Seyfarth Synopsis: Happy Thanksgiving to our loyal readers of the Workplace Class Action Blog! Our team has been busy at work this Thanksgiving season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report. We anticipate going to press in early January, and launching the 2021 Report to our readers from our Blog.

This will be our 17th Annual Report, and the biggest yet with analysis of over 1,500 class certification rulings from federal and state courts in 2020. With 2020 being the year of COVID-19, workplace class action litigation took some interesting and unexpected turns.

As in the past, the Report will be available for download as an E-Book too.

We are humbled and honored by the recent review of our 2020 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. Anyone who practices in this area, whether as a corporate counsel, a private attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker, cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’ In short it is ‘the bible’ for class action legal practitioners, corporate counsel, employment practices liability insurers, and anyone who works in related areas.”

The 2021 Report will analyze 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 2020 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. With 2020 being the year of COVID-19, workplace class action litigation took some interesting and unexpected turns.

Information on downloading your copy of the 2021 Report will be available on our blog in early January. Happy Thanksgiving to everyone!

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Alex W. Karasik

Seyfarth Synopsis:  In an EEOC-initiated lawsuit – EEOC v. LogistiCare Solutions LLC, No. 20-CV-852, 2020 U.S. Dist. LEXIS 215486 (D. Ariz. Nov. 18, 2020) – involving allegations dating back to 2013, a federal district court in Arizona denied an employer’s motion to dismiss and motion for summary judgment on the ground of laches, holding there was insufficient information to determine whether the elements of laches were met, and a material dispute of fact existed over whether the employer was prejudiced by the delay.

Although the employer’s motions here were unsuccessful, employers who face similar lawsuits following major time lapses in EEOC investigations can use the Court’s analysis to better prepare laches arguments.

Case Background

In EEOC v. LogistiCare Solutions LLC, two female employees attended a two-week training program for a call center in Phoenix, Arizona.  Both were released from the training class on September 16, 2013.  One of the employees filed a charge of pregnancy discrimination with the EEOC on October 31, 2013.   After completing its investigation, on May 1, 2020, the EEOC filed a lawsuit against multiple Defendants for terminating the employees based on sex (pregnancy) in violation of 42 U.S.C. § 2000e-2(a).  In its complaint, the EEOC alleged it was bringing suit on behalf of the charging party and, “other aggrieved individuals.” Id. at *2.  Defendant LogisticCare moved to dismiss the EEOC’s complaint, or in the alternative, for summary judgment on the grounds of laches.

The Court’s Decision

The Court denied LogistiCare’s motion to dismiss and denied its motion for summary judgment.  Citing Ninth Circuit precedent, the Court explained that a claim is barred by laches where: (i) the plaintiff unreasonably delays in bringing suit; and (ii) the defendant is prejudiced by the delay.  Id. (citations omitted).  It added that determining whether delay was unreasonable and whether prejudice ensued necessarily demanded a close evaluation of all the particular facts.  Accordingly, the Court opined that claims are not easily disposed of at the motion to dismiss stage based on a defense of laches.  Id.  Applying the this Ninth Circuit precedent, the Court held that it was not possible to determine whether the elements of laches were met from the complaint.  Rejecting LogistiCare’s argument, the Court held that a lengthy span of time alone was not enough to prove unreasonable delay.  Id. at *3 (citation omitted).

Further, the Court addressed whether LogistiCare showed it was prejudiced under the laches standard.  Id. at *4.  The Court opined that even if the EEOC’s delay in filing suit was unreasonable, genuine issues of material fact existed regarding whether LogistiCare was prejudiced by any such delay.   LogistiCare identified six witnesses for whom there were issues, such as locating the witnesses’ whereabouts and memory loss.  Id. at *5-6.  The Court indicated that LogistiCare must prove that the witnesses were unavailable, and that their unavailability was a result of the EEOC’s delay.  In its motion, LogistiCare did not explain why there was “no reasonable way” to contact its former employees.  The Court also pointed out how the EEOC was able to locate and interview one of the six witnesses.  Id. at *6.  Accordingly, the Court held that it was “entirely speculative at this point whether the former employees are outside this Court’s jurisdiction.”  Id.

The Court further held that LogistiCare did not show it was prejudiced based on loss of memory because LogistiCare could not simply rely on general statements that memories have lapsed.  Id. at *6.  Specifically, the Court observed that other than the conclusory statement that memories fade over time, LogistiCare did not provide evidence that the potential witnesses had forgotten the alleged incident.  In response to a declaration submitted by LogistiCare’s corporate representative indicating that the training supervisor for the Phoenix call center at the time of the alleged incident no longer had a meaningful independent recollection of the events, the Court held that the declaration was insufficient, since it was not submitted by the training supervisor himself.  Id. at *6-7.

Finally, the Court held that although increased back pay was one factor that demonstrated prejudice, potential back pay liability was not enough to show prejudice on its own since the Court had the power to take the EEOC’s delay into account when crafting a remedy.  Id. at *7.  In support of this position, the Court cited several decisions holding that back pay can be limited, and further noted that back pay is an equitable remedy that can be subjected to mitigation.  Id. (citations omitted).   Accordingly, the Court denied LogistiCare’s motion to dismiss since the complaint did not provide sufficient information to determine whether the elements of laches were met, and denied its motion for summary judgment since there was a genuine dispute of material fact over whether LogistiCare was prejudiced by the EEOC’s delay in filing this suit.

Implications For Employers

Given the EEOC’s perpetual backlog of charges, no matter how diligently the Commission pursues its investigations, it is not uncommon that some claims may slip through the cracks and endure substantial delays in the investigative process.  Here, there was nearly a seven-year time gap between the filing of the charge and the EEOC’s filing of the lawsuit.  Although this substantial time lapse manifests challenges for both parties and the Court relative to adjudicating a lawsuit involving a stale set of facts, this ruling illustrates that time alone does not automatically entitle employers to a quick win at the pleading stage.

Employers who are subjected to EEOC-initiated litigation stemming from alleged incidents that occurred several years ago should not lose all hope, however, because of this ruling.  The Court’s opinion provided insight into potential avenues to enhance employers’ arguments, for instance, submitting declarations directly from a witness who suffered memory loss as opposed to having a corporate representative make that statement on the witness’s behalf.  Accordingly, employers should be prepared to give specific and direct examples of how the defense of laches will impact the litigation, in order to best increase their chances of beating the lawsuit at the pleading stage.

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

By: Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis: On November 16, 2020, the EEOC released its “Agency Financial Report” (“AFR”)  for Fiscal Year 2020 (here). The AFR is a data compilation regarding the EEOC’s financial health, initiatives, and guiding principles, and the inaugural AFR was released last year for FY 2019. The AFR is an important guide to how the EEOC spent its budget in FY 2020, and is therefore a useful indication of the Commission’s strategic direction and litigation enforcement priorities in FY 2021 and beyond. In that respect, it is a “must read” for employers.

As we previously reported here, FY 2020 was a year of substantial change for the EEOC, which is apparent in the AFR for FY 2020. An Annual Performance Report (“APR”) will also be published in February 2021 in coordination with the EEOC’s Congressional Budget Justification. The APR will report on the EEOC’s progress achieving the goals and objectives in the agency’s Strategic Plan and Annual Performance Plan, which is issued as part of the OMB’s budget request, along with performance and program results achieved for the previous fiscal year. Until the APR is published in February, employers must look to the AFR as the most reliable guide to how the EEOC’s new leadership views the agency’s mission and intends to reach its goals for the coming year.

FY 2020: Political Developments Guide The EEOC’s Initiatives

FY 2020 saw significant activity at the top of the EEOC. The EEOC leadership is appointed by the President and confirmed by the Senate, which inherently ties the Commission to the shifting political climate in Washington, and includes the Chair, Vice Chair, and three Commissioners. By law, the leadership must be bipartisan. Before October 2020, the EEOC’s leadership included only three of five Commissioners, including Janet Dhillon (Republican – Chair), Vicki Lipnic (Republican), and Charlotte Burrows (Democrat). Commissioner Lipnic’s term technically expired in July 2020, but she was allowed to stay on so the Commission still had a quorum and could still operate.

In October 2020, three new Commissioners, two Republicans and one Democrat, were sworn in for the two vacant seats and the seat held by Commissioner Lipnic. These new additions effectively solidify a Republican majority at least until July 2022 when Chair Dhillon’s term expires. The two new Republican Commissioners are Andrea Lucas and Keith Sonderling, who add additional Republican-based voices at the Commission. The new Democratic Commissioner, Jocelyn Samuels, has a focus on LGBTQ+ issues.

The tea leaves that employers might read suggest that the solidified Republican majority is expected to support the initiatives put in place by Chair Dhillon, including Chair Dhillon’s judgment that litigation by the Commission should only be a “last resort.”

A Surge In Recoveries

During FY 2020, despite the significant drop in cases filed by the EEOC against employers, the EEOC recovered a record amount of $535.4 million on behalf of alleged discrimination victims. By comparison, the EEOC recovered approximately $486 million in FY 2019; approximately $505 million in FY 2018; and approximately $484 million in FY 2017. However, despite the EEOC’s efforts to enhance and improve its mediation and conciliation programs during FY 2020, the amount recovered through mediation, conciliation, and settlement dropped again from $354 million in FY 2019 to $333.2 million in FY 2020. Conversely, litigation recoveries increased from $39.1 million in FY 2019 to $106 million, the highest in 16 years. The EEOC credits this surge in litigation recovery to its resolution of 165 lawsuits in FY 2020 and states that it achieved “favorable results” in approximately 96% of district court resolutions.

Additional Progress Reducing The Commission’s Backlog

Since FY 2017, the EEOC has made concerted efforts to process the significant backlog of pending charges.

In FY 2019, the Commission reduced the charge workload by 12.1% to a total number of pending private sector charges of 43,850. In FY 2020, the Commission further reduced the inventory of pending private sector charges by 3.7% — to 41,951 charges — the lowest in 14 years.

Further, the EEOC reduced the federal sector hearings pending inventory by 15.7%, and the federal sector appeals that were more than 500 days old by 32%.

Prioritizing Alternative Dispute Resolution

Throughout FY 2020, the EEOC made a substantial push to improve its Alternative Dispute Resolution programs, including the mediation and conciliation procedures.

The EEOC reported that in FY 2020, the Commission successfully resolved 6,272 of its 9,036, resulting in over $156.6 million in benefits to charging parties. Mediators in the EEOC’s ADR program also conducted 766 federal sector mediations. The EEOC’s report further indicated that the respondent participation rate was 31.7% in FY 2020, a 3.3% increase in the rate of participation in FY 2019, which was 30.7%.

The Commission further reported that, in light of its efforts to improve its conciliation program procedures, successful conciliations rose from 27% in FY 2010 to 43.6% in FY 2020. The success rate for conciliation of systemic charges was 64% in FY 2020, up 8% from the 56% success rate reported in FY 2019.

Implications For Employers

Despite the ongoing political upheaval this year, the EEOC is focused and committed to pursuing its mission and increasing enforcement activity. Our fiscal year-end analysis, and the EEOC’s own AFR, reflect the EEOC’s continuing commitment to quickly process charges, bring and pursue enforcement litigation, and obtain litigation and settlement recoveries on behalf of workers.

We will continue to monitor trends and developments in the EEOC’s mission, including the types of cases that are filed and how the agency chooses to fight those lawsuits in court. As we do every year, we look forward to providing you an in-depth look at those trends and developments in January.

 

 

 

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Alex Oxyer

Seyfarth Synopsis: In a recent ruling out of the U.S. District Court for the District of Columbia, the Court assessed a petition for attorney’s fees filed in conjunction with the settlement of a 43-year old sex discrimination class action. After entering into the largest discrimination settlement in United States history – with each of the over 1,000 class members receiving an average award of $460,000 – class counsel sought a fee award that would raise the total fee award for the case to $75 million, which the Court ultimately denied. Given the eye-popping numbers underlying the fees request, the decision in this case – Hartman, et al. v. Pompeo, et al., No. 77-CV-2019, 2020 WL 6445873 (D.D.C. Nov. 3, 2020) – is a must-read for employers, corporate counsel, and class action practitioners.      

Case Background

Filed over 43 years ago in 1977, the Hartman case was brought by female reporters, editors, announcers, producers, and others against the Voice of America, the government-run radio service that offered news and entertainment programs to listeners outside of the United States, and its former parent agency, the United States Information Agency, components of which are now incorporated into the U.S. Department of State. Plaintiffs alleged that the Defendants refused to hire or promote women, including by taking active steps to commit test fraud against female applicants in the hiring process, such as altering test scores and destroying personnel and test files, in violation of Title VII of the Civil Rights Act of 1964.

Plaintiffs’ counsel worked without any fees for the first 18 years of the litigation and, on July 30, 1993, Plaintiffs submitted their first fee petition, seeking fees incurred from 1977 through August 31, 1992. Plaintiffs submitted 27 additional interim fee petitions throughout the case, resulting in payments totaling $26,570,701.19. On March 24, 2000, the parties entered into a consent decree that provided a settlement fund of $508 million for the class. On the issue of fees, the consent decree provided only that Plaintiffs’ counsel would be entitled to reasonable attorneys’ fees and costs, deferring the resolution of the attorneys’ fees issue until the end of litigation and making clear that Plaintiffs’ counsel was not seeking a percentage of the class recovery.

In 2018, the last portion of the $508 million settlement fund was distributed to class members, leaving attorneys’ fees as the only remaining issue in the case. In their motion for a final determination of attorneys’ fees award filed on October 19, 2019, Plaintiffs sought an additional $34,114,143.52 in fees, for a final total fee recovery of $75 million. Plaintiffs’ counsel argued that the additional amount sought was based on a percentage of the total recovery and that a lodestar method of calculation was not warranted. In the alternative, Plaintiffs’ counsel argued that, if a lodestar method was used, an enhancement calculation was warranted that would result in an adjusted amount equivalent to the amount of fees sought in their motion. Defendants opposed any award of fees beyond what had already been paid to Plaintiffs’ counsel throughout the case, asserting that under a traditional lodestar method, they had already received a reasonable fee award.

The Court’s Opinion

The Court focused analysis of Plaintiffs’ motion for fees by determining the appropriate method for calculating the fees for the case. The Court analyzed whether the case was a “fee-shifting case,” which would necessitate a lodestar method of calculation, or a “fee-spreading case,” which would allow for a percentage-of-the-fund calculation of fees. To assess under which category the case fell, the Court looked to the consent decree to determine the parties’ intent.

Although the consent decree was ambiguous on its face as to which method the parties had agreed, the Court concluded that, because the parties ultimately had agreed that Defendants would make the final fee payments to Plaintiffs, and because Plaintiffs’ counsel intentionally had declined to negotiate a percentage of the fund award for attorneys’ fees, the parties most likely intended for the case to be fee-shifting, thereby necessitating a lodestar method of fees calculation. The Plaintiffs argued that the settlement was actually a “constructive common-fund,” which is an equitable arrangement where, even if attorneys’ fees and class settlements are paid out of separate funds, if the two are negotiated as a “package deal,” common fund principles, including a percentage-of-the-fund fees calculation, should apply. The Court rejected this argument. Instead, it determined that the fees and class fund were not negotiated as a package deal because the parties specifically declined to set a final fee award in the consent decree.

The Court also analyzed Plaintiffs’ argument that, if the fees were to be calculated using the lodestar method, it should include an enhanced calculation. Generally, the lodestar is calculated by multiplying the hours reasonably expended on the litigation multiplied by a reasonable hourly rate. There is traditionally a strong presumption that the lodestar results in sufficient attorneys’ fees for a case, and parties seeking an enhancement have the burden to show specific evidence supporting such a calculation.

In this case, Plaintiffs’ counsel argued that the lodestar calculation did not adequately measure the true market value of the legal work because: (i) junior attorneys on the case performed work at lower rates traditionally done by more senior attorneys; (ii) the rates used to determine the interim payments were not market rates because they were based on the Laffey matrix, a grid that established hourly rates for Washington D.C. lawyers of differing levels of experience engaged in complex litigation; and (iii) there was significant delay in Plaintiffs receiving final payment of their fees.

Although the Court rejected Plaintiffs’ first argument – finding that there was little support for an enhancement based on lower-level attorneys performing more advanced work – it did find their second argument persuasive. Determining that the Laffey matrix failed to keep up with the true rate of inflation, the Court assessed the time period for which Plaintiffs’ counsel was not compensated at their full market value. From the beginning of the case through 1998, Plaintiffs’ counsel represented that the fees they sought in their fee petitions corresponded to their actual billing rates in similar cases. Accordingly, the Court held that Plaintiffs’ counsel was eligible for an enhancement calculation for the fees covering work performed in 1998 through 2018. Relatedly, the Court ruled that, because Plaintiffs’ counsel had received sub-market fee rates for approximately 20 years, they were entitled to some additional fees to make up for the delay in receiving payment.

Turning to the appropriate enhancement calculation for Plaintiffs’ fees, the Court assessed Plaintiffs’ argument that the appropriate enhancement resulted in a fee calculation of $75,232,463.96, which compensated Plaintiffs for 116,783 hours of work at the true market rates for the year 2010. However, the Court rejected this calculation because Plaintiffs did not sufficiently justify using the 2010 rates for the entirety of the case. Accordingly, the Court denied Plaintiffs’ motion and sent them “back to the drawing board” to calculate a more appropriate enhancement. Id. at 19.

Implications

Aside from the sheer amount of attorneys’ fees at issue, the Court’s decision in Hartman is notable for multiple reasons.  First, it marks the near end of one of the longest-running and highest-value employment discrimination class action in history. Second, the Court’s assessment of Plaintiffs’ request for fees highlights the importance of clearly describing the parties’ intent for fee payment in settlements of class actions in order to avoid future litigation over the issue. Third, the Court’s outline of the stringent requirements for an enhancement to a lodestar calculation, even in the face of exceptional litigation such as Hartman, provides an additional tool to defense counsel opposing requests for an enhancement of fees. The resolution of this issue will be a must-watch for class action practitioners.

 By Gerald L. Maatman and Michael L. DeMarino

Seyfarth Synopsis: The U.S. Supreme Court’s decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), still lords over employment discrimination class actions nearly a decade later. Indeed, Nelson, et al. v. Pace Suburban Bus, et al., No. 17 C 7697, 2020 WL 6565241, at *1 (N.D. Ill. Nov. 9, 2020), is a reminder that plaintiffs attempting to certify class discrimination claims face significant commonality hurdles when the alleged discriminatory policy is discretionary. In Nelson, the U.S. District Court for the Northern District of Illinois denied class certification solely on commonality grounds because the Plaintiffs failed to demonstrate that their purported common question – whether the company’s disciplinary actions were discriminatory – can be answered on a classwide basis.

This case is an important read for employers, particularly companies that vest their supervisors with discretionary disciplinary authority, because it demonstrates the advantages that such a policy may play in defeating class certification.

The Decision

In Nelson, Plaintiffs were former school bus drivers for Defendant Pace Suburban Bus (“Pace”). Plaintiffs alleged that Pace’s disciplinary practices were racially discriminatory because Black drivers generally were disciplined at higher rates than White drivers in violation of Title VII of the Civil Rights Act of 1964 and Illinois law.

After discovery, Plaintiffs moved to certify a Rule 23 class consisting of current and former Black employees who drove school buses for Pace. Pace opposed class certification on the basis that Plaintiffs failed to meet the commonality requirement under Rule 23(a). Pace argued that the putative class members were disciplined for violating different employment policies in different ways. The Court agreed and denied class certification. Id.

In response to Pace’s opposition, Plaintiffs pointed to one supervisor as the common denominator who participated in disciplining all putative class members and who they alleged discriminated, intentionally or unintentionally, against all putative class members. Id. Plaintiffs also relied on discipline statistics, which showed that White drivers were suspended .75 times per driver; whereas, Black drivers were suspended 1.15 times per driver. Id. at *3.

The Court underscored its analysis by likening the case to Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). “Like Dukes,” the Court explained, “this is an employment case, and as in Dukes, ‘[t]he crux of this case is commonality — the rule requiring a plaintiff to show that there are questions of law or fact common to the class.’” Id. (citing Wal-Mart, 564 U.S. at 349.).

Although the Court agreed that a discriminatory bias on the part of the same supervisor may be sufficient to establish commonality, the Court explained that under Wal-Mart, 564 U.S. at 350, such an assertion must still be capable of class-wide resolution. Id. at *5. Because the supervisor’s level of involvement and discretion in making disciplinary decisions — and the level of involvement and input of other supervisors — varied substantially based on the particular Pace policy at issue, the Court concluded that plaintiff could not establish the supervisor’s discriminatory bias on a class-wide basis. Id. at *6. Instead, the Court found that a trier of fact would have to consider different sets of facts to determine whether the supervisor discriminated against a particular driver in a particular context. Id.

The Court also rejected Plaintiffs’ attempt to rely on allegations of a “pattern or practice” of discrimination to justify class certification. Id. at 7. Because Plaintiffs only presented statistics showing disparities in overall numbers of suspensions, and not testimony capturing specific instances of intentional discrimination, the Court reasoned that Plaintiffs could not rely on their pattern-or-practice allegations to support Rule 23 commonality. Id.

Implications For Employers

The ruling in Nelson is a reminder for employers that vesting multiple supervisors with discretionary disciplinary authority may go a long way in defeating class certification. Nevertheless, employers should be careful to evaluate their disciplinary statistics because, as this case is clear, had Plaintiffs offered testimony of specific instances of discrimination, they may have satisfied the commonality requirement of Rule 23.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

Seyfarth Synopsis:  With the final election results in (or nearly in…), and the White House set to turn “blue” for the next four years, employers can expect the change to bring shifts to the workplace class action landscape.  Employers should anticipate that, while leadership of the EEOC will remain in place through the short term, Mr. Biden will bring policy changes on other fronts that may take shape through legislative efforts, agency action and regulation, and enforcement litigation.  Contrary to the pro-business approach of the Trump Administration, many of these efforts may be intended to expand the rights, remedies, and procedural avenues available to workers and, as a result, have the potential to shake up the workplace class action landscape.  Employers should expect that, as the Biden Administration takes charge, multiple trends may take shape on the workplace class action front.

1. Continued Refocus Away From Systemic Litigation At The EEOC:   President Trump appointed three Republican commissioners to the EEOC whose terms solidify a Republican majority through at least July 2022, irrespective of which party holds the White House.  As a result, it is likely that the EEOC will continue its shift away from systemic litigation as a priority at least through the first few years of the Biden presidency. That being said, a future Democratic chair at the EEOC – operating in the minority – may seek to turn the Commission’s agenda (even if ever so slightly), or influence it in a way that aligns more closely with the agenda of the Biden Administration.

Significant for employers, during the past year, the EEOC has undertaken multiple initiatives that reflect a shift away from systemic litigation as a priority.  First, on February 4, 2020, Chair Janel Dhillon announced five priorities for 2020, none of which included a systemic litigation focus.  Although the Chair acknowledged that the Commission will continue to pursue litigation as vigorous advocates, she opined that “litigation is truly a last resort and not an appropriate substitute for rule-making or legislation.”  (Read more here.)

Second, on March 10, 2020, the EEOC released its Resolution Concerning the Commission’s Authority to Commence or Intervene in Litigation whereby, in short, it removed authority over EEOC litigation activities from the General Counsel and reassigned the authority to commence or intervene in systemic discrimination litigation solely to the Commissioners. To the extent that Republic appointed Commissioners – who hold the majority – are the decision-makers of last resort when it comes to initiation of agency litigation, employers may see less rather than more government enforcement lawsuits. (Read more here.)

Third, on October 8, 2020, the EEOC released a notice of proposed rule-making that overhauled the conciliation process with the goal of improving its transparency and effectiveness.  The EEOC stated that its proposed amendments will establish “basic information disclosure requirements that will make it more likely that employers have a better understanding of the EEOC’s position in conciliation and, thus, make it more likely that the conciliation will be successful.”  (Read more here.)

The agency’s filings over the past year reflect this trend and a continued shift away from litigation.  For instance, after more than doubling its inventory of systemic filings between FY 2016 and FY 2018 (with 18 in FY 2016, 30 in FY 2017, and 37 in FY 2018), the EEOC’s systemic filings dropped to 17 in FY 2019.  Total filings followed a similar trajectory, with 136 in FY 2016, 202 in FY 2017, 217 in FY 2018, but only 149 in FY 2019 and 101 in FY 2020.  (Read more here.)

2. A Resurgent Plaintiffs’ Class Action Bar: Because the EEOC’s leadership likely will remain in place through at least mid-2022, it is likely that the EEOC will remain on its current trajectory into a Biden Presidency.  But, as forces of change are apt to be in play, employers can expect other factors to fill the void if the Commission is not aligned with the Biden Administration in terms of a pro-worker litigation focus.

Over the past decade, the plaintiffs’ class action bar has been both innovator and activist in finding its way around defense-centric legal precedents – such as the more rigorous class action standards established in Wal-Mart-Stores, Inc. v. Dukes,  564 U.S. 338 (2011). Emboldened by a new public policy focus on workers’ rights, the plaintiffs’ class action bar is apt to ramp up its case-filings and efforts to stretch the legal envelope in workplace litigation. The bottom line is that employers can expect to see the void of government enforcement litigation filled by private employment-related litigation.

3. Renewed Efforts To Change The Arbitration and Class Action Waiver Landscape:   As the U.S. Supreme Court issued a series of rulings culminating in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), which validated the enforceability of mandatory workplace arbitration agreements with class action waivers, lawmakers launched efforts to modify that landscape.  Employers should expect a Biden Administration to reinvigorate those efforts, particularly if accompanied by a shift in the landscape of leadership and compromise in the Senate.

On February 28, 2019, for instance, U.S. Representative Hank Johnson (D-GA) and U.S. Senator Richard Blumenthal (D-CT) introduced “The Forced Arbitration Injustice Repeal Act” (the “FAIR Act”).  The FAIR Act would have prohibited pre-dispute arbitration agreements that forced employees and other individuals, such as applicants or independent contractors, to arbitrate future disputes and prohibited agreements that restricted such persons from participating in class or collective actions related to employment, consumer, antitrust, or civil rights matters.  Similar efforts took the form of the “Restoring Justice for Workers Act,” introduced in the House on October 30, 2018, and the “Ending Forced Arbitration of Sexual Harassment Act of 2017,” introduced in the Senate on December 6, 2017.  Employers should expect similar efforts during a Biden presidency, particularly if the balance of power shifts closer to a Democratic majority in the Senate.

During the past several years, many employers large and small have adopted mandatory arbitration programs to manage disputes with their prospective hires and existing workforces.  As a result, if taken up for a vote and signed into law, employers should anticipate that such measures would work a sweeping change in both the forums and procedural mechanisms available for dispute resolution in that they would redirect litigation to the courts and reintroduce class and collective action devices into the toolkits of the plaintiffs’ bar.

4. An Uptick In Wage & Hour Litigation:   As a key element of Biden’s platform, he decried “wage theft” and claimed that employers “steal” billions each year from working people by paying less than the minimum wage.  As a candidate, Biden represented that he would push for enactment of legislation that makes worker misclassification a substantive violation of law and build on efforts by the Obama Administration to drive an effort to dramatically reduce worker misclassification.

Such statements, among others, signal that the Biden Administration will take efforts to reverse pro-business measures of the Trump Administration’s Department of Labor (“DOL”) that arguably narrowed application of minimum wage and overtime requirements.  On March 16, 2020, for instance, the Trump DOL adopted a final rule narrowing the definition of “joint employer” thereby limiting the circumstances under which multiple companies could be deemed to “employ” the same workers.  On September 22, 2020, the Trump DOL proposed a rule broadening the “independent contractor” test thereby making it easier for companies to classify workers as independent contractors under the Fair Labor Standards Act (“FLSA”).

Employers can expect the Biden administration to shift these efforts, which may include abandoning defense of the joint employer rule (although a federal district judge struck down portions of the rule on September 8, 2020, he subsequently permitted business groups to intervene in the lawsuit) and may include new rulemaking to rescind the independent contractor rule or adoption of new regulations that provide more worker-protective interpretations of employee status under the FLSA.  By expanding the group of workers who qualify as “employees” under the FLSA, such measures may expand the application of minimum wage and overtime requirements and, in turn, broaden the scope of litigation and raise the stakes for employers.

5. A Narrowing Of Exemption Defenses:  Along a similar line, employers may see renewed efforts to narrow exemption defenses.  Although the FLSA requires employers generally to pay minimum wage and overtime, DOL regulations identify several exceptions, including multiple categories of workers who are exempt from such requirements due to their duties and salary.

In May 2016, the Obama DOL issued new rules that increased the minimum salary required to qualify for white collar exemptions.  After a district judge halted their implementation, however, and found that the DOL exceeded its authority, the agency dismissed its appeal at the U.S. Court of Appeals for the Fifth Circuit.  The Biden Administration, however, may pick up the reigns on these issues and renew efforts to increase the minimum salary test.  Such efforts, if successful, may increase the value of potential litigation over the proper classification of workers, making such suits more attractive to the plaintiffs’ class action bar.

6. A Potential Litigation Shift Away From Federal Courts:  Perceiving that President Trump’s judicial selections have tilted the federal courts, employers may see the Plaintiffs’ bar file and attempt to pursue more lawsuits in state court.

As of November 4, 2020, the Senate has confirmed 220 Article III judges nominated by President Trump, including three associate justices of the U.S. Supreme Court, 53 judges for the United States Courts of Appeals, and 162 judges for the United States District Courts.  Trump’s appointees account for approximately 25% of all active judges in the federal court system.

Given perceived changes to the federal judiciary by President Trump, particularly at the appellate level, employers may expect to see the plaintiffs’ class action bar opting where possible for a state forum or tailoring their complaints to avoid jurisdictional thresholds.

Conclusion

The workplace class action landscape is anything but static.

As the Biden Presidency begins, employers are likely to see shifts.  If Mr. Biden pursues an expected agenda, those shifts may enhance the scope and value of workplace class action litigation

We will continue to monitor those updates here.

By: Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis:  On November 2, 2020, the EEOC held its first public meeting of its fiscal year, and the first meeting with its three new commissioners. The public meeting was held so that the Commission could consider a proposed memorandum of understanding (“MOU”) between the EEOC, the Department of Labor (“DOL”), and the Department of Justice (“DOJ”) aimed at recommitting to collaboration between the agencies and coordinating efforts to protect civil rights in the workplace. At the conclusion of the meeting, the EEOC voted in favor of entering into the MOU. This is an important development for all employers.

The EEOC held its November 2 meeting remotely and, per the requirements of the Sunshine Act, it was open for the public to call in and listen to the proceedings. EEOC Chair Janet Dhillon, Vice Chair Keith Sonderling, and Commissioners Charlotte Burrows, Jocelyn Samuels, and Andrea Lucas were all present to discuss the content of the draft agreement between these three agencies.  EEOC attorney Andrew Maunz outlined the mechanics of the MOU, which is an updated version of the agreement that has been in place between the EEOC and DOL since 1970.

While the full details of the MOU have not yet been released, four key provisions of the MOU were outlined during the meeting:

  • First, the latest MOU adds the DOJ as a signatory so that all three agencies responsible for enforcing the protections of Title VII are aligned. This is significant, given the disconnect between the DOJ and the EEOC on certain issues such as the application of Title VII to sexual orientation discrimination.
  • Second, the MOU seeks to promote accountability and makes high level officials at each agency responsible for any disclosures of information under the MOU.
  • Third, the MOU strengthens procedures for coordination between the three agencies at the field and headquarters levels, including discussions on enforcement priorities, finding efficiencies and eliminating duplication, and coordinating on issues like religious liberty, conscious protections, and novel or unique issues.
  • Fourth, the MOU seeks to bring greater efficiencies to the investigation process, including allowing the Office of Federal Contract Compliance Programs (“OFCCP”), the part of the DOL responsible for ensuring that employers contracting with the Federal government comply with the laws regarding nondiscrimination, to retain and investigate an individual charge of discrimination without seeking the permission of the EEOC or coordinating investigations between the EEOC and OFCCP, making it less likely that employees or employers need to deal with multiple agencies for the same claim or that multiple agencies reach different conclusions.

During the discussion of the MOU, Commissioners Samuels and Burrows, the two Democratic commissioners in the EEOC leadership, proposed several amendments to the MOU to address operational concerns with the MOU and expressed concerns that the MOU undermines the EEOC’s autonomy in its enforcement of Title VII. However, the outcome of the proposed amendments highlights the politics currently at play at the EEOC, as all 11 of the proposed amendments were voted down by the Republican Commissioners. Ultimately, though Commissioners Samuels and Burrows voted against it, the EEOC voted to approve the interagency MOU.

Implications For Employers

Though the full details of the MOU have yet to be released, the EEOC appears to be taking strides to coordinate with its fellow federal agencies to improve the efficiency and consistency in the enforcement of workplace discrimination laws. The EEOC’s efforts to address issues caused by the investigation of charges by multiple agencies will hopefully streamline the process for employers facing such multiple charges and avoid any inconsistent determinations by separate agencies.

This MOU is the latest in a series of high priority press releases issued by EEOC over the past few months. The ongoing changes at the Commission are a must-watch for employers as the EEOC kicks off its 2021 fiscal year.

 

By Gerald L. Maatman, Jr., Jennifer A. Riley, and Alex Oxyer

Seyfarth Synopsis: In a recent decision from the U.S. District Court for the Central District of California, the Court examined the viability of class action waivers in the face of claims that the defendants’ negligence led to an outbreak of COVID-19. Ultimately holding that the class waivers previously signed by the plaintiffs were enforceable, the Court’s analysis gives some hope to employers that class action waivers signed by employees may be enforceable even against claims involving COVID-19. The opinion – in Archer v. Carnival Corp. and PLC, et al., No. 2:20-CV-04203, 2020 WL 6260003 (C.D. Cal. Oct. 20, 2020) – is a must-read for all employers and class action practitioners.      

Case Background

Plaintiffs in this case were passengers aboard Defendants’ Grand Princess cruise ship on February 21, 2020, when it departed from San Francisco bound for Hawaii. Prior to the departure for Hawaii, the ship had been on a roundtrip voyage from San Francisco to Mexico. Upon arrival back in San Francisco, the plan was for the ship to off-load all but 62 passengers and then board passengers for the Hawaii cruise. However, some of the passengers on the cruise to Mexico had contracted COVID-19, which led to an outbreak on the ship.

Plaintiffs filed a class action against Defendants asserting claims of negligence and infliction of emotional distress, alleging that: (i) Defendants knew or should have known about the risk of a COVID-19 outbreak on the ship, as they knew ships created a heightened risk of a viral outbreak; (ii) several international organizations had issued statements recognizing the severity of the situation; (iii) Defendants had an outbreak on another of their ships; and (iv) at least one passenger had been suffering from COVID-19 symptoms, but the ship set sail without providing personal protective equipment or putting in place other measures to prevent spread.

Plaintiffs filed a motion to certify the class. Defendants opposed the motion, primarily arguing that Plaintiffs were precluded from bringing a class action because they had signed a class action waiver as part of their Passenger Agreement with the cruise lines.

The Court’s Opinion

In considering Plaintiffs’ motion for class certification, the Court examined Defendants’ argument that the class waiver signed by Plaintiffs in the Passenger Agreement precluded the class from being certified. To determine whether the class waiver was enforceable, the Court analyzed the waiver using the “reasonable communicativeness test” under federal common law and maritime law, which is used to ascertain the enforceability of contractual provisions attached to passenger tickets. The test involves two prongs: first, the Court examines the physical characteristics of the provisions in question to determine the ease with which the an individual can read them; and second, the Court looks at the circumstances surrounding the purchase and retention of the ticket and corresponding contractual provisions and the opportunity for the individual to review them.

Hence, the Court examined the physical characteristics of the class action waiver. When passengers booked tickets through Defendants, the passenger was first required to review the Passenger Agreement and affirmatively agree to its provisions before finalizing the booking. The Agreement also contained several examples of advisory language to passengers, including bold language reading “IMPORTANT NOTICE” relative to the waiver of certain rights of the passengers. The Court found that these provisions were conspicuous enough to pass the first prong of the test.

As to the second prong, the Court noted that after passengers agreed to the provisions of the Passenger Agreement, a PDF copy of the Agreement was sent to their email addresses, allowing them to review the provisions at any time. The Court determined that this satisfied the second prong of the reasonable communicativeness test, as passengers had access to familiarize themselves with the Agreement’s terms whenever they chose.

Although the class action waiver satisfied the reasonable communicativeness test, Plaintiffs argued that the waiver should not be enforced based on the principles of fundamental fairness and unconscionability, as well as a matter of public policy. However, because Plaintiffs did not submit any evidence of a bad faith motive, fraud, overreaching, or that Defendants attempted to limit passengers’ substantive rights to bring a claim against the cruise line, the Court rejected these arguments. Instead, it held that the waiver was enforceable.

In light of the enforceability of the class action waiver, the Court declined to address any other arguments relative to class certification and denied Plaintiffs’ motion to certify the class.

Implications

The ruling in Archer gives some hope to employers that class action waivers signed in the employment context may be enforceable even in cases involving outbreaks of COVID-19. Although this case falls outside of the employment realm and involved interpretations of maritime law, employers should note the general principles that agreement terms involving the waiver of rights or otherwise available procedures, like class action waivers, should be conspicuous and easily accessible and apply such principles to their own agreements with employees.

This case was one of the first to interpret these principles in the era of COVID-19, and developments in this area will continue to be tracked by us here.

 

By: Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis:  As we first reported here, the EEOC announced in August 2020 that it was proposing significant amendments to its conciliation process via a notice of proposed rulemaking (“NPRM”), though specific details regarding the amendments were not released at that time. On October 8, 2020, the EEOC followed through and finally released the specifics of the NPRM and its proposed changes to the conciliation process.

The changes are a critical read for all employers and practitioners alike, as the amendments aim to improve transparency and the effectiveness of the EEOC’s previously opaque and undefined conciliation procedures.  

Proposed Amendments To The Conciliation Process

In its NPRM, the EEOC outlined a detailed history of the conciliation process and the Commission’s previous philosophy related to conciliating charges. The EEOC acknowledged in the NPRM that, historically, it elected to not adopt detailed regulations relative to its conciliation efforts based on its belief that retaining flexibility over the conciliation process would “more effectively accomplish its goal of preventing and remediating employment discrimination.” While the Commission’s NPRM makes clear that the Commission still believes that it is important to maintain a flexible approach to conciliation, it also acknowledged that, over the last several years, its conciliation efforts resolved less than half of the charges where a reasonable cause finding was made. Specifically, between fiscal years 2016 and 2019, only 41.23% of the EEOC’s conciliations with employers were successful.

In an effort to improve the effectiveness of the conciliation process, the NPRM seeks to amend the conciliation process for charges brought pursuant to Title VII, ADA, GINA, and the ADEA. The Commission opined that these amendments will support the EEOC’s statutory obligations in the conciliation process, provide a better opportunity to resolve charges with employers, and remedy unlawful discrimination without need for litigation. Ultimately, the EEOC stated in the NPRM that the proposed amendments establish “basic information disclosure requirements that will make it more likely that employers have a better understanding of the EEOC’s position in conciliation and, thus, make it more likely that the conciliation will be successful.”

Relative to the actual changes, the EEOC is seeking the following specific amendments to the conciliation process:

  • First, the EEOC will provide respondents with a written summary of the known facts and non-privileged information that the Commission relied on to reach a reasonable cause finding, including identifying known aggrieved individuals for whom relief the Commission is seeking relief, unless the individuals request anonymity. Additionally, if the EEOC anticipates that a claims process will be used subsequently to identify aggrieved individuals, it will identify the criteria that will be used to ascertain aggrieved individuals from the pool of potential class members. In cases in which the information does not provide an accurate assessment of the size of the class (such as in harassment or reasonable accommodation cases), the EEOC may, but is not required to, provide more detail to respondent, such as the identities of alleged harassers or supervisors, or a description of the testimony or facts gathered from identified class members during the investigation. The Commission may also use its discretion to determine whether to disclose current class size to respondents and, if class size is expected to grow, an estimate of potential additional class members.
  • Second, the Commission will provide the respondent with a summary of the Commission’s legal basis for finding reasonable cause of discrimination, including an explanation as to how the law was applied to the facts. If there is material information that the Commission obtained during its investigation that caused the Commission to doubt that there was reasonable cause to believe discrimination occurred, it will explain how it was able to determine there was reasonable cause despite the information. In addition, the Commission may, but is not required to, provide a response to any defenses raised by the respondent.
  • Third, the EEOC will provide the respondent with the basis for monetary or other relief, including the calculations underlying the initial conciliation proposal, and an explanation of the same.
  • Fourth, the EEOC will advise the respondent whether it has designated the case as systemic, class, or pattern or practice as well as the reason for the designation.
  • Fifth, the Commission will provide the respondent at least 14 calendar days to respond to the Commission’s initial conciliation proposal.

Implications For Employers

Now that the NPRM has been released, the EEOC will be seeking input on whether these proposed amendments will result in additional challenges to the Commission’s conciliation efforts, and whether such challenges would delay or adversely impact litigation brought by the Commission. The EEOC is also asking for feedback relative to whether it should be required to make the proposed disclosures in writing or whether oral disclosures would suffice. However, if these proposed changes are ultimately adopted, they would result in substantially more transparency in the conciliation process for employers and would create a more consistent process for employers negotiating conciliation terms with the Commission.

These changes are the latest in a series of high priority press releases issued by EEOC over the past few months. The ongoing changes at the Commission are a must-watch for employers and, as we reported earlier this month, the EEOC had a whirlwind of activity as it wrapped up its 2020 fiscal year. Employers dealing with these issues should carefully read the newest guidance as well as details on the EEOC’s other recent changes, all of which have been tracked here.

By: Gerald L. Maatman, Jr.Christopher J. DeGroff, Matthew J. Gagnon, and Alex S. Oxyer

Seyfarth Synopsis: In the last fiscal year before the November 2020 election, the EEOC made significant changes to many of its programs, all in the midst of the global COVID-19 pandemic. Like most employers across the country, the EEOC found itself reconsidering its priorities and resources to address the pandemic, issuing a series of guidelines to assist employers with navigating the challenges of COVID-19. To top it off, the EEOC experienced significant leadership changes in the last few days of the Fiscal Year, with three new Commissioners approved by the U.S. Senate within the last week. The immediate impact of this flurry of activity appears to be a substantial drop in cases filed by the EEOC.

When the EEOC’s last fiscal year before the November election began in October 2019, many expected that the agency would be busy completing many of its objectives to further the strategic priorities set by the new Chair of the Commission, Janet Dhillon. However, FY 2020 was thrown in an unexpected direction by the COVID-19 pandemic, causing an unanticipated interruption in the EEOC’s enforcement and litigation program.

For the better part of the last 25 years, the EEOC’s Fiscal Year ended with a predictable spike in last-minute lawsuits; August and September filings often eclipsed the entire rest of the year combined.  Not so this year.  FY 2020 ended with a whimper, with only 33 lawsuits filed during September (unlike the 52 filed in September of FY 2019 and the 84 in FY 2018). In the end, the agency’s total number of filings fell dramatically below the numbers posted the last several years. At the time of publication of this blog posting, the EEOC had filed 101 total cases in FY 2020, which includes 94 merits lawsuits and 7 subpoena enforcement actions. This total number of filings is significantly less than the last two years (see here and here), and is closer to the drop off in filings that we saw in FY 2016 (see here).

Cases Filed By EEOC District Offices

In addition to tracking the total number of filings, we also keep a close watch on which of the EEOC’s 15 district offices are most actively filing new cases. Some districts tend to be more active than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by EEOC district office.

The most noticeable trend of FY 2020 is the marked decrease in coast-to-coast filings that we have seen compared to past years. Leading the pack in new filings were the Indianapolis and New York district offices, with 13 and 12 filings respectively. Indianapolis’s filings shot up from 8 filings last year, and New York matched its 12 filings from FY 2019. The Charlotte office, which was one of the leaders in new filings last year, posted extremely low numbers in FY 2020. The Chicago district office has historically been at the head of the pack, but had only 3 new filings this year, and the Houston office was down to 4 filings from the 12 it posted last year. This marks one of the most substantial declines in litigation enforcement activity that we have seen on a year-over-year basis.

Analysis Of The Types Of Lawsuits Filed In FY 2020

Each fiscal year we also analyze the types of lawsuits the EEOC files, in terms of the statutes and theories of discrimination alleged, in order to determine how the EEOC is shifting its strategic priorities. Those numbers at least – when considered on a percentage basis – are in line with the numbers we have seen the last few years, possibly indicating less of a shift in priorities than expected from the agency’s new leadership under Chair Dhillon. The graphs below show the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

Although the total number of filings is down across the board, when considered on a percentage basis, the distribution of cases filed by statute remained roughly consistent compared to FY 2018 and 2019. Title VII cases once again made up the majority of cases filed, making up 60% of all filings (on par with the 60% in FY 2019 and 55% in FY 2018). ADA cases also made up a significant percentage of the EEOC’s filings, totaling 30% this year, though down from 37% in FY 2019. This too is fairly typical. There were only 7 age discrimination cases filed in FY 2020, the same number as FY 2019.

COVID-19 Guidance

On March 17, 2020, near the beginning of the coronavirus pandemic in the United States, the EEOC released a technical assistance guide: What You Should Know About the ADA, the Rehabilitation Act, and COVID-19, which aimed to provide employers some guidance on how to navigate the safety concerns associated with COVID-19 while staying in compliance with the federal disability and other discrimination laws. The EEOC periodically updated the guide throughout the course of the pandemic to address employers’ questions, including those related to reasonable accommodations, COVID-19 screening and testing, and furloughs and layoffs. The EEOC also held a webinar on March 27, 2020, to answer common questions from employers relative to the application of discrimination laws to issues posed by the pandemic.

On March 21, 2020, the EEOC announced that it would cease issuing charge closure documents, also known as Notices of Right to Sue (“Notices”), in response to the difficulties facing parties in light of the COVID-19 pandemic. The closure documents were suspended until August 3, 2020.

Significant Changes To The EEOC’s Policies And Procedures

Throughout FY 2020, the EEOC undertook significant efforts to amend or limit its enforcement policies and procedures in accordance with its strategic priorities announced by Chair Dhillon earlier this year. Such priorities included continuing to provide excellent customer service; continuing to provide robust compliance assistance to employers, enhancing efforts to reach vulnerable workers; strategically allocating Commission resources; and continuing the EEOC’s efforts to be a model workplace. These priorities emphasized goals of consistency and an acknowledgement that litigation is “truly a last resort.”

On July 7, 2020, the EEOC announced two new six-month pilot programs aimed at increasing voluntary resolutions of discrimination charges. One of the new programs seeks to increase the effectiveness of the conciliation process at the Commission by reestablishing the commitment for full communication between the EEOC and the parties to a charge of discrimination and, notably, adding a requirement that conciliation offers be approved by an “appropriate level of management” before they are shared with respondents. The other program looks to create more opportunities to resolve matters through the EEOC’s popular mediation process by expanding the kinds of charges eligible for the mediation process and allowing for mediation throughout the entire charge investigation.

On August 18, 2020, the EEOC held a public meeting to address a notice of proposed rulemaking containing potential substantive amendments to the Commission’s conciliation process. Though a copy of the notice has not yet been publicly released, the EEOC has stated that the proposed changes to the conciliation process aim to “enhance its effectiveness and to create accountability and transparency.” Those changes could require the EEOC to disclose more substantial portions of its investigation file to respondents – including the identities of individuals who participated in the investigation, a summary of the known facts, and the factual and legal analyses that support a for-cause finding by the Commission.

Finally, on September 3, 2020, the EEOC issued an opinion letter regarding the Commission’s interpretation and enforcement of § 707(a) of Title VII, which authorizes the EEOC to sue employers engaged in a “pattern or practice” of discrimination. The opinion letter states that: (1) a pattern or practice claim under section 707(a) requires allegations of violations of section 703 or section 704 of Title VII; and (2) the EEOC must satisfy pre-suit requirements such as conciliation before it can bring a section 707 case.  Although technical, these points put significant limitations on the EEOC’s enforcement powers as to pattern or practice cases  (a full summary of the opinion letter is covered in an earlier blog post here).

More Changes At The Top

On top of all this, the EEOC is facing more leadership turnover at the top. Prior to last week, the EEOC’s leadership included only three of five Commissioners: Janet Dhillon (Republican – Chair), Vicki Lipnic (Republican), and Charlotte Burrows (Democrat). Commissioner Lipnic’s term technically expired in July 2020, but she has been allowed to stay on so the Commission still had a quorum and could still operate.

On September 22 and 23, 2020, three new Commissioners, two Republicans and one Democrat, were confirmed by the Senate for the two vacant seats and the seat held by Commissioner Lipnic. The Commission must remain bipartisan by law, but these new additions effectively solidify a Republican majority at least until July 2022 when Chair Dhillon’s term expires, regardless of the outcome of the upcoming elections.

The two new Republican Commissioners are Andrea Lucas, currently an attorney at the law firm Gibson Dunn who represents employers in labor and employment disputes, and Keith Sonderling, currently the Deputy Administrator of the Department of Labor’s Wage and Hour Division. Both are expected to add conservative voices at the Commission. The new Democratic Commissioner, Jocelyn Samuels, is currently the Executive Director of the Williams Institute and has served as the Director of the Office for Civil Rights at the U.S. Department of Health & Human Services. She is a strong advocate with a focus on LGBTQ+ issues.

On September 30, 2020, Sonderling was sworn in as Commissioner.

Implications For Employers

FY 2020 has shaped up to be a year of whirlwind change at the EEOC. The EEOC is starting to reflect the changes in priorities and leadership that many expected out of the Trump Administration, but that, until now, had been slow in coming. Now that they are finally here, they have landed in a world that has been turned upside down by a global pandemic. Employers find themselves once again looking out over a dim and uncertain horizon, as it remains to be seen how new priorities and strategies will be applied to a radically different employment landscape.

We will continue to monitor these changes closely and keep readers apprised of developments. Our annual comprehensive analysis of trends in EEOC litigation will be published at the end of the calendar year. As always, we will keep abreast of EEOC data amid the ever-changing political milieu, and share lessons learned from FY 2020 to carry employers through the new year.

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