-finding and litigation functions. We have stressed that a separation between these functions is necessary to ensure that EEOC’s investigations are fair and impartial, as opposed to surface attempts to check off “investigation” and “conciliation” boxes before filing suit, or worse, a way of obtaining “pre-discovery” before litigation. Our concerns are not addressed in the draft principles; we hope later drafts and the final Quality Control Plan will reinforce such a division.

Good-faith conciliation: Employers dealing with the EEOC are often vexed by its unwillingness (or inability) to explain the bases or merits of enormous pre-suit conciliation demands. The draft principles offer a glimmer of hope in this regard. As part of a quality conciliation, the EEOC appears to be more willing to share information with employers regarding how it calculates monetary relief and why it may be seeking certain programmatic relief. However, the quality criteria for conciliations omit any reference to or discussion about the merits of the charge or the EEOC’s reasonable cause determination. We suggest that the EEOC re-think and expand its conciliation parameters.  From employers’ perspective, a meaningful negotiation regarding the appropriate value of the EEOC’s claims must include a discussion regarding the merits.  

We recognize that the draft principles are a work in progress. We are cautiously optimistic that the EEOC has initiated a discussion regarding the manner in which it conducts investigations and conciliations. A meaningful discussion is necessary to reform the process, which, as we have previously noted, is balkanized and district-centric, often combative rather than cooperative. We hope the EEOC is committed to doing the hard work it will take to flesh out the draft principles into a robust Quality Control Plan that encourages uniformity and accountability - the touchstones of “quality.”

By Christopher DeGroff, Reema Kapur, and Gerald L. Maatman, Jr.

We previously reported that the United States Equal Employment Opportunity Commission (EEOC) secured a verdict of $240 million in its lawsuit against Hill Country Farms last week. Read our previous blog post here.

The EEOC trumpeted the verdict in a post-trial press release, but did not reveal the fact that the verdict would be reduced due to the caps in the applicable law at issue in the case. We noted that the verdict would be reduced due to statutory damages caps applicable to claims brought under the Americans With Disabilities Act (ADA). On May 14, 2013, the Court did just that and entered an order reducing the jury award for all thirty two claimants to $1.6 million. The Court’s May 14 Order, in addition to its previous award of back wages in the amount of $1.3 million, drastically reduces the total recovery in this case to $2.9 million. In the same order, the Court set the case for a further hearing on June 10, 2013 to address the EEOC’s request for injunctive relief. 

The post-trial briefing in EEOC v. Hill Country Farms case is an example of the aggressive tactics and push-the-envelope arguments that employers facing EEOC-initiated litigation can encounter. 

Background

We discussed the background of this case in previous posts (here and here). 

On May 1, a jury awarded $240 million to thirty two intellectually disabled workers in connection with the EEOC’s claims that Hill Country Farms, their employer, discriminated against them and subjected them to a hostile work environment. Following the verdict, the Court invited briefing from defendant and the EEOC regarding the appropriate judgment award to be entered in the case.

Damages Caps Under The ADA

The ADA imposes a statutory cap -- a ceiling -- of $50,000 for each claimant in cases where an employer-defendant has more than 14 but fewer than 101 employees. The $50,000 limit is inclusive of compensatory and punitive damages. 

Here, given the size of Hill Country Farms’ workforce at the time of the alleged violations, the “maximum allowable” recovery with respect to each claimant was $50,000, for a total recovery of $1.6 million for all claimants, plus “applicable prejudgment interest.” The Court will determine the proper amount of prejudgment interest at the June 10 hearing.

EEOC’s Request For Injunctive Relief

The EEOC is also seeking injunctive relief. To prove that it is entitled to an injunction, it must show that there is a “threat of irreparable harm” in connection with further violations by Hill Country Farms. However, Hill Country Farms reportedly went out of business in February 2009. So the EEOC will need to convince the Court that injunctive relief is necessary to stop a defunct business that has not employed anyone since 2009 from engaging in future violations of employment laws. The President of Hill Country Farms allegedly admitted at trial that although the company is no longer in business, it remains a “corporation in good standing in the State of Texas.” In other words, while the corporation is no longer operating a business and has no workforce, it remains a legal entity. Thus, the EEOC is maneuvering around the company’s current defunct status by arguing that Hill Country Farms or a successor company could “potential[ly] return to full operations or re-initiat[e]…the business.” If (and when) it resumes operations, the EEOC wants an injunction in place.

Because the potential “threat” that the defendant may resume or re-incorporate a business may occur “any time in the future,” EEOC is requesting ongoing and permanent future injunctive relief. For instance, the EEOC has requested injunctive relief provisions requiring that the defendant must notify the EEOC in writing if (1) the company or its principals or owners “engage in business at any time in the future” of any type or (2) the company or a successor company resumes business activities “similar to those conducted by Hill Country Farms.”

Further, if the company ever resumes business, the EEOC is seeking an order imposing a variety of obligations -- including training, reporting, and hiring a mental health professional as a consultant -- for five years.

Implications For Employers

It will be interesting to see if the Court accepts the EEOC’s novel argument in favor of injunctive relief in this case, and how it treats the defendant’s arguments opposing the propriety and scope of the relief. Stay tuned.

By Christopher DeGroff, Reema Kapur, and Gerald L. Maatman, Jr.

On May 1, 2013, the United States Equal Employment Opportunity Commission (EEOC) secured a jury award of $240 million in an ADA case. The verdict is the largest ever obtained by the EEOC, a fact it is already touting on its website.

The verdict was handed down in EEOC v. Hill Country Farms, Inc., No. 3-11-CV-41 (S.D. Iowa) with a jury finding that an Iowa turkey-processing company discriminated against its intellectually disabled workers and subjected them to a hostile work environment on the basis of their disability.

While this case is a factual outlier, employers should take note of the EEOC’s expansive legal theories here as we expect them to resurface in pattern or practice cases.

Background

We discussed the background of this case in our previous post regarding the EEOC’s partial summary judgment win here. In September 2012, the EEOC secured summary judgment and damages of over $1.3 million on its claim that Hill Country Farms discriminated against intellectually disabled workers by paying them lower wages than non-disabled persons.

The EEOC tried its remaining claims to a jury. It alleged that claimants were subjected to a range of “severe and pervasive unwelcome conduct,” including being called names and being hit and kicked by defendant’s employees. (Complaint, ¶ 9(a).) It also alleged that claimants were subjected to harsh discipline and discriminatory job assignments due to their disability. (Id., ¶ 9(b).) Finally, it contended that claimants were discriminated against when they were assigned to substandard living, given inadequate medical attention, not allowed to move or communicate freely, restrained or confined to rooms, and denied bathroom breaks. (Id.)

After a week-long trial, the jury found against defendants in connection with both the discrimination and hostile work environment claims.

Jury Verdict

The jury awarded $5.5 million in compensatory damages and $2 million in punitive damages to each of the 32 claimants in the lawsuit for a total damages award of $240 million. The verdict is subject to reduction because the ADA caps damages but for now it is a symbolic victory for the EEOC.

To put the verdict in context -- between 1997 and 2012, the EEOC secured a total of $89 million in damages for all ADA claims. During the same time, the EEOC secured a total of $3.25 million in damages for all intellectual disability claims under the ADA. Thus, the verdict in this case is 77 times the total amount of damages the EEOC has obtained for all intellectual disability claims between 1997 and 2012. 

EEOC’S Overreaching

The facts of this case are extreme. Leading up to the EEOC’s lawsuit, Hill Country Farms failed to change its pay practices or improve work conditions despite several government investigations that revealed violations. By apparently mistreating its disabled workers for two decades, the defendant practically invited the spectacularly bad outcome in this case.

However, putting aside the shocking facts of this case, from a legal perspective, certain of EEOC’s allegations in this lawsuit are problematic. The EEOC shoe-horned into an ADA claim allegations regarding unlawful and potentially criminal conduct including that defendant provided substandard or unsafe housing and restricted employees’ movement and communications. Without question, defendant’s conduct is reprehensible and should have been prosecuted. But the ADA is not the appropriate vehicle to do so. These types of violations are subject to other federal and state laws and statutes, each with its own enforcement mechanisms and remedial schemes. For example, in this case, the state stepped in and closed down the living quarters that the EEOC alleged to be unsafe and uninhabitable. Similarly, allegations that defendant restricted employees’ movement could have been addressed through state law claims such as the tort of false imprisonment. 

Hill Country Farms did not challenge the EEOC’s legal theories concerning its discrimination and hostile work environment claims. It did not move to dismiss or strike certain of the allegations in the EEOC’s lawsuit to trim down the scope of the claims nor did it engage in any other dispositive motion practice. Instead, it chose to go to trial and lost.   

Implications For Employers

Hard cases make bad law. Whether the record-breaking jury verdict in the EEOC v. Hill Country Farms case may prove the wisdom of that maxim remains to be seen.

This verdict may encourage the EEOC to continue to stretch civil rights laws beyond their plain statutory meaning. Because of headline-grabbing facts and defendant’s strategic choice not to challenge the EEOC’s claims as a matter of law, the EEOC’s expansive legal theories have been blessed by at least one federal jury. Employers may see this case cited as precedent to support the EEOC’s wide-ranging pattern or practice claims through which it impermissibly seeks to expand its jurisdiction into the realm of tort and criminal violations.

By Gerald L. Maatman and Jennifer A. Riley

On April 12, 2013, Judge Laurie Smith Camp of the U.S. District Court for the District of Nebraska issued her summary judgment opinion in EEOC v. JBS USA, LLC, No. 10-CV-318 (D. Neb. Apr. 12, 2013). In a mixed decision, Judge Camp gave the EEOC the benefit of the doubt on its investigation and conciliation efforts, but granted summary judgment on its claims for unlawful termination and retaliation, finding that a single mass termination of 80 employees did not constitute a “pattern or practice.”

We previously have blogged about the EEOC’s companion case pending before Judge Phillip Brimmer in the U.S. District Court for the District of Colorado and its thorny procedural and administrative issues (read more here, here and here). The series of rulings provide a window into the EEOC’s regular practices for prosecuting systemic claims and they are a valuable read for any employer facing large-scale EEOC litigation.  

Factual Background

The EEOC filed two lawsuits alleging that JBS USA, LLC, which does business as meat packing company JBS Swift & Company, discriminated against a class of Somali Muslim employees at its facilities in Greeley, Colorado and Grand Island, Nebraska.

In the Nebraska suit, the EEOC alleged that JBS Swift engaged in a pattern or practice of religious discrimination when it failed to reasonably accommodate at least 153 Muslim employees by allowing them prayer breaks. The EEOC also alleged that the company retaliated against the employees and terminated their employment when they requested that the company move their evening breaks so that they could pray at sundown during the month of Ramadan.

JBS sought summary judgment on EEOC’s three pattern or practice claims, and the EEOC sought a ruling as a matter of law that JBS had engaged in a pattern or practice of denying reasonable accommodation. Id. at 3. 

The Court’s Opinion On Investigation

JBS argued that the court should grant summary judgment because the EEOC failed to satisfy certain conditions precedent to filing suit, including investigation. Id. at 19. 

JBS asserted that Section 707 authorizes only the EEOC to investigate charges of discrimination, and, therefore, the EEOC could not rely on the investigation performed by the Nebraska Equal Opportunity Commission (“NEOC”). The Court disagreed. The Court found that, because Section 707 incorporates the “procedures” set forth in Section 706, and Title VII supports worksharing between the EEOC and state and local agencies, it likewise permitted the EEOC to rely on investigation performed by NEOC. Id. at 21-24.

JBS also asserted that the EEOC failed to satisfy conditions precedent because the investigation was flawed and insufficient. Id. at 24. In rejecting JBS’s argument, the Court distinguished EEOC v. CRST Van Expedited, Inc. (read more here and here). Unlike EEOC v. CRST, JBS did not assert that the EEOC failed to identify or give it notice of the individual claims; rather, JBS asserted that the investigation was inadequate. The Court held that the EEOC enjoys “wide latitude” to investigate charges and, so long as an investigation occurred, the Court cannot review its sufficiency. Id. at 26. 

The Court’s Opinion On Pattern Or Practice Claims

JBS also moved for summary judgment on the EEOC’s pattern or practice claims. JBS contended that the EEOC’s religious accommodation claims were inappropriate for pattern or practice treatment because, to show that unlawful discrimination occurred, each alleged victim must demonstrate a sincerely held religious belief. Id. at 30. The Court rejected JBS’s argument, but noted that to the extent individual workers’ beliefs varied, JBS could present this evidence during Phase I to show that accommodation would cause undue hardship. Id. at 31. 

JBS also asserted that the EEOC could not make out a prima facie case because it could not show that discrimination was the company’s “standard operating procedure.” Id. at 32. The Court noted that the EEOC failed to produce statistical evidence showing disparities between protected and non-protected workers, but it nevertheless concluded that evidence of JBS’s purported company-wide policies regarding unscheduled prayer breaks created issues of fact for trial. Id. at 35. 

Finally, JBS asserted that the EEOC could not establish a pattern or practice of unlawful termination or retaliation based on JBS’s isolated termination of 80 Somali Muslim employees. The Court agreed, noting that “multiple acts of discrimination are required to establish a pattern or practice.” Id. at 38. The EEOC did not allege that JBS adopted a discriminatory termination policy and, although it referred to 80 decisions, the mass termination was a single action in response to the events of a single day. Id. at 39. 

Implications

Although a mixed bag, EEOC v. JBS contains some bright spots for employers. Most notably, Judge Camp rejected the EEOC’s theory that a mass termination is a “pattern or practice” simply because it involves multiple employees. Further, the Court found that, because the EEOC brought separate actions in separate forums, it could not introduce evidence from its Colorado action to bolster its inadequate claims. The opinions in both EEOC v. JBS cases thus provide valuable insight for employers facing large-scale EEOC pattern or practice claims.

Fresh on the heels of a full defense verdict in one of the EEOC’s highest profile sexual harassment cases of 2012-2013, the Commission was dealt another blow on April 19, 2013, when the U.S. District Court for the Eastern District of Washington dismissed a closely related retaliation case because of the lack of admissible evidence supporting those claims. The ruling — EEOC v. Evans Fruit, No 10-CV-3093, 2013 U.S. Dist. LEXIS 56668 (E.D. Wash. Apr. 19, 2013) — represents another significant setback for the Commission and a rebuke of its questionable litigation tactics.  

Factual Background

In EEOC v. Evans Fruit, No 10-CV-3093 (E.D. Wash.), the EEOC sued Evans Fruit on behalf of 10 charging parties who claimed that they were retaliated against for participating in the EEOC’s investigation into allegations of sexual harassment. The retaliation claims stemmed from a meeting between EEOC attorneys and the claimants, a group of former Evans Fruit employees, at a public library in Sunnyside, Washington. One of the charging parties recognized two men at the library who he believed were Evans Fruit employees. The EEOC argued that the employees’ presence at the library was meant to intimidate the claimants and further asserted that several of the individuals were threatened after they attended the meeting. In moving for summary judgment, Evans Fruit challenged the evidentiary basis for the EEOC’s assertions and argued that there was no proof of retaliation. 

The Court’s Decision

On April 19, 2013, Judge Lonny R. Suko granted Evans Fruit’s motion for summary judgment, dismissing all 10 of the EEOC’s retaliation claims. Significantly, the Court noted that unlike sexual harassment claims that take into account whether the alleged victim subjectively believed the work environment was hostile or abusive, retaliation claims are based on an objective, reasonable person standard. Thus, although “out of court statements relayed to a sexual harassment claimant regarding similar acts of harassment in the workplace may be admissible for the purpose of showing the effect on the listener (the claimant),” such statements serve no legitimate purpose in evaluating the charging parties’ retaliation claims because the “subjective effect of a statement on a particular claimant is irrelevant.”  Id. at *10.

In reviewing the EEOC’s purported evidence of retaliation, the Court found that none of the claimants could reasonably have believed that their presence at the library was retaliatory based on what they knew at the time, particularly because all but one of the claimants were either unaware of the two men’s presence at the library or did not believe their presence was significant at the time. Critically, the Court ruled that the claimants’ testimony that they later came to believe that they had been retaliated against — after they learned of the men’s identities and heard that threats had been made by third parties against those who attended the meeting — was based on out of court statements offered to prove the truth of the matter asserted. Finding that nearly all of the EEOC’s evidence was based on inadmissible hearsay, the Court granted Evans Fruit’s motion for summary judgment and dismissed all 10 of the claimants’ retaliation claims.

Implications For Employers

The EEOC has shown from time to time that it will play fast and loose with the “facts,” oftentimes claiming that second-hand rumors, gossip, and even its own pleadings and arguments are “evidence” of Title VII violations. Courtesy of the rule against hearsay, the Court’s decision in Evans Fruit shattered these smoke-and-mirrors tactics. 

Readers can also find this post on our EEOC Countdown blog here.

By Courtney Bohl and Laura J. Maechtlen

Recently, in EEOC v. Wedco, Inc., No. 3:12-CV-00523 (D. Nev. March 12, 1013), the U.S. District Court for the District of Nevada considered whether the EEOC met is Title VII conciliation obligations when it ended conciliation negotiations after an employer, Wedco, Inc., refused to make a counter-offer to the EEOC’s settlement demand. The Court held that the EEOC was not required to continue conciliation negotiations once Wedco refused to make a counter-offer. 

This ruling is somewhat troubling for employers, as the Court made this finding despite an express acknowledgement that Wedco did not make a counter-offer because the EEOC refused to provide Wedco with information to support the agency’s high monetary demand. The Court reasoned that — because Wedco refused to make a counter-offer — the employer was the one responsible for conciliation negotiations failing, and not the EEOC.

This case is unfortunate for employers faced with the EEOC’s “hide the ball” strategies during conciliation, and suggests that employers must make a counter-offer during negotiations despite the EEOC’s unreasonable or unsupported demands to succeed on a failure-to-conciliate defense in subsequent litigation.    

Background Of The Case

In EEOC v. Wedco, the EEOC initiated suit against Wedco based on a charge of discrimination filed by Larry Mitchell, a warehouse delivery driver, alleging racial harassment, discrimination and constructive discharge. Id. at 1. In his charge, Mitchell claimed  that he was subjected to racial comments and name-calling and was exposed to a noose hanging in a high traffic area of the company’s warehouse. Id. Mitchell also alleged he was required to ask for permission to use the restroom, which non-black employees were not required to do, and was denied breaks that non-black employees received. Id. Finally, Mitchell alleged he was forced to quit because of the harassment he endured at Wedco.

The Nevada Equal Rights Commission (“NERC”) investigated Mitchell’s charge, finding probable cause to believe Wedco subjected Mitchell to a racially hostile work environment and constructive discharge. Id. at 2. The NERC then issued a determination letter to Wedco outlining its factual findings and offering to begin conciliation, initially demanding $161,000. Id. at 2, 6. Although over a four month period Wedco repeatedly asked for additional information that supported the NERC’s high demand, the NERC refused. Id. Accordingly, Wedco declined to make a counter-offer, and, shortly thereafter, the NERC notified Wedco that conciliation had failed. Id. at 2.

The NERC then forwarded the charge to the EEOC. Id. at 2. The EEOC issued its own letter of determination and a conciliation letter, in which it solicited Wedco’s counter-offer. Id. at 2, 8. Wedco requested additional information from the EEOC on the charge, and the EEOC refused to respond. Id. at 8. Wedco, again, declined to make a counter-offer. Id.  

The EEOC subsequently filed a complaint against Wedco alleging harassment, constructive discharge, and disparate treatment. Id. at 2. Wedco moved to dismiss the EEOC’s complaint for lack of subject matter jurisdiction based on the EEOC’s failure to conciliate, or, in the alternative, for a stay to complete the conciliation process. Id. at 2.

The Court’s Ruling

The Court denied Wedco’s motion in its entirety. The Court held that Title VII’s conciliation requirement is not jurisdictional. Id. at 3. The Court reasoned that statutory prerequisites are only jurisdictional if Congress’ intent is clear, and Title VII is not “clothed in unmistakably jurisdictional language.” Id. at 4. 

Turning to whether the EEOC conciliated in good faith, the Court applied a deferential test, looking only to see if the EEOC made a “colorable attempt” at conciliation. Id. at 4. The Court found the EEOC did - both the NERC and the EEOC invited Wedco to negotiate and provided an initial offer. Id. at 6-7. The Court reasoned that it was Wedco’s  refusal to make a counter-offer that caused the EEOC to end conciliation negotiations. Id. at 7. The Court noted if “Wedco was unsatisfied with the EEOC’s offer based upon the evidence, it could have made a counter-offer of a token sum.” Id. If the EEOC had refused this counter-offer, then perhaps the Court would have grounds to find the EEOC failed to conciliate. Id. The Court also made clear that the EEOC is like any other civil litigant, and is able to begin with a settlement proposal that seems extreme to its adversary. Id. at 8. Thus, because of Wedco’s “continued refusal to make any counter-offer when repeatedly solicited for one,” the Court found it impossible to determine that the EEOC was not prepared to conciliate in good faith. Id.

Implications Of The Ruling

This ruling is disappointing in that it encourages the EEOC to make an initial opening settlement proposal that is untethered to the facts of the dispute. The ruling warns employers that they must make some offer during conciliation negotiations to preserve their ability to challenge the EEOC’s conciliation tactics in defending a subsequent lawsuit. Accordingly, to preserve their defenses, employers should, even when faced with an unreasonable and unsupported monetary demand, make a counter-offer, even if it is only for a “token” sum.

By Christopher DeGroff and Gerald L. Maatman, Jr.

Calling all loyal blog readers - the EEOC-Initiated litigation webinar is just a few days away – on Tuesday, March 12, 2013. We still have spaces available for the webinar – click here to register and attend.

Our readers have given us wide-ranging feedback since the launch of our annual EEOC litigation study, EEOC-Initiated Litigation: Case Law Developments In 2012 And Trends To Watch For In 2013. This publication is a definitive source of information that focuses exclusively on EEOC-related litigation (click here to order a copy). Our webinar will provide a comprehensive review of these workplace litigation trends and provide attendees with updates on 2013 rulings. 

The webinar will focus on the past twelve months, which represented a landmark year for EEOC complex employment-related disputes and portends an array of developing trends for employers to monitor in 2013. These trends emerge on the heels of the EEOC’s release of its Strategic Enforcement Plan (discussed here, here, and here). Just a few months into 2013, we have already seen the EEOC make good on its promise to devote increased resources to its six national enforcement priorities, which include: (1) eliminating barriers recruitment and hiring; (2) protecting immigrant, migrant, and other vulnerable workers; (3) addressing emerging and developing issues; (4) enforcing equal pay laws; (5) preserving access to the legal system and; (6) preventing harassment through systemic enforcement and targeted outreach.

Against this backdrop, partners Gerald L. Maatman, Jr. and Christopher DeGroff, co-chairs of our complex discrimination litigation group, will lead attendees through the substantive trends in the EEOC’s 2012 litigation and discuss what employers should look out for in 2013. Some of the topics we will discuss include:

• A practical review of the EEOC’s new Strategic Enforcement Plan.
• Noteworthy case filings and settlements in 2012 & early 2013 and what they signal for employers.
• Significant court rulings in 2012 & early 2013 and what they mean for employers.
• Practical advice on dealing with the EEOC and what every employer should have in its EEOC defense “toolkit.”

The date and time of the webinar is Tuesday, March 12, 2013

2:00 p.m. to 3:00 p.m. Eastern
1:00 p.m. to 2:00 p.m. Central
12:00 p.m. to 1:00 p.m. Mountain
11:00 a.m. to 12:00 p.m. Pacific

We look forward to you joining us!

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff and Gerald L. Maatman, Jr.

In yet another case regarding discovery of social media content, Magistrate Judge Michael E. Hegarty of the U.S. District Court for the District of Colorado recently sanctioned the EEOC for its efforts to evade discovery of social media content in EEOC v. The Original Honeybaked Ham, No 11-CV-2560 (D. Colo. Feb. 27, 2013), a systemic sexual harassment and retaliation case. The Defendant argued that many of its employees utilized social media to communicate and therefore claimed that the employees’ online statements were discoverable. On several occasions, the EEOC made the Defendant’s discovery efforts “more time consuming, laborious, and adversarial than it should have been.” Id. at 2. Thus, the Defendant filed a motion for sanctions in a last-ditch effort to compel the EEOC to comply with its discovery requests. Siding with the Defendant, Magistrate Judge Hegarty granted in part and denied in part the Defendant’s request for sanctions.

Background Of The Case

In 2010, the EEOC investigated allegations that the Defendant’s regional manager subjected Wendy Cabrera, and other female employees to repeated and offensive sexual comments and physical touching. One year later, the EEOC initiated claims of sexual harassment, hostile environment, and retaliation, alleging that the Defendant subjected approximately 20 women employees to sexual harassment. Id. at 1. One of the charging parties, Cabrera, claimed that her supervisor solicited sex from her and other women employees. Cabrera also claimed that after she reported the harassment, the Defendant terminated in her in retaliation. The EEOC demanded the Defendant provide back pay and compensatory and punitive damages to the allegedly aggrieved individuals. The EEOC also requested that the Court require the Defendant to initiate anti-discrimination training for its managers and human resource personnel.

In efforts to build its defense, the Defendant requested discovery of the employees’ social media accounts, text messages, and emails. The Defendant argued that such information was relevant to the lawsuit because, for example, Cabrera posted on her Facebook page her hopes to recover $400,000 from the lawsuit; statements about several personal matters; “musings about her emotional state in having lost a beloved pet as well as having suffered a broken relationship; other writings addressing her positive outlook on how her life was post-termination; her self-described sexual aggressiveness; statements about actions she engaged in as a supervisor with Defendant; sexually amorous communications with other class members; [and,] her post-termination employment and income opportunities and financial condition[.]” EEOC v. The Original Honeybaked Ham, No 11-CV-02560, at 304 (D. Colo. Nov. 7, 2012).  In objecting to the Defendant’s discovery request, th

e EEOC asserted that the Defendant’s request was overly broad and intruded on the employees’ privacy.

In November 2012, the Court ruled on the parties’ discovery dispute and held that the information the employees posted on their Facebook profiles is relevant to the lawsuit and therefore discoverable. Noting that social media presents “thorny and novel issues,” the Court reasoned that the employees’ Facebook postings are discoverable because they may contain information that could lead to discovery of admissible evidence relating to the lawsuit. Id. at 2. The Court rejected the EEOC’s privacy objections and noted that the employees shared information in a public forum, knowing that it was accessible by other people. Nevertheless, the Court did not disregard the EEOC’s privacy concerns. Instead, the Court selected a forensic expert as a special master to review the requested documents – a process it defined as necessary to “gather only discoverable information.” Id. at 4-5.

Despite the Court’s order, the EEOC continued to refuse to provide requested discovery and failed to engage in its mandatory pre-suit conciliation efforts. Thus, in January 2013, HBH filed a motion to dismiss the EEOC’s claims for failure to satisfy its pre-suit requirements under Title VII.  On January 15, 2013, the Court joined with a litany of recent rulings (discussed here, here, and here) and held that the EEOC’s pre-litigation efforts were unacceptable under Title VII’s framework.  Thus, the Court barred the EEOC from asserting claims not specifically identified during pre-suit litigation and prohibited the EEOC from seeking relief on behalf of individuals who HBH could not reasonably identify from the information provided by the EEOC. 

Then, most recently, the Defendant filed a motion for sanctions against the EEOC for its continued endeavors to thwart the discovery of social media evidence. Magistrate Judge Hegarty’s recent ruling serves as warning to the EEOC that preventing discovery of relevant social media content may result in sanctions.

The Court’s Ruling

The Court found that the EEOC prolonged the discovery process and caused unnecessary expense and delay on several occasions. The Court found that “in certain respects, the EEOC has been negligent in its discovery obligations, dilatory in cooperating with defense counsel, and somewhat cavalier in its responsibility to the United States District Court. EEOC counsel has prematurely made promises about agreed-upon discovery methodology and procedure when they apparently had no authority to do so . . . .” Id. at 2. 

Despite the EEOC’s clear foul play, the Court noted that it faced a hurdle in granting the Defendant’s motion for sanctions because although the EEOC’s conduct was “inappropriate and obstreperous,” it did not rise to a level that is sanctionable under most rules governing the litigation process. Id. at 3. However, the Court found a remedy vis-à-vis Fed. R. Civ. P. 16(f)(1). The Court explained that Rule 16(f)(1) grants courts the inherent power to sanction parties for unnecessary burdens. Thus, the under Rule 16(f)(1), the Court held that it could sanction the EEOC for its actions that negatively affected the Court’s management of its docket and caused unnecessary burdens on the Defendant and delays in the Court’s efforts to proceed with the case. Id. at 6.

Implications For Employers

The EEOC’s tactics in EEOC v. The Original Honeybaked Ham ultimately resulted in a sanction fee against the Commission. The Court’s ruling warns the EEOC that using discovery as a tool to create ongoing and unnecessary burdens is unacceptable. 

Readers can also find this post on our EEOC Countdown blog here.

By Lorie Almon, Gerald L. Maatman, Jr., and Ian Morrison

On February 27, 2013, we hosted our annual workplace class action litigation webinar. Over 1,000 clients attended. If you missed it, attached is the audio and the PowerPoint deck from the presentation.

As discussed at the webinar, the past twelve months represented a landmark year for complex employment-related disputes and portends an array of developing trends for employers to monitor in 2013, led by a dramatic “halo effect” from the U.S. Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011).

The webinar focused on a changed national landscape of “bet the company” employment disputes fueled by an aggressive plaintiffs’ bar and invigorated federal and state enforcement regimes. We discussed the new parameters for Rule 23 standards and workplace class arbitration defenses created by Wal-Mart and AT&T Mobility LLC v. Concepcion, and how employers can continue to prepare themselves for litigation in light of those decisions. Some of the trends we focused on included:

•  The impact of the Supreme Court’s opinions in Wal-Mart and Concepcion and the creative case law theories that will continue to evolve and impact employers in the defense of their cases in 2013.

•  The U.S. Equal Employment Opportunity Commission’s focus on systemic lawsuits and how government enforcement activity is expected to accelerate even more in 2013.

•  The influence of Wal-Mart on settlement strategies for workplace class actions and how the plaintiffs’ class action bar is “re-booting” its approach to class-based litigation.

•  How the sluggish U.S. economy during 2012 fueled more class action and collective class action litigation and how this trend will continue in 2013.

•  Why wage & hour litigation continued to outpace all other types of workplace class actions in 2012 and is expected to grow again in 2013.

•  How the plaintiffs’ class action bar has moved to respond to Wal-Mart and craft new approaches to class-wide theories of certification, liability, and damages related to the Rule 23 developments.

By Rebecca Bromet, Christopher DeGroff, and Gerald L. Maatman, Jr.

The EEOC’s Quality Control Plan for investigations and conciliation emerges on the heels of the Commission’s Strategic Enforcement Plan for FY 2013-2016. As we previously reported, the EEOC’s Strategic Plan will function as the blueprint for the Commission’s enforcement activity for the next several years. Because of the Plan’s importance to employers, corporate counsel, and HR professionals, Seyfarth Shaw LLP offered its input on the Strategic Plan from the earliest stages of the EEOC’s drafting process (those submissions are available here, here, here, and here ). Seyfarth was pleased that the final Strategic Plan contemplated the implementation of a Quality Control Plan that will improve the EEOC’s coordination between investigation and legal enforcement functions. The EEOC has indicated that it is hopeful that the Quality Control Plan will increase the timeliness of its investigation administrative charges and the quality of its conciliation efforts.

On February 12, 2013, the EEOC asked the public for input on its new Quality Control Plan. The EEOC indicated that it was most interested in, among other things, recommendations for improving investigations, conciliations, and the quality of the Commission’s intake process.

Today Seyfarth Shaw submitted its recommendations to the Commission for ways in which the EEOC can better fulfill its investigation and conciliation functions, based on our years of close interaction with the agency in some of its largest and most complex matters. Seyfarth Shaw’s recommendations include:

Refining the pre-investigation process: We have seen an alarming trend of the EEOC abandoning its core tenant of seeking voluntary compliance with EEO laws through cooperating with employers to eliminate real and perceived problems. Seyfarth’s submission notes that, although there are large segments of the agency still committed to working with employers during its pre-suit investigations, there is at least a perception that this contingent is shrinking. In today’s submission, we provide a number of suggestions on how the Commission can reverse this trend.

True investigative neutrality: As we point out in our submission, the EEOC is first and foremost to be a neutral fact-finder at the investigative stage. All parties would benefit from increased employer involvement in all facets of the EEOC process. Seyfarth’s submission provides step-by-step suggestions of how the EEOC can keep employers in the loop through the investigation process.

Addressing opportunities for conciliation improvements: We have consistently observed that the Commission has lost some sense of its core mission when it shifted its emphasis to aggressively pursuing large-scale, high-impact and high-profile investigations and cases. With alarming and increasing frequency, the EEOC’s shift in focus has meant that the Commission drifted from its statutory mandate that it may pursue civil action against an employer only after it has satisfied its statutory duty to “eliminate the alleged unlawful employment practice through informal methods of conference, conciliation and persuasion” as a precondition to filing an action. In today’s submission, Seyfarth once again strongly urged the EEOC to consider a change in its current conciliation approach.

We hope that armed with this feedback, the EEOC will be better able to accomplish the goal of improving its investigation and conciliation process. It remains to be seen if the EEOC will listen to Seyfarth Shaw’s suggestions, as well as the many other submissions presented to the agency. We may have an answer to our question next month, when the Quality Control Plan is slated to be submitted to the EEOC’s Commissioners. On April 30, 2013, the EEOC will vote on the Quality Control Plan. We will provide readers with updates on these important dates. Stay tuned. 

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff and Gerald L. Maatman, Jr.

After much anticipation, heated debate, and numerous invitations for public comment on the EEOC’s Strategic Enforcement Plan, on February 20, 2013, the EEOC provided an update on its implementation of the Strategic Plan. Approved on December 18, 2012, the Strategic Plan will function as the blueprint for the Commission’s enforcement activity for the next several years. Because of the Plan’s importance to employers, corporate counsel, and HR professionals, Seyfarth Shaw LLP offered its input on the Strategic Plan from the earliest stages of the EEOC’s drafting process. Seyfarth voiced pressing concerns in both its June 2012 and September 2012 comments to the EEOC.   

The EEOC opened the first portion of its meeting to the public and addressed the Commission’s progress in implementing the Strategic Plan. The EEOC’s Performance Improvement Officer, Claudia Withers, and the Director of Research, Information and Planning, Deidre Flippen, answered questions about the EEOC’s objective of strategic law enforcement and addressed the Strategic Plan’s performance measures. 

An additional speaker was Constance Barker, one of the Commissioners of the EEOC. Much could be gleaned from the issues Commissioner Barker addressed (her written comments are here). Especially telling was Commissioner Barker’s prediction that the EEOC’s systemic litigation program will take precedent over the EEOC’s prevention efforts. She articulated several concerns about the EEOC’s emphasis on enforcement of discrimination laws. She sees this as driving up the amount of resources allocated on discrimination that has already occurred, whereas the EEOC would be better off allocating those resources on prevention mechanisms. Commissioner Barker explained that she is opposed to the Strategic Plan because it places the EEOC’s emphasis on litigating discrimination claims, instead of concentrating efforts on preventing discrimination from happening in the first place. 

She also lamented the fact that most lawsuits are filed without the Commissioners’ knowledge. For example, Commissioner Barker stated that in FY 2012, the Commission filed 122 lawsuits in the name of the EEOC but under the rules of the delegation to the General Counsel, only 3 of the 122 lawsuits were sent to the Commissioners for their review and vote. Her speech pointedly suggested that the EEOC rescind the delegation to the General Counsel, which would allow Commissioners to carry out their fundamental responsibility of reviewing, deliberating, and voting on proposed litigation.

In all, this meeting resulted in a robust exchange of ideas and viewpoints from the EEOC. The question remains, of course, will those key decision-makers at the EEOC take control of litigating systemic issues? If the EEOC acts on the written recommendations that were submitted, along with those voiced in last week’s meeting, it would mean a fundamental change in the way that the EEOC views and approaches cases. Further, if the EEOC does embrace a dialogue focused on education and outreach efforts - as Commissioner Barker urged - it would value the efforts that many large employers have made to promote diversity in their workforces and the prospects for reducing discrimination in the workplace will come closer to full realization.

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff and Gerald L. Maatman, Jr.

In a unique case, the U.S. District Court for the Western District of Pennsylvania recently dismissed the EEOC’s allegations that the Defendant’s random drug and alcohol testing of probationary employees violated the ADA. The decision in EEOC v. United States Steel Corp., No. 10-CV-1283 (W.D. Pa. Feb. 20, 2013), is striking in its even-handedness while, at the same time, is a vital point of reference for employers accused of discriminating through the use of medical examinations. 

In Seyfarth Shaw’s EEOC-Initiated Litigation book (discussed here), we noted that the proportion of ADA claims filed in 2012 more than doubled from claims filed in FY 2011. Considering the large number of ADA cases brought by the EEOC in 2012, we predicted that we will see a significant crop of federal court decisions addressing ADA issues in 2013. To that end, Judge Nora B. Fischer’s ruling in EEOC v. United States Steel Corporation kicks off 2013 and is a significant blow to the EEOC’s disability discrimination litigation agenda.

Facts Of The Case

The case began when the EEOC initiated an action on behalf of Abigail DeSimone against the Defendant under § 706 and § 707 of Title VII. The EEOC asserted that the Defendant required DeSimone to undergo random breath alcohol testing during her probationary period and allegedly fired her as a result of the test. Based on this fact, the EEOC claimed that the Defendant engaged in a pattern or practice of disability discrimination by maintaining a nationwide procedure of requiring probationary employees to undergo random alcohol tests. In support of its claim, the EEOC alleged that the Defendant did not have a reasonable basis for subjecting the employees to the random tests.

In July 2012, the Court granted the Defendant’s motion to dismiss claims of discrimination based on alcohol breath tests and or termination that occurred more than 300 days before the administrative charge was filed with the EEOC. We discussed that previous ruling here. The Court noted that “no clear trend has emerged in District Courts that have addressed the issue “of whether § 706’s 300-day limitations period is applicable to the EEOC’s pattern or practice allegations.” EEOC v. United States Steel Corp, et al., Case No. 10-CV-1284 (W.D. Pa. July 23, 2012). Citing to and siding with other federal courts that have recognized the 300-day procedural requirement, the Court applied the plain language of § 706 and reasoned that any claims of discrimination based on events that occurred 300 days before the charge that gave rise to the EEOC’s lawsuit are time-barred, and are therefore dismissed. The Court’s ruling on the 300-day limitation period was a significant win for all employers seeking to limit the number of claimants in EEOC litigation.

In the Defendant’s motion to dismiss, it also argued that the EEOC failed to “specifically plead that it . . . met its statutory pre-suit obligations to investigate, issue reasonable cause findings and conciliate its claims, or to name any of the presently unidentified aggrieved employees who make up the purported class.” Id. at 14-15. The Court determined that it was premature to determine whether the EEOC satisfied all of its statutory pre-suit obligations because it had not yet considered all of the evidence. Thus, the Court found that even though the EEOC’s claims were subjected to Title VII’s 300-day statute of limitations, the Commission could proceed with the remaining allegations.

We predicted in our blog posting that the Court’s July 2012 ruling left the door open for the Defendant to re-assert its arguments at the summary judgment stage. Sure enough, soon thereafter, the Defendant filed a motion for summary judgment and incorporated its past arguments by asserting, among other things, that: “(1) the EEOC failed to complete the multistep enforcement procedure prior to bringing the lawsuit; [and] (2) the practice of randomly testing probationary employees is job-related and consistent with business necessity.” EEOC v. United States Steel Corp., Case No 10-CV-01284, at 1 (W.D. Pa. Feb. 20, 2013).

The Court’s Ruling

       I.            Pre-Suit Investigation And Conciliation Efforts

The Court began its ruling by discussing the EEOC’s investigation and conciliation requirements under Title VII. Relying on EEOC v. CRST Van Expedited, Inc. (discussed here, here, here, and here), the Court noted that the EEOC’s failure to comply with pre-suit investigation and its good faith conciliation obligations warrants dismissal of charges. In a seemingly employer friendly pronouncement of the related law, the Court noted that “[t]he EEOC may not use discovery in the resulting lawsuit as a fishing expedition to uncover more violations.” Id. at 16. Applying the facts of this case, the Court explained that the record shows that the EEOC undertook minimal investigation before filing the lawsuit; the EEOC did little to investigate DeSimone’s charge; and the EEOC failed to obtain information as to whether employees at any of the Defendant’s other plants were subject to the alcohol testing policy. Id. at 18. 

Despite the EEOC’s inadequate pre-suit investigation, the Defendant’s own tactics precluded the Court from disposing of the case on this basis. Evidently, the parties engaged in conciliation efforts and upon the Defendant’s request, the related discussions and motions were all deemed confidential. Thus, the only knowledge that the Court obtained regarding the conciliation attempts was that the parties made an unsuccessful effort to resolve the allegations prior to litigation. Aside from that, the “exact details of the conciliation attempt remain unknown to the Court.” Id. at 8. Thus, without any documentary evidence as to the substance of the conciliation process, the Court held that it could not dismiss the case for the EEOC’s failure to engage in good faith conciliation. Sending a message to the Defendant, the Court stated that the Defendant could not withhold crucial documents relating to the conciliation and then attempt to benefit from ensuing the evidentiary void.  In other words, the Court ruled that the Defendant “cannot have its cake and eat it, too.” Id. at 20.

    II.            Random Breath Alcohol Testing Is A Business Necessity

Next, the Court considered whether the Defendant’s policy of randomly breath testing probationary employees was a job-related business necessity (an exception built into the ADA’s broad ban on medical testing). In a significant win for employers, the Court held that the Defendant’s policy was a business necessity and therefore the Defendant could lawfully administer alcohol breath tests to probationary employees. The Court reasoned that because the probationary employees perform dangerous and safety-sensitive duties, the employees must be alert at all times and therefore no level of intoxication is acceptable on the job. Additionally, the Court noted that the tests were practical and fair because protective gear worn at the plant makes it nearly impossible to otherwise determine if an employee is intoxicated while working. Finally, the Court reasoned that the Defendant’s policy of randomly testing its employees for drug and alcohol abuse functioned to deter employees in safety-sensitive positions from working under the influence. Thus, the Court held that the random alcohol tests are a reasonable safety precaution, and it therefore dismissed the EEOC’s remaining allegations.

Implications For Employers

The Court explained in no uncertain terms that the “EEOC’s vision of the ADA [in this case] would defy common sense by prohibiting random alcohol testing on new employees under the counterintuitive and unsupported premises that they are not more likely to engage in risky behavior like abusing alcohol at work.” Id. at 32-33. This decision should provide a measure of relief to employers engaging with the EEOC in allegations that alcohol and drug testing violates the ADA. 

The Court’s discussion of the EEOC’s pre-suit investigation and conciliation tactics deserves just as much attention. In the last two years, a series of rulings across the nation have cut against the EEOC for its failure to investigate and engage in good faith conciliation efforts. However, the recent ruling in EEOC v. U.S. Steel Corp. provides the EEOC with ammunition that employers must be on the look-out for. Employers beware:  you may hit a brick wall in attempting to dismiss the EEOC’s actions for failure to satisfy Title VII’s pre-investigation and conciliation requirements if you do not turn over related documents to the Court.

Readers can also find this post on our EEOC Countdown blog here.

By Gerald L. Maatman, Jr. and Christopher DeGroff

As we blogged about here previously, in the EEOC’s first draft of its Strategic Enforcement Plan, the Commission telegraphed that it was increasingly focused on preventing, and when necessary, litigating workplace harassment and retaliation allegations. The EEOC’s warning was no bluff, for in 2012 the EEOC filed a significant amount of harassment and retaliation lawsuits (discussed here, here, and here). The EEOC kicked off 2013 by entering a series of consent decrees resolving allegations of retaliation. One week after we blogged about the EEOC’s rash of retaliation settlements, Judge Kocoras of the U.S. District Court for the Northern District of Illinois approved a consent decree in EEOC v. South Loop Club, Case No. 12-CV-07677 (N.D. Ill. Feb. 6, 2013), resolving allegations of sex harassment and retaliation. As we predicted in our EEOC-Initiated Litigation book, the EEOC’s SEP is functioning as the blueprint for the Commission’s enforcement activity. The recent consent decree in EEOC v. South Loop Club signals that the EEOC continues to vigorously pursue its stated “big six” agenda items enunciated in its SEP.

Background Of The Consent Decree

The case began when five women who worked at South Loop Club, a Chicago bar and restaurant, filed charges with the EEOC alleging discrimination in violation of Title VII. Pursuant to its statutory obligations, the EEOC investigated the charges and found reasonable cause to believe that the Defendant discriminated against the charging parties. Through the EEOC’s investigation, the Commission allegedly found reason to believe that the Defendant also discriminated against an unnamed “class” of female employees. In July 2013, the parties discussed conciliation, but their efforts were fruitless. 

Two months later, the EEOC filed a complaint in the U.S. District Court for the Northern District of Illinois alleging that the Defendant discriminated against a “class” of female employees by subjecting them to harassment because of their sex, retaliating against them, and constructively discharging them as a result of the sexual harassment. The EEOC asserted that the Defendant harassed the charging parties by subjecting them to repeated acts and comments of a sexual nature that were demeaning and unwelcome. Specifically, the EEOC alleged that the Defendant made comments about the female employees’ bodies and touched female employees’ bodies. In October, four additional employees moved to intervene and filed a complaint.  After a series of status hearings before Judge Kocoras and before the parties even initiated discovery, they settled the litigation and filed a joint motion for entry of a consent decree. The next day, Judge Kocoras signed the parties’ motion.

Terms Of The Consent Decree

Judge Kocoras granted the EEOC’s motion for approval of the consent decree, which provides significant monetary relief to the allegedly aggrieved victims of sex harassment and retaliation (to the tune of $64,000). The consent decree also provides that the Defendant will pay $36,000 in attorneys’ fees and costs to counsel for the intervening plaintiffs.

In terms of equitable relief, the consent decree includes injunctions prohibiting the Defendant from future sexual or gender-based harassment or retaliation, including forbidding the toleration of a work environment that is sexually hostile to employees. Additionally, the Defendant must adopt a policy and training to prevent sexual harassment, gender-based harassment, and retaliation.

Implications For Employers

Although the monetary amount of this settlement is not as significant as some of the multi-million consent decrees the EEOC secured last year (discussed here and here), this case provides insight on the EEOC’s continued interest in pursuing harassment and retaliation lawsuits. Notably, much is at stake for employers that the EEOC investigates for discriminatory harassment and retaliation actions.  EEOC v. South Loop Club serves as a reminder to employers that when employees complain about workplace harassment, employers must take prompt action. Implementing a policy that requires an investigation of reported harassment or discrimination can aid in avoiding employer liability, and also work toward the goal of discrimination-free workplaces. 

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff and Gerald L. Maatman, Jr.

We have been keeping our readers posted on the rapidly evolving developments concerning the EEOC’s agenda in 2013 and beyond. As we noted in past postings, the EEOC promised in its Strategic Enforcement Plan (“SEP”) that it would increasingly focus on preventing and, when necessary, litigating retaliation claims. The EEOC sharpened its focus on retaliation after obtaining written comments and a full-day public meeting seeking input on its SEP. At the meeting, several advocacy groups urged the EEOC to rededicate its enforcement efforts on preventing discriminatory retaliation. The EEOC’s final SEP integrated the concepts into its national playbook, included retaliation as one of the “big six” global EEOC priorities. 

The EEOC’s warning in its SEP was no bluff. The EEOC recently announced three significant settlements with employers concerning claims of retaliation: $130,000 in a case relating to disability discrimination retaliation, $85,000 in a sex harassment retaliation case; and $77,500 to settle another disability harassment retaliation lawsuit. The EEOC closed out January 2013 with a $500,000 consent decree against Cognis Corporation relating to yet another claim of retaliation.

A Salvo Of Retaliation Actions

EEOC v. D.O.E. Technologies, Inc. et al., Case No. 11-CV-00861 (D. Del. Jan. 24, 2013). We start with a case in the U.S. District Court for the District of Delaware. Christopher Vely, a sales representative, allegedly notified his employer of his hearing disability and requested an accommodation. When those talks went sour, he complained. The EEOC claimed that after Vely complained, he was fired. The EEOC filed a retaliation complaint in federal court in Delaware, and on January 24, the EEOC finalized a $130,00 consent decree that provides monetary relief to Vely and enjoins the Defendant from engaging in adverse employment actions or retaliation in violation of the ADA.

EEOC v. D.O.E. Technologies, Inc. is also significant because it the EEOC’s SEP also makes clear that the EEOC is going to “gear up” the investigation and subsequent litigation of ADA matters.  For further discussion on this topic, check out the Executive Summary in our EEOC-Initiated Litigation book.

EEOC v. Cappo Management XX, Inc., Case No. 12-CV-0239 (M.D. Tenn. Jan. 25, 2013). Next we turn to the EEOC’s allegations that Cappo Management fired several salespersons because they complained about sexual harassment. The EEOC asserted that three employees were fired just a week after they complained. Eleven months after filing suit in Tennessee, the parties negotiated a consent decree for $85,000 in monetary damages and a variety of other non-monetary provisions. Cautioning employers that the EEOC will continue its focus on retaliation discrimination, Faye Williams, regional attorney of the EEOC’s Memphis District Office, publicly stated that “Title VII and Supreme Court precedent provide that employees have a right to complain about practices they believe are unlawful without repercussions, and the EEOC will continue to act forcefully to protect this right.” 

EEOC v. Kintetsu International Express (USA), Inc., Case No. 10-CV-00560 (D. Haw. Jan. 29, 2013). The consent decree in EEOC v. Kintetsu International Express (USA), Inc. resolved the Commission’s claims that the Defendant harassed and retaliated against, Yuko Lesher, tour coordinator who was purportedly forced to resign in retaliation for her reporting her disability harassment. The parties entered into a $77,500 consent decree and a three-year agreement requiring the Defendant to create new policies and train employees about disability discrimination. 

EEOC v. Cognis Corp., Case No. 10-CV-2191 (C.D. Ill. Jan. 25, 2013). In June 2012, we reported that Judge Michael P. McCuskey of the U.S. District Court for the Central District of Illinois granted a rare summary judgment motion for the EEOC, ruling that the Defendant unlawfully retaliated against its employee Steven Whitlow. The Court found that Whitlow engaged in protected activity when he revoked a “last-change” agreement, and Cognis retaliated against him in violation of Title VII when it terminated his employment. At the same time, the Court denied the EEOC’s second motion for summary judgment regarding a similar charge on behalf of a class of Cognis employees. Just days ago, Judge McCuskey entered a consent decree resolving the lawsuit for $500,000. At the close of the litigation, the EEOC’s Chicago District Director, John Roe, publicly stated that “Cognis presented the victims in this case with a terrible, illegal choice:  lose your job or lose your civil rights. Under the law, no worker has to make that kind of choice. Employers would be better served by working to ensure that their employees are free from discrimination, rather than threatening their workers with termination in an effort to make sure that employees don’t complain.”

Implications For Employers

The EEOC has communicated that it intends to vigorously pursue its stated “big six” agenda items enunciated in its Strategic Enforcement Plan. The cases reviewed in this post suggest it is doing just that. The government’s message is clear: the EEOC has been and will continue to scrutinize employers’ actions for any hint of retaliation. In each of these cases, the employers denied any wrongdoing, but the best winning move is not to be on the EEOC’s target list from the start. Employers should train management and human resource officials to effectively deal with retaliation complaints. Suffice it to say, this is a “white hot” area for the EEOC, and administrative enforcement and full-scale litigation will continue to focus on retaliatory practices. 

Readers can also find this post on our EEOC Countdown blog here.

By Pamela Q. Devata, Gerald L. Maatman, Jr., Jennifer A. Riley, and David J. Rowland

On January 28, 2013, Judge Patricia A. Gaughan of the U.S. District Court for the Northern District of Ohio granted summary judgment to the defense in EEOC v. Kaplan Higher Education Corp, et al., No. 10-CV-2882, 2013 U.S. Dist. LEXIS 11722 (N.D. Ohio Jan. 28, 2013) and thereby dismissed the EEOC’s first lawsuit challenging the use of credit reports in the hiring process on the grounds that such a screen adversely impacts African-Americans. The lawsuit, one of the Commission’s highest profile cases, received immediate media attention following the summary judgment order (click here, here, and here to read more).

The Court also rejected the EEOC’s theory that, contrary to its own mandates, an expert can determine the races of job applicants by looking at their photographs. The Court excluded the EEOC’s “race rating” evidence and, finding no evidence of disparate impact, entered judgment in favor of Kaplan. 

Factual Background

The EEOC brought suit against Kaplan claiming that its use of credit as a hiring criterion had a disparate impact on Black applicants. (Id. at 6.) (Click here for the EEOC’s press release issued upon the filing of the case.)

Kaplan did not collect race information for job applicants. Id. at *4. Thus, to attempt to show the races of particular applicants, the EEOC subpoenaed records from the Department of Motor Vehicles (DMV) in 38 states and the District of Columbia. Id. at *9. Although 14 states provided records that identified race, 24 states provided only copies of driver’s license photos. Id.

To purport to determine race from the photos, the EEOC’s expert, Dr. Kevin Murphy, assembled a team of five “race raters,” individuals with advanced degrees in cultural anthropology, education, human development, psychology, and economics. Id. at *10. Dr. Murphy asked the “race raters” to review each photograph (along with each applicant’s name) and determine whether the individual was African-American, Asian, Hispanic, White, or “Other.” Id.

Although Dr. Murphy assembled a data set of 4,670 individuals, he utilized only 1,090 of the applicants in his statistical analysis and did not take a random or representative sample. Id. at *19-21. Kaplan moved to exclude the expert’s opinions and moved for summary judgment on several additional grounds, including a novel governmental estoppel theory, as the EEOC itself conducts credit checks on its own employees. As the Court noted, the EEOC runs credit checks for job applicants for 84 of the 97 positions at the EEOC, for reasons similar to those employed by Kaplan. Id. at *6.

The Court’s Opinion

The Court excluded the expert reports and testimony of Dr. Murphy as inadmissible because the EEOC failed to show that his methodology was reliable. Id. at *13.

The Court noted that, “to establish the reliability of the analysis, the Court must be convinced that the rate of error is within acceptable parameters.” Id. at *14. The EEOC offered no indication that its use of “race raters” had been or could be tested and provided no known or potential rate of error in the technique employed by the “rate raters.” Id. at *13. Likewise, the EEOC failed to show that the process of “rating race” by visual means had been the subject of peer review or publication. Id. at *14. 

The Court expressed “great concern” over numerous other aspects of Dr. Murphy’s analysis. For instance, Dr. Murphy was involved not only in the statistical analysis of race data, but he selected photos to forward to the race raters and sat on the “panel” that determined race for 15 applicants. Id. at *15-16. Further, Dr. Murphy supplied the names of the applicants to the “race raters,” increasing the likelihood that an individual would be rated “Hispanic,” for instance, merely because she had a traditionally Hispanic surname. Id.

The Court also noted that the EEOC itself discourages employers from visually identifying an individual by race and indicates that visual identification is appropriate “only if an employee refuses to self-identify.” Id. Thus, the EEOC itself “frowns on the very practice it seeks to rely on.” Id. at *17.

Finally, the Court expressed great concern that Dr. Murphy’s sample was not random and, instead, consisted only of individuals for whom Dr. Murphy obtained race information. “There is no indication, for example, that the data is fairly distributed among geographic areas or is in any other way ‘representative’ of the applicant pool as a whole.” Id. at *18-19. In fact, the evidence showed the opposite. Id. at *21.   

Implications For Employers

Judge Gaughan’s opinion is a welcome relief for employers who fall victim to the EEOC’s “do as I say, not as I do” litigation tactics. The Court was quick to point out that the EEOC’s methodology for judging race based on photographs contradicted its own mandates and was an affront to both common sense and personal dignity. Because Judge Gaughan excluded the EEOC’s evidence of a purported statistical disparity, the Court did not reach other grounds for summary judgment, including arguments concerning job-relatedness, business necessity, and estoppel. These arguments centered, in part, on the EEOC’s decision to attack a criterion that it uses in its own personnel practices.

By Christopher DeGroff and Gerald L. Maatman, Jr.

Calling all loyal readers of our blog – our annual EEOC litigation study is here: the launch of our book entitled EEOC-Initiated Litigation: Case Law Developments In 2012 And Trends To Watch For In 2013.

This publication is what we hope you will agree is a definitive source of information that focuses exclusively on EEOC-related litigation. To order a copy, please click here. This year for the first time, we are also offering this publication for immediate download as an eBook. To download the eBook, please click here.  This year’s book covers more decisions than ever before and provides readers with a detailed Executive Summary on the unique challenges of litigating against the EEOC.

This publication is what we hope you will agree is a definitive source of information that focuses exclusively on EEOC-related litigation.  This year’s book covers more decisions than ever before and provides readers with a detailed Executive Summary on the unique challenges of litigating against the EEOC. 

In November, we blogged that the EEOC’s Performance and Accountability Report (“PAR”) reported a striking drop in the number of lawsuits the EEOC filed in FY 2012.  The PAR noted that the EEOC only filed 122 lawsuits in FY 2012, down from 261 merits lawsuits in FY 2011. This precipitous drop in the total cases filed, however, did not affect the EEOC’s bottom-line of systemic discrimination lawsuits. In furtherance of its strategic objectives, the EEOC continued its ever-increasing focus on pursuing large-scale, high-impact, and high-profile cases with the hope that this brand of high-stakes litigation will channel employers’ behavior. To that end, the EEOC reported that by the end of FY 2012, systemic suits accounted for 20% of all of the EEOC’s active merits suits, the largest proportion on the EEOC’s active docket since it began tracking in FY 2006. 

Our EEOC-Initiated Litigation book also includes a discussion of five substantive trends in the EEOC’s 2012 litigation: (1) A rush on ADA cases; (2) subpoena enforcement actions; (3) a focus on workplace harassment cases; (4) attacking novel theories - expanding coverage of existing laws, and (5) rulings that apply § 706’s limitation period to EEOC pattern or practice allegations brought under § 707 of Title VII. With this retrospective in mind, each year we select a short list of what we consider the five most intriguing EEOC-related decisions handed down this past.

So what are the 5 most intriguing decisions? Here are our pick for 2012.

1.  EEOC v. Interstate Distributor Co., Case No. 12-CV-02591 (D. Col. Nov. 8, 2012). We start with a focus on the ADA. The EEOC’s Strategic Enforcement Plan released just last month makes clear that the EEOC is going to “gear up” the investigation and subsequent litigation in this area. In FY 2012, the EEOC built significant momentum toward achieving this goal, and made sure that its focus on ADA claims would not go unnoticed by employers. Among these significant settlements included approval of a $4.85 million consent decree in EEOC v. Interstate Distributor Co. Judge Brooke Jackson of the U.S. District Court for the District of Colorado put an end to the litigation just one month after the EEOC filed its disability discrimination lawsuit. The parties negotiated a consent decree, and Judge Jackson approved the monetary payment to the class of alleged victims that provided them with back pay and compensatory damages. In terms of equitable relief, the consent decree includes injunctions prohibiting the Defendant from further discrimination or retaliation based on disability. For the next three years, the Defendant must provide periodic training on the ADA to its employees in efforts to prevent such discrimination. Additionally, every six months the Defendant must provide the EEOC with information relating to terminations of employees, FMLA extensions, employees’ requests for accommodations, and disability complaints. 

The EEOC’s $4.85 million consent decree is nothing to sneeze at. This is a big settlement for the EEOC and a reminder to employers to review their ADA-realted policies and consider whether they are over restrictive. This case also provides insight on settlements that seek quick relief. While it can take years to obtain a final resolution through settlement or trial, the parties disposed of the EEOC’s claims in record time – one month.

2.  EEOC v. McLane Company, Inc., 2012 U.S. Dist. LEXIS 164920 (D. Ariz. Nov. 19, 2012). Next, we turn to subpoena enforcement. Increasingly, the EEOC resorts to its subpoena power to launch broad-scale discovery in its investigations. In 2012, even though the total number of EEOC cases shrunk by half, the number of subpoena actions stayed roughly the same as last year. In 2012, the EEOC reported that it filed 33 subpoena/“other” actions. Courts gave the EEOC continued to give considerable latitude with respect to the breadth of the information the agency could obtain, even with respect to seemingly focused charges of discrimination. On the bright side for employers, a handful of courts issued rulings that limited or denied EEOC subpoenas. 

Employers should tuck EEOC v. McLane Company, Inc. away for future use in confronting aggressive EEOC subpoenas. In EEOC v. McLane Company, Inc., the U.S. District Court for the District of Arizona denied the EEOC’s application to enforce portions of an administrative subpoena on the grounds that:  (i) the EEOC did not have jurisdiction to investigate a generalized charge of discrimination that is not tied to a specific aggrieved party; and (ii) some of the EEOC’s information requests were overbroad and irrelevant to the underlying charge. The Court reasoned “[t]o ignore the plain language of the statute and to allow the EEOC to investigate a generalized charge of discrimination that is untethered to any aggrieved person would invite the oft-cited ‘fishing expedition’ to become a full-blown harvest operation.” Id. at *10.

The ruling in EEOC v. McLane Company, Inc. confirms that the EEOC’s investigative powers are not unlimited and the EEOC does not have unbridled reign to seek any and all information from an employer merely because a charge of discrimination was filed against it.  This case is a rare gem and can be used as ammunition for employers facing broad information requests in investigation of pattern or practice claims.

 3.  EEOC v. Yellow Transportation, Inc. and YRC, Inc., Case No. 09-CV-7693 (N.D. Ill. June 28, 2012). In the EEOC’s first draft of its SEP, the Commission telegraphed that it was increasingly focused on preventing, and when necessary, litigating workplace harassment allegations.  The EEOC’s warning was no bluff:  the EEOC filed a series of race and sex harassment lawsuits in 2012. Indeed, we saw a notable case concerning race harassment in EEOC v. Yellow Transportation, Inc. and YRC, Inc. In this somewhat complicated case from the U.S. District Court for the Northern District of Illinois, the EEOC secured approval of $11 million consent decree in its largest settlement of 2012. The EEOC alleged a pattern or practice lawsuit involving allegations of systemic race discrimination. The consent decree resolved two lawsuits (including a private plaintiff class action brought by 14 workers who also intervened in the EEOC’s lawsuit) that had been consolidated for purposes of settlement negotiations. The EEOC and a class of African-American workers employed by Yellow Transportation, Inc. and YRC, Inc. alleged that the companies discriminated against workers at their Chicago Ridge facility and subjected them to multiple incidents of hangman’s nooses and racist graffiti, comments, and cartoons. The EEOC also claimed that Yellow Transportation and YRC subjected African-American employees to harsher discipline and scrutiny than their white counterparts and gave them more difficult and time-consuming work assignments. 

Two years ago, the EEOC secured a $10 million consent decree with YRC and Roadway Express stemming from the EEOC’s claims that African-American employees at the companies’ Chicago Heights and Elk Grove Village, Illinois facilities were subjected to a racially hostile working environment and race discrimination. The consent decree, however, did not end the litigation in store for YRC.  Although it resolved the EEOC’s discrimination charges at the Chicago Heights and Elk Grove facilities, the settlement did not address pending charges against the company’s Chicago Ridge facility. To that end Magistrate Judge Cox entered a joint motion for preliminary approval of the $11 million consent decree, which provides significant monetary relief to the class of allegedly aggrieved victims, and payment of $1.1 million in attorneys’ fees and costs to private class counsel. 

The EEOC’s $11 million settlement - or looking at it in context, the $21 million settlement with the defendants involving its three Illinois facilities - underscores the Commission’s goals for prosecuting large-scale systemic harassment litigation. The defendants’ pay out of $21 million in the last two years reminds employers not to tread lightly on the EEOC’s goals to attack race and sex harassment involving groups that it has called “underserved” - young, uneducated, and/or non-English speaking employees.

4.  EEOC v. Houston Funding II, Ltd., 2012 U.S. Dist. LEXIS 13644 (S.D. Tex. Feb. 2, 2012). Next we turn to an issue of first impression. The ruling in EEOC v. Houston Funding II, Ltd., et al. is believed to be the first decision on the issue of whether lactation is a form of sex discrimination covered by Title VII. In this unusual case, the EEOC alleged that an employer unlawfully discriminated against a worker on the basis of her sex because she wanted to express breast-milk while at work.  In a terse, three-page decision, the Court rejected the EEOC’s claim out of hand. The Court reasoned that even assuming that the “real reason” the worker was fired was because she wanted to pump breast-milk at work, “firing someone because of lactation or breast-pumping is not sex discrimination” because “lactation is not pregnancy, childbirth, or a related medical condition.” Id. at *2. 

EEOC v. Houston showcases another of the EEOC’s stated goals from its SEP, namely addressing emerging and developing legal issues. The Court’s decision makes clear that expressing breast-milk is not protected under federal anti-discrimination laws and is yet another example of overreaching by the EEOC. The Commission, not apt to “give up” on this front , hosted a meeting on February 15, 2012 at its headquarters on a range of issues relative to pregnancy discrimination. Clearly, these issues remain front and center on the EEOC’s radar.

5.  EEOC v. Global Horizons, Inc., et al., 2012 U.S. Dist. LEXIS 105993 (E.D. Wash. July 27, 2012). We close with a case that manifests an issue that the EEOC feverishly battled over in 2012. Since the inception of its systemic litigation program in 2006, the EEOC has maintained that it is unencumbered by the 300-day statute of limitations in § 706 of Title VII that applies to private litigants (which frames any Title VII lawsuit as limited to events occurring within 300 days preceding the filing on an EEOC charge with the EEOC). Typically, the EEOC argues that it can sue an employer for alleged violations going back to the start of the allegedly illegal pattern or practice (e.g., a discriminatory practice of denying promotions to female employees) irrespective of the date when a charging party filed his or her EEOC administrative charge.

In our Top 5 picks from 2011, we included EEOC v. Freeman, 2011 U.S. Dist. LEXIS 8718 (D. Md. Jan. 31, 2011), and noted that in 2011 the EEOC had a mixed track record of success in convincing federal courts to adopt its view of the statute of limitations issue. By the year-end of 2012, however, a wave of similar decisions make clear that a clear trend in federal courts emerged that finds § 706’s 300-day limitations period is applicable to the EEOC’s pattern or practice allegations. We pick EEOC v. Global Horizons, Inc., as one of the top 5 most intriguing case in 2012 because this employer-friendly decision struck at the heart of the EEOC’s attempt to litigate its case unrestrained by any statute of limitations. In this case, the EEOC alleged that Global Horizons, with the help of the agricultural companies and farms with it contracted, engaged in a litany of unlawful and potentially criminal acts , including human trafficking, confiscation of passports, the provision of substandard housing, and wage and hour violations. The U.S. District Court for the Eastern District of Washington imposed § 706’s 300-day limitations period on the EEOC’s pattern or practice claims and barred the EEOC from seeking relief for employment practices occurring more than 300 days before the filing of the underlying administrative charge. 

This ruling punctuates a trend of judicial intolerance for the EEOC’s attempts to litigate broad pattern or practice claims without adherence to any statute of limitations. Only two years ago, federal courts were split on the issue of whether the charge-filing period of § 706 applies to pattern or practice cases brought by the EEOC under § 707. The decided tide of decisions addressing this issue now flow in favor of employers. Employers can confidently argue that Title VII’s language implicates and requires that Title VII’s language implicates and requires that § 707 allegations comply with § 706’s 300-day limitations period. Finally, EEOC v. Global Horizons, Inc. is particularly interesting because it illuminates the EEOC’s foray into human trafficking issues. 

We hope you find this retrospective on FY 2012 and the EEOC-Initiated Litigation helpful.  Looking ahead, on Tuesday, March 12th, we will host our annual webinar that will guide attendees through an analysis of these and many other EEOC rulings and trends, and provide an opportunity to participate in a virtual dialogue with the authors. We will follow up with more details on our EEOC webinar in the next couple of weeks, so please stay tuned. 

Readers can also find this post on our EEOC Countdown blog here.

By Gerald L. Maatman, Jr. and Rebecca Bjork

The opinion of Judge Mark R. Hornak of the U.S. District Court for the Western District of Pennsylvania, issued on January 22, 2013 in EEOC v. Ruby Tuesday, Inc., No. 09-CV-01330, 2013 U.S. Dist. LEXIS 8268 (W.D. Pa. Jan. 22, 2013), should be required reading for all in-house and law firm attorneys who are faced with the prospect of litigating against the EEOC. The decision is striking in its even-handedness while, at the same time, is sweeping in its indictment of what readers of this blog know to be the EEOC’s “take no prisoners” approach to litigating its cases, particularly pattern or practice cases. This is definitely one to file away and keep for future use. 

In his ruling, Judge Hornak demonstrates an impressive ability to cut through the background noise while ruling on Ruby Tuesday’s motion to dismiss for failure to state a claim under Twombly and Iqbal and for summary judgment on the ground that the EEOC failed to engage in good-faith conciliation. By keying his decision on the motion off of events that took place during only a five-week period (between August 25, 2009, when the EEOC issued a determination finding reasonable cause, and September 30, 2009, when the EEOC filed its lawsuit, proclaiming conciliation to have failed), the Court decided it was time to go back to square one, and to require the EEOC to provide the Defendant with the factual basis for its pattern or practice claims, and engage in true conciliation under the Court’s watchful eye. 

A single employee filed a charge of sex discrimination and retaliation in her employment in one Ruby Tuesday restaurant in Altoona, Pennsylvania. Id. at *4. (Later, the charge was amended to add allegations of age discrimination.) After an investigation, the EEOC found reasonable cause, and also determined that Ruby Tuesday had engaged in a pattern or practice of age discrimination in six of its restaurants in Western Pennsylvania. Id. at *5. The EEOC’s August 25, 2009 Determination Letter gave the defendant only 13 days to respond, and Ruby Tuesday sought a 30-day extension of time, in addition to denying any wrongdoing. The EEOC denied the extension and specified for the first time that it sought a payment of $6,458,375 to conciliate. It also demanded a response from the defendant either accepting that demand or setting forth a “best and final offer” no later than 2:30 pm nine days later, on September 18, 2009 without explaining why such a short response time was necessary (e.g., to avoid expiration of the statute of limitations). Id. at *6, *22. When Ruby Tuesday made a counter-offer on September 15 as to the Charging Party’s individual claim, expressed a willingness to engage in further conciliation, and asked for the factual basis for the EEOC’s pattern or practice allegations, the EEOC refused and filed suit on September 30, 2009, the last day of its fiscal year. Id. at *7, *22-23. 

More than three years of litigation and discovery (including 40 depositions) ensued before Ruby Tuesday filed its motion, in part, under Rule 12(b)(6). The Court concluded that the complaint (which contained bare-bones allegations of age discrimination and disclosed no facts to support any pattern or practice allegations) “falls so substantially short of the minimal level” of notice required by Twombly  and Iqbal that it did not pass muster. Id. at *14. Judge Hornak, however, declined to dismiss the complaint, taking note of the fact that the motion was untimely. Id. at *15. Instead, he ordered the EEOC to file a more definite statement within 30 days, and noted that the “EEOC is specifically cautioned that what it must plead is not a matter within its unilateral determination, and it acts at its peril if it elects to apply only a very narrow interpretation of the scope of the plausible factual predicate that must be pled [given the] . . . thinness of the allegations” of the complaint. Id. at *16 (emphasis in original). The EEOC had steadfastly refused to produce in discovery the statistical basis for its age-based pattern or practice claims, so now, presumably, it must disclose at least some of that information.

As for summary judgment for failure to engage in good faith conciliation, Judge Hornak explained in no uncertain terms that the EEOC had acted unreasonably. He wrote: “It is difficult for the Court to discern how the EEOC’s actions here would indicate a meaningful desire to actually engage in a process of ‘persuasion,’ ‘conference,’ or ‘conciliation.’ . . . By any measure, a demand for the payment of more than $6 million, coupled with nine (9) days to either say ‘yes’ or to make a ‘best and final’ response in these circumstances (which includes . . . a demand for more than a dozen significant affirmative remedial measures) is so devoid of reasonableness as to lead this Court to the conclusion that it was not a meaningful, good faith conciliation effort.” Id. at *21-22. 

This decision should provide a measure of relief to those employers engaging with the EEOC in attempting to not only understand the basis of charges brought against them, but also the foundation for the EEOC’s conciliation demands. Hopefully, it will result in progress and real efforts to resolve such disputes short of costly, protracted litigation. 

By Courtney Bohl and Laura J. Maechtlen

In yet another case regarding the sufficiency of the EEOC’s pre-litigation conciliation efforts, Judge Marcia Kriger of the U.S. District Court for the District of Colorado recently cautioned the EEOC about “hiding the ball” during conciliation negotiations. In EEOC v. The Original Honeybaked Ham, No. 11-CV-02560 (D. Colo. Jan. 15, 2013), the Court found the EEOC’s pre-suit conciliation efforts unsatisfactory and limited the EEOC’s claims to only those identified during its conciliation negotiations. The Court also limited the number of individuals for whom the EEOC could seek relief to those sufficiently identified during conciliation, whether they were identified directly by name or identified as part of a group of which the EEOC specifically defined. This decision represents another helpful precedent for employers facing a recalcitrant EEOC during conciliation.

Background Of The Case

In EEOC v. The Original Honeybaked Ham, the EEOC filed suit on behalf of a class of female workers alleging sex discrimination and retaliation. The lawsuit stemmed from a charge of discrimination filed by Wendy Cabrera, a female who alleged she was harassed by a Manager, James Jackman, and terminated after complaining to District 8 Manager Donna Wagner-Rego and Human Resources Representative Michael Costello. 

The EEOC investigated Caberea’s charge by interviewing three employees at the Highland Ranch store, and obtaining statements from two employees stating that Jackman had harassed them and other female employees. After the investigation, the EEOC issued a letter of determination and invited HBH to engage in conciliation. 

The EEOC’s initial conciliation offer demanded monetary relief for Cabrera and eight other female employees who were subjected to Jackman’s allegedly harassing conduct. The EEOC also advised HBH that it would likely discover more victims if the case proceeded to litigation, but refused to identify any additional class members or provide any information about the scope of this unnamed class. Because the EEOC provided only nebulous information during conciliation, HBH was unable to assess its liability and declined to make a counter-offer. 

After filing its initial complaint and despite only engaging in conciliation with respect to female employees subjected to Jackman’s conduct, the EEOC amended its complaint, broadening the scope of its claims to individuals subjected to Jackman’s conduct and/or the conduct of other supervisors and managers within District 8 under Human Resource Representative Costello’s oversight. 

The parties subsequently reentered negotiations on the broadened claims. Predictably, the EEOC again refused to provide specific names of aggrieved parties or the scope of the potential class. As a result, HBH was unable to make a meaningful counter-offer and notified the EEOC that it wished to proceed with litigation. 

In response to the EEOC’s amended complaint, HBH filed a motion to dismiss, seeking to: (1) limit the scope of the EEOC’s claims to claims arising from Jackman’s unlawful conduct and not of any other supervisor or manager; and (2) limit the available remedies to injuries suffered by Cabrera and the eight aggrieved individuals identified in the pre-litigation conciliation.

The Court’s Ruling

The Court agreed with HBH’s first argument and limited the EEOC’s claims of sex discrimination and retaliation to conduct by Jackman. Id. at 11. In doing so, the Court acknowledged that the EEOC is authorized to pursue claims of illegal conduct beyond what was alleged in the initial charge, so long as the additional conduct is discovered during the course of the charge’s investigation. Id. at 9. However, if the EEOC discovers additional wrongdoing, it must give notice of this wrongdoing to the employer and provide the employer an opportunity to conciliate on all charges before a lawsuit is filed. Id. The Court found that the EEOC failed to do so, focusing its negotiations on the unlawful conduct of Jackman. Id. at 10. Moreover, the Court flatly rejected the EEOC’s argument that it gave HBH informal notice by alleging retaliation by Wagner-Rego and Castello. Id.  at 11. 

The Court also held that while the EEOC could pursue a remedy for those aggrieved individuals impacted by the conduct of Jackman, it could not do so for individuals affected by the conduct of other supervisors or managers. Id. at 15. HBH cited the Eighth Circuit’s decision in EEOC v. CRST (that we previously blogged about here) in arguing that relief could only be sought by the EEOC for aggrieved persons whose identities were disclosed in pre-litigation negotiations. Id. at 13. The Court rejected this categorical interpretation of EEOC v. CRST, finding that the amount of information required on the identities of potential class members should be viewed on more of a “sliding-scale.” Id. at 13-14. Thus, the greater specificity the EEOC gives in describing the alleged unlawful conduct, the less important it becomes for the EEOC to identify each aggrieved individual by name. Id. The Court reasoned that, if the employer is given information on the “extent, location, time period, and persons involved in the alleged unlawful conduct,” the employer would be able to reasonably estimate the number of individuals impacted. Id. at 14. Because the EEOC disclosed information about Jackman’s conduct at a specific retail store, HBH had sufficient notice of all individuals affected by Jackman’s conduct, but not individuals subjected to conduct engaged in by other supervisors. Id. at 15.

Implications For Employers

The U.S. District Court for the District of Colorado’s ruling joins a litany of recent rulings (here, here and here) that have similarly found the EEOC’s pre-litigation efforts unacceptable under Title VII’s framework. The ruling bars the EEOC from asserting claims not specifically identified during pre-suit litigation and prohibits the EEOC from seeking relief on behalf of individuals who the employer could not reasonably identify from the information provided by the EEOC. Although the Court refused to require the EEOC to identify all aggrieved individuals in its pre-suit negotiations, the Court did make clear that if the EEOC declines to name each individual, it must, at the very least, sufficiently identify an outline or definition of the class so the employer is on notice as to the extent of its liability. This case should be added to every employer’s “tool-box” of cases to use when faced with an EEOC investigation and lawsuit.

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff and Julie Yap

Despite a number of setbacks in 2011 and 2012, it appears that the EEOC is charging into 2013 with much the same playbook it adopted in years past: aggressive litigation tactics, unreasonable demands for settlement, and an expectation that it can investigate and litigate under its own special set of rules. As we have reported in earlier posts, the EEOC’s questionable practices have not gone unnoticed by the federal bench. In EEOC v. Swissport Fueling, Inc., Case No. 10-CV-2101 (D. Az. Jan. 7, 2013), the U.S. District Court for the District of Arizona joined the growing number of federal judges to reject the EEOC’s aggressive litigation tactics and unsupported arguments that it should receive special treatment under the rules.  Specifically, the Court concluded that the EEOC is not entitled to relaxed burdens of proof or to limitless time periods in which to file claims. Id. at 13, 34. The Court also concluded that the EEOC has a statutory duty to engage in good faith conciliation efforts prior to filing suit and cannot engage in “fishing expeditions” during the course of discovery. Id. at 43-44, 49-50.        

Background Of The Case

In EEOC v. Swissport Fueling, the EEOC brought claims for harassment, disparate treatment, and retaliation on behalf of a group of workers from various countries in Africa, including Sudan, Nigeria, Ghana, and Sierra Leone. From April 2007 to June 2010, the EEOC investigated allegations made by 18 employees and subsequently issued letters of determination for each. 

Between June and September of 2010, Swissport and the EEOC unsuccessfully attempted to conciliate the charges. The EEOC’s initial conciliation offer demanded back pay for only four charging parties in the amount of $61,328.84, non-pecuniary compensatory damages in the amount of $3,725,000.00, and punitive damages in the amount of $1,200,000. When Swissport requested more information regarding the basis for these alleged damages, the EEOC stonewalled. The EEOC refused to indicate what factors it considered or how it arrived at any of its figures. Though Swissport indicated throughout the conciliation process that it might increase its offer if given more information, the EEOC steadfastly refused. Indeed, the EEOC repeatedly changed its position regarding how many charging parties and class members it sought to represent. Accordingly, the “conciliation efforts” by the EEOC failed to resolve the investigation. 

After filing suit, the EEOC identified 17 charging parties, who had been the subject of the pre-litigation conciliation efforts. The EEOC also named 21 additional charging parties, who were not identified prior to bringing suit.

The EEOC’s claim was based on allegation that a Swissport manager verbally abused African employees, ridiculed their national origins, yelled and cursed at them, and generally treated them more harshly than their non-African counterparts.  

The Court’s Ruling

The Court dismissed the EEOC’s claims brought on behalf of the 21 charging parties not identified before filing suit, concluding that the EEOC had failed to comply with its statutory mandate to engage in good-faith conciliation. Id. at 43-44. Specifically, the Court concluded that the EEOC did not give Swissport a meaningful opportunity to make an informed choice to settle when it failed to disclose the claimants’ identities, particularly in light of Swissport’s repeated requests to do so. Id. at 40. The Court also noted that granting the EEOC a stay to attempt conciliation for claimants it had never previously identified would not only fail to resolve the deficiency, but also would “improperly reward the EEOC for using the discovery phase of this litigation to engage in prohibited ‘fishing’ to solicit more claimants.” Id. at 43-44.

Moreover, the Court ordered the EEOC’s claims brought on behalf of the 17 identified charging parties stayed, pending meaningful conciliation. Id. at 49-50. The Court concluded that the EEOC’s failure to respond to Swissport’s reasonable requests for necessary information regarding the asserted claims and their value constituted a failure to conciliate in good faith. The Court noted that “[w]hile the EEOC’s burden to attempt conciliation is not a heavy one, it is not a mere formality.” Id. at 49. Based upon its pre-litigation conduct, the EEOC failed to meet even that minimal burden.

In turning to the merits, the Court concluded that the EEOC could not litigate the claims of the charging parties “in the aggregate.” Id. Rather, it held that the EEOC must prove its hostile work environment claims on claimant-by-claimant basis. Id. at 13. Furthermore, the Court noted that the EEOC cannot substantiate hostile work environment claims based only on offensive comments made to persons other than the claimant. Id. at 17-18. As such, despite its efforts to carve out its own distinct burden of proof, the EEOC has to play according to the same rules applicable to everyone else.

Additionally, the Court joined a growing majority of federal courts by rejecting the EEOC’s contention that it does not have to abide by the time limits in the statute. Indeed, the Court clarified that the EEOC cannot attempt to apply the continuing violation doctrine in the aggregate. Id. at 34. The Court refused to adopt the EEOC’s argument that it may bring claims on behalf of any claimant that experienced a hostile work environment, so long as one act against one claimant fell within the proper time period.  Rather, the Court again noted that this type of theory must be litigated on a claimant by claimant basis. 

Implications Of The Ruling

The Court’s ruling is a tour-de-force of developing legal concepts that have cut against the EEOC in the last two years; and a decision that is encouraging for its precedential value but disheartening in the sense that it shows the EEOC continues to use the same counterproductive tactics it has used in the past. EEOC v. Swissport once again emphasizes that the EEOC must take the statutory conciliation obligations seriously. As the EEOC continues to take an aggressive litigation stance and seeks to bring more systemic discrimination suits in the coming years, employers should ensure that the EEOC is bringing sufficient information to the conciliation efforts in order to truly assess the value of the case. 

Readers can also find this post on our EEOC Countdown blog here.

By Christopher DeGroff, Gerald L. Maatman, Jr. and Julie G. Yap

After much anticipation, heated debate, and numerous invitations for public comment, today the EEOC announced that it approved its Strategic Enforcement Plan for FY 2013-2016. As we previously reported, the EEOC’s SEP will function as the blueprint for the Commission’s enforcement activity for the next several years. Because of the Plan’s importance to employers, corporate counsel, and HR professionals, Seyfarth Shaw LLP offered its input on the SEP from the earliest stages of the EEOC’s drafting process. On June 19, 2012, Seyfarth Shaw LLP submitted a series of extensive recommendations to the EEOC, suggesting concrete examples of challenges faced by employers working with the EEOC, and ways the agency could address these challenges while still achieving its goals. 

Following up on those written submissions, the EEOC held a full-day public meeting on July 18, 2012, attended by Seyfarth Shaw, seeking additional input on its Plan. In September, the EEOC released a “revamped” Draft Plan. Finally, on December 18, 2012, the EEOC approved the final, operative SEP by a 3-1 vote. The SEP is a dense read, but contains a number of interesting take-aways that give insight into the sometimes baffling inner-workings of this government agency. Borrowing from spaghetti westerns, the SEP could be said to contain “The Good, The Bad and The Ugly.”

The Good

One of the most pressing concerns voiced by Seyfarth Shaw in both its June 2012 and September 2012 comments was the need for greater transparency in the EEOC’s goals and procedures. The final SEP begins by expressly listing six national enforcement priorities, including: (1) eliminating barriers in recruitment and hiring; (2) protecting immigrant, migrant, and other vulnerable workers; (3) addressing emerging and developing issues; (4) enforcing equal pay laws; (5) preserving access to the legal system; and (6) preventing harassment through systemic enforcement and targeted outreach. These stated priorities, while extremely broad, provide employers at least some insight into the EEOC’s goals and key concerns. These goals have remained consistent throughout the EEOC’s drafting process, and should be seen for what they are: the “hot topics” for the EEOC for the foreseeable future. 

Seyfarth Shaw’s earlier comments also stressed the need for greater consistency among the EEOC’s district offices. We were heartened to see that throughout the final SEP, the EEOC has placed a consistent emphasis on the concept of integration. Specifically, the EEOC acknowledged the need for national priorities, standards, and oversight, and asserted that the SEP “seeks to establish clear expectations for those charged with implementing this plan and to provide for regular and meaningful communication amongst the Commission, General Counsel, agency leadership, and agency staff.” The SEP puts in place the EEOC’s oversight on implementation and an annual reporting requirement in furtherance of these ends. The SEP also mandates the formation of “Strategic Enforcement Teams” to promote uniformity and efficiency in achieving its enforcement priorities. A robust integration program could be highly beneficial to employers by stopping the EEOC’s current practice of filing multiple, identical lawsuits across the nation.

Despite such laudable goals, it is unclear whether the SEP’s focus on integration will actually result in marked improvements. Although the SEP highlights its integration plans, it also expressly provides for a continuing system of delegated authority to District Directors, the General Counsel, and the Office of Federal Operations. The final SEP also calls for the development of local priorities to address particular issues prevalent in a geographic location, which could very likely result in less transparency and clarity at the actual investigation and litigation level. As Seyfarth Shaw suggested in its comments though, the SEP calls for more coordination between investigative and legal enforcement staff and mandated that districts be held responsible for ensuring that such coordination is achieved.

Accordingly, although the SEP at least acknowledges the concerns raised by Seyfarth Shaw in its numerous comments and contributions, it remains to be seen whether the very real concerns raised will ultimately be addressed by this plan.

The Bad

As has been previously reported, the SEP further emphasizes the EEOC’s increased emphasis on systemic litigation suits, which can have a devastating impact on employers caught in the crosshairs of the EEOC’s wide-reaching investigation and aggressive litigation. Specifically, the SEP notes that, at both the national and local level, “meritorious systemic charges and cases that raise SEP or district priority issues [will] be given precedence over individual priority matters and over all non-priority matters, whether individual or systemic.” As such, employers should be mindful that an EEOC investigation into one of the six national priorities or yet to be determined local priorities could turn into “example setting” litigation. 

An even more troubling element of the SEP has survived the final cut in the drafting process. Earlier versions of the SEP decried the EEOC’s lack of resources as a barrier to pursuing what it felt was meritorious claims. One answer to the EEOC’s dilemma was to shuttle those cases to private attorneys who (for their cut of the recovery) will pursue the cases instead of the government. In an alarming statement, the EEOC suggest that the private bar “play[s] a vital role in enforcing laws prohibiting employment discrimination. The SEP goes so far to say that the EEOC will “support private enforcement of the federal anti-discrimination laws” through referrals to local and state bar associations. Many employers may find this delegation of governmental responsibilities to perform even-handed and unbiased investigations into (critically) alleged violations troubling, perhaps even reckless. As many employers know from experience, the agenda of the EEOC and the plaintiff’s employment bar are often divergent, and certainly Congress did not view the plaintiff’s bar as a deputized arm of the government’s enforcement mechanism when the EEOC was first formed.

How these more troubling aspects of the final SEP play out remains yet to be seen.

The Ugly

Finally, there are portions of the SEP that, even upon close examination, are vague and downright confusing – and perhaps “bad” as compared to the good and the ugly. For example, Section V. D. of the final SEP discusses an “integrated” approach to research, data, and employment. This section calls for “relevant research on a timely basis for cases in litigation, and have the ability to research broad issues of employment discrimination that are not connected to pending cases.” Even agency scholars have a tough time cracking the code of what this actually means, although apparently the SEP calls for a vote on a plan to integrate certain “priority areas” sometime in the summer of 2013. Unfortunately, this cryptic language only enforces employer skepticism that there will truly be any change in the EEOC’s methodology.

In this vein, one of the themes throughout the SEP is the EEOC’s implied lack of resources. The SEP sets forth that its goals and procedures are limited by their resources - a clear message to Congress and the administration that more money will translate into better results. Again, employers may take a cynical read of the SEP that suggests that the EEOC’s goals and mandates will shift based on its funding. Many employers will see such a grab for funding in the climate of a “fiscal cliff” as Washington business as usual.

Implications For Employers

Ultimately, employers will benefit from the EEOC adopting the SEP. The most common criticism in dealing with the EEOC is its lack of transparency and consistency. The SEP arms employers with at least some idea (no matter how opaque at times) of the EEOC’s goals and agenda. This will allow employers to prioritize compliance functions and order their affairs accordingly, but perhaps more importantly, will give them concrete authority when an element of this highly decentralized agency strays from its own core tenants.

Readers can also find this post on our EEOC Countdown blog here.