seal.pngBy Christopher J. DeGroff and Gerald L. Maatman, Jr.

When the EEOC approached Congress for its FY2011 and 2012 budgets, it repeatedly emphasized that it planned to file more lawsuits, especially large-scale, systemic cases. The preliminary scorecard is now in, as the EEOC’s fiscal year ended on September 30, 2011. Although the government is not scheduled to release its complete year end statistics until next month, Seyfarth Shaw’s survey of the EEOC’s year-end filings suggests that the EEOC has made good on this promise, and then some.

As we reported on September 13, 2011, the trajectory of the EEOC’s year-end filings was already startling, and on pace for a record high. Now that the dust is cleared, we see the results of a blizzard of EEOC filings from coast to coast. The EEOC filed an astonishing 175 lawsuits in the last eight weeks of its 2011 fiscal year (a period we call the “Red Zone”). Compared to a total of 250 EEOC suits filed in all of FY 2010 combined, the sheer volume of the cases filed by the Commission is significant by itself. 

Looking behind the numbers provides additional insight into the EEOC’s litigation plan. For instance, the types of EEOC claims filed in the Red Zone are notable. The trends we reported on in September continued through the month, with almost a full third of the EEOC’s new filings being ADA-related – far more than the year end 16% we saw in FY 2010. More importantly, of the 175 lawsuits, a whopping 59 were systemic cases or cases involving more than one claimant, consistent with the EEOC’s commitment to bring more large-scale lawsuits to effectuate its enforcement agenda. Until the year-end figures are in, it is difficult to see any particular geographic trends, as cases were filed in dozens of states. Large states like Texas and California still put up large numbers in the last few weeks (48 of the 175 cases), but we see new hot areas as well, like New Mexico (eight cases) and Minnesota (six cases). Interestingly, the EEOC also filed six cases against other state and local government units in the last two months.

But here is the kicker: despite this frenetic litigation activity, on September 14, 2011, the Senate Appropriations Committee approved a $359 million EEOC budget for FY 2012 – $7.3M less than the EEOC’s fiscal 2011 budget. Translation:  the EEOC is now under even greater pressure to do more with less. Filing a federal court complaint is relatively inexpensive, but the government’s 175 new cases must now be staffed and fought, potentially straining the EEOC’s reduced resources to the breaking point. This is reminiscent of the high-pressure environment that spawned the EEOC’s Systemic Initiative in the first instance; an initiative that revolutionized the way the EEOC approached litigation.

It is not unreasonable to expect a shift in EEOC tactics and strategies to manage this high-pressure environment. We predict that the EEOC will have no choice but to focus on its large-scale cases or see them crumble under their own weight. With a shift of resources to big-ticket litigation, employers may have early-out opportunities in the single-claimant space, with the EEOC seeking Consent Decrees more readily in those relatively low-stakes matters.

At the same time, shifting resources to the larger cases may prove difficult. The year-end filing figures discussed above represent only new cases.  The EEOC has dozens of existing systemic cases in various stages of maturity in every region of the country (the EEOC filed 92 such actions last year). Employers now facing this litigation may be well-served to become more strategic in these cases. At a time when the EEOC is stretched thin, accelerated litigation schedules and push back on EEOC “war of attrition” tactics may well pay dividends. An early push by employers to make the EEOC fight all of the cases it has filed may have an aggregate effect on the amount of attention the EEOC can truly pay to any one case. In the end, the EEOC must be forced to put its money where its mouth is, and litigate the cases it has filed.

Time will tell if the EEOC’s shotgun approach to its Red Zone filings was wise. One thing is for certain: FY 2012 will be an interesting year, presenting unprecedented challenges – and perhaps opportunities – for employers targeted by EEOC litigation.