By Gerald L. Maatman, Jr., Christopher DeGroff, Matthew J. Gagnon, and Sarah K. Bauman

Seyfarth Synopsis: As 2022 begins, we are pleased to present our annual selections for the five most intriguing developments in EEOC litigation during 2021, as well as our annual report on developments and trends in EEOC-initiated litigation. This year’s book, entitled EEOC-Initiated Litigation: 2022 Edition, examines the EEOC’s filings in 2021, and analyzes the significant legal decisions and trends impacting EEOC litigation in 2022. We hope that employers will benefit from this deep dive into how the EEOC’s priorities reveal themselves through litigation.

The EEOC pursues dozens of cases across the country annually, guided by its strategic enforcement priorities and objectives. Each year, we analyze those new case filings, and legal decisions handed down by courts across the country, and we publish that analysis in a comprehensive yearly report entitled EEOC-Initiated Litigation: 2022 Edition. In the report, we outline noteworthy trends and try to identify how the Commission intends to pursue its objectives in the year to come.

Our goal is to assist clients to comply with existing laws, and to protect themselves against becoming future targets of enforcement. Our annual report is designed for business leaders, human resources professionals, corporate counsel, and other corporate decision-makers. We hope that it continues to provide them with useful commentary and analysis as they navigate EEOC-initiated litigation in 2022. This year’s book is available here.

In terms of the most interesting decisions and developments of the year, here is our list of the “top five” most intriguing developments of 2021:

Development #1: The Beginning Of A Post-Bostock Battle Between LGBTQ Rights And Religious Freedom

In recent years, the EEOC has aggressively campaigned to have LGBTQ discrimination recognized as a prohibited form of discrimination under Title VII. That issue was finally settled in the landmark decision of Bostock v. Clayton County, 140 S. Ct. 1731 (2020). On June 15, 2020, the U.S. Supreme Court held that Title VII prohibits discrimination against gay or transgender employees because it is tantamount to a form of sex discrimination. At the same time, the EEOC has also continued to direct its attention to religious discrimination and accommodation issues under Title VII. Many commentators see a potential conflict brewing between the religious liberty rights protected by the federal Religious Freedom Restoration Act (“RFRA”) and the Court’s Bostock decision.

The potential conflict between Bostock and the RFRA came to a dramatic head in at least one case this year, Bear Creek Bible Church v. EEOC, 2021 WL 5449038 (N.D. Tex. Nov. 22, 2021), a suit involving a non-denominational Christian Church and for-profit Christian institution that sought to avoid Title VII’s protections of LGBTQ employees under Botstock. In its opinion on November 22, 2021, the District Court held that the Christian Church was exempt from Title VII under the Act’s statutory exemption, and, although the for-profit Christian institution did not qualify for this exemption, it was not required to comply with Title VII since such compliance would substantially interfere with its free exercise of religion. The District Court observed that Bostock “expressly left open the implications for religious liberties and other matters arising from its decision,” and reasoned that “[f]orcing a religious employer to hire, retain, and accommodate employees who conduct themselves contrary to the employer’s views regarding homosexuality and gender identity” was not the least restrictive means of promoting that interest.

This is just one early decision exploring the potential conflict between LGBTQ and religious rights under Title VII. The full implications of Bostock’s impact on the American workforce will have to wait for future developments as it continues to be applied in courts across the county.

Development #2: A Focus On Pregnancy Discrimination

Pregnancy discrimination has been highlighted by the EEOC as an emerging and developing issue of concern for almost a decade. Yet cases alleging such discrimination and case law interpreting this area of the law have been few and far between. This year was a notable exception. In EEOC v. Wal-Mart Stores East, LP,  2021 U.S. Dist. LEXIS 214357 (S.D. Tex. Nov. 5, 2021), the EEOC alleged that an employer discriminated against a group of pregnant employees by failing to accommodate their pregnancy-related medical restrictions by allowing them to work light duty assignments under a temporary alternative duty program. Relying on the recent Supreme Court case (the ruling in Young v. United Parcel Service, Inc., 575 U.S. 206 (2015)), the District Court held that the EEOC must only show that the charging party’s employer accommodated others “similar in their ability or inability to work” and that employees can prove pretext “by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers” and the employer’s “legitimate, non-discriminatory reasons are not sufficiently strong to justify the burden.” Because the EEOC failed to show whether and to what extent other injured employees (who were not injured on the job) were allowed to use the program, and, because pregnant employees and employees who were disabled (but not injured on the job) were apparently equally able to access the employer’s ADA accommodation policies, the District Court ruled in favor of the employer.

Development #3: A Return To The Basics In Female Employee And Applicant Discrimination

In EEOC v. Stan Koch & Sons Trucking, Inc., 2021 U.S. Dist. LEXIS 168297 (D. Minn. Aug. 30, 2021), the EEOC advanced a theory of liability that has flown under the radar in recent years. Specifically, the EEOC alleged that the use of a physical abilities test had a discriminatory impact on female applicants and introduced statistical evidence to prove its theory. The District Court ultimately concluded that the physical abilities test constituted “disparate impact” discrimination under Title VII, which prohibits facially neutral employment practices that fall more harshly on one group than another and cannot be justified by business necessity. The EEOC’s efforts to eliminate potential discrimination involving pre-employment screening tests has a long history. Those cases have fallen out of fashion somewhat as the EEOC has focused its attention on other ways that employers allegedly erect barriers to recruitment and hiring of certain groups. But the rise of third-party firms who offer assistance to employers in making employee selections could give rise to a new wave of these types of lawsuits. Employers who use such services must be certain that the methods they use are suited for their purpose and have been properly vetted for disparate impact.

Development #4: Pay Equity Continues To Loom As A Potent Source Of Discrimination Litigation

Lawsuits brought under the Equal Pay Act (“EPA”) tend to be highly fact-driven and therefore challenging for employers to dispense with through motion practice before trial. This is especially true when it comes to EEOC-initiated litigation. For example, in a recent case, EEOC v. University of Miami, 2021 U.S. Dist. LEXIS 186479 (S.D. Fla. Sept. 29, 2021), the EEOC alleged that the Defendant paid a female professor less than her male counterpart who performed the same job. The Defendant had hired the charging party as an associate professor during the same year that it hired a male professor with comparable qualifications for a lower-ranked position in the same department at a higher salary. The Defendant asserted that the EEOC could not establish a prima facie case of pay discrimination under the EPA because the professors had never performed substantially equal jobs. The District Court disagreed, finding that there remained a genuine issue of fact on this issue and as to whether the pay differential was based on factors other than sex.

Development #5: A Novel Procedural Issue Is Put To The Test

In EEOC v. Activision Blizzard, No. 21-CV-7682 (C.D. Cal. Dec. 20, 2021), the EEOC settled an enforcement lawsuit with an employer, and subsequently the California Department of Fair Employment and Housing (“DFEH”) objected to it. The District Court refused to allow the DFEH to intervene in the action and challenge the proposed consent decree and settlement on the ground that it had an interest in preserving potential state law claims against the Defendant. This ruling is the first time a federal court has decided whether to allow intervention on this basis, and the decision is certainly a favorable one for employers.  In this case, the EEOC filed suit on behalf of female employees alleging that they faced gender-based harassment and retaliation. The parties ultimately reached a settlement and proposed a consent decree that established a voluntary claims process. The DFEH sought to challenge the voluntary claims process because it claimed to have an interest in protecting its ability to prosecute its own parallel state court case against the Defendant. Since the consent decree released all state law claims, the DFEH claimed the consent decree would allow the Defendant to destroy evidence relevant to the DFEH’s state court case. The District Court disagreed and denied the motion. The District Court held that the interest actually belonged to those undergoing the claims process, not the DFEH, and if it were to accept the DFEH’s argument, the District Court would essentially be able to intervene in any employment action in the state. The District Court also reasoned it would be unlikely that it would ever enter a consent decree that would purport to allow or mandate destruction of evidence relevant to litigation.

Summing It All Up

In most respects, FY 2021 represented a return to form for the EEOC following a year of transition, stemming from significant changes to many of its programs in the midst of the global COVID-19 pandemic and significant leadership changes. The surge in the number of cases filed by the EEOC, particularly during the month of September, could mean that FY 2022 will be a much more litigation-intensive year. And, given the leadership changes that have rocked the agency over the past few years, it may also reveal a noticeable change in strategic direction as well. If so, employers should expect to see such new developments manifest themselves in the theories the Commission chooses to advance and the types of cases it files.

We will of course continue to monitor these developments, and we look forward to sharing our thoughts and analysis in the coming year.