By: Rachel V. See

Seyfarth Synopsis: Following President Biden’s comprehensive Executive Order on AI, the White House announced the formation of the “US AI Safety Institute” within the Commerce Department’s technology arm, the NIST.  The Institute has been directed to develop technical guidance used by regulators, such as the EEOC, considering rulemaking and enforcement on discrimination related to AI. The White House has also released for public comment draft guidance relating to the federal government’s use of AI. These standards contain an expansive scope of AI applications in the employment space that are considered presumptively “rights impacting” and thus require certain government agencies to conduct an impact assessment and other minimum risk-management practices. Critically, these definitions and practices are likely to be held out as practices that should also be adopted by private-sector employers.

On Monday, October 30, President Biden signed a comprehensive Executive Order addressing AI regulation across a wide range of industries and issues. Our prior management alert discussed how the EO set forth President Biden’s vision for America to continue leading in AI innovation while also addressing risks associated with the use of AI, and highlighted provisions in the EO we identified as particularly relevant to employers using AI.

Now just a few days later, there already are further developments with significant implications for employers paying attention to enforcement and litigation efforts in this area.

1. The new US AI Safety Institute within NIST 

    On November 1, the White House announced the formation of the “US AI Safety Institute” within the National Institute of Standards and Technology. NIST. According to the White House, the new AI Safety Institute will develop “technical guidance that will be used by regulators considering rulemaking and enforcement on issues such as … identifying and mitigating against harmful algorithmic discrimination”.

    Put another way, the tech gurus at NIST will be helping enforcement agencies such as the EEOC in their enforcement efforts on AI. Thus, the EEOC will be able to tap the technical expertise of some of the federal government’s leading experts on AI risk as the EEOC attempts to scale up its AI enforcement efforts.

    We anticipate that the new NIST group will be working towards guidance and other documents that directly address the use of AI-powered employment screening tools. NIST’s core function, as its name implies, centers around crafting technical standards. President Biden’s Executive Order directs NIST to “establish guidelines and best practices, with the aim of promoting consensus industry standards, for developing and deploying safe, secure, and trustworthy AI systems,” as well as “launching an initiative to create guidance and benchmarks for evaluating and auditing AI capabilities”. While The October 30 Executive Order emphasized that broad mandate, the recent unveiling of the AI Safety Institute on Wednesday and its emphasis of technical assistance leading to enforcement highlights the Biden Administration’s attention to the government’s role as the enforcer of existing civil-rights laws.

    We believe that even if the EEOC does not immediately adopt the NIST group’s recommendations formally as enforcement guidance or mandatory requirements for employers, it may still endorse them as practices that AI developers and deployers should aspire to follow.

    2. Implications for Employers of the Draft Guidance on the Federal Government’s Use of AI

    Also on November 1, the White House’s Office of Management and Budget (OMB) issued draft guidance to the federal government regarding the government’s own use of AI. (The White House’s fact sheet is a good summary.)  Public comments are being accepted through December 5. We expect prompt issuance of the final memo, due to the significant momentum present.

    In our summary of President Biden’s Executive Order from Monday, we predicted that the way the Federal government thinks about AI risk will influence the way private companies think about AI risk. Employers should pay particular attention to how these government-wide AI risk management efforts will influence the EEOC’s thinking on AI risk and risk management, as well as how they may shape the EEOC’s own use of AI.

    OMB’s draft guidance purports to speak solely to the federal government’s own use of AI, and disclaims that it applies to federal agencies’ own regulatory efforts. However, past experience suggests that the federal government will ultimately decide that the AI risk management “best practices” it applies to itself should also be adopted by private-sector AI deployers. Moreover, federal agencies will be purchasing many types of AI systems from private-sector developers, and so the government’s own purchasing requirements will influence the development of systems that are sold to both the government and private industry.  

    In its draft guidance to the federal government, the White House is essentially requiring federal agencies to take certain minimum risk-management steps for “safety-impacting AI” and “rights-impacting AI”. Importantly for employers using AI in hiring, the draft OMB guidance has a very broad definition of what employment-related AI applications are presumed to be “rights impacting” and thus subject to the memo’s minimum risk management processes. Its definition of “rights impacting” applications includes those related to:  

    G. Determining the terms and conditions of employment, including pre-employment screening, pay or promotion, performance management, hiring or termination, time-on-task tracking, virtual or augmented reality workplace training programs, or electronic workplace surveillance and management systems; 

    Under the draft OMB memo, agencies cannot use “rights impacting” systems after August 1, 2024 without first taking these steps: 

    1. Complete an impact assessment.
    2. Test the AI for performance “in a real world context”.
    3. “Independently evaluate the AI”. 

    To continue using such systems, the agency must on an ongoing basis —

    4. Conduct ongoing monitoring and establish thresholds for periodic human review.

    5.  Mitigate emerging risks to rights and safety.

    6. Ensure adequate human training and assessment.  

    7. Provide appropriate human consideration as part of decisions that pose a high risk to rights or safety. 

    8. Provide public notice and plain-language documentation through the AI use case inventory.  

    The “impact assessment” requirement could vary from a simple review to a complex evaluation.

    Importantly, the OMB memo’s discussion of impact assessments includes the directive that, as part of the impact assessment, agencies should assess the quality and appropriateness of relevant data, including the data the AI was trained on. This data assessment is in addition to requiring agencies to assess disparate impact. Specifically, the OMB memo requires agencies to ensure that training data “is adequately representative of the communities who will be affected by the AI, and has been reviewed for improper bias based on the historical and societal context of the data”. We note that this process-focused mandate to use adequately diverse data sources goes beyond the results-focused analysis required by Uniform Guidelines on Employee Selection Procedures of 1978, the standards discussed in the EEOC’s technical assistance issued in May 2023 about the applicability of Title VII to AI.

    Employers using AI should note that the minimum requirements set forth by OMB’s draft memo also go beyond the pre-deployment bias audit requirements required by New York City’s Local Law 144, whose enforcement began in July 2023. (Additionally, the scope of employment-related AI applications presumed by OMB’s draft guidance to be “rights affecting” extends well beyond the New York City law’s narrow definition of “automated employment decision tool”.)  

    We’re already seeing movement on one of these points. In her remarks earlier in October 2023, EEOC Chair Burrows emphasized the need for AI to be trained on diverse data sources.

    3. President Biden’s Executive Order emphasizes enforcement efforts

    We expect that EEOC leadership will want to be an active participant in the meeting that will be convened by the Department of Justice by the end of January 2024, in which the heads of Federal civil rights offices will meet “to discuss comprehensive use of their respective authorities” to address potential civil-rights harms arising out of the use of AI. President Biden’s Executive Order specifically mentions the potential harm arising out of “issues related to AI and algorithmic discrimination” and directs the civil rights offices and independent agencies, like the EEOC, to increase their coordination on issues related to AI and algorithmic discrimination.

    President Biden’s Executive Order also directs the agencies to increase their outreach efforts to external stakeholders, in order “to promote public awareness of potential discriminatory uses and effects of AI”. Increased federal government outreach efforts in this realm are highly likely to encourage workers who feel they have experienced unlawful discrimination to file a charge with the EEOC, who will investigate it.

    With respect to the EEOC, President Biden’s directives align with the EEOC’s ongoing emphasis on its enforcement priorities.  In April 2023, EEOC Chair Charlotte Burrows joined the heads of three other federal agencies in a press release touting the agencies’ “commitment to enforce their respective laws and regulations to promote responsible innovation in automated systems.” Additionally, in May 2023, all EEOC personnel were requested by EEOC Chair Charlotte Burrows to attend an AI training about how front-line staff could “identify AI-related issues in [their] enforcement work”. And as discussed previously on the Workplace Class Action Blog, in August 2023 the EEOC entered into a settlement with the iTutor Group overa lawsuit that many have called the EEOC’s “first-ever” artificial intelligence discrimination in hiring lawsuit, even though the underlying technology being used simply asked job applicants for their date of birth and was configured to automatically reject female applicants age 55 or older and male applicants age 60 or older. (To be clear, automatically rejecting older job applicants, when their birthdates are already known, does not require any sort of artificial intelligence or machine learning.)

    And in September 2023, the EEOC’s new Democratic majority approved the EEOC’s Strategic Enforcement Plan in a 3-2 party-line vote. The approved SEP instructs EEOC personnel and clarifies for the public the issues the commission will prioritize in its enforcement, outreach and other efforts. The first listed priority in the SEP is a focus on discriminatory recruitment and hiring practices, with a particular emphasis on the use of technology, AI, and machine learning used in job advertisements, recruiting, and hiring decisions.

    4. Upcoming guidance from OFCCP about Federal Contractors’ Use of AI

    President Biden’s Executive Order directed that within a year, the Secretary of Labor shall publish guidance to federal contractors regarding “nondiscrimination in hiring involving AI and other technology-based hiring systems.” 

    Employers not directly subject to OFCCP’s audits should still pay close attention to what the Department of Labor does here, because there is always the potential for the Department of Labor’s guidance to be held out as a broader standard that employers everywhere might incorporate in their practices, and enforcement standards articulated by the Department of Labor against federal contractors are likely to be used by the EEOC in its own enforcement efforts.

    Implications for Employers

    President Biden’s Executive Order on AI is a far-reaching order that tasks multiple federal agencies with seeking to harness the power of AI, both for the government and the American economy as a whole, while also working to manage risks associated with AI. There is a strong enforcement component to actions set in motion by the Executive Order, and employers should expect the EEOC’s activity in this area to continue to increase. Moreover, employers should be prepared for heightened coordination on AI issues between the EEOC and its peer civil-rights enforcement agencies, as well as with NIST on technical issues and standards. Finally, the ways that the federal government thinks about assessing AI risk, establishing minimum AI risk management practices, and implementing various AI risk management frameworks will likely be held out as exemplary practices that the private sector will be encouraged to adopt.

    We will continue to monitor these developing issues, and Seyfarth plans to provide additional updates as we dive more deeply into President Biden’s comprehensive EO on AI and the actions it set in motion.  For additional information, we encourage you to contact the author of this article, a member of Seyfarth’s People Analytics team, or any of Seyfarth’s attorneys.

     

    By: Danielle Kays and Kristin Stokes

    Seyfarth Synopsis:  While the plaintiffs’ bar has aggressively pursued class actions under the Biometric Information Privacy Act (“BIPA”) in recent years, these cases soon may be rivaled by the influx of class actions brought under the Genetic Information Privacy Act (“GIPA”), 410 Ill. Comp. Stat. Ann. 513/1, et seq.  After GIPA’s 1998 enactment, only two cases were brought under the statute in nearly 25 years; however, in 2023, over 40 GIPA class action complaints have been filed in Illinois courts.

    What is the Illinois Genetic Information Privacy Act (GIPA)?

    GIPA was intended to facilitate voluntary and confidential genetic testing by providing protection from discriminatory use or disclosure of such information.  In the employment context, GIPA bars employers from directly or indirectly acquiring “genetic testing or genetic information” from a prospective or current employee.  See 410 ILCS 513/25(c)(1).  In 2008, GIPA was amended to more closely conform to a later, federal analog—the Genetic Information Nondiscrimination Act (“GINA”).  Both GINA and GIPA prohibit employer discrimination because of “genetic information” including: information about an individual or family member’s genetic test, request for genetic services, or manifestation of a disease or disorder.  See 45 CFR 160.103.  GIPA provides for a private right of action to “any person aggrieved by a violation of this Act . . . .”  410 ILCS 513/40.

    This sudden influx of GIPA class actions likely are the result of steep statutory damages and a broad private right of action.  While monetary damages are limited under GINA, GIPA contemplates no statutory cap and provides for damages of $2,500 per negligent violation or actual damages, whichever is greater.  Moreover, an employer may be liable for $15,000 per intentional or reckless violation.  410 ILCS 513/40(a).  GIPA even provides for significantly greater statutory damages than popular class action vehicle, BIPA.  See 740 ILCS 14/20.

    Current litigation also may be fueled by a recent decision in the case Bridges v. Blackstone Group, Inc., No. 21-cv-1091, 2022 WL 2643968 (S.D. Ill. 2022), establishing a broad class of possible claimants. In Bridges, plaintiffs brought a class action, alleging that Blackstone violated GIPA when it acquired Ancestry.com.  The complaint was ultimately dismissed for failure to state a plausible violation of GIPA.  Bridges, 2022 WL 2643968 at *2.  However, the court first addressed whether the plaintiffs were “aggrieved persons” for purposes of bringing a claim. See 410 ILCS 513/40.  The court adopted the Illinois Supreme Court’s definition of “aggrieved person” under BIPA.  Accordingly, “an individual need not allege some actual injury or adverse effect, beyond violation of his or her rights.”  Bridges, 2022 WL 2643968 at *2 (citing to Rosenbach v. Six Flags Ent. Corp., 129 N.E. 3d 1197 (Ill. 2019)).

    Relatedly, genetic information and post-offer medical exams recently crossed the radar of the EEOC.  Last month, the EEOC settled a case for alleged unlawful post-offer medical exams that required applicants to divulge family history of cancer, diabetes, and heart disease.  See EEOC Press Release, Dollar General to Pay $1 Million to Settle EEOC Disability and GINA Lawsuit, https://www.eeoc.gov/newsroom/dollar-general-pay-1-million-settle-eeoc-disability-and-gina-lawsuit (Oct. 19, 2023).

    Perhaps spurred by the breadth of potential claimants, and in the wake of several Illinois Supreme Court plaintiff-friendly BIPA decisions (Cothron v. White Castle and Tims v. Black Horse) and the first BIPA jury verdict (Rogers v. BNSF Railway Co.), plaintiffs firms have doggedly filed more than 40 GIPA class actions pending in Illinois courts.  Utilizing nearly identical format, these complaints allege that large employers and companies solicited, requested, or required employee disclosure of genetic information.  Specifically, these cases pursue generous statutory damages for GIPA violations arising out of required pre-employment physical exams, interviews, and questionnaires seeking family medical history.

    Implications for Employers

    In light of trending GIPA class actions, Illinois employers should exercise caution when requiring employees to submit to physical exams, inquiries, or screenings.  Although courts have yet to resolve many legal defenses to these claims, targets of GIPA lawsuits may be vulnerable to significant exposure as plaintiffs allege that they are not required to prove actual injury.  Businesses should review current hiring policies and procedures for compliance with this state genetic privacy law.

    For more information about the GIPA and how genetic information laws may affect your business, contact the authors Danielle Kays and Kristin Stokes, your Seyfarth attorney, or Seyfarth’s Workplace Privacy & Biometrics Practice Group.

    By: Matthew J. Gagnon

    Seyfarth Synopsis: On October 17, 2023, the Second Circuit issued the eagerly-awaited decision in Eisenhauer v. Culinary Institute of America. The court clarified that the federal EPA never required employers to show that a “factor other than sex” must be related to the job in question, contrary to arguments by many plaintiffs and commentators. This was a notable appeal because it raised several critical issues, any one of which could have changed the contours of equal pay litigation dramatically. The Second Circuit chose to leave most of those issues undecided, and instead took the opportunity to clarify a thirty-year-old decision, and its thirty years of precedent.

    On October 17, 2023, the Second Circuit issued its eagerly-awaited decision in Eisenhauer v. Culinary Institute of America, No. 21-2919-cv (2d Cir. 2023). This decision clarified an important issue regarding an employer’s “factor other than sex” affirmative defense under the federal Equal Pay Act (“EPA”). This appeal was notable due to the several weighty issues it raised regarding the course and conduct of equal pay litigation. Even the EEOC had jumped into the mix, filing an amicus brief on the plaintiff’s behalf relating to two of those issues. Ultimately, however, most of those issues were left undecided, as the Second Circuit focused its energies on clearing up a confusing history of case law regarding the affirmative defenses available under the federal EPA.

    Background

    The plaintiff in Eisenhauer, a female professor at a culinary school, alleged she was paid less than a male professor who managed a similar course load. That salary disparity existed because plaintiff and her comparator were hired at different salaries, which then increased over time according to the sex-neutral terms of a compensation plan. Under that plan, all faculty members received the same percentage increase in their salaries each year. The result was that the pay disparity between the professors only grew over time. The Second Circuit addressed itself to an issue that was not much discussed by the district court: does the federal EPA require an employer to show that the factor it is relying upon to establish its “factor other than sex” affirmative defense is related to the job in question?

    The Second Circuit held that no such requirement exists under the federal EPA. To be clear, the district court found in favor of the employer even applying the more stringent standard the Second Circuit held was in error, i.e., the district court appeared to hold that the ”factor other than sex” relied upon by the employer was in fact job related: “The parties appear to agree, and the evidence shows, that the disparity between the initial salaries was due to non-discriminatory, business-related reasons.” Id. at *7.

    But the Second Circuit noted that the plaintiff had brought equal pay claims under both the federal and state-level equal pay statutes, and that the district court had decided the two claims under the same standard—as most courts do for most purposes. The Second Circuit clarified that these two statutes are different with respect to a job-relatedness requirement applicable to the “factor other than sex” defense. When the New York legislature amended the New York equal pay statute, it added a provision that required a “factor other than sex” to be “job-related with respect to the position in question,” among other things. N.Y. Lab. Law 194(1)(iv). The federal EPA, on the other hand, allows for “any other factor other than sex,” without qualification, which the Second Circuit held means exactly what it says: “to establish the EPA’s ‘factor other than sex’ defense, a defendant must prove that the pay disparity in question results from a differential based on any factor except for sex. . . .  The requirement that a ‘factor other than sex’ be job related appears nowhere in the EPA’s text and, in our view, conflicts with the statute’s plain meaning.” Eisenhauer, 2023 WL 6815280, at *6.

    The court’s clarification of this point is welcome news. As the Second Circuit explained, decisions from the Second Circuit and other circuits have given some litigants the mistaken impression that the federal EPA’s language says more than it does. Much of the court’s decision was spent clarifying and distinguishing its own earlier decision, Aldrich v. Randolph Central School District, 963 F.2d 520 (2d Cir. 1992), which was as guilty as any other in introducing this misunderstanding into the case law. As the Eisenhauer court acknowledged, “[t]he term [factor other than sex] has sowed needless uncertainty and confusion among our sister circuits.” Eisenhauer, 2023 WL 6815280, at *5. Among those is the Ninth Circuit, which—according to the Second Circuit—erroneously found in its famous decision, Rizo v. Yovino, an ambiguity in these unambiguous words, which led it to misapply canons of statutory construction and, ultimately, to read a “job-relatedness” requirement into the federal EPA where none belonged.

    The Second Circuit remanded the decision back to the district court to reconsider its decision in light of the different standards under the federal and New York EPA statutes. As noted above, the district court decided both claims under the arguably higher standard articulated by Aldrich, i.e., that the employer “bears the burden of proving that a bona fide business-related reason exists for using the gender-neutral factor that results in a wage differential in order to establish the factor-other-than-sex defense.” Eisenhauer, 2023 WL 6815280, at *3 (quoting Aldrich, 963 F.2d at 525). It concluded that the employer met its burden to establish this affirmative defense even under that standard, so it is hard to see how it would come to any different conclusion under the New York EPA, even with a job-relatedness requirement.

    As important as this issue is, the Eisenhauer decision is also notable for the issues it left undecided. The district court had held that the plaintiff had established a prima facie case of wage discrimination because she had identified one male comparator who earned more than her, even though there were other male employees who earned less than her, and other female employees who earned more. The defense argued that the presence of those other comparators negated any inference of discrimination. While the district court agreed that the identification of a single comparator may be insufficient to prove discrimination as a matter of fact at trial, it nevertheless held that the plaintiff could establish a prima facie case based on the existence of just one comparator at the summary judgment stage. Moreover, the court declined to even consider the existence of other, countervailing comparators before trial, holding that those were questions exclusively for the jury. (We previously blogged about this “one comparator rule” and its many practical difficulties here.)

    The district court decision also touched upon another issue currently bedeviling equal pay litigants: how does burden shifting work under the EPA? Some courts have held that the burden shifts only once; it shifts to the employer when the employee establishes a prima facie case, and that is where it remains. Other courts have held that the burden shifts back to the employee to prove pretext if the employer successfully establishes its affirmative defense. The district court in Eisenhauer appeared to apply the latter framework, holding: “Because Defendant has articulated a legitimate, non-discriminatory reason for the pay disparity, the burden would now shift to Plaintiff to establish that that reason was a pretext for discrimination.” Eisenhauer v. Culinary Inst. of Am., No. 19-cv-10933(PED), 2021 WL 5112625, at *9 (S.D.N.Y. Nov. 3, 2021). Because the plaintiff had failed to establish pretext, the district court ruled in favor of the employer. (See our analysis about this issue and its ramificationshere.)

    Both of these questions were important enough to attract the attention of the EEOC, which filed an amicus brief with the Second Circuit in support of the plaintiff. Some might even add to this list of issues the district court’s highly questionable holding that it was not allowed to even consider the existence of other comparators at the prima facie stage, because that issue is exclusively the province of the jury. A decision on any one of these three issues could have had a profound impact on equal pay litigation. The Second Circuit held them for another day.

    Implications for Employers

    While Eisenhauer left many weighty questions unanswered, it clarified that the “factor other than sex” defense under the federal EPA does not contain any job-relatedness requirement. This alone made the decision worth the wait, given the vast confusion that has crept into the case law on this point.

    Moreover, there is at least a chance one of the other issues raised by the lower court may eventually be resolved in this matter. When the Second Circuit remanded the case, it did so with explicit instructions. If the district court decides to retain supplemental jurisdiction over the state law EPA claim, it must decide whether the plaintiff had established a prima facie case under the New York law by identifying a single male comparator who earns more than her, while ignoring other comparators who would complicate any inference of discrimination. The Second Circuit explained in a footnote the disagreement that exists on this issue under the federal EPA, but left it to the district court to decide this as a separate issue under the New York law: “should the District Court decide to invoke its supplemental jurisdiction over [plaintiff’s] [NY EPA] claim on remand, it must determine whether a single male comparator is sufficient to establish a prima facie case under [the NY EPA].” Eisenhauer, 2023 WL 6815280, at *9 n.83. EPA litigants will just have to wait and see whether this questionable proposition gains new life under New York law. Seyfarth will, of course, keep our readers updated on any developments.

    By: Rachel V. See and Andrew L. Scroggins

    Seyfarth Synopsis: The Senate has confirmed Karla Gilbride as the EEOC’s General Counsel, following an almost two and a half year vacancy. As GC, Gilbride is poised to make her mark on the EEOC’s litigation program by directing and advocating for EEOC’s litigators, both internally and externally. An accomplished disability-rights litigator, Gilbride could potentially further emphasize the EEOC’s upward trend in filing litigation involving disability rights and accommodations.

    On October 17, 2023, in a 50-46 largely[1]  party-line vote, the Senate confirmed Karla Gilbride as General Counsel of the EEOC. The position has been vacant since March 2021, when President Biden fired Sharon Gustafson, the EEOC General Counsel nominated by President Trump.

    Gilbride’s confirmation is important for employers paying attention to the EEOC’s litigation program. EEOC career staff in Washington, DC manage the litigation program in the absence of a Senate-confirmed GC, and career staff oversaw the spike in merits cases filed by the EEOC in FY2023, which we wrote about here. However, a Senate-confirmed appointee like Gilbride can introduce new priorities and direction based on her unique perspectives and political authority. With Gilbride’s Senate confirmation, the EEOC’s litigation program will soon have a leader looking to make her mark on the program’s operations, bringing her own perspectives regarding litigation priorities and strategy, and advocating for additional resources for EEOC’s litigators.

    As General Counsel of the EEOC, Gilbride will have statutory responsibility for “conducting” litigation brought by the Commission, and as she gets up to speed she will soon start working with the EEOC’s Regional Attorneys and trial attorneys, potentially asserting influence over the “conduct” of their cases. EEOC’s Office of General Counsel can also be thought of as akin to a nationwide law firm with over 200 trial attorneys developing and bringing employment discrimination lawsuits. So, in addition to her statutory responsibility, Gilbride will also be responsible for managing the EEOC’s litigators, addressing high-level personnel issues and advocating for resources, and setting their priorities.

    While the Commission itself sets forth the Agency’s priorities through documents like its Strategic Plan and Strategic Enforcement Plan (see our previous coverage here and here), past EEOC General Counsels have sought to emphasize their own litigation priorities. For example, during her tenure as EEOC GC in the Trump Administration, Sharon Gustafson spoke frequently on issues relating to religious freedom, and keen EEOC observers can draw easy connections between Gustafson’s stated priorities and religious freedom lawsuits developed and brought during her tenure. Likewise, David Lopez, the EEOC GC nominated twice by President Barack Obama, frequently emphasized his priority of how the EEOC should function as one “national law enforcement agency,” and under his tenure the EEOC’s litigators were encouraged to operate with more collaboration and coordination across the various District Offices.

    A natural area for Gilbride to focus on may be disability rights, accessibility, and reasonable accommodations. Gilbride is an accomplished litigator and trailblazer. In 2022, Gilbride was the first blind attorney to argue a case before the U.S. Supreme Court (obtaining a unanimous decision in favor of her client), and she has spoken about how, for her, technology “has been an absolute game-changer in terms of being able to access information.”  With her unique experience, Gilbride can be expected to bring a perspective that could further emphasize the importance of disability discrimination and accommodation issues in the workplace.

    All of this comes against the backdrop of increased EEOC focus on litigating ADA claims. The EEOC filed 48 disability-related lawsuits in FY2023, nearly doubling the 27 ADA cases it had filed the here prior. (Read more about that here.) Gilbride will be the EEOC’s first blind General Counsel, and having a Senate-confirmed appointee in this very public role will unquestionably further elevate disability discrimination and accommodation issues, both internally within the Commission, in the Commission’s outreach efforts, and potentially also in its litigation efforts.

    Implications for Employers

    With her confirmation by the Senate, Kara Gilbride is poised to shape the EEOC’s litigation program as its new General Counsel, bringing her own perspectives regarding litigation priorities and strategy, and advocating for additional resources for EEOC’s litigators. We will watch closely to see if, under her leadership, EEOC’s litigators will bring increased focus to disability discrimination and accommodation issues.

    Stay tuned to the Workplace Class Action Blog for more EEOC analysis, as the Seyfarth team continues to analyze all EEOC activity and prepares to publish its annual EEOC-Initiated Litigation Report.

    For more information on the EEOC or how changes in the EEOC’s Office of General Counsel may affect your business, contact the authors – Rachel See and Andrew Scroggins – or a member of Seyfarth Shaw’s Complex Discrimination Litigation Group.

    [1] Senator Susan Collins of Maine was the lone Republican voting in favor of Gilbride’s confirmation.

    By: Michael Jacobsen

    Seyfarth Synopsis:  As reported here, to mark the two-year anniversary of TransUnion LLC v. Ramirez (“TransUnion”), the Workplace Class Action blog is examining how each of the federal Circuit Courts have applied this significant ruling on standing from the U.S. Supreme Court (see also here).  After serving a pair of district court rulings as an appetizer, the blog moves on now to the main course with the following rulings from the First, Second, Third, and Fourth Circuits that employers should read and consider, as these developments will drive how companies defend complex litigation in these jurisdictions. 

    TransUnion at a Glance

    As a refresher, in TransUnion, the Supreme Court reinforced that Article III standing requires a “concrete harm,” even when there is a statutory violation, and that “an injury in law is not an injury in fact.”  As Justice Kavanaugh put it pithily:  “No concrete harm, no standing.”  Also applicable here, the Supreme Court held that plaintiffs must demonstrate standing with respect to each claim asserted and each form of relief they seek (e.g., injunctive relief and damages).

    The First Circuit’s Analysis

    Webb v. Injured Workers Pharmacy, LLC

    Case Background

    Webb picks up where we left off in our last posting on TransUnion, in the data breach context.  In Webb, the plaintiffs brought a putative class action against the defendant home-delivery pharmacy service (“IWP”) in the U.S. District Court for the District of Massachusetts after learning that their personally-identifying information (“PII”) was compromised in a data breach that IWP suffered.  The district court granted IWP’s motion to dismiss for lack of standing. 

    The Court’s Decision

    Just days after TransUnion’s second anniversary, the U.S. Court of Appeals for the First Circuit affirmed the district court’s ruling in part.  On the one hand, the court held that the plaintiffs plausibly demonstrated standing to seek damages, including by alleging lost time spent taking protective measures that otherwise would have been put to some productive use.  However, the First Circuit also noted TransUnion’s teaching that plaintiffs “must demonstrate standing for each claim that they press and for each form of relief that they seek.”  As a silver lining for the defense, the court held that the plaintiffs lacked standing to pursue injunctive relief because their requested injunctions were not likely to redress their alleged injuries, e.g., an injunction requiring IWP to improve its cybersecurity systems could not protect the plaintiffs from future misuse of their PII by the individuals who they alleged already possessed it. 

    The Second Circuit’s Analysis

    Calcano v. Swarovski North America Limited

    Case Background

    In Calcano, visually impaired plaintiffs sued various stores under the Americans with Disabilities Act (“ADA”) for failing to carry Braille gift cards.  The plaintiffs alleged they lived near the stores, had been customers in the past, and intended to purchase gift cards in the future.  Nonetheless, the U.S. District Court for the Southern District of New York dismissed the plaintiffs’ claims for lack of standing.     

    The Court’s Decision

    The Second Circuit affirmed the district court.  The court acknowledged its prior holdings that an ADA plaintiff has suffered an injury in fact when it is reasonable to infer that the plaintiff intended to return to the subject location based on the frequency of the plaintiff’s prior visits and the proximity of the defendant’s business to the plaintiff’s home.  However, the court also made clear that conclusory allegations of intent to return and proximity are not enough in light of TransUnion’s holdings that plaintiffs must establish a “material risk of future harm” that is “sufficiently imminent and substantial” to pursue forward-looking injunctive relief.  Among other deficiencies that Seyfarth’s ADA Title III blog discussed in more detail here, the court explained that the plaintiffs’ allegations simply “parrot[ed]” the court’s prior holdings outlining categories of information that could support a reasonable inference.  The Second Circuit deemed these allegations to be nothing more than legal conclusions couched as factual allegations and ruled that they did not raise a reasonable inference of injury. 

    The Third Circuit’s Analysis

    Oxenberg v. Secretary United States Department Of Health & Human Services

    Case Background

    In Oxenberg, the plaintiffs submitted Medicare claims for therapy offered by Novocure, Inc. that were denied.  Per the Medicare “mulligan,” if a claim is denied but neither the supplier nor the beneficiary had reason to know that the treatment would not be covered, Medicare would bear the cost.  If there was reason to know, the supplier bears the cost instead.  The decisions denying the claims held Novocure responsible for the cost on this basis.  However, the plaintiffs still received the treatment.  When the plaintiffs sued, the U.S. District Court for the Eastern District of Pennsylvania dismissed the complaint on standing grounds.

    The Court’s Decision

    The U.S. Court of Appeals for the Third Circuit affirmed.  Although their claims were denied, the court held that the plaintiffs suffered no tangible injury as a result, noting they still received treatment at no cost.  The plaintiffs argued that they sustained statutory injuries through the loss of their “mulligan” and entitlement to have Medicare pay for their treatment.  Quoting TransUnion, however, the Third Circuit countered that although Congress may “elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law,” its “creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide” whether plaintiffs have standing.   

    The Fourth Circuit’s Analysis

    John And Jane Parents 1 v. Montgomery County Board Of Education

    In John And Jane Parents 1, the Montgomery County Board of Education (“Board”) adopted gender identity guidelines permitting schools to develop gender support plans for students.  The guidelines authorized schools to withhold information about the plans from parents who were deemed to be unsupportive.  The plaintiff parents alleged the guidelines usurped their right to raise their children.  The U.S. District Court for the District of Maryland granted the Board’s motion to dismiss the plaintiffs’ claims, although it did not consider standing.

    The Court’s Decision

    Nonetheless, in its ruling just weeks ago, the U.S. Court of Appeals for the Fourth Circuit announced that this case “begins and ends with standing.”  The court noted the principles underscored in TransUnion that courts do not “adjudicate hypothetical or abstract disputes” or “possess a roving commission to publicly opine on every legal question” and held that the plaintiffs had not alleged the type of injury required to show standing.  Noting that the plaintiffs did not allege that their children had gender support plans, were transgender, or were struggling with issues of gender identity, the court concluded that the plaintiffs failed to allege facts that the schools had any information about their children that was being withheld or that there was a substantial risk that information would be withheld in the future. 

    Implications For Employers

    Each of these cases featured multiple plaintiffs, but only one of them was a class action.  None of them took place in the workplace.  Nevertheless, the types of issues they feature are familiar, and they offer useful nuggets for defendants.  Among other things, Webb reinforces the importance of analyzing plaintiffs’ standing as to each claim and request for relief asserted.  Calcano and John And Jane Parents 1 showcase deficient pleading as to standing requirements.  And Oxenberg highlights that plaintiffs do not satisfy the injury-in-fact requirement simply by way of their statutory rights.  Employers who find themselves defending against complex litigation in one of these circuits should be aware of these holdings.

    By: Christopher J. DeGroff, Andrew L. Scroggins, and James P. Nasiri

    Seyfarth Synopsis: Following the EEOC’s aggressive litigation posture in the Obama-era, the Commission’s federal case filings has been markedly sluggish, at least in part because of transitions in leadership. Seyfarth forecasted changes were imminent in FY 2023, with the EEOC’s hefty budget increase and a likely Democratic majority, and we further anticipated a substantial increase in filings from the Commission this year. The EEOC did not disappoint. The EEOC wrapped FY 2023 with a jaw-dropping 144 filings at the time of publication, which represents a five-year high in EEOC merit lawsuits. The EEOC even touted in an evening press release trumpeting that it had filed 50% more suits than in the previous year. An analysis of the EEOC’s case filing metrics in overdrive—along with the timing, location, and type of claims asserted in these lawsuits—signal that the EEOC is returning to a heightened level of litigation activity not seen in years.

    As we have reported in prior EEOC year-end reports (see FY 2022, FY 2021, and FY 2020), the Commission’s filing activity has taken a significant downturn since the beginning of the COVID-19 pandemic.  Indeed, over the last three years the Commission has struggled to file more than 100 merit lawsuits each year. This is a substantial plunge from the EEOC’s sizeable filing numbers under the Obama administration, when upward of 300 merit suits were filed in some years.

    Moving into FY 2023, the EEOC appeared primed to increase its litigation activity in light of a change in administration, a sizeable budget increase, and a pending Democratic Commissioner (Kalpana Kotagal) nominated by President Biden.  That final piece of the puzzle did not fall into place until July 13, 2023, when the U.S. Senate confirmed Commissioner Kotagal, ending a 2-2 political stalemate at the EEOC and tilting the Agency in favor of the three Democratic Commissioners.

    Perhaps not surprisingly given the initial vacancy while waiting for Commissioner Kotagal’s confirmation, the Commission saw a slow start to FY 2023; the EEOC filed only three lawsuits in the first four months of its fiscal year.  Despite this sluggish start, the EEOC quickly ramped up its filing numbers in the spring with 13 lawsuits filed in March 2023, a number far above the norm for a typical year.  This was followed by a notably active May in which the EEOC filed a total of 16 lawsuits, making it the busiest non-September filing month since FY 2019.  Finally, the EEOC ended its fiscal with a dramatic last-minute filing surge, lodging 13 lawsuits in August and an eye-popping 71 lawsuits in September alone.  Altogether, the EEOC finished its year with 144 merit filings in FY 2023.  In the last hours of its fiscal year, the EEOC took a victory lap by launching a press release touting its case-filing accomplishments.  But the EEOC’s September 29 announcement included very few details about its lawsuit activity, and what that means for employers facing the EEOC in the next fiscal year.  Seyfarth has analyzed each of the EEOC’s 144 cases, and provides this one-of-a-kind analysis.

    FY2023 Cases Analyzed By EEOC District Office

    Although overall EEOC filing numbers were up in FY 2023, it was not a typical year for the Commission in terms of where these lawsuits were filed.  This year, the Commission’s East Coast offices were its most active. Philadelphia leads the pack with 22 lawsuits, more than tripling its filing activity last year and became the first EEOC District Office to hit over 20 filings since FY 2018 (when Chicago posted 21 new cases).  Beyond Philadelphia, the EEOC’s District Offices in New York, Charlotte, and Miami were also among the busiest Districts in FY 2023, filing 10, 9, and 9 suits, respectively.  Chicago retained its traditional position as one of the leading offices, with 13 merits filings of its own.  Notably, the typically-active Western portion of the country filed fewer cases this year than is typical. While the Los Angeles District office spearheaded 10 suits, both Phoenix and San Francisco lagged behind, with 8 and 5 suits respectively.

    Analysis of the Types of Lawsuits Filed in FY 2023

    In its press release, the EEOC touted that its FY 2023 filings “include 25 systemic lawsuits, almost double the number filed in each of the past three fiscal years and the largest number of systemic filings in the past five years. Also, the EEOC filed 32 non-systemic class suits seeking relief for multiple harmed parties and 86 suits seeking relief for individuals.” The EEOC did not provide more detail about the underlying claims in those suits, but we track the types of claims alleged in each of the EEOC’s complaints.  This includes an analysis of both the statute alleged to have been violated, as well as the specific claims asserted on behalf of the employee(s).  FY 2023’s filing numbers generally align with prior years insofar as the Commission continued to primarily allege claims under Title VII and the Americans with Disabilities Act (“ADA”).  The EEOC also filed 13 lawsuits under the Age Discrimination in Employment Act (“ADEA”), representing a significant increase from the last two years when the Commission filed six (FY 2022) and one (FY 2021) ADEA cases.  Conversely, filings under the Equal Pay Act experienced a slight year-over-year decrease, while Pregnancy Discrimination Act filings remained consistent.

    Taking a closer look at these numbers, the ADA was a particularly hot area. The EEOC filed 48 disability-related lawsuits in FY 2023, nearly doubling the 27 ADA cases it filed last year.  While these filings concerned a broad range of disabilities, but one particular type of case stood out:  claims concerning employee and applicant hearing impairments.  Not coincidentally, the EEOC published guidance in late January 2023 regarding hearing disabilities in the workplace.  Since then, the EEOC filed nine ADA cases on behalf of hearing impaired employees in FY 2023.  The Chicago District leads the pack, pressing three of these cases in Illinois, followed by one in each of Florida, Kansas, Maryland, Massachusetts, New York, and Ohio.

    The EEOC also continued a trend that began last year, filing suits over alleged failure to accommodate mental impairments. This year, that included suits related to individuals with autism spectrum disorder, attention deficit/hyperactivity disorder, depression, anxiety, and post-traumatic stress disorder.

    Furthermore, two of the EEOC’s most notable litigation priorities over recent years relate to systemic discrimination and workplace harassment.  These priorities were again reflected in the FY 2023 filing data, as the Commission filed 43 hostile work environment lawsuits this year.  27 of these 43 cases asserted harassment on the behalf of an employee’s sex or sexual orientation, with another 15 alleging harassment based on race or national origin. 

    On the systemic front, the Commission initiated a few notable lawsuits in FY 2023 that alleged systemic discrimination.  To highlight some examples:

    • The EEOC sued a moving company, alleging that it maintains a pattern or practice of recruiting and hiring young college students, intentionally excluding older workers regardless of their individual abilities.
    • The EEOC sued a pet boarding service, alleging that the company failed to engage in the interactive process and provide a reasonable accommodation to a class of applicants and employees with disabilities whose post-offer drug tests came back positive.
    • The EEOC sued a waste disposal company, alleging that it failed to hire women for truck driver positions and subjected candidates to derogatory comments about their appearance and discriminatory lines of questioning about their ability to do the job based on sex-based stereotypes.
    • The EEOC sued a Midwest sports bar claiming that the bar maintained “a policy and practice of hiring female employees for front-of-house restaurant positions and steering male applicants to back-of-house restaurant positions because of sex.” 
    • The EEOC sued several Nevada bar and restaurant owners alleging that the companies engaged in a pattern and practice of subjecting employees to discrimination and harassment because of their sexual orientation. 

    According to the Commission, it intends to litigate 25 of its cases as systemic matters, though precisely which cases it includes in that count is not clear at this time. Nonetheless, it is evident that the Commission is continuing its commitment to curb systemic discrimination.

    What Industries Were Commonly Targeted by the EEOC in FY 2023?

    The EEOC sued a wide variety of businesses in FY 2023, but a thorough analysis of its filings demonstrates that the Commission focused its litigation activity on a few industries in particular.  The most common industry target was hospitality, which faced 31 EEOC-initiated new lawsuits.  This industry filing trends aligns with the EEOC’s expressed interest in protecting young workers in low wage jobs from sexual harassment (as we previously reported HERE).  Beyond the hospitality space, the healthcare (24), retail (18) and constructions/natural resources industries (15) were all hit with a significant number of EEOC lawsuits in FY 2023.  Furthermore, the Commission also sued nine transportation/logistics companies and four non-profits this year.

    Interestingly, we noticed a curious trend concerning the size of employers the EEOC sued.  The EEOC has historically favored household-name defendants, presumably because the brand recognition of these employers would have stronger deterrent impact.  But this year the EEOC frequently set its sights on quite small business in communities across the country, including a pet store, a “pet resort” boarding and training service with just two locations, an appliance store, a lodge in a state forest area, a small medical practice, and a used car dealership, among others.  The EEOC’s motivation for singling out these small businesses is unclear, but the impact of such asymmetric litigation resources could be sorely felt by these community employers. 

    Implications For Employers

    The bottom line for employers is that, after a few relatively quiet years at the EEOC, the Commission has made a roaring return to its prior levels of litigation activity now that it is under Democratic control.  Although all employers should be on the lookout for potential EEOC activity, East Coast employers and companies in the hospitality industry in particular should keep a close eye on EEOC-initiated litigation.  Moreover, given the Commission’s clear emphasis on disability claims, employers should also review their accommodation policies and consult a legal expert if faced with potential ADA issues.

    We will continue to monitor these changes closely and keep readers apprised of developments.  And, as always, we will keep up-to-date on EEOC data amid the ever-changing political climate and apparent increase in EEOC filing activity. For more information on the EEOC or how the Commission’s filing activity may affect your business, contact the authors – Christopher DeGroff, Andrew Scroggins, and James Nasiri– or a member of Seyfarth Shaw’s Complex Discrimination Litigation Group.

    By: Christopher Kelleher, Rachel See, Christopher DeGroff, and Andrew Scroggins

    Seyfarth Synopsis: An essential read for any employer, the EEOC’s final Strategic Enforcement Plan (SEP), was released on September 21, 2023. The SEP identifies the agency’s enforcement priorities for the next five years, Fiscal Years 2024-2028. The SEP indicates that the agency intends to aggressively pursue its enforcement agenda through Commissioner Charges, directed investigations, and litigation involving systemic harassment and discrimination. The new plan also suggests a new direction for the agency on a number of key subject matter priorities.

    The EEOC has released its new Strategic Enforcement Plan (“SEP”) for Fiscal Years 2024-2028. The SEP lays out the EEOC’s enforcement priorities to focus and coordinate the agency’s work over multiple years “to have a sustained impact in advancing equal employment opportunity.”

    As we previously covered, in January 2023 the EEOC posted a draft of the SEP for public comment. For almost a year, since November 2022, the five-member Commission was evenly divided politically, with two Democrats and two Republicans. However, last month, in August 2023, Democrat Commissioner Kalpana Kotagal was sworn in, giving the Democrats a 3-2 majority on the Commission for the first time during the Biden Administration.

    While many aspects of the Commission’s operations are advanced on a bipartisan basis, the timing of the release of the final SEP, combined with the lengthy interval since public comments were accepted, suggests that EEOC Chair Charlotte Burrows may have needed a third Democrat vote to get her SEP across the finish line. The launch of the SEP, coupled with last month’s adoption of the EEOC Strategic Plan, suggests that Commissioner Kotagal is rapidly getting up-to-speed, and that Chair Burrows is beginning to use her Democrat majority. The eventual release of the Commission vote on the SEP may tell us more.[1]

    But political wrangling aside, the true headline is what the EEOC will now be targeting. In today’s SEP, the EEOC has again identified six subject matter priorities. Employers can expect that the EEOC will conduct a more aggressive enforcement agenda with respect to each of these priorities:

    • Eliminating Barriers in Recruitment and Hiring. The EEOC will focus on discriminatory recruitment and hiring practices, with a special emphasis on the use of technology, AI, and machine learning used in job advertisements, recruiting, and hiring decisions. The new SEP emphasizes an employer’s use of all technology (not just “automated systems”) in hiring and recruitment as an area strategic focus. The EEOC has, historically, focused on recruiting and hiring in part because private plaintiffs’ counsel have been unwilling to champion large scale hiring cases due to cost and challenges identifying potential “victims.”
    • Protecting Vulnerable Workers from Underserved Communities. The EEOC will expand its focus on protecting vulnerable workers, and the agency has expanded the categories of workers categorized as “vulnerable and underserved.” Vulnerable workers include, among other groups: immigrant and migrant workers; workers with developmental, intellectual, and mental health related disabilities; LGBTQI+ individuals; individuals employed in low wage jobs, including teenage workers; and survivors of gender-based violence. The EEOC has identified these groups, among others, as deserving special protection because they may be unaware of their rights under EEO laws, and/or may be reluctant or unable to exercise their rights.
    • Addressing Selected Emerging and Development Issues. The EEOC states that it will continue to prioritize emerging or developing issues, and it has updated the emerging and developing issues priority to include protecting workers affected by pregnancy, childbirth, or related medical conditions, including under the Pregnant Workers Fairness Act. This priority will also focus on addressing discrimination “influenced by or arising as backlash in response to local, national, or global events.” Notably, the new SEP dials back the scope of the EEOC’s prior focus on Covid-19. Under the SEP, only “Long Covid” is considered an area of strategic emphasis. This is important in part because, while the EEOC and its local counterparts have fielded thousands of charges of discrimination relating employees’ religious and/or medical exemption requests from employers’ Covid-19 vaccination mandates, vaccination-related enforcement is not referenced in the SEP.
    • Advancing Equal Pay for All Workers. The EEOC will continue to use directed investigations and Commissioner Charges to advance enforcement of pay discrimination laws, including the Equal Pay Act and Title VII. The EEOC further promises that it will focus on employer practices that may impede equal pay, or contribute to pay disparities, such as secrecy policies, discouraging or prohibiting workers from sharing pay information, and “reliance on past salary history or applicants’ salary expectations to set pay.” The recently announced partnership between the EEOC and the Department of Labor provides the agency an additional source for information that could fuel investigations in this area.
    • Preserving Access to the Legal System. The EEOC will also focus enforcement on workplace policies or practices that limit employees from exercising their rights, including any policies that deter or prohibit filing charges with the EEOC or cooperating freely in EEOC investigations. Particularly important for employers: the EEOC warns it will focus on overly broad waivers, releases, non-disclosure agreements, and non-disparagement agreements; unlawful or improper mandatory arbitration provisions; employers’ failure to keep required applicant and employee data and records; and retaliatory practices that could dissuade employees from exercising their rights.
    • Preventing and Remedying Systemic Harassment. Finally, the EEOC will focus on remedying harassment, both in-person and online. As part of this priority, the EEOC will focus on promoting comprehensive anti-harassment programs and practices.

    The SEP notes that the EEOC also plans to “support employer efforts to implement lawful and appropriate diversity, equity, inclusion, and accessibility (“DEIA”) practices that proactively identify and address barriers to equal employment opportunity, help employers cultivate a diverse pool of qualified workers, and foster inclusive workplaces.” This language suggests that the EEOC may anticipate a battle over affirmative action in the workplace in the wake of the Supreme Court’s Fair Admissions decision.

    Implications for Employers

    The importance of the new SEP is, without hyperbole, profound.  The EEOC’s SEP identifies the types of claims the EEOC’s front-line personnel are searching for when they are investigating charges, and what types of litigation the EEOC will aggressively pursue. While the EEOC will continue its routine charge-investigation processes for all charges, claims identified as “strategic” – i.e. falling into one of the categories set forth in the SEP – will receive increased attention from the EEOC’s investigators and litigators. Additionally, the EEOC is likely to conduct outreach to employees informing them about their rights, and encouraging them to file charges in these areas designated for strategic emphasis. The new SEP, propelled by demonstrable steps to move resources to these goals, promises to have a significant impact on how the Commission interacts with – and litigates against – employers. 

    [1] Votes taken by the Commission are now publicly posted on the EEOC’s website, but there is a delay between the individual Commission votes and the posting on the EEOC website.

    Addendum: On September 25, 2023, an EEOC spokesman confirmed that the SEP was approved in a 3-2 split vote.

    By: Rachel V. See, Christopher J. DeGroff, and Andrew L. Scroggins

    Seyfarth Synopsis: The EEOC and the Department of Labor Wage Hour Division (WHD) have taken an important step toward inter-agency coordination, committing to information sharing, joint investigations, training, and public outreach. The Memorandum of Understanding between the EEOC and DOL contemplates referring complaints between the two agencies, a move that should catch the attention of all employers.  What is more, the agencies have agreed to share swaths of information, including EEO-1 reports and FLSA records.  This coordination will not just occur at the agency leadership level – the MOU enables front-line personnel from both agencies to receive shared information quickly and expeditiously. This enhanced and elevated level of agency cooperation should be top of mind for all employers.

    On September 14, 2023, the EEOC and WHD announced that they had entered into a Memorandum of Understanding enabling information sharing, joint investigations, training, and outreach. The MOU now empowers the agencies’ field staff to coordinate efforts on both individual matters and larger investigations.

    The EEOC’s press release, and some initial media coverage, have focused on the agencies’ coordinated efforts relating to the recently enacted PUMP Act (extending to more nursing employees the rights to receive break time to pump and a private place to pump at work) and the Pregnant Workers Fairness Act (requiring reasonable accommodations for limitations related to pregnancy, childbirth, or related medical conditions). But the MOU’s information-sharing and other contemplated coordinated activity provisions go far beyond those statutes, covering a broad range of activities, touching on all aspects of EEOC and WHD jurisdiction.

    For example, the MOU explicitly describes that each agency will make complaint referrals to the other, and that the two will share complaint or investigative files, EEO-1 reports and FLSA records, and “statistical analyses or summaries,” and that the agencies “will explore ways to efficiently facilitate” the data sharing.

    Information sharing under the MOU is not limited to just top-level agency officials in Washington, DC; leadership from each agency’s District (or Regional) offices may request information without the need to first obtain approval from HQ in Washington, DC. Importantly, the EEOC District Directors and Regional Attorneys also may designate other EEOC employees to make the request. This means that front-line EEOC staff involved in enforcement and litigation can quickly access a wide range of information held by WHD. It is also noteworthy that the MOU allows any EEOC Commissioner to directly request information from WHD, without first channeling the request through EEOC career staff. This is significant because it enables EEOC Commissioners from different political parties than the Chair to obtain information directly from WHD.

    But the elephant lurking in the corner of the room may be the potential for broad-based data-sharing between the two agencies. The MOU specifically contemplates that the EEOC may share employer EEO-1 reports with WHD. Notably, Title VII prohibits the EEOC from disclosing EEO report data to the public, but the MOU does not bind the WHD in the same way. Instead, the WHD agrees to “observe” Title VII’s confidentiality requirements.

    Whether these provisions of the MOU might be sufficient to ward off a FOIA request directed to WHD may, at some point, be tested in the courts. WHD’s sibling agency at the Department of Labor, OFCCP, has been involved in contested FOIA litigation seeking large volumes of EEO-1 reports in OFCCP’s possession. For more information about this litigation, see our most-recent client update on OFCCP’s release of EEO-1 reports.

    Implications for Employers

    Employers can expect the MOU to lead to more information sharing between the EEOC and WHD when it comes to individual charges and investigations. (The MOU contains a high-level framework for coordinated investigations involving the same employer.)  More concerning is the potential for data sharing to fuel broader systemic investigations. Indeed, as we recently wrote, the EEOC’s five-year Strategic Plan announced just last month that it is committing to developing these “big cases,” in the hope that this will enable the EEOC “to increase its impact on dismantling discriminatory patterns, practices, or policies.” The ability to gather additional data through this partnership with the WHD adds another powerful tool to the EEOC’s investigative powers. 

    Stay tuned to the Workplace Class Action Blog for more EEOC analysis, as the Seyfarth team continues to analyze all EEOC activity and prepares to publish its annual EEOC-Initiated Litigation Report.

    For more information on the EEOC and WHD, and how both may affect your business, contact the authors or a member of Seyfarth Shaw’s Complex Discrimination Litigation Group or Wage Hour Litigation Practice Group.

    By: Christopher DeGroff, James Nasiri, and Rachel See

    Seyfarth Synopsis: On August 22, 2023, the Equal Employment Opportunity Commission officially adopted its new Strategic Plan for Fiscal Years 2022-2026. The Strategic Plan outlines the Commission’s major goals and objectives over the coming years, and also sets forth various performance metrics under which its activities will be measured. Particularly notable for employers is the EEOC’s greater emphasis on its systemic investigation program, its desire for increased compliance monitoring, and commitments to improve its charge intake processes. Given that the Strategic Plan describes elements of the EEOC’s enforcement approach in detail, it is a must-read for employers. This is especially true for the FY 2022-2026 Strategic Plan, which is noteworthy not only for the priorities that the Commission discusses, but also for those anticipated topics that it does not.

    The Significance of the EEOC’s Strategic Plan

    The EEOC is required by statute to submit to the White House and Congress a five-year strategic plan identifying the agency’s major goals and objectives, how the agency intends to achieve those goals and objectives, and how it will measure its progress towards those goals.

    The EEOC outlines its enforcement strategies through two separate documents: its Strategic Plan, and its Strategic Enforcement Plan (“SEP”). Despite the similarity in their titles, these plans serve two distinct purposes. The SEP lays out the Commission’s specific priorities by highlighting certain areas of law or groups of workers that it will aim to address over the new four years. The EEOC is currently accepting public comments on its proposed SEP for FYs 2023-2027.

    On the other hand, the Strategic Plan explains how the EEOC will achieve its strategic mission, including executing on the priorities contained in the SEP. In the words of the EEOC, “[t]he Strategic Plan serves as a framework for achieving the EEOC’s mission to prevent and remedy unlawful employment discrimination and advance equal employment opportunity for all.” The Commission released a draft of its new Strategic Plan in November 2022 (see our blog post on the proposed Plan HERE), and on August 22, 2023, it announced that it had officially adopted its Strategic Plan for FYs 2022-2026.

    Strategic Goal 1: Combat and Prevent Discrimination Through Strategic Application of the EEOC’s Enforcement Authority

    While the EEOC’s Strategic Plan is distinct from the SEP, the first goals discussed in the Strategic Plan for FYs 2022-2026 focus on the strategic application of the Commission’s enforcement authority. Three noteworthy goals relate to the EEOC’s systemic investigations, its monitoring of compliance with conciliation agreements, and the challenges it has been facing with charge intake.

    • Emphasizing systemic investigations and litigation.

    The EEOC’s Strategic Plan emphasizes the EEOC’s systemic program. The EEOC is committing to devoting additional resources to investigating and litigating systemic claims. The EEOC has defined systemic discrimination cases as matters involving a pattern or practice, policy, and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic area. The Strategic Plan commits to developing these “big cases,” in the hope that refocusing its efforts on these types of cases will enable the EEOC “to increase its impact on dismantling discriminatory patterns, practices, or policies.” And while the SEP sets forth the EEOC’s enforcement priorities, the Strategic Plan makes sweeping statements about where it will be looking to develop systemic charges, promising, “The Commission is committed to tackling systemic employment discrimination in all forms and on all bases.”

    There are two immediate tangible items that will flow from this commitment to the EEOC’s systemic program. First, every year that this Strategic Plan is in effect, the EEOC has committed to conducting training to all field staff on identifying and investigating claims of systemic discrimination, and it expects that at least 90% of its investigators and trial attorneys will participate in this annual training.

    Second, the EEOC plans to hire “at least two dedicated Enforcement Unit systemic staff members” at each District Office. While some District Offices already have dedicated systemic staff, having additional dedicated systemic staff in each District Office will unquestionably help the EEOC identify and investigate claims of systemic discrimination. Nevertheless, the commitments in the Strategic Plan will not necessarily result in new and immediate hires, as the EEOC only commits to meeting this hiring goal by the end of FY2026.

    • Monitoring conciliation agreements

    The EEOC’s Strategic Plan also commits to “improved monitoring” of conciliation agreements. The Strategic Plan emphasizes that the successful conciliation agreements that are negotiated to resolve charges of discrimination before litigation routinely include targeted, equitable relief in addition to relief for the charging party and aggrieved individuals. The EEOC asserts that greater monitoring of the targeted, equitable relief in conciliation agreements is “critical to the EEOC’s ability to ensure workplaces are free from discrimination after the EEOC makes a finding of discrimination.”

    But the EEOC’s Strategic Plan does not explain what, exactly, this “improved monitoring” will entail, or what additional resources its enforcement staff will be committing to compliance monitoring. The Strategic Plan simply requires the EEOC to “report on enhancements” to its compliance monitoring program, on an annual basis. The EEOC is also silent on whether this improved monitoring will extend to non-monetary relief included in matters resolved post-litigation in Consent Decrees.

    • Charge intake improvements

    The EEOC also emphasized the EEOC’s commitment to “improving and expanding access to intake services.

    In October 2022, the U.S. Government Accountability Office (“GAO”) issued a report finding notable inconsistencies in the EEOC’s intake efforts. The GAO report observed that the EEOC was not monitoring the length of the EEOC’s charge “intake” process across its many field offices. (The GAO report defined the “intake” process as starting when an individual files an inquiry, and ending when EEOC staff interviewed the individual about the alleged incident.) The GAO report found that there was wide variance in the length of the intake process. In its evaluation of data from the EEOC’s 53 field offices from FY 2018 to FY 2021, GAO found that the length of time varied significantly from office to office, with the  fastest office averaging 11 days from inquiry to intake and the slowest office averaging 111 days  in FY 2021.

    The EEOC’s intake challenges have also been the subject of Congressional scrutiny and Republican oversight.  In December 2022, Representative Virginia Foxx, Ranking Member on the House Committee on Education and Labor, and Representative Russ Felcher, Ranking Member on the House Education Subcommittee on Civil Rights and Human Services, urged the EEOC to incorporate the GAO report’s recommendations into its strategic plan.

    The GAO report recommended that the EEOC monitor field office data on the length of the intake process, in order to help it support offices that take longer to complete the process. In its Strategic Plan, the EEOC commits to “identify technological solutions and other resources to improve and expand accessibility” to intake services by FY23 – i.e., by the end of the current fiscal year. Beyond that, the EEOC is committing to “make yearly progress” in improving the availability of intake interview appointments, but it does not commit in the Strategic Plan to specific goals for speeding up intake, or to identify specific additional resources that will be deployed to aid in this process.

    Nevertheless, given the GAO’s recommendations, ongoing scrutiny from Congress, and the commitments in the EEOC’s Strategic Plan, employers can expect that the EEOC field offices that have been struggling with long wait periods before intake interviews are conducted will be feeling increased pressure to show progress in speeding up intake.

    Strategic Goal 2: Prevent Discrimination and Advance Equal Opportunities Through Education and Outreach

    The Commission’s second strategic goal emphasizes its education and outreach efforts. These efforts go to both educating individuals regarding their rights, and assisting employers, federal agencies, unions, and staffing agencies to prevent discrimination and effectively resolve EEO issues.

    The EEOC addresses not only its education and outreach efforts, but also the populations receiving such services. The Strategic Plan emphasizes the importance of providing educational resources to vulnerable communities, such as employees who are new to the workforce, immigrants, or migrant workers. On the business side, the Plan also notes that “underserved segments of the employer community, including small, new and disadvantaged businesses” must receive training programs to assist with compliance. As part of this strategic goal, the EEOC also indicates that it will be looking to revise “priority” sub-regulatory guidance and resources, and to promote “promising practices” that employers can adopt to prevent discrimination in the workplace.

    Strategic Goal 3: Strive for Organizational Excellence

    The EEOC’s third and final strategic goal is to pursue organizational excellent through its people, practices, and technology. Key objectives here include: (1) achieving a culture of accountability, inclusivity, and accessibility; and (2) aligning resources with priorities to strengthen intake, outreach, education, enforcement, and service to the public to protect and advance civil rights in the workplace.

    While these goals might appear to be -internal only, one significant aspect is the EEOC’s ongoing progress regarding the modernization of its charge/case management system, now called ARC (or the Agency Records Center). The Strategic Plan includes the agency’s success in modernizing this system. While many EEOC external stakeholders have already seen aspects of ARC in action, the Strategic Plan commits the agency to linking ARC to “new and redesigned digital services for the agency’s multiple external constituencies, including for charging party attorney representatives”. The agency also commits to leverage “the use of data, analytics, and information management to support, evaluate, and improve the agency’s programs and processes.” 

    Using these tools, EEOC management will have greater visibility into the progress of investigations and litigation, and may better be able to exert influence over individual offices or matters.

    Implications for Employers

    The EEOC’s FY 2022-2026 Strategic Plan contains some key takeaways for employers. Probably most importantly, the Strategic Plan expresses the EEOC’s intent to ramp up its efforts in investigating and litigating matters identified as involving “systemic” issues. This priority will be reinforced not only by widespread internal training, but also by an eventual hiring increase that will allow EEOC District Offices to each have their own units tasked with investigating systemic discrimination. The Commission has filed 13 systemic lawsuits in each of the last two fiscal years, and it will be interesting to see whether the EEOC’s increased systemic commitments will result in additional systemic lawsuits being filed in FY 2023 and beyond.

    Stay tuned to the Workplace Class Action Blog for more EEOC analysis, as the Seyfarth team continues to analyze all EEOC activity and prepares to publish its annual EEOC-Initiated Litigation Report.

    For more information on the EEOC or how the Commission’s Strategic Plan may affect your business, contact the authors – Christopher DeGroff, James Nasiri, and Rachel See – or a member of Seyfarth Shaw’s Complex Discrimination Litigation Group.

    By Danielle Kays and James Nasiri

    Seyfarth Synopsis: In February 2023, the Illinois Supreme Court issued a landmark opinion in Cothron v. White Castle finding that claims under the Illinois Biometric Information Privacy Act (“BIPA”) accrue each time a private entity scans or transmits an individual’s biometric data. (Seyfarth’s analysis of this decision can be found HERE.) Defendant White Castle promptly filed a petition for rehearing, arguing that the Court incorrectly interpreted the Act and failed to consider practical factors concerning the amount of damages plaintiffs would now be entitled to under BIPA. In a blow to Illinois businesses, on July 18, 2023, the Court denied White Castle’s petition for rehearing and upheld the standard that BIPA claims accrue upon each scan or transmission.

    Illinois Supreme Court Relies on Prior Reasoning in Denying the Petition for Rehearing

    As a brief background, Plaintiff Cothron was a manager at a White Castle store in Illinois, and she sued the Company alleging that its fingerprint-scanning system used for payroll purposes violated Section 15(b) and (d) of BIPA. White Castle moved to dismiss Plaintiff’s Complaint as time-barred on the grounds that Plaintiff’s claims accrued in 2004 when she was hired, but Plaintiff responded that her claims accrued every time she scanned her fingerprint. This issue eventually went up to the Illinois Supreme Court, and as we discussed in our February blog post, the Court held that Section 15(b) and (d) claims accrue each time an entity captures or transmits an individual’s biometric identifier.

    In its petition for rehearing, White Castle primarily argued that the Illinois Supreme Court erred in its interpretation of the relevant BIPA provisions. More specifically, White Castle highlighted the phrase “unless it first” within Section 15(b), contending that this language suggests that the acts of collecting or capturing biometric data can only happen at one singular point in time. Along these same lines, White Castle took the position that Section 15(d) refers to “the disclosure of biometrics by one party to a new, third party—said differently, a party that has not previously possessed the relevant biometric identifier or biometric information.” According to White Castle, a “transmission” under Section 15(d) can also only occur one time.

    The Illinois Supreme Court firmly rejected White Castle’s statutory arguments, just as it did in February, without offering any new analysis. By relying on its prior ruling, the Court thus determined that actions like “collecting,” “capturing,” and “disclosing” can occur more than once, especially given that White Castle had to scan and analyze an employee’s fingerprint each time they needed computer or pay stub access. The Court also copied its previous analysis in rejecting White Castle’s practical argument concerning the potential for massive damages awards of BIPA, again stating that “where statutory language is clear, it must be given effect, ‘even though the consequences may be harsh, unjust, absurd or unwise.’”

    Judge Overstreet Issues a Stark Dissent

    While the majority did not write a new opinion when it denied White Castle’s petition for rehearing, Judge Overstreet – joined by Judges Theis and Holder White – issued a fresh dissent. In the dissent, Judge Overstreet focused more on practical and constitutional concerns rather than analyzing the statutory language. According to the Judge Overstreet, the majority’s holding “subverted the intent of the Illinois General Assembly, threatens the survival of businesses in Illinois, and consequently raises significant constitutional due process concerns.”

    As to the legislative intent, Judge Overstreet emphasized that the Illinois General Assembly intended for BIPA “to be a remedial statute that implemented prophylactic measures . . . .” However, “under the majority’s view, the legislature intended for Illinois businesses to be subject to cataclysmic, job-killing damages, potentially up to billions of dollars, for violations of the Act.” The dissent found no statutory support for such an interpretation and emphasized that, under the majority’s holding, Plaintiff Cothron alone could be entitled to “damages exceeding $7 million for this single employee despite the fact that plaintiff has not alleged a data breach or any costs or other damages associated with identity theft or compromised data.”

    Judge Overstreet further emphasized that, by acknowledging the “harsh” and “absurd” consequences of their interpretation but nevertheless finding the per-scan approach to be proper, the majority “authorized exorbitant damages awards threatening financial ruin for some businesses . . . .” Moreover, the dissent found the majority’s interpretation to not only pose practical concerns for businesses, but to also present constitutional due process concerns for Illinois courts. Therefore, the dissent concluded by “implor[ing]” the Court to reconsider White Castle’s petition for rehearing and assess whether the resulting interpretation of BIPA passes constitutional scrutiny.

    Implications For Businesses

    The Illinois Supreme Court’s Cothron decision remains a large disappointment for Illinois businesses, especially when considered in light of the Court’s Tims decision (summary can be found HERE) finding a 5-year limitations period to be appropriate for BIPA claims. Moreover, BIPA claims are no longer limited to just timekeeping technology – plaintiffs’ firms are targeting companies’ use of other biometric technology such as retinal scans, facial scans, and voiceprint-collecting headsets.

    With Cothron and Tims being the law within Illinois courts, companies must quickly adjust to this new BIPA landscape. While there have been proposed legislative amendments to the Act that would limit its broad scope and damages potential, these measures have not progressed to the point of becoming law. As a result, it is now more important than ever for Illinois businesses to thoroughly assess their use of biometric technology, analyze their biometric data policies, and ensure compliance with BIPA. For more information about the Illinois Biometric Information Privacy Act and how this decision may affect your business, contact the authors—Danielle Kays and James Nasiri—your Seyfarth attorney, or Seyfarth’s Workplace Privacy & Biometrics Practice Group.