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

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

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

FY 2020: Political Developments Guide The EEOC’s Initiatives

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

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

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

A Surge In Recoveries

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

Additional Progress Reducing The Commission’s Backlog

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

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

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

Prioritizing Alternative Dispute Resolution

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

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

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

Implications For Employers

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

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