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!

washington-monument-754745_960_720Seyfarth Synopsis: Governmental enforcement litigation was a mixed bag in 2016. The U.S. Department of Labor (“DOL”) and the Equal Employment Opportunity Commission (“EEOC”) continued their aggressive enforcement programs, but their effectiveness was down “by the numbers” as compared to previous years. What does this mean for 2017?  In the 6th and final installment in our series of blog postings on workplace class action trends, we examine what employers are likely to see in 2017 on the government enforcement litigation front.

Introduction

Government enforcement lawsuits brought by the DOL and EEOC continued the aggressive litigation programs of both agencies, but by sheer numbers of cases, their enforcement activities were arguably limited in their effectiveness, at least when measured by lawsuit filings and recoveries compared to previous years. Settlement numbers for government enforcement litigation in 2016 decreased substantially as compared to 2015, as did the litigation dockets of the DOL and the EEOC. This trends is aptly illustrated by a comparison of settlement recoveries over the past 7 years. Settlement recoveries in 2016 were the second lowest of any year during that period.

Top 10 Government Enforcement

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. The content and scope of enforcement litigation undertaken by the DOL and the EEOC in the Trump Administration remains to be seen; most believe there will be wholesale changes, which may well prompt the private plaintiffs’ class action bar to “fill the void” and expand the volume of litigation pursued against employers over the coming year.

Governmental Enforcement Litigation Trends In 2016

On the governmental enforcement front, both the EEOC and the DOL intensified the focus of their administrative enforcement activities and litigation filings in 2016.  At the same time, the number of lawsuits filed and the resulting recoveries by settlement – measured by aggregate litigation filings and the top 10 settlements in government enforcement litigation – were less than half of what the EEOC and DOL achieved in 2015.

The EEOC’s lawsuit count dropped precipitously. By continuing to follow through on the systemic enforcement and litigation strategy plan it announced in April of 2006 (that centers on the government bringing more systemic discrimination cases affecting large numbers of workers), the EEOC filed less cases overall but more systemic lawsuits. This manifested the notion that the Commission’s limited budget and bandwidth are best deployed to matters where a systemic focus is most needed and the largest numbers of alleged victims are at issue.  As 2016 demonstrated, the EEOC’s prosecution of pattern or practice lawsuits is now an agency-wide priority backed up by the numbers.  Many of the high-level investigations started in the last three years mushroomed into the institution of EEOC pattern or practice lawsuits in 2016. These numbers are shown by the following chart:

EEOC Systemic Cases: Filed, Resolved, And On Active Docket
FY 2013 – 2016

Cases Filed

The Commission’s 2016 Annual Report also announced that it expects to continue the dramatic shift in the composition of its litigation docket from small individual cases to systemic pattern or practice lawsuits on behalf of larger groups of workers.  The EEOC’s FY 2016 Annual Report detailed the EEOC’s activities from October 1, 2015 to September 30, 2016.  The EEOC’s Report indicated that:

  • The Commission completed work on 273 systemic investigations in FY 2016, which resulted in 21 settlements or conciliation agreements that yielded a total recovery of $20.5 million for systemic claims; six of the settlements involved 50 alleged victims or more, and 13 settlements included 20 or more alleged victims. The FY 2016 recoveries represent a decrease of systemic recoveries in FY 2015 when the Commission netted $33 million based on resolution of systemic investigations.
  • The EEOC recovered $347.9 million for alleged victims of employment discrimination in FY 2016 through mediation, conciliation, and settlements. This represented a decrease of $10.4 million as compared to FY 2015, when the Commission garnered $356.6 million for its enforcement efforts.
  • For its lawsuits, the EEOC secured $58.3 million in recoveries in FY 2016.  This figure was down $7 million as compared to the FY 2015 recoveries of $65.3 million. However, the EEOC resolved fewer lawsuits than it did last year, and recovered less money from those cases.  Specifically, the EEOC resolved 139 lawsuits during FY 2016 for a total recovery of $52.2 million; by comparison, the EEOC resolved 155 lawsuits in FY 2015 for a total recovery of $65.3 million.
  • The EEOC filed only 86 lawsuits in 2016 (down significantly from the 139 lawsuits it filed in 2015), of which 31 were “multiple victim” lawsuits, with 18 cases involved claims of systemic discrimination on behalf of 20 or more workers, and 13 cases involved multiple alleged discrimination victims of up to 20 individuals.  The EEOC had 165 cases on its active lawsuit docket by year end (down from FY 2015, when it had 218 cases on its docket, of which 48% involved multiple aggrieved parties and 28.5% involved challenges to alleged systemic discrimination).  Overall, this represented increases in these categories in terms of the make-up of the Commission’s litigation being tilted more heavily toward systemic cases.
  • The EEOC also received 91,503 administrative charges of discrimination, which was slightly up from the FY 2015 total of 89,385 charges and the FY 2014 total of 88,778 charges. Thus, charge activity was one of the heaviest in the 52 year history of the Commission.
  • The EEOC also encountered significant criticism in the manner in which it enforced anti-discrimination laws.  This criticism took various forms in terms of judicial sanctions, suits against the Commission by private litigants and States, and questioning by Congress over the EEOC’s alleged lack of transparency.

While the inevitable by-product of these governmental enforcement efforts is that employers are likely to face bigger lawsuits on behalf of larger groups of workers in 2017, the EEOC’s systemic litigation program is not without its detractors.  Several federal judges entered significant sanctions against the EEOC – some in excess of seven figures – for its pursuit of pattern or practice cases that were deemed to be without a good faith basis in fact or law. The U.S. Supreme Court in EEOC v. CRST Van Expedited, Inc., 136 S. Ct. 1642 (2016), examined the propriety of the $4.7 million fee sanction, the largest fee sanction ever leveled against the Commission; while the EEOC had been successful in its initial appeal in reversing the sanction before the Eighth Circuit, the Supreme Court unanimously rejected the EEOC’s position, remanded the fee sanction issue for review, and gave new life to the employer’s efforts to recoup millions of dollars against the Commission.

Fiscal year 2016 also marked another year in the EEOC’s 2012-2016 Strategic Enforcement Plan (“SEP”).  The SEP was created in 2012 as a blueprint to guide the EEOC’s enforcement activity.  Its most controversial and perhaps most far-reaching effect on the agency’s activity is the priority it gives to systemic cases: those pattern or practice, policy, or class-like cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic area.  Systemic cases have been the main driver of EEOC litigation over the past few years, and likely will be well into the future.  The EEOC is now fighting challenges to its power to bring those cases on a number of fronts.  Among other things, it is aggressively challenging any court’s ability to review how it conducts certain statutorily-mandated procedures before bringing suit, including how it investigates its cases and tries to conciliate those cases with employers.  If successful in those efforts, the EEOC will have greatly eased its path to pursuing systemic cases.

The EEOC is not only expanding its reach in procedural terms, but also it is attempting to broaden the scope of its authority through an expansion of the scope of anti-discrimination laws themselves.  In a number of recent cases, the EEOC has advanced novel legal theories that would, among other things, expand anti-discrimination protections to cover transgender employees and require employers to reasonably accommodate pregnant employees, even those who are experiencing normal pregnancies.  The EEOC continued to push the edge of the legal envelope in 2016, viewing itself as an agency that not only enforces the law, but also one that expands the scope of those laws as it deems appropriate.

For this and other reasons, the agency has come under increasing scrutiny and criticism by Republican members of Congress, business groups, and critics of an allegedly activist agency wasting the taxpayers’ dollars.  Such criticism is unlikely to stem the tide of systemic cases or deter the EEOC from continuing to try to expand its enforcement powers.  Subject to policy-directed changes mandated by the Trump Administration, employers can expect the EEOC will use the next year to continue to push for expansion of its procedural and substantive limits.

The DOL also undertook aggressive enforcement activities in 2016.

The Wage & Hour Division (“WHD”) kept up its aggressive enforcement actions in 2016, particularly in the hotel, restaurant, and retail industries.  Much of WHD’s enforcement and other activities took place under the umbrella of “fissured industries” initiatives, which focus on industries with high usage of franchising, sub-contracting, and independent contractors.  At the conclusion of those enforcement actions, WHD continued to increase its use of civil money penalties, liquidated damages, and enhanced compliance agreements.

Legislatures and government agencies in various states and municipalities also increased their activities on the wage & hour front.  Whether increasing the minimum or living wage, enacting scheduling laws and ordinances, implementing wage theft prohibitions, or increasing the minimum salary level required for exemption, many have already revised or are actively planning to revise laws and rules governing how businesses pay employees in 2017.

With the approaching ten-year anniversary of the last time Congress enacted a minimum wage increase (2007), advocates of a minimum wage increase are likely to turn up the volume on their requests for an increase to the federal minimum wage in 2017.  This may well depend on the politics of the debate, for the incoming Republican Administration appears opposed to such an increase.

Finally, if history is a guide, the incoming Administration is likely to return to the decades-old practice of issuing opinion letters in response to specific requests, which had been abandoned by the Obama Administration’s decision-makers at the DOL.

Over the past several years, the DOL’s Wage & Hour Division (“WHD”) fundamentally changed the way in which it pursues its investigations.  Suffice to say, the investigations are more searching and extensive, and often result in higher monetary penalties for employers. According to the DOL, since early 2009, the WHD has closed 200,000 cases nationwide, resulting in more than $1.8 billion in back wages for over 2 million workers.  In FY 2016, the WHD collected more than $266.5 million in back pay wages, an increase of $20.5 million over the past year. Hence, in 2016, employers finally saw the impact of these changes on the WHD’s enforcement priorities, and 2017 is apt to bring much of the same absent a stark change in priorities under the Trump Administration.

The DOL also focused its activities in 2016 on wage & hour enforcement on what it terms “24/7.” The WHD’s Administrator, Dr. David Weil, was an architect of the WHD’s fissured industry initiative.  This initiative focuses on several priority industries, including food services (both limited service/full service establishments), hotel/motel, residential construction, janitorial services, moving companies/logistics providers, agricultural products, landscaping/horticultural services, healthcare services, home healthcare services, grocery stores, and retail trade.  In FY 2016, the WHD reported recoveries of $143,274,845 for nearly 19,000 workers within these fissured industries.

Not to be outdone, the National Labor Relations Board (“NLRB”) undertook an ambitious agenda in 2016 too.  It reconsidered well-settled NLRB principles on joint employer rules and representative elections, entertained the possibility of extending the protections of the National Labor Relations Act (“NLRA”) to college athletes, and litigated novel claims seeking to hold franchisors liable for the personnel decisions of franchisees. More than any other area impacting workplace litigation, the NLRB also remained steadfast in its view that workplace arbitration agreements limiting class or collective claims are void under § 7 of the NLRA. It pursued a myriad of unfair labor practice charges against employers for alleged violation of the NLRA for use of arbitration agreements with class action and collective action waivers.

Implications For Employers In 2017?

So what are employers likely to see in 2017 on the government enforcement litigation front? In the early days of the Trump Administration, clear direction on litigation policy remain unclear. Most pundits believe that employers can expect less litigation and less regulation than during the Obama Administration. Furthermore, the phenomenon of “regulation by enforcement litigation” is likely no longer the by-product of the DOL and the EEOC’s enforcement litigation programs. Most likely, control of agency budgets may well provide the lever that the Trump White House may use to force its policy choices upon the government enforcement litigation programs of the DOL and the EEOC.

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On February 9, 2017, Seyfarth Shaw hosted a signal event regarding workplace class action litigation in 2016 and the implications for employers looking to anticipate and prepare for workplace trends in 2017.

Vickie Lipnic, the newly appointed Acting Chair of the Equal Employment Opportunity Commission, joined Jerry Maatman in launching Seyfarth’s 2017 Workplace Class Action Litigation Report. Vickie has been a Commissioner with the EEOC since 2010 and her knowledge of the focal points of the government agency tasked with enforcing employee civil rights offered guests a great deal of insight. The EEOC has been increasingly committed to systemic litigation and, while these types of cases are intended to have a broad impact, Vickie stressed the importance of single plaintiff litigation and the impact that single plaintiff lawsuits can have on an industry, company, or geographic area. Vickie also opined on the importance of bi-partisanship as a Commissioner. She is the one remaining Republican-appointee on the Commission with Democratic-appointee Jenny Yang, her successor as Chair of the EEOC, whose term is ending July 1, 2017. Vickie noted that there are currently 2 seats open on the Commission, and President Trump will be tasked with appointing two new Commissioners as well as filling the currently vacant General Counsel position. With regard to these shifting positions and the new Presidential administration, Vickie confirmed that the EEOC is steadfast in its mission to protect and enforce the civil rights of all employees and to ensure that employers are readily prepared to adhere to the laws protecting their employees from discriminatory practices.

Additionally, Jerry discussed the six key trends in workplace class action litigation for 2016 and how those trends will impact employers in 2017. First is the impact of the U.S. Supreme Court decisions in Tyson Foods, Inc. v. Bouaphakeo, et al., and Spokeo, Inc. v. Robins, et al., and how they will influence complex employment-related litigation in the coming years.  Equally important for the coming year, the Supreme Court has accepted five cases that are likely to be decided in 2017 that also will impact and shape class action litigation and government enforcement lawsuits faced by employers; chief among them is the issue of the legality of class action waivers in arbitration agreements. In terms of settlements in 2016, after reaching all-time highs in 2014 and 2015, the monetary value of aggregate top-ten employment class action settlement declined significantly overall, but wage & hour class action settlements sky-rocketed.  Another trend for 2016 was that federal and state courts issued more favorable class certification rulings for the plaintiffs’ bar than in past years. Plaintiffs, for instance, secured certification in 76% of the time in wage & hour class and collective actions. However, for the first time in over a decade, case filing statistics for 2016 reflected that wage & hour litigation decreased over the past year. Additional factors set to coalesce in 2017 – including litigation over the new FLSA regulations and the direction of wage & hour enforcement under the Trump Administration – are apt to drive these exposures for Corporate America. To the extent that government enforcement of wage & hour laws is ratcheted down, the private plaintiffs’ bar likely will “fill the void” and again increase the number of wage & hour lawsuit filings. Also in 2016, Plaintiffs’ attorneys were extremely successful in certifying first stage conditional certification motions, which can mean filings are likely to go up in 2017.  Finally, the government enforcement lawsuits brought by the DOL and EEOC continued the aggressive litigation programs of both agencies, but by sheer number, lawsuit filings and recoveries were lower when compared to previous years.

WCAR event pic 2

Thank you to Victoria for visiting us in Chicago for this hugely successful event. We hosted over 150 guests at our Seyfarth Shaw Chicago office and over 1,800 guests via our live Webcast.

Thank you to everyone who joined us either here in Chicago or via our live webcast. For those interested in viewing a video of the presentation, stay tuned. We will be posting a complete video of the event next week.

Readers can find more information about the event on Seyfarth’s Pay Equity Issues & Insights Blog here.

Additionally, if you have not yet registered for the upcoming WCAR webinar, you can do so by clicking here.

thCAD0SFA4By Christopher DeGroff, Gerald L. Maatman, Jr., and Jennifer A. Riley

On November 19, 2015, the EEOC released its annual 2015 Performance and Accountability Report (“PAR”). The Report reflects the progress of the EEOC’s continued efforts to meet the enforcement priorities outlined in its 2012 strategic enforcement plan (“SEP”), including its systemic litigation initiative. For employers, this is perhaps the most important document issued by the Commission. In short, it should be required reading for corporate counsel and professionals involved in compliance efforts relative to workplace litigation issues.

In its SEP, among other things, the EEOC underscored its efforts to champion bigger, more media-focused “systemic” cases, including pattern or practice cases where the alleged discrimination “has a broad impact on an industry, occupation, business, or geographic area.” In the SEP, the EEOC set forth a goal to ensure that systemic cases make up at least 20% of its annual litigation docket and at least 22% to 24% of its litigation docket by 2016. (Read more here.)

As background, the PAR is a “scorecard” of sorts for the EEOC. It provides a report on its activities during the past fiscal year, from October 1, 2014 through September 30, 2015, including its progress toward meeting the goals outlined in the SEP, and provides a preview of what we can expect to see from the EEOC in the upcoming months.

In sum, although the Report acknowledges that the EEOC filed fewer systemic lawsuits in FY 2015, the number of systemic investigations and recoveries exceeded FY 2014 levels. Despite significant setbacks in FY 2014 (read more here), the agency’s statistics trumpeted in the PAR show that, rather than backing down, the EEOC was inspired to be even more aggressive in FY 2015.

The EEOC’s Overall Results

The EEOC’s results reflect a mixed bag for employers.  The EEOC’s totals represent a slight increase in charges filed (93,727 in 2013, compared with 88,778 in 2014, and 89,385 in 2015), and a slight increase in merits lawsuits (131 in 2013, compared with 133 in 2014, and 142 merits lawsuits in 2015).

However, the EEOC’s report reflects a steady decrease in the number of systemic lawsuits, both in the number filed (21 in 2013, compared with 17 in 2014, and 16 in 2015), and in the number of systemic lawsuits on-going in the court system (54 in 2013, compared with 57 in 2014, and 48 in 2015).

Although the agency completed more systemic investigations in 2015 than it completed in 2014, the EEOC’s numbers did not meet 2013 levels. In 2015, the agency completed more investigations than it completed in 2014, but fewer investigations than it completed in 2013 (300 in 2013, compared with 260 in 2014, and 268 in 2015).  The agency recovered more as a result of those investigations than it recovered in 2014, but less than it recovered in 2013 ($63 million in 2013, compared with $13 million in 2014, and $40 million in 2015).

Charges:   A Bigger Backlog

Monthly-Reports (2)The EEOC reported that it received 89,385 charges alleging employment discrimination in 2015.  The number was up slightly over the number received in 2014 (88,778), but remains below the record-breaking recession-period numbers that we saw between 2008 and 2013.  During those years, the numbers steadily rose from 95,402 in 2008, to 93,277 in 2009, to 99,922 in 2010, and 99,947 in 2011, before starting a gradual decline to 99,412 in 2012 to 93,727 in 2013.

As of the end of FY 2015, the EEOC had a backlog of 76,408 charges, a slight increase of 750 charges over the backlog at the conclusion of FY 2014.

Settlements: Recoveries Soar

In its Report, the EEOC reported a surge in the total amount of monetary settlements.  Its administrative enforcement program produced $356.6 million from claim resolutions, up over $60 million from the $296.1 million that it collected in FY 2014.  The EEOC resolved 155 merits lawsuits in the federal district courts, for a total monetary recovery of $65.3 million, a substantial increase ($42.8 million) over the $22.5 million that it collected during FY 2014.  In addition, the EEOC resolved 6,360 complaints and secured more than $94.9 million in relief for federal employees and applicants who requested hearings in FY 2015.

Lawsuits: More Suits, Smaller Share Of Systemic Cases

In its 2015 PAR, the EEOC reported that, during fiscal year 2015, the EEOC filed 142 merits lawsuits, including 100 individual suits, and 42 suits involving “discriminatory policies or multiple victims,” of which 16 (or 11%) involved challenges to alleged systemic discrimination. According to the EEOC, in the 16 systemic lawsuits, the EEOC challenged a variety of types of alleged systemic discrimination, including an alleged age-based refusal to hire, a refusal to accommodate religious beliefs, an imposition of unnecessary medical restrictions, and a systematic failure to maintain records.

Whereas these numbers reflect an upward trend in the number of merits lawsuits, the growth of systemic lawsuits was stagnant. In 2013, the EEOC reported that it had filed 131 merits lawsuits, compared with 133 merits lawsuits in 2014, and 142 merits lawsuits in 2015.  However, in 2013, the EEOC reported that 21 (16%) of those lawsuits were systemic suits, compared with 17 (13%) systemic lawsuits in 2014, and 16 (11%) systemic lawsuits in 2015.  These numbers might explain the agency’s effort in 2015 to report 40 (18.3%) “multiple victim” cases.

At the end of FY 2015, the EEOC had 218 cases on its active district court docket, of which 48 (22%) involved challenges to systemic discrimination. These numbers also reflect a decrease over the past two years.  At the end of FY 2013, the agency had 231 cases on its active docket, of which 54 (23%) involved challenges to systemic discrimination.  At the end of 2014, the agency had 228 cases on its active docket, of which 57 (or 25%) involved challenges to systemic discrimination.

Our “peek behind the numbers” suggests that the Commission’s prosecution of systemic lawsuits has stressed its budget, attorney workloads, and overall capacities. Big cases equate to significant hours of attorney time, and the EEOC’s capacity to file and prosecute an increasing number of systemic lawsuits has hit somewhat of a ceiling or cap due to budgetary and attorney workload limitations.

Systemic Investigations

With respect to investigations in FY 2015, the agency reported that it completed 268 systemic investigations and issued 109 cause findings. It resolved 70 systemic investigations by voluntary conciliation agreements and obtained over $33.5 million in remedies as a result of its systemic initiative.

While reflecting an increase over FY 2014, these numbers still did not achieve the agency’s FY 2013 results. One year ago, the EEOC reported completing only 260 systemic investigations and securing only $13 million in monetary relief. At the end of 2013, the EEOC had launched 300 systemic investigations, resulting in 63 settlements or conciliation agreements, and had recovered approximately $40 million in remedies.

Overall Implications For Employers

Do these numbers mean that the EEOC is backing off its systemic initiative? Not a chance in our view.  Although the EEOC filed fewer systemic lawsuits in FY 2015, the number of 7_Top_HR_Mistakes_Companies_Make_NEW_BANNER (2)systemic investigations and recoveries exceeded FY 2014 levels, and its recoveries represented a climb toward its FY 2013 numbers. As we predicted a year ago, rather than backing down, these numbers signal that the EEOC’s FY 2014 defeats inspired it to more aggressively pursue its agenda.

We expect the EEOC to continue to search for and to initiate systemic investigations to continue this upward trend in 2016. In its FY 2015 PAR, the EEOC continued to highlight its emphasis on “maximizing [its] impact” through its focus on systemic discrimination. The EEOC noted that, at the end of FY 2015, it employed more lead systemic investigators “whose work is dedicated exclusively to development and coordination of systemic investigations,” and more social science research staff.

The EEOC also noted that it continued its efforts to develop means to coordinate systemic investigations across offices. In particular, the EEOC reported that its Systemic Watch List, a software tool that matches ongoing investigations or lawsuits, has “proven integral” to improved coordination. The EEOC also reported that it completed its expansion of the CaseWorks system, a “central shared source of litigation support tools” that facilitate the collection and review of electronic discovery and enable “collaboration” in the development of cases for litigation.

In short, we do not expect the EEOC to back off its systemic initiative in 2016, but to be more aggressive in pursuing those cases that fit within its agenda. So numbers aside, these metrics reflect an agency committed to “big impact” lawsuits that “send a message” to the employer community.

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

 

 

EEOC CoverFor all our loyal blog readers – our Annual EEOC-Initiated Litigation Webinar is scheduled for Monday, March 23, 2015. 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 2014 And Trends To Watch For In 2015. 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 2014 rulings and trends developing thus far in 2015.

The book’s Co-Authors Gerald L. Maatman, Jr. and Christopher J. DeGroff, co-chairs of the firm’s Complex Discrimination Litigation practice group, will lead this interactive discussion.

Substantive trends to be discussed are:

  • The EEOC’s Systemic Initiative – Still Alive and Kicking – Increasing focus on bigger, more complex, and more media-driven cases was prevalent in 2014.
  • The Commission’s Priorities – ADA, Sex/Pregnancy, and hiring cases remain chart-toppers for the EEOC in FY 2014.
  • Location, Location, Location – The “where” is an important question for EEOC activity, and makes a difference in the types of cases brought and how aggressively they are pursued.
  • EEOC Challenges and What They Mean for Employers – How EEOC setbacks in 2014 may translate to evolving legal tactics in 2015.
  • Where We Go From Here – Our predictions for EEOC enforcement activity in 2015, both substantive and tactical.

The webinar will be held on Monday, March 23, 2015:

1:00 p.m. to 2:00 p.m. Eastern

12:00 p.m. to 1:00 p.m. Central

11:00 a.m. to 12:00 p.m. Mountain

10:00 a.m. to 11:00 a.m. Pacific

Speakers: Christopher J. DeGroff and Gerald L. Maatman, Jr. of Seyfarth Shaw

Registration: There is no cost to attend this program, please click here to register and attend.

By Christopher DeGroff, Kevin Fritz, and Gerald L. Maatman, Jr.

The EEOC’s reach once again exceeded its grasp in its failed lawsuit against growers in the U.S. District Court for the Eastern District of Washington. In EEOC v. Global Horizons, Inc., 11-CV- 3045, 2014 WL 2207866 (E.D. Wash. May 28, 2014), the Court tossed out the EEOC’s discrimination claims of two of the three defendants in a human-trafficking case over the treatment of Thai workers that has spanned years and was the subject of considerable media attention when it was first filed. Our prior posts on the case are herehere and here. A look at the anatomy and disposition of the case is useful for all employers facing EEOC systemic litigation.

Background

The case began in 2011 when the EEOC sued two growers, Green Acre Farms and Valley Fruit Orchards, and their labor contractor, Global Horizons, on behalf of hundreds of alleged trafficking victims. Our readers have been tracking the case since it first grew roots, and the latest development is a classic example of the EEOC’s sue first, aim later philosophy.

In ruling on the growers’ motions for summary judgment, the Court examined the hostile work environment, constructive discharge, and retaliation claims against the growers. Specifically, the Court reviewed whether a worker was subjected to unwelcome conduct based on race or national origin that was sufficiently severe and pervasive to alter employment conditions and create an abusive working environment. The Court also reviewed the work environment provided by the growers and claims of retaliation against employees who complained about working conditions.

Judge Edward F. Shea granted the growers’ summary judgment on all of the EEOC’s Title VII liability claims against them. In doing so, the Court found that the work environment provided by the farms was not so “intolerable” that a reasonable person would have felt compelled to just walk away from the job, and that the EEOC failed to show there was a single worker who could sustain a timely retaliation claim. The Court’s decision is a clear showing that when the EEOC makes assertions of systemic discrimination, it cannot reach so far without first planting the necessary evidence to grow the assertions. The Court’s decision now leaves farm labor contractor Global Horizons, Inc. as the sole defendant in the case.

Sour Grapes

One other issue was front and center in the summary judgment briefing – whether the EEOC had attempted to resolve the case in good faith before resorting to litigation in the courthouse. The growers said the answer to this question was a resounding no.  The Court, however, looked to the Seventh Circuit’s recent EEOC v. Mach Mining, LLC decision, deciding it was not the Court’s place to review those conciliation efforts, even though other federal courts had done so in the past.  Circuit splits like this make it difficult to assess the strength and merit of lawsuits. As we previously blogged, because of the importance of this issue, both the EEOC and employers are requesting that the Supreme Court resolve what is now an even greater disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

Implications For Employers

EEOC v. Global Horizons stands as a reminder to employers that the fact that the EEOC alleges systemic allegations does not make it so. The unfortunate consequence to those who find themselves in the EEOC cross-hairs is that they may need to endure years of costly litigation and media scrutiny to vindicate their cause. Fighting the good fight can pay off, as it did here.

As for the EEOC’s obligation to fulfill its mandate to informally attempt to resolve these expensive cases before they are filed, the jury remains out.  The EEOC insists that federal courts should simply take the government’s word for it when it says it has negotiated in good faith – a position many employers know first-hand is problematic.

Check back soon to see how Global Horizons, Inc. fairs in the next round, and whether the Supreme Court elects to finally take a bite at the Mach Mining apple.

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

By Laura J. Maechtlen and Brian Wong

On May 20, 2014, the California Department of Fair Employment and Housing (“DFEH”) announced the impending settlement of its high-profile systemic action against the Law School Admission Council, Inc. (“LSAC”). Our ongoing coverage of this case, DFEH v. Law School Admission Council, Inc., No. 12-CV-1830, can be found here and here. The proposed settlement will include payment by LSAC of upwards of $8 million in penalties, damages, costs and fees, as well as an exhaustive slate of injunctive relief.

This multimillion dollar settlement is a big win for the DFEH, and a clear warning to employers that state agency systemic enforcement is here to stay. The agency’s press release can be found here, and the U.S. Department of Justice’s press release is available here.

Background

The DFEH’s enforcement suit sought damages and injunctive relief for alleged failure by LSAC to provide disability-related accommodations to individuals taking its Law School Admission Test (“LSAT”). The DFEH brought its action both on behalf of seventeen named individuals, and also on behalf of a “group or class” consisting of all disabled individuals in California who have requested a reasonable accommodation for the LSAT since January 2009. During litigation, the U.S. Department of Justice and a number of individuals joined the DFEH as plaintiff-interveners.

The DFEH alleged that LSAC violates titles III and V of the Americans with Disabilities Act (“ADA”), 42 U.S.C. §§ 12181 et seq. and 12203—incorporated by reference in Unruh Civil Rights Act, Cal. Civ. Code § 51(f)—by (i) failing to provide required testing accommodations to individuals with disabilities; (ii) subjecting applicants requiring accommodations to excessive documentation demands; and (iii) annotating or “flagging” such individuals’ test results prior to sending their scores to law schools.

Over the course of the lawsuit, the DFEH flexed its newfound enforcement powers (see here for our prior discussion of the agency’s novel authority) in an attempt to lay further groundwork for future systemic actions. On April 22, 2013, Judge Edward Chen of the U.S. District Court for the Northern District of California held that DFEH collective enforcement actions are cut from the same cloth as EEOC enforcement suits, and therefore need not satisfy federal Rule 23 class certification requirements (see here for our analysis of Judge Chen’s order). The DFEH has already shown its eagerness to rely on this ruling as it looks to pursue future collective actions against large employers in California.

Terms Of Settlement

The parties in DFEH v. LSAC, Inc. memorialized the terms of their proposed settlement in a lengthy 61-page consent decree filed with the district court on May 20. Pending court approval of the consent decree, LSAC will pay over $8 million for costs and fees, civil penalties, damages payments to named claimants and plaintiff-interveners, and creation of a large monetary fund to compensate thousands of aggrieved claimants.

Major elements of the consent decree’s exhaustive slate of injunctive relief include: (i) creation of new policies and practices for processing accommodation requests; (ii) engagement of expert consultants for evaluation of testing accommodation requests; (iii) enhanced tracking of accommodation-related data; (iv) ADA notice posting, monitoring and reporting; and (v) alteration of LSAC’s score annotation practices.

Implications For Employers

Settlement of this high-profile case heralds a new reality in systemic enforcement litigation – the DFEH now has a model for engaging employers in “bet the company” systemic lawsuits on behalf of large swaths of employer workforces to which Rule 23 class certification requirements may not apply.

The question on employers’ minds nationwide now should be: “Will agencies in other states also join in the EEOC’s unwavering focus on systemic litigation?” Provided they have the statutory authority to so act, this settlement may well entice them. The best defense? As we discussed recently in our CalPecs blog, employers should ensure their policies and procedures strictly comply with state and federal law, and that managers receive the training they need to know, observe, and enforce these policies and procedures.

Please visit our sister blog’s recent analysis of this case here for additional thoughts on the impact of DFEH v. LSAC, Inc. from an ADA Title III standpoint.

By Gerald L. Maatman, Jr.

The U.S. Equal Employment Opportunity Commission has made eliminating so-called “discriminatory” barriers in recruitment and hiring one of its top priorities. For practical purposes, this means the agency is targeting and scrutinizing the recruitment and hiring practices of all employers. 

As a result, issues with EEOC enforcement litigation remain at or near the top of corporate counsel’s radar screen. The financial stakes are typically high, corporate reputations are on the line, and problems with media attention can divert critical corporate resources. 

Often, I hear corporate counsel bemoan that defending an EEOC systemic investigation or pattern or practice lawsuit is akin to “holding a tiger by the tail…” This type of litigation can be tough, but sound defense strategies can turn the tables and secure successful outcomes.

Today I had the privilege of discussing these issues in a keynote address at the American Staffing Association’s Legal Symposium with over 650 corporate counsel.

Substantial Q & A focused on the defense victories earlier in 2014 in the two biggest and most-high profile EEOC lawsuits in the country – in EEOC v. Sterling (discussed here) and EEOC v. Kaplan (discussed here and here). The rulings in these cases have generated significant criticism of the EEOC’s systemic litigation program – with the Wall Street Journal calling the Sixth Circuit’s decision in EEOC v. Kaplan the “Opinion of the Year” (here and here).

But given the Commission’s current agenda, hiring and recruitment practices remain vulnerable to enhanced scrutiny.

Sound HR compliance programs, strong defense strategies, and practical litigation decisions are key to eliminating and/or minimizing these exposures.

eeocseal.jpgBy 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.

eeocseal.jpgBy Christopher DeGroff and Gerald L. Maatman, Jr.

We have frequently opined to readers of The Workplace Class Action Blog that litigating against the EEOC is, in a word, different. The EEOC arguably has an agenda that every U.S. employer shares:  striving for a discrimination-free workplace. But the EEOC is also a political entity, and with that reality comes a host of shifting positions and pressures. For employers, being aware of the EEOC’s official and unofficial agenda is key to working with (and sometimes litigating against) the agency.

We previously reported that the number of the EEOC’s lawsuits filed dropped precipitously in FY 2012. Although we first reported this significant drop in filings here, the EEOC’s Performance and Accountability Report confirms that the EEOC filed only 122 lawsuits in FY 2012, down from 261 merits lawsuits in FY 2011. But at a time when the overall number of lawsuits has decreased, the proportion of those cases that assert systemic claims has sharply increased; systemic suits accounted for 20% of all of its active merits suits the largest proportion on the EEOC’s active docket since it began tracking in FY 2006. This mathematical combination and the EEOC’s overall enforcement program resulted in a record number of recoveries in FY 2012, up to $365.4 million last year. This graphic captures those three elements. 

But one more critical metric must be considered when trying to forecast how the EEOC will behave in 2013: its budget.

The resources the EEOC can draw upon play an integral part in how many cases the agency can file and, bluntly, just how well it can litigate those cases. The EEOC’s pursuit of an unprecedented number of federal court filings and systemic investigations in FY 2012 tested the agency’s already strained budget. The EEOC indicated in its Strategic Enforcement Plan (discussed here, here, and here) that it has been forced to retreat from its “all in” systemic litigation focus to a more narrowly defined sub-set of systemic cases. The unspoken undertone of the SEP is that the EEOC may have concluded that its aggressive litigation machine had outstripped its manpower and budget, and that its litigation plan of attack was too ambitious.

Ultimately, the EEOC’s agenda will always be a reflection of its monetary resources. In late 2011, Congressional action reduced the Commission’s annual budget by $6.6 million. Translation: the EEOC is now under even greater pressure to do more with less. Although filing a federal court complaint is relatively inexpensive, staffing and litigating the EEOC’s 122 cases comes at a high price. And we should not forget the 261 lawsuits filed the year before – many of which are just now maturing into full-on litigation. In response to mounting political pressure, the EEOC faces even further budget cuts. The union representing EEOC workers – the American Federation of Government Employees (AFGE) – recently went on the offensive, warning that budget cuts threaten to compromise the EEOC’s effectiveness. The AFGE claims that sequestration scheduled for March 2013 may slash between $23 million to $30 million from the EEOC’s budget. The impact? AFGE National President J. David Cox Sr. warns: “This cut would cripple the agency’s ability to enforce laws that protect against workplace discrimination. EEOC cannot enforce laws without frontline staff allowed to be on the job.”

Impact For Employers

One may think that a cash-strapped litigation adversary is a good thing. Yet, employers should remember that the EEOC launched its Systemic Initiative in 2006 in the face of similar budget pressures – an initiative that has resulted in larger and larger lawsuits filed by the agency. Given the political climate, the EEOC may again try to do “more with less” and reduced budgets may actually mean that the EEOC will place an even greater emphasis on bringing large-scale claims against employers, relying on these high-impact and highly-publicized cases to send a message to other employers. Even more chilling, the EEOC indicated in its SEP that it plans to engage in strategic partnering with other agencies or may even be a referral source to the private plaintiff’s bar.

We will continue to monitor these developments and will report to our readers on budgetary next steps.