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

This past week the U.S. Equal Employment Opportunity Commission issued its FY 2011 Performance and Accountability Report. The Report was posted on line at the EEOC’s website with a series of press releases. The agency’s fiscal year ends on September 30th each year, and the Report details the EEOC’s activities from October 1, 2010 to September 30, 2011. It is quite a Report, and very telling in the story told by the Commission. As such, it should be required reading for corporate counsel, business executives, and HR professionals who deal with employment-related litigation issues.

The Report details an inevitable by-product of our nation’s economic woes. In FY 2011, the EEOC received a new record high of 99,947 discrimination charges against private sector employers. By comparison, the EEOC last year reported receiving a record high of 99,922 private sector discrimination charges in FY 2010. This statistic confirms what employers are experiencing – terminations and adverse employment decisions are increasingly high-risk situations, as workers who lose their jobs often file discrimination charges not only on account of believing themselves to be discrimination victims, but also out of a fear that self-preservation compels them to “sue now” if their prospects for re-employment are dim in today’s economy. It also comes as no surprise then that the EEOC recovered a record $364 million for discrimination victims through administrative enforcement.  Title VII claims still dominate these filings, accounting for 75% of the charge filings in FY 2011, but ADA claims are also strongly represented, and represent a disproportionate portion of the overall settlements last year.

We think the more significant take-away from the Report, however, is the EEOC’s focus and “trumpeting” of its systemic litigation initiative. The key passages in the Report are at pages 4, 19, 20, and 21. The EEOC’s systemic program – in which the Commission emphasizes the identification, investigation, and litigation of discrimination claims affecting large groups of “alleged victims” – continues to grow. The key numbers reported by the EEOC include: 

  • As of the close of the last fiscal year on September 30, the EEOC had 580 systemic investigations involving more than 2,000 charges under way. This is a significant bump from last year, which saw 468 active systemic investigations.
  • During FY 2011, the EEOC filed 261 lawsuits, of which 23 involved claims of systemic discrimination “involving large numbers of people” and 61 cases involved multiple alleged discrimination victims of 1 to 20 individuals.
  • The EEOC resolved 277 merits lawsuits in FY 2011, resulting in a total monetary recovery of $90.9 million.
  • As of September 30, 2011, the EEOC had 443 cases on its active docket, of which 116 involved multiple aggrieved parties and 63 involved challenges to alleged systemic discrimination.
  • The EEOC completed work on 235 systemic investigations in FY 2011, demonstrating an accelerated rate of handling these matters as the EEOC only cleared 165 such investigations in FY 2010. 
  • The EEOC became more aggressive in subpoena enforcement actions associated with these investigations as well, filling a record 36 such actions, up from 28 last year. 
  • These FY 2011 systemic investigations resulted in 96 “probable cause” determinations, and 35 settlements or conciliation agreements that yielded a total recovery of $9.6 million – a jump from $6.7 million in 2010. 
  • The EEOC was not content with simply being reactive this past year, either.  In FY 2011, the EEOC initiated 47 charges on its own behalf.  These “Commissioners’ Charges” are up from only 39 in FY 2010.

These numbers are remarkable. They evidence an agency with a laser-focus on bigger, more high-impact litigation. The numbers of systemic investigations and lawsuits are the largest since adoption of the systemic program in 2006.  We expect employers will see even more high-impact litigation in FY 2012, as page 20 of the Report ominously predicts that “[b]ased on the large volume of systemic charges currently in investigation, the quantity of systemic lawsuits and their representation on the total docket is expected to steadily increase.” 

But there is also another reason for the EEOC pursuing (and at times, creating) large-scale cases: political survival.  We reported earlier this year that the EEOC was seeking more money for its 2012 budget to focus on its ever-increasing diet of “high impact” cases. This week, however, Congress approved a measure that cut $6.6 million from the Commission’s annual budget. The systemic initiative was born out of the EEOC facing forced budget austerity in 2005 and 2006. To stay relevant, the EEOC has expressed that it will seek more large-scale cases to push its various initiatives and agendas. 

The bottom line is that there are more employment discrimination charges being filed, which necessarily will lead to more employment discrimination lawsuits; in addition, the EEOC is gearing up with more personnel and a focus on systemic “big case” investigations against employers, and while 2011 had more such systemic cases brought than ever before, employers can expect even more in 2012.