By Matthew J. GagnonChristopher J. DeGroff, and Gerald L. Maatman, Jr.

Seyfarth Synopsis: With uncertain times and profound changes anticipated for the EEOC, employers anxiously await what enforcement litigation the EEOC has in store. Although 2016 showed a marked decline in filings, fiscal year 2017 shows a return to vigorous enforcement filings, with a substantial number of filings in the waning days of the fiscal year.

Employers are living in uncertain times. The impact of a Trump Administration and the EEOC’s new Strategic Enforcement Plan (SEP) for fiscal years 2017-2021 are still working themselves out in the FY 2017 filing trends. Nonetheless, one trend has reemerged: a vigorous number of EEOC case filings. It looks like the anemic numbers of FY 2016 were just a bump in the road, as FY 2017 has revealed an increase in total filings, even eclipsing the numbers from FY 2015 and 2014. (Compare here to here and here.) This year, the EEOC filed 202 actions, 184 merits lawsuits and 18 subpoena enforcement actions.

The September filing frenzy is still an EEOC way-of-life, as this past month yet again holds the title for most filings compared to any other month. At the time of publication, 88 lawsuits were filed in September, including 21 in the last two days alone. In fact, the EEOC filed more cases in the last three months of FY 2017 than it did during all of FY 2016. The total number of filings for the remaining months remains consistent with prior years, including a noticeable ramp up period boasting double digit numbers through the summer.

Filings out of the Chicago district office were back up in FY 2017 after an uncharacteristic decline to just 7 total filings in 2016. This year, Chicago hit 21 filings, an enormous increase from last year. This is closer to the total number of Chicago filings in FY 2015 and 2014 (26 in each year). The Los Angeles district office also increased its filings, hitting a high of 22, a substantial jump compared to previous years and the most of any district office in FY 2017. On the other end of the spectrum, the Phoenix district office has seen a notable drop, with only 7 filings compared to 17 in FY 2016.

New SEP, Same Focus

Every year we analyze what the EEOC says about its substantive focus as a way to understand what conduct it is targeting. This year, Title VII takes center stage. Although Title VII has consistently been the largest category of filings, last year showed a dip in the percentage of filings alleging Title VII violations, at only 41%. Nonetheless, this year Title VII has regained its previous proportion, accounting for 53% of all filings. This is on par with FY 2015 and 2014, showing once again that FY 2016 seems to have been an outlier.

Although the 2017-2021 SEP outlined the same general enforcement priorities as the previous version of the SEP (covering FY 2012 to 2016), the new SEP added “backlash discrimination” towards individuals of Muslin/Sikh/Arab/Middle Eastern/South Asian communities as an additional focus. One would expect this focus might increase the number of Title VII claims alleging either religious, racial, or national origin discrimination. However, those filings stayed relatively even, and were even a bit down from previous years. Religious, national origin, and race discrimination claims made up 42% of all Title VII claims, compared to 50% in 2016 and 46% in 2015.

Uncertainty For Equal Pay Claims

With a new administration came a new Acting Chair for the EEOC. President Trump appointed Victoria Lipnic as Acting Chair on January 25, 2017. Employers expected the EEOC’s new leader to steer the EEOC’s agenda in a different direction. Some believed Lipnic was foreshadowing future trends when she made it clear at her first public appearance – hosted by none other than Seyfarth Shaw – that she is “very interested in equal pay issues.” (See here.) And indeed, we have seen a slight uptick in the number of EPA claims filed in FY 2017. In FY 2017, The EEOC filed 11 EPA claims, compared to 6 in 2016, 5 in 2015, and 2 in 2014.

However, on June 28, 2017, President Trump tapped Janet Dhillon as Chair of the EEOC. Dhillon would come to the EEOC with extensive experience in a big law firm and as the lead lawyer at three large corporations, US Airways, J.C. Penney, and Burlington Stores Inc. Although it is too early to know how she could change the direction of the agency if confirmed, it is entirely possible that she could back away from previous goals to pursue equal pay claims more aggressively.

The Trump Administration has also made other moves that may indicate a change in direction with respect to equal pay initiatives. On February 1, 2016, the EEOC proposed changes to the EEO-1 report that would require all employers with more than 100 employees to submit more detailed compensation data to the EEOC, including information regarding total compensation and total hours worked by race, ethnicity, and gender. This was a change from the previous EEO-1 report, which only required employers to report on employee gender and ethnicity in relation to job titles. However, on August 29, 2017, the new EEO-1 reporting requirements were indefinitely suspended. We will have to wait and see whether the slight uptick in EPA claims in FY 2017 was a one-year anomaly.

Implications For Employers

The changes brought by the Trump Administration are still in the process of working themselves down into the rank and file of many federal agencies. The EEOC is no exception. Despite all of the unrest and uncertainty about where the EEOC may be headed, the FY 2017 filing trends largely show a return to previous years, albeit with a slight uptick in EPA claims. Certainly, changes in top personnel will have an impact on how the EEOC pursues its enforcement agenda. Exactly what that impact will be remains to be seen.

Loyal readers know that this post is merely a prelude to our full analysis of trends and developments affecting EEOC litigation, which will be published at the end of the calendar year. Stay tuned for our continued analysis of FY 2017 EEOC filings, and our thoughts about what employers should keep an eye on as we enter FY 2018. We look forward to keeping you in the loop all year long!

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

 

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  After an employer circulated a letter to 146 employees discussing an employee’s EEOC Charge that alleged discrimination on the basis of his disability in violation of the ADA, a federal district court in Connecticut denied both parties’ motions for summary judgment.

This ruling provides valuable lessons for employers on the risks of widespread internal communication regarding pending EEOC charges.

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In EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-1416, 2017 U.S. Dist. LEXIS 133918 (D. Conn Aug. 22, 2017), a Day & Zimmerman NPS, Inc. (“DZNPS”) employee filed a charge with the EEOC alleging that DZNPS violated the ADA by denying him a reasonable accommodation.  As part of its investigation of the Charge, the EEOC sought information from DZNPS, including the names and contact information of other DZNPS employees.  Prior to providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 employees that identified the Charging Party by name, and noted that he had filed a charge of discrimination with the EEOC.  The EEOC alleged that by sending the letter, DZNPS retaliated against the employee for filing a charge with the EEOC in violation of the ADA and interfered with the Charging Party and letter recipient employees’ exercise and enjoyment of rights protected by the ADA.

As we previously blogged about here, the Court previously denied DZNPS’s motion to dismiss.  After the EEOC filed a motion for partial summary judgment on its interference claim under the ADA, and DZNPS filed a motion for summary judgment as to the Complaint in its entirety, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied both parties’ motions for summary judgment.

For employers considering whether to communicate internally about the pending EEOC charges, this ruling illustrates they should be careful to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

Case Background

In or around the fall of 2012, DZNPS hired 147 temporary electricians, including the Charging Party, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”).  Id. at *4.  After the Charging Party began training for the position, he provided a doctor’s note to a DZNPS representative indicating that he could not work around radiation.  The note requested a reasonable accommodation.  After receiving the doctor’s note and the request for a reasonable accommodation, DZNPS terminated the Charging Party’s employment.

In October 2012, the Charging Party filed a charge of discrimination with the EEOC, alleging that DZNPS failed to accommodate his disability reasonably and unlawfully terminated his employment.  Id. at *5.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  Id. at *6-7.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator, and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.

The EEOC moved for partial summary judgment on its interference claim under the ADA.  DZNPS moved for summary judgment as to the Complaint in its entirety, arguing that: (1) the EEOC’s legal theories would violate DZNPS’s free speech rights under the First Amendment of the United States Constitution; (2) that the June 2014 letter is protected by the litigation privilege under Connecticut law; (3) that the EEOC cannot, as a matter of law, make out a claim for retaliation under the ADA; (4) that the EEOC cannot, as a matter of law, make out a claim for interference under the ADA; and (5) that the EEOC lacks standing to bring this case under Article III of the United States Constitution.

The Court’s Decision

The Court denied both parties’ motions for summary judgment.  First, the Court rejected DZNPS’s claim that the EEOC lacked Article III standing to bring the case because no punitive or compensatory damages were available to the EEOC.  Id. at *13-14.  The Court noted that DZNPS cited to no legal authority supporting that proposition.  DZNPS also argued that if the Court found that its sending of the letter was either retaliation or interference in violation of the ADA, then the Court would be establishing a content and speaker-based restriction on speech that violated the First Amendment.  The Court rejected this argument on the basis that DZNPS identified no authority supporting its argument that the First Amendment protects speech from a defendant if that speech gives rise to liability under the ADA or other employment discrimination statutes.  Id. at *16-19.  Further, after analyzing Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), and subsequent cases interpreting Gulf Oil, the Court held that the Gulf Oil line of cases did not prevent courts from imposing restrictions on employer communications in situations where those communications could amount to “coercion” or prevent employees from exercising their rights.  Id. at *20-22.

Turning to the ADA retaliation claim, DZNPS argued that there was no genuine dispute of material fact that the EEOC would not be able to establish the third and fourth prongs of the prima facie case of retaliation under the ADA, either an adverse employment action or a causal connection between the protected activity and the adverse employment action.  Id. at *26-28.  DZNPS also argued that, even if the EEOC showed a genuine dispute of material fact as to the prima facie case for retaliation, the EEOC did not rebut DZNPS’s legitimate non-retaliatory reasons for sending the letter.  The Court found that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable factfinder could determine that such conduct constitutes an adverse employment action.  In regards to DZNPS’s proffered legitimate, non-discriminatory reason for sending the letter, to “minimize business disruption” and notify the recipients that DZNPS had disclosed their “home telephone numbers and addresses . . . to the EEOC,” the Court found that a reasonable jury could also conclude that DZNPS’s explanation was pretextual because the letter did not need to explain that recipients need not speak to the EEOC investigator and that counsel for DZNPS could be present if the recipient chose to speak to the EEOC.  Id. at *34.

Finally, the Court addressed both parties’ motion for summary judgment on the ADA interference claim.  Id. at *35-39.  The EEOC argued that DZNPS interfered with the rights under the ADA of all the letter recipients because a reasonable jury would need to conclude that the letter had a tendency to chill recipients from exercising their rights under the ADA.  Citing its previous order denying DZNPS’s motion to dismiss, where the Court held that the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA, the Court found that a reasonable jury could conclude that the letter could have the effect of interfering with or intimidating the letter’s recipients with respect to communicating with the EEOC about possible disability discrimination by DZNPS.  Accordingly, explaining that because this question should be reserved for the jury, the Court denied both parties’ motions for summary judgment.

Implications For Employers

For employers considering whether to internally disclose information on a widespread basis regarding charges of discrimination filed by employees, this ruling should serve as a cautionary tale.  Further, it illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of motions for summary judgment.  As such, employers should exercise caution when considering when and to whom it should internally disclose information about pending administrative charges.

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

EEOCBy Gerald L. Maatman, Jr.Christopher J. DeGroff, and Matthew J. Gagnon

Seyfarth Synopsis: Reviewing the EEOC’s case filings during the first half of the Commission’s fiscal year may already reveal some surprising trends, most notably a sharp uptick in the total number of case filings – up 75% from the same point last year – and a corresponding increase in systemic cases.

March 31 was the mid-point of the EEOC’s fiscal year. Given the significant changes brought to the federal government by the Trump Administration, we sharpened our pencils and examined the EEOC’s case filings during the first half of FY 2017 and compared those filings to the first half of FY 2016 to see what changes, if any, the new administration has wrought.

As the chart below reveals, the number of filings is up significantly from the same point in time in FY 2016. From October 1, 2016 through March 31, 2017, there were 35 new cases filed. During the same time period in the prior year, there were only 20. That means that filings are up a whopping 75% for the first half of the year.

Total EEOC Case Filings - 2017 Midyear Review

In addition to a larger number of total filings, we have also seen a rise in systemic cases. These cases – defined as having a significant impact on the development of the law or promoting compliance across a large organization, community, or industry – have long been a strategic priority for the agency. As we blogged about here, Acting Chair of the EEOC, Victoria Lipnic, reaffirmed the agency’s commitment to systemic cases when she spoke to Seyfarth Shaw and our invited guests in February of this year. However, systemic cases have garnered negative attention from Republican members of Congress, so it was not clear whether the EEOC would shift direction under the new Republican leadership.

Although we cannot know for certain which cases the EEOC considers “systemic,” based on our review of EEOC press releases and the substance of the EEOC filings, we have identified a significant uptick in systemic case filings in the first half of FY 2017 compared to the same period in FY 2016. Last year there were only four filings during this time period, compared with nine this year. If this trend holds through to the end of the year, then this could turn out to be a banner year for systemic case filings.

Systemic EEOC Case Filings - 2017 Midyear Review

Finally, we analyzed the particular discrimination theories and statutes that the EEOC is pursuing. That analysis can be seen in the chart below. Not surprisingly, Title VII and Americans with Disabilities Act cases lead the way, with 17 and 14 cases filed respectively. Year after year, those types of cases lead the pack. The number of ADEA cases is slightly higher than this time last year, but is still generally consistent with prior years and does not yet reflect a significant change in direction for the EEOC.

As Seyfarth’s Pay Equity Issues & Insights Blog noted here, Chairperson Lipnic has stated that she is very interested in pay equity issues. However, that level of interest is not yet translating into any increase in Equal Pay Act (“EPA”) cases on a year over year basis. The first half of FY 2017 saw only one EPA case filed, the same as during the same period last year.

EEOC Case Filings By Statute - 2017 Midyear Review

We will continue to monitor trends and developments in EEOC litigation throughout the year so that we can once again bring you our annual comprehensive end-of-year examination of trends affecting EEOC litigation (see here for last year’s version). As always, we look forward to bringing that analysis to you, our loyal readers!

200px-NDAla_sealSeyfarth Synopsis: An Alabama district court granted a temporary staffing company’s motion to dismiss all claims in one of the EEOC’s most high-profile lawsuits asserting hiring discrimination and abuse of vulnerable workers. The ruling illustrates the procedural defenses that employers possess to ensure that pre-lawsuit investigations undertaken by the EEOC accord with its obligations under the law.

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A recent mission of the EEOC has been to aggressively pursue lawsuits on behalf of “vulnerable workers” who may not always be aware of their rights. A result of the EEOC’s recent aggressiveness is that the Commission often neglects to fulfill its pre-suit obligations under Title VII and overlooks jurisdictional requirements when racing to the courthouse. These tactics came under scrutiny in EEOC v. Labor Solutions of Alabama, Inc. f/k/a East Coast Labor Solutions, No. 16-CV-1848 (N.D. Ala. Mar. 17, 2017), where Judge Virginia Emerson Hopkins of the U.S. District Court for the Northern District of Alabama granted Labor Solutions of Alabama, Inc.’s (“LSA”) motion to dismiss the EEOC’s complaint. The Court found that the EEOC lacked subject-matter jurisdiction and failed to exhaust its administrative remedies after suing LSA for alleged conduct that occurred by its supposed predecessor before LSA was ever formed.

This ruling is a signal victory for employers involved in EEOC litigation regarding potential successor liability, as well as any employer involved in EEOC litigation where the Commission fails to exhaust its pre-suit duties under Title VII.

Case Background

The EEOC investigated charges of discrimination against a company called East Coast Labor Solutions, LLC (“East Coast”), alleging that East Coast discriminated against the charging parties on the basis of their national origin and failed to accommodate their disabilities. Following its investigation, the EEOC issued East Coast a letter of determination finding reasonable cause to believe that Title VII and the ADA were violated with respect to the charging parties and a class of current and former employees. Id. at 8.  The EEOC thereafter unsuccessfully attempted to conciliate with East Coast.  In November 2013, East Coast ceased operations.  LSA was formed in October 2014.

Despite the fact that LSA was not in existence when the alleged misconduct occurred, the EEOC filed a Complaint alleging that LSA subjected the Claimants to discriminatory treatment based on their national origin and failed to accommodate their disabilities. While East Coast partnered with its owner Labor Solutions (a different entity than LSA), the only Defendant named in the lawsuit was LSA.  Thereafter, LSA moved to dismiss the Complaint because it failed to allege that LSA employed the Claimants, thereby meaning the Complaint should be dismissed for lack of subject matter jurisdiction and failure to state a claim under Title VII and the ADA. Id. at 9.  LSA also argued that the EEOC failed to exhaust administrative prerequisites, noting that LSA was not named in the original EEOC charge or in any amendment thereto.

The Courts Decision

The Court granted LSA’s motion to dismiss. First, the Court addressed the EEOC’s argument that it alleged plausible facts to infer so-called “successor liability.” Id. at 11.  After thoroughly examining various Eleventh Circuit precedents regarding successor liability, the Court explained that “[a]lthough the Court agrees with the EEOC that successorship does not have to be conclusively determined at this stage of the litigation, that does not absolve the agency from pleading facts which make its existence plausible.” Id. at 26.

Applied here, the Court determined there were “no facts suggesting substantial (or even any) continuity in business operations from East Coast to LSA. The Complaint contains no allegations that there was any sale of East Coast, or any of its assets, to LSA.”  Id. at 27.  Finding there was no successor liability, the Court further reasoned that East Coast had been defunct nearly an entire year before LSA was formed; there was no allegation that LSA employed substantially the same work force and/or supervisors as East Coast; the Complaint did not allege that LSA operated at the same location as East Coast; there was no allegation as to whether East Coast could have provided relief before or after any alleged sale or transfer; and there was no allegation as to whether LSA could provide any relief now.

The Court further rejected the EEOC’s argument that East Coast and LSA were both temporary staffing agencies and that both entities shared the same managing officers, principal office address, and company email accounts, holding this was not enough to demonstrate continuity when one considered the break in time between when East Coast ceased operations and LSA began. Finally, the Court opined that even if the Complaint had plausibly alleged that LSA was the successor to East Coast, it would still be dismissed since it was undisputed that LSA was not named in the original EEOC charge, or in any subsequent amendment.  Accordingly, the Court granted LSA’s motion to dismiss, but noted the EEOC may file an amended complaint to attempt to cure its deficiencies.

Implications For Employers

For employers with intricate corporate structures and ties to defunct entities, this ruling is a major victory. Employers with corporate officers who previously worked at a similar but defunct entity can use this ruling to as a roadmap to navigate EEOC lawsuits concerning allegations from before their business was ever formed. In sum, this is yet another example of a court pumping the brakes on procedurally improper EEOC litigation.

Readers can also find this on our EEOC Countdown Blog here.

dice2Seyfarth Synopsis: A seemingly innocuous case filed by the EEOC on behalf of a single charging party against a casino operator highlights some of the risks of betting at the conciliation table.  Employers take note!

As its FY 2016 wound down, the EEOC filed suit against a casino operator – in the case of EEOC v. Greektown Casino, L.L.C., Case No. 2:16-CV-13540 (E.D. Mich.) – alleging that it failed to accommodate and then terminated a pit manager because of his alleged disability – stress anxiety disorder. Obviously, the casino not yet responded to the complaint, and it may well have excellent legal defenses. Yet, the Complaint shows the EEOC’s hand (or at least part of it) and provides an example of some of the important stakes in EEOC litigation.

Is The Commission Bluffing?

Employers sometimes assume that the EEOC is only in the business of suing large companies based upon allegations of class-wide mistreatment of large groups of employees.  It is true that the EEOC makes headlines filing pattern or practice cases against big companies, but the EEOC routinely files complaints on behalf of individual charging parties against lesser known businesses and often smaller companies. In fact, the EEOC often does so strategically – because it has determined that the underlying legal issue is more important than whether there is a big-name company, thousands of employees, or big dollars involved. As noted here and here, the EEOC’s recent challenge to a wellness program, and its recent attempt to pursue a claim for transgender discrimination, for example, were pursued on behalf of individual charging parties. Obviously, though, the legal issues were deemed important and, frankly, the press coverage was just as wide as that of any of the EEOC’s behemoth cases.

Also, more than a few cases are filed by the EEOC because it simply determines justice must be done and that the charging party might not have the resources to pursue it.  So, don’t assume during the conciliation process that the EEOC is just bluffing when it threatens to bring a case on behalf of one charging party.  It happens.

Know When To Fold Them?

With each reasonable case determination, comes an invitation to the conciliation (gaming) table. The conciliation process can be long, episodic, and frustrating.  Along the way, an employer must balance the various pros and cons associated with settling a case with the EEOC.  Certainty of outcome is almost always a factor, as is money, but, for some employers, the question is whether the game is lost the instant a suit is filed by the EEOC.  Consumer product and service companies, for example, are heavily invested in brand development and the relentless pursuit of brand loyalty.  So, each employer must ask itself what it will wager on whether the failure to reach compromise will result in damage to its brand or company name if the government publicly accuses it of discriminatory treatment of employees (i.e., fellow consumers). The frustrating part is that the allegations may be wildly misleading and eventually proven wrong, but no matter how frivolous the assertions may be, the reputational damage can be done on filing day.

Know When (Not) To Run?

None of this is to suggest that employers should bend to the will of the EEOC in a meritless individual or class case just because the EEOC says it might file suit.  The fact is that the EEOC is quite choosy and has limited resources.  As we reported here, the EEOC filed only 136 cases in its fiscal year ending September 30, 2016.  By contrast, as noted here and here, the EEOC routinely receives more than 80,000 charges of discrimination per year. In other words, the odds of the EEOC filing suit are actually quite low in any given case.

Plus, not all negative publicity hits are created equal.  What is the issue?  Is there an advantage to taking a stand? Do you have strong PR advisors?  Can you turn it on the government – David v. Goliath style?

And, perhaps most importantly, settling is not always a good bet.  EEOC conciliation agreements are confidential as a matter of law and EEOC policy – except where the employer agrees to some measure of publicity.  Employers should bet that the EEOC will request an “agreed” press release if there is any level of significance to the case, and should demand to see details of that card before deciding to take it.

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

thPBYES7VQSeyfarth Synopsis: After the EEOC brought an action under the Americans With Disabilities Act against an employer who implemented a wellness program requiring employees to take a health assessment to participate, the Court granted the employer’s motion for summary judgment and denied the EEOC’s motion for summary judgment after finding that the program was voluntary. As such, the ruling is a bench-slap to the Commission in terms of its position on challenging wellness programs.

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After an employer in Wisconsin implemented a wellness program that required employees to take a health risk assessment if they wanted to participate, the EEOC brought an action under the Americans With Disabilities Act (“ADA”), which generally prohibits employers from requiring employees to undergo medical examinations.  In EEOC v. Orion Energy Systems, Inc., No. 14-CV-1019 (E.D. Wis. Sept. 19, 2016), Judge William C. Griesbach of the U.S. District Court for the Eastern District of Wisconsin granted in part employer Orion Energy Systems, Inc.’s (“Orion”) motion for summary judgment and denied the EEOC’s motion for summary judgment.

This ruling illustrates that for employers who implement wellness programs that require employees to take a health assessment if they wish to participate, those medical examinations do not violate the ADA as long as the program is voluntary.

Case Background

In 2008, Orion switched from a fully insured health plan to a self-insured health plan.  In 2009, Orion implemented a multi-faceted wellness program.  Relevant here, employees would have to either complete a health risk assessment (“HRA”) at the beginning of the insurance year or pay the entire monthly premium equivalent amount.  Employees who completed the HRA paid no premium equivalent, but still had to pay their own deductibles, co-pays and out-of-pocket expenses.  The HRA consists of a health history questionnaire and biometric screen involving a blood pressure check, body measurements, and blood analysis. Orion did not receive any personally-identifiable information as a result of the HRA, as the information was compiled by outside entities who then transmitted it to Orion in an anonymous format.  The anonymous, aggregated data allowed Orion to see the percentage of participants in its plan who had particular health risks such as high cholesterol, identify common health issues, and offer employees educational tools to improve their health.

In the spring of 2009, only one Orion employee chose to opt-out of the program.  Orion management spoke with the employee regarding negative comments the employee made to co-workers about the amount of the premium being charged by Orion.  The employee claimed she was told during this meeting to keep her opinions about the new wellness program to herself, while Orion claimed that such negativity was not welcome in the workplace, and that if the employee had concerns, she needed to speak with someone in management.  The employee later sent an e-mail criticizing the tactics of Orion’s former CEO.  Shortly thereafter, the employee was terminated.

The EEOC brought suit against Orion alleging it violated the ADA by requiring employees who elect to enroll in Orion’s self-insured health insurance plan to either complete the HRA or pay 100 percent of their monthly premium amount.  The EEOC also alleged that Orion violated the ADA’s anti-retaliation provisions, 42 U.S.C. § 12203(a) and (b), by instructing the employee not to discuss her concerns about the legality of this requirement with co-workers and by terminating her employment shortly after she voiced opposition to Orion’s wellness program.  Orion contended that its requirement that employees who elect to receive health insurance from Orion either participate in the wellness program or pay the full premium amount was lawful under the ADA’s insurance “safe harbor” provision, which allows self-insured organizations to administer benefits plans, or alternatively, that its wellness program is voluntary under 42 U.S.C. § 12112(d)(4)(B).  Both parties moved for summary judgment.

The Decision

The Court granted in-part Orion’s motion for summary judgment and denied the EEOC’s motion for summary judgment.  Initially, the Court explained that Section 12112(d)(4)(A) of the ADA “shall not require a medical examination and shall not make inquiries of an employee as to whether such employee is an individual with a disability . . . unless such examination or inquiry is shown to be job-related and consistent with business necessity,” but that Section 12112(d)(4)(B) permits employers to conduct “voluntary medical examinations . . . which are part of an employee health program available to employees at that work site.”  Id. at 6-7.  The EEOC argued that the HRA was not “voluntary” given that Orion shifted 100 percent of the health benefit premium to employees who opted out.  Orion argued its wellness initiative did not violate the ADA for three reasons: (1) the ADA’s safe harbor relating to insurance applied to the challenged aspects of the wellness program; (2) Orion did not “make inquiries” since it received only anonymous, aggregated results from the HRA; and (3) the wellness program was voluntary because Orion’s employees had a choice regarding whether to participate and sufficient time to make that choice.

Regarding the safe harbor provision, the Court rejected Orion’s argument and found that the safe harbor provision did not apply to Orion’s wellness program.  Citing Congressional intent, the Court noted that the safe harbor provision was a limited exception that was created to protect the basic business operations of insurance companies, and that generally, wellness programs are unrelated to basic underwriting and risk classification.  Id. at 15 (citations omitted).  Applied here, the Court found that the wellness program was not used to underwrite, classify, or administer risk.  Id.  The Court explained that “[i]f an employee refused to complete the HRA and participate in the wellness plan, she could still be a member of Orion’s insurance plan, provided she pay the full premium amount. In short, Orion’s wellness program was wholly independent from its insurance plan.”  Id. at 16.

Next, the Court addressed Orion’s argument that even if its wellness initiative was not immune under the safe harbor provision, Orion’s program was still voluntary.  Id. at 17.  The EEOC argued that the wellness program was involuntary because shifting 100 percent of the premium cost to an employee who opted out of a program was so substantial that Orion’s offer to pay the health benefit premium in exchange for the employee’s participation in the program is more than a mere incentive.  The Court rejected the EEOC’s argument, noting that, “even a strong incentive is still no more than an incentive; it is not compulsion,” and that, “Orion’s wellness initiative is voluntary in the sense that it is optional.”  Id. at 18.  Accordingly, the Court found that Orion was entitled to summary judgment and rejected the EEOC’s claim that the wellness program, including the HRA, violated § 12112(d)(4)(A).

Finally, in regards to the EEOC’s retaliation and interference claims, Orion argued that the employee was not engaged in any protected activity by complaining about aspects of the program that were lawful.  The Court rejected Orion’s argument, noting it was “undisputed that [the employee] expressed concern about the confidentiality of her medical information under the new wellness initiative. As that is a legitimate concern under the ADA, i.e., something the ADA actually does govern, her expression may have been protected.”  Id. at 20.  Accordingly, the Court denied Orion’s motion for summary judgment as to the retaliation and interference claims.

Implications For Employers

Employer’s implementing wellness programs absolutely need to pay attention to decisions such as this one.  So long as participation in the program and any accompanying health assessment are truly voluntary, employers can utilize such wellness programs without violating the ADA.  Nonetheless, employers must be cautious in making sure their programs are truly voluntary or else face this risk of EEOC litigation.

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

th7Y6M6GN7By Gerald L. Maatman, Jr., Mark Casciari, and Christina M. Janice

Seyfarth Synopsis: For the first time since 1998, the EEOC has updated its enforcement guidance on retaliation claims brought under the various anti-discrimination laws the Commission is charged with enforcing.  Observing that retaliation is now the single largest category of claims presented in its charges, the EEOC’s new enforcement guidance advocates expansive interpretations of law to broaden retaliation protections for federal and private sector applicants and employees, creating new burdens on employers who decide to attempt to comply with this new EEOC directive.

Making good on its stated objective to transform itself from a “nationwide law firm” to a “national law enforcement agency,”[1] the EEOC on August 29, 2016 issued its new Enforcement Guidance on Retaliation and Related Issues along with a Small Business Fact Sheet.  After a period of public comment on its Proposed Enforcement Guidance on Retaliation, see here, the EEOC has now asserted even stronger, more expansive positions than it first proposed on defining actionable retaliation under Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), Title V of the Americans With Disabilities Act (ADA), Section 501 of the Rehabilitation Act (Section 501), the Equal Pay Act (EPA), and Title II of the Genetic Information Nondiscrimination Act (GINA).  While the Guidance itself does not have the force of law, it provides employers with a valuable roadmap of the EEOC’s agenda both in pursuing workplace retaliation claims and in attempting to make law in the courts.

The EEOC now clearly positions itself as interpreting anti-discrimination laws and federal decisions as it sees fit to serve its enforcement objectives: “This document sets for the Commission’s interpretation of the law of retaliation and related issues. . . . Where the lower courts have not consistently applied the law or the EEOC’s interpretation of the law differs in some respect, the guidance sets forth the EEOC’s considered position and explains its analysis.” (Emphasis added.)  Rather than enforce existing law as interpreted by courts throughout the country, the EEOC supports its nationwide objective to expand employee protections by relying on court decisions favoring its approach, while at the same time rejecting court decisions that do not.

What Is Retaliation?

The Guidance says that the preconditions to a retaliation claim include: 1) protected activity being either “participation in an EEO process” or “opposition to discrimination”; 2) materially adverse action taken by the employer; and 3) a requisite level of causal connection between the protected activity and materially adverse action.  The EEOC considers these three elements to be fluid concepts, to be read and enforced expansively.

The Guidance also focuses on the concept of “anticipatory retaliation” or “pre-emptive retaliation” articulated by the Seventh and Tenth Circuits, that retaliation occurs “…when an employer takes a materially adverse action because an individual has engaged in, or may engage in, activity in furtherance of the EEO laws the Commission enforces” (emphasis added, citing Beckel v. Wal-Mart Assocs., Inc., 301 F.3d 621, 624 (7th Cir. 2002); Sauers v. Salt Lake Cty., 1 F.3d 1122, 1128 (10th Cir. 1993)). Employers concerned about the EEOC’s scrutiny now must be vigilant to document or otherwise be able to prove that all aspects of performance management – including, but not limited to, evaluations, warnings, reprimands, hiring, promotions, compensation, terminations and references – is conducted without regard to whether an applicant or employee may be about to participate in an EEO process or oppose discrimination.

What Is Protected Activity?

Participation In An EEO Process.  The Guidance restates the EEOC’s longstanding position that participation in an EEO process is protected whether or not an individual has a reasonable, good faith belief that the allegations are or could become unlawful. Conceding that the Supreme Court has not addressed this question, the EEOC nonetheless rejects decisions by the Seventh and Eighth Circuits that hold that the anti-retaliation protections of Title VII do not extend to individuals making false claims to the EEOC. (See Gilooly v. Mo. Dep’t of Health & Senior Servs., 421 F.3d 734, 240 (8th Cir. 2005); Mattson v. Caterpillar, Inc., 359 F.3d 885, 891 (7th Cir. 2004)).

Opposition To Discrimination.  The Guidance provides that “opposition to discrimination” must be “reasonable” in manner to receive protection. The Guidance then qualifies this position by observing that that there is overlap between what constitutes “participation in an EEO process” and “opposition to discrimination.”  Relying on Sixth Circuit case law the Guidance provides, self-servingly, that the EEOC is afforded great discretion to determine what constitutes protected activity. Employers should be on the lookout that the reasonableness of behaviors alleged to be in opposition to discrimination may be eroded as a defense to retaliation claims.

The Guidance also states that the EEOC rejects and will challenge what some courts have dubbed the “manager rule”; namely, that managers must step outside their management roles and take a position adverse to the employer in order to engage in the protected activity of opposition to discrimination.

What Is A Materially Adverse Action?

With respect to the requirement that an individual suffer a materially adverse action at the hands of an employer, the EEOC continues to broaden the actions that in its view constitute “materially adverse actions” as to include one-off incidents, warnings, dissuasive activities that do not directly affect employment, and activities outside of the workplace that may dissuade an applicant, employee or former employee from engaging in protected activity.  Further, actions purportedly taken against close family members and fiancés on account of an applicant, employee or former employee engaging in protected activity also will be challenged as retaliatory.

What Is Causation?

While the Guidance acknowledges that the Supreme Court has held that the standard for proof of retaliation under Title VII is that “but for” the a retaliatory motive, the employer would not have taken the adverse action, the Guidance introduces the “motivating factor” standard for federal sector Title VII and ADEA retaliation cases, prohibiting retaliation if it is a mere motivating factor behind an adverse action.  The Guidance provides that suspicious timing, incriminating oral or written statements, evidence of how comparable individuals were treated differently, and inconsistent or shifting explanations of the adverse action all can support a finding of retaliation, while the employer’s ignorance of the protected activity or having a legitimate, non-discriminatory reason for the adverse action may support a finding that no unlawful retaliation has occurred.

Related Issues – Requests For Accommodation

The Guidance discusses that, in addition to retaliation, the Americans With Disabilities Act prohibits interference with an applicant, employee or former employee’s rights under the ADA, including assisting another in the exercise of their rights under the ADA.  The Guidance suggests that the EEOC will aggressively challenge conduct allegedly interfering with requests for accommodation for disability under the ADA, as well as requests for religious accommodation under Title VII.

Implications For Employers

While the Guidance states that “[e]mployers remain free to discipline or terminate employees for legitimate, non-discriminatory, non-retaliatory reasons, notwithstanding any prior protected activity,” employers have no cause for reassurance from the EEOC.  The Guidance signals that the EEOC is broadening its interpretation of retaliation to include protection for activity that has not yet occurred, possible protection for “opposition” activities that may not be reasonable, and protection to the applicant and  employee who may engage in protective activity in the future.

[1] We previously blogged about the EEOC’s change in focus here.

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

Connecticut-sealBy Gerald L. Maatman, Jr. and Alex W. Karasik

Anti-discrimination laws command that “thou shall not retaliate…” The recent ruling in EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-01416 (D. Conn Apr. 12, 2016), is a case study in how employers can be taken to task for allegedly retaliating against workers who claim discrimination.

In this case, the EEOC brought an ADA action against the employer defendant, alleging it retaliated against an employee by sending a letter, which identified the employee and discussed his discrimination charge, to 146 other Day & Zimmerman NPS, Inc. (“DZNPS”) employees who belonged to the same union.  The EEOC also alleged that the letter interfered with the rights of 146 current and former employees under the ADA to communicate with the EEOC regarding potential unlawful discrimination.  After defendant moved to dismiss the ADA retaliation and interference claims, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied the employer’s motion to dismiss on the grounds that the EEOC’s allegations were sufficient to state plausible claims for retaliation and interference under Sections 503(a) and 503(b) of the ADA.

This ruling serves as a cautionary tale for employers facing discrimination charges brought by employees, and shows the breadth of anti-discrimination prohibitions on retaliation.

It illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of a motion to dismiss.

Case Background

In October 2012, a DZNPS employee, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”) filed a charge of discrimination with the EEOC, alleging that his employer failed to accommodate his disability reasonably and unlawfully terminated his employment.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.  Id. at 2-3.

On May 20, 2015, the EEOC issued a Letter of Determination to DZNPS, finding reasonable cause to believe that the ADA had been violated.  Following unsuccessful conciliation, the EEOC filed a complaint on September 28, 2015.  The EEOC alleged that since at least June 2014, DZNPS engaged in unlawful employment practices with respect to a group of electricians hired to work at the Millstone Power Station, in violation of Sections 503(a) and 503(b) of the ADA.  Id. at 3.  Thereafter, DZNPS moved to dismiss the complaint.

The Ruling

Judge Bolden denied DZNPS’s motion to dismiss without prejudice, holding that the EEOC’s claims of retaliation and interference under the ADA may proceed.  Pursuant to Section 503(a) of the ADA, the EEOC alleged that defendant unlawfully retaliated against the employee because he filed a charge of discrimination with the EEOC.  Id. at 4.  The Court noted that to plead a retaliation claim sufficiently in an employment discrimination context, the Second Circuit has held that “the plaintiff must plausibly allege that: (1) defendants discriminated—or took an adverse employment action—against him, (2) ‘because’ he has opposed any unlawful employment practice.”  Id. at 5 (quoting Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 90 (2d Cir. 2015)).  Defendant argued that the ADA retaliation claim should be dismissed because the EEOC’s claims failed on both prongs.  Id.  First, defendant argued that the EEOC had not alleged that DZNPS took any adverse employment action against the employee.  Second, defendant argued that even if the EEOC had plausibly alleged an adverse employment action, it did not allege facts showing that the action was caused by the employee’s protected activity.  Id. at 5.

The Court rejected both of defendant’s arguments.  First, the Court noted how case law authorities have routinely held that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable fact-finder could determine that such conduct constitutes an adverse employment action.  Id. at 6.  As to the second prong, the Court held that the three-month gap between when the June 2014 letter was sent and when the EEOC contacted DZNPS to request names and contact information for other electricians who had worked for defendant in the Fall of 2012 provided sufficient temporal proximity to satisfy the causation prong.  Id. at 7-8.  Specifically, the Court found it was plausible that the first opportunity to retaliate against the employee, whom they had already terminated, was when the EEOC provided a list of fellow union members to whom defendant could disseminate the potentially damaging EEOC charge.  Id.  Accordingly, denying the motion to dismiss, the Court noted that it could not conclude as a matter of law that defendant’s disclosure of the details of the employee’s EEOC disability discrimination charge in the June 2014 letter could not plausibly have been a retaliatory act in violation of the employee’s rights under the ADA.  Id. at 8.

In regards to the ADA Section 503(b) interference claim asserted by the EEOC, the Court initially noted that neither the Supreme Court nor the Second Circuit has yet outlined a test for an interference claim under the ADA.  Id. at 9.  Thereafter, the Court found that while it was true that the EEOC did not allege any direct evidence of DZNPS’s intent behind the June 2014 letter, the issue of an employer’s intent is a question of fact that cannot be resolved on a motion to dismiss.  Further, the Court held that “the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA. Therefore, the Court reasonably could infer that the letter could have the effect of interfering with or intimidating [the employee] and the letter’s recipients with respect to communicating with the EEOC about potential disability discrimination by [d]efendant.”  Id. at 10.  Accordingly, the Court denied defendant’s motion to dismiss the retaliation and interference claims brought under the ADA, while also deferring to rule on DZNPS’s arguments regarding the available prayers for relief.  Id. at 13-14.

Implications For Employers

This ruling is instructive as to why employers should exercise restraint when considering whether to internally disclose information about charges of discrimination filed by an employee, especially on a widespread basis.  Courts may view such conduct as obstructive to employees’ rights to file charges with administrative agencies.  Accordingly, employers should carefully limit internal communication about such charges to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

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

calmBy Gerald L. Maatman, Jr.

Today I had the privilege of attending the 24th Annual Employment Practices Liability Insurance Program hosted by the American Conference Institute in New York City (I moderated a session on EEOC litigation).

Constance Barker, one of the five Commissioners at the U.S. Equal Employment Opportunity Commission, gave the keynote address at the Program. Her presentation was fascinating, and focused largely on the future enforcement litigation activities of the EEOC for 2016. As the tag line of the old E.F. Hutton TV commercial suggested, “when the EEOC talks, employers should listen….” Commissioner Barker’s views and pronouncements are important for employers in crafting their workplace compliance strategies.

Focus Of Possible EEOC Activities

Commissioner Barker noted that 2016 is apt to see the EEOC issuing various regulations and guidance as the final year of the Obama Administration winds down. As she said at today’s Program, “expect a lot of activity…” In addition to regulations on GINA, the ADA, and wellness plans, Commissioner Barker asserted that other guidance is likely in the areas of retaliation, joint employer liability, leave policies, and national origin discrimination relative to Muslim workers. Commission Barker advised employers to take a close look at the proposed retaliation guidance, which she termed was “huge, huge, huge…” In particular, she cited the guidance’s expansive view of what constitutes protected activity, and how even discipline over “do not discuss compensation” policies would constitute retaliation (on the premise that discussing pay is protected activity).

Systemic Litigation Targets

Commissioner Barker opined that the healthcare, restaurant, and manufacturing industries would see significant litigation activity in 2016. Moreover, race, gender, pregnancy, and leave issues will be “litigation hot spots” for those industries. With nearly 25% of the EEOC’s docket now focus on systemic litigation involving assertion of claims on behalf of groups of employees, Commissioner Barker said that “leave and accommodation policies” also will be prime targets for systemic litigation.

Commissioner Barker shared the view that certain leave policies are on the EEOC’s litigation radar screen, such as policies that cap leave at a certain number of days; policies that have no accommodation safeguards; “100% healed” policies; and policies prohibiting leave if a worker is not FMLA-eligible.

New Developing Areas

Commissioner Barker also predicted a continuing commitment by the EEOC to “develop the law” on joint employer concepts, LGBT rights, workplace arbitration, and protections for workers in the gig economy. She noted that various agencies – such as the NLRB – have been quite aggressive in expanding traditional notions of employer liability, and that employers should be mindful that the EEOC is sometimes aligned to those views too.

In broader terms, this squarely raises the issue of the proper role and responsibility of the EEOC. Should it enforce the law as written or expand the law to maximize the reach and public policies within employment discrimination prohibitions? Many critics of the EEOC have cited its litigation focus as further evidence that the Commission is an activist agency that is result-oriented and willing to do whatever it takes to pursue litigation enforcement strategies it deems appropriate.

This issue is sure to heat up further in 2016.

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

#16-3130 2016 WCAR Tickit Icon R!By Gerald L. Maatman, Jr.

Our 2016 Workplace Class Action Report is now available. At 853 pages, it analyzes 1,314 rulings and is our biggest and best Report ever.

Click here to order your copy in eBook format. Click here to download Chapter 1 on the 2015 Executive Summary/Key Trends. Our annual webinar on the Report is now set for February 1, 2015, and a link to register for the webinar is here.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were humbled and honored by the review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLi said: “The Report is the singular, definitive source of information, research, and in-depth analysis on employment-related class action litigation. Practitioners and corporate counsel should not be without it on their desk, since the Report is the sole compendium of its kind in the United States.”

The 2016 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2015 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

We hope our loyal blog readers will enjoy it!

Executive Summary

Workplace class action litigation often poses unique “bet-the-company” risks for employers. An adverse judgment in a class action has the potential to bankrupt a business. Likewise, the on-going defense of a class action can drain corporate resources long before the case reaches a decision point. Companies that do business in multiple states are also susceptible to “copy-cat” class actions, whereby plaintiffs’ lawyers create a domino effect of litigation filings that challenge corporate policies and practices. Hence, workplace class actions can adversely impact a corporation’s market share, jeopardize or end the careers of senior management, and cost millions of dollars in defense fees. For these reasons, workplace class action litigation risks are at the top of the list of problems that keep business leaders up at night.

Skilled plaintiffs’ class action lawyers and governmental enforcement litigators are not making that challenge any easier. They are continuing to develop new theories and approaches to prosecuting complex employment litigation. In turn, the events of the past year in the workplace class action world demonstrate that the array of litigation issues facing businesses are continuing to accelerate while also undergoing significant change. Governmental enforcement litigation pursued by the U.S. Equal Employment Commission (“EEOC”) and the U.S. Department of Labor (“DOL”) also manifests an aggressive “push-the-envelope” agenda of two activist agencies, with regulatory oversight of workplace issues continuing as a high priority. The combination of these factors are challenging businesses to integrate their litigation and risk mitigation strategies to navigate these exposures. These challenges are especially acute for businesses in the context of complex workplace litigation.

Key Trends Of 2015

An overview of workplace class action litigation developments in 2015 reveals five key trends.

First, class action dynamics increasingly have been shaped and influenced by recent rulings of the U.S. Supreme Court. Over the past several years, the Supreme Court has accepted supreme courtmore cases for review – and issued more rulings than ever before that have impacted the prosecution and defense of class actions and government enforcement litigation. The past year continued that trend, with several key decisions on complex employment litigation issues, and more cases accepted for review that are posed for rulings in 2016. While the Supreme Court led by Chief Justice John Roberts is often thought to be pro-business, the array of its key rulings impacting class action workplace issues is anything but one-dimensional. Some decisions may be viewed as hostile to the expansive use of Rule 23, while others are hospitable and strengthen the availability of class actions. Further, the Supreme Court has declined several opportunities to impose more restraints on class actions, and by often deciding cases on narrow grounds, it has left many gaps to be filled in by and thereby fueled disagreements arising amongst lower federal courts. Suffice it to say, the range of rulings form a complex tapestry that precludes an overarching generalization that the Supreme Court is pro-business or pro-worker on class actions.

Second, the monetary value of employment-related class action settlements reached an all-time high in 2015. The plaintiffs’ employment class action bar and governmental enforcement litigators successfully translated their case filings into larger class-wide settlements at unprecedented levels. The top ten settlements in various employment-related categories totaled $2.48 billion over the past year as compared to $1.87 billion in 2014. As success in the class action litigation context often serves to encourage pursuit of more class actions by “copy-cat” litigants, 2016 is apt to see the filing of more class actions than in previous years.

#15-3099 2015 WCAR Infographics - Aggregate Settlement Amounts R

Third, federal and state courts issued more favorable class certification rulings for the plaintiffs’ bar in 2015 than in past years. In addition to converting their class certification rulings into class action settlements with higher values and pay-outs, plaintiffs’ lawyers continued to craft refined and more successful class certification theories to counter the more stringent Rule 23 certification requirements established in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), and Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013). In the areas of employment discrimination, wage & hour, and ERISA class actions, the plaintiffs’ bar scored exceedingly well in securing class certification rulings in 2015. Statistically, the plaintiffs’ bar secured class certification at an astounding rate of 75% of cases in 2015. In sum, class actions continue to be certified in significant numbers and certain “magnet” jurisdictions continue to issue decisions that encourage or, in effect, force the resolution of large numbers of claims through class action mechanisms.

#15-3099 2015 WCAR Infographics - U.S. Circuit Courts of Appeal R7

Fourth, complex employment-related litigation filings are up from past years, but by far and away, wage & hour class actions and collective actions are the leading type of “high stakes” lawsuits being pursued by the plaintiffs’ bar. Case filing statistics for 2015 reflected that wage & hour litigation outpaced all other categories of lawsuits, and increased yet again over the past year, with no end in sight of the crest of the tidal wave of case filings. Additional factors set to coalesce in 2016 – including new FLSA regulations, the impact of digital technology, and increased scrutiny of independent contractor and joint employer relationships – are apt to drive these exposures even higher for Corporate America.

Fifth, government enforcement lawsuits brought by the DOL and EEOC continued the aggressive litigation programs of both agencies. Settlement numbers for government enforcement litigation in 2015 increased substantially over 2014, as did the litigation dockets of the DOL and the EEOC. This trend is critical to employers, as both agencies have a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue.

Implications For Employers

The one constant in workplace class action litigation is change. More than any other year in recent memory, 2015 was a year of great change in the landscape of Rule 23. As these issues play out in 2016, additional chapters in the class action playbook will be written.

The lesson to draw from 2015 is that the private plaintiffs’ bar and government enforcement attorneys are apt to be equally, if not more, aggressive in 2016 in bringing class action and collective action litigation against employers.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2016.