Seyfarth Synopsis: Governmental enforcement litigation increased in 2018 despite the U.S. Equal Employment Opportunity Commission’s (“EEOC”) first full year under the presumably business-friendly Trump Administration. However, while the EEOC’s filing numbers went up, the value of the top 10 governmental settlements dropped by more than $350 million. As a result, these developments represent the third trend of the 15th Annual Workplace Class Action Litigation Report (“WCAR”). In today’s post, our blog readers to see and hear WCAR author Jerry Maatman’s presentation from Seyfarth Shaw’s recent “Top Trends In Workplace Class Action Litigation” book launch event. Watch Jerry discuss the government’s 2018 enforcement litigation activity in the link below!
5 Key Trends In Workplace Class Action Litigation For 2018: Trend #3 Enforcement Up, Values Down Video
Seyfarth Synopsis: Last week, our blog posting analyzed another busy year on the governmental enforcement front, with a key focus on the U.S. Equal Employment Opportunity Commission (“EEOC”). Though many expected the EEOC’s litigation activity to decline in its first full year under the Trump Administration, the Commission’s filing numbers actually went up in 2018, whereas the top 10 settlements dropped in comparison to 2017. Today, the Workplace Class Action Report (WCAR) video series continues with author Jerry Maatman’s explanation of the third trend of 2018, governmental enforcement litigation. Watch in the link below!
5 Key Trends For Workplace Class Action Litigation For 2018: Trend #3 Governmental Enforcement Litigation Trends In 2018
By: Seyfarth Synopsis: On the governmental enforcement front, the change-over from the Obama Administration to the Trump Administration had little to no impact on reducing the pace of litigation filings and settlements in 2018 at least insofar as EEOC litigation was concerned. At the same time, while the number of lawsuits filed went up, the aggregate recoveries – measured by the top 10 settlements in government enforcement litigation – went down.
To the extent the Trump Administration aims to change those dynamics, its agency appointees at the DOL either were not nominated in time to influence their respective agencies or were not put into place until mid to late 2018. Insofar as the EEOC is concerned, the Trump nominees for the Chair, two Commissioners, and the general counsel were never voted upon by the Senate in 2018. The result was a delay in changes to agency policies and priorities. In this respect, fundamental changes to patterns in government enforcement litigation are more akin to changing the direction of a large sea-going cargo tanker than a small motor boat. Change is inevitable, but it takes time. Thus, the impact of change on governmental litigation enforcement trends is not likely to be felt until well into 2019.
As a result, the EEOC’s lawsuit count increased again in 2018. It filed 199 merits lawsuits, and 20 subpoena enforcement actions. By continuing to follow through on the systemic enforcement and litigation strategy plan it announced in April of 2006 (that centers on the government bringing more systemic discrimination cases affecting large numbers of workers), the EEOC filed more cases as well as more systemic lawsuits. As 2018 demonstrated, the EEOC’s prosecution of pattern or practice lawsuits remained an agency-wide priority backed up by the numbers. Many of the high-level investigations started in the last three years mushroomed into the institution of EEOC pattern or practice lawsuits in 2018.
By comparison to previous years, 2018 was a big one for the EEOC in terms of the number of lawsuits filed. Total merits filings were up more than 100% as compared to 2016. In fact, the EEOC filed more lawsuits in the month of September of 2018 than it did in all of the months of 2016 combined.
This past year also marked the second year of the EEOC’s new Strategic Enforcement Plan (“SEP”), which is intended to guide enforcement activity for 2017 to 2021. Although the new SEP outlines the same six enforcement priorities as in prior years, few people familiar with how the agency pursues its objectives expect that the EEOC will continue to enforce those priorities in the same way under the Trump Administration. The six enforcement priorities include: (1) the elimination of systemic barriers in recruitment and hiring; (2) protection of immigrant, migrant, and other vulnerable workers; (3) addressing emerging and developing issues; (4) enforcing equal pay laws; (5) preserving access to the legal system; and (6) preventing harassment through systemic enforcement and targeted outreach.
Each of these priorities can be interpreted in multiple ways. For example, the EEOC has consistently focused on the protection of lesbians, gay men, bisexuals, and transgender people as one of the most important emerging and developing issues in the workplace. The EEOC’s efforts in this area have resulted in a body of case law in many jurisdictions over the past several years that now holds that discrimination against transgender individuals, or on the basis of sexual orientation, is a form of sex discrimination prohibited by Title VII. However, the Department of Justice under President Trump has recently disagreed with that interpretation. This may signal that this is one area that will shift in 2019 as high-level personnel changes are made within the EEOC.
The EEOC also focused in the past year on employers’ utilization of social media and the use of algorithms and information available on the internet to screen job applicants. Recent comments by the EEOC’s staff indicate that this may be one of the “barriers to recruitment and hiring” that the agency will focus on in 2019 and beyond. Along the same lines, the EEOC has shown an increased willingness to bring ADEA lawsuits against employers – especially in the hospitality industry – that it believes are discriminating against hiring applicants aged 40 and over.
The EEOC also recently issued new guidance impacting two of its enforcement priorities, including preserving access to the legal system (i.e., through increased enforcement of the anti-retaliation provisions of Title VII, the ADA, and the ADEA) and preventing harassment in the workplace. Among other things, the retaliation guidance expands the definition of “adverse action” to include one-off incidents and warnings, as well as anything that reasonably could be likely to deter protected activity. With respect to preventing harassment, the new guidance clarifies the EEOC’s thinking about what constitutes a hostile work environment and the defenses available to employers when that hostile work environment is the result of supervisors’ misconduct. Although important developments in their own right, the real impact of these new guidelines may not be clear until employers see how they are interpreted by the EEOC in active litigation situations. Like the priorities themselves, that will be impacted by whatever new policies and directives are put in place by the new Trump appointees.
Furthermore, the EEOC has focused on #MeToo issues with more intensity than ever before. The most striking trend of all is the substantial increase in sex-based discrimination filings, as 74% of the EEOC’s Title VII filings this past year targeted sex-based discrimination. By comparison, in 2017, sex-based discrimination accounted for 65% of Title VII filings. Of the 2018 sex discrimination filings, 41 filings included claims of sexual harassment. The total number of sexual harassment filings was notably more than 2017, where sexual harassment claims accounted for 33 filings.
It also appears that the EEOC is finally executing on its oft-stated intention to increase enforcement under the Equal Pay Act (“EPA”). The EEOC filed 11 EPA lawsuits in 2018. This is a significant increase over prior years (six EPA lawsuits were filed in 2016, five in 2015, and two in 2014). However, its enforcement efforts in this area may have suffered a setback when the changes the EEOC planned to make to the EEO-1 reporting requirements were put on hold in 2018. It was widely speculated that the new reporting requirements would have assisted the EEOC in bringing more claims under the EPA. Under the leadership of the new Administration, the Office of Management and Budget, pursuant to its authority under the Paperwork Reduction Act, stayed implementation of the EEOC’s new EEO-1 regulations this past year.
The Commission’s 2018 Performance Accountability Report announced that its systemic litigation program continues to be a focus for the EEOC. The EEOC labels a case “systemic” if it “has a broad impact on an industry, company, or geographic area.” The EEOC’s FY 2018 report outlined the EEOC’s activity from October 1, 2017 to September 30, 2018. It showed the following:
The EEOC’s field offices resolved 409 systemic investigations and collected $30 million in remedies (compared to 329 systemic investigations and $38.4 million in 2017). The figures for 2018 constitute a significant increase in the number of investigations over the previous year, but a marked decrease in the amounts for monetary relief for systemic cases.
The EEOC also issued cause determinations finding discrimination in 204 systemic investigations (compared to 167 in 2017 and 113 in 2016). Hence, the EEOC resolve more systemic investigations compared to 2017, and made considerably more cause determinations that may well result in an increase in systemic lawsuits filed in the coming year.
The EEOC secured approximately $505 million in total relief in 2018 in litigation, mediations, and pre-litigation investigations. This tracks closely the total relief figure of $484 million for 2017. It also includes $354 million obtained through mediation, conciliation, and settlement for victims of discrimination in private, state and local government, and federal workplaces. That number was marginally down from 2017, which saw $355.6 million in such recoveries.
Litigation recoveries, on the other hand, were relatively flat as compared to the past few years, hitting only $53.5 million in 2018. This was slightly higher than in 2017 and 2016, which saw the EEOC obtain $42.4 million and $52.2 million respectively, and lower than in 2015 when the EEOC obtained $65.3 million in litigation recoveries.
The EEOC filed 199 merits lawsuits in 2018. This is up from 184 lawsuits in 2017, and more than double the 86 merits lawsuits that were filed in 2016. Of the lawsuits, 117 were on behalf of individuals, 45 were non-systemic suits with multiple victims, and the other 37 were systemic claims. The EEOC also filed 20 subpoena enforcement actions in 2018. Hence, the EEOC in the first and second years of the Trump Administration was far more active in filing lawsuits than in the final year of the Obama Administration.
In FY 2018, the EEOC received 76,418 charges, as compared to 99,109 charges in 2017. Furthermore, the EEOC decreased its charge inventory by 19.5%, to 49,607 charges. This is the lowest level of charge inventory in 10 years and represents a significant reduction compared to FY 2017, when the EEOC reduced its outstanding charges by 16.2%.
In contrast to the EEOC, the DOL’s agenda in 2018 reflected that its new Republican-appointed decision-makers had been in place for the better part of the past year. That being said, however, the DOL’s Wage & Hour Division (“WHD”) still did not have a Senate-confirmed Administrator nominated by the Trump Administration. Despite the lack of a confirmed leader (or perhaps because of it), the WHD continued its aggressive enforcement activities, setting a new record of $304 million in back wages recovered during 2018, which represents an increase of more than $30 million over the previous year.
At the same time, however, the DOL increased its focus on compliance assistance, holding more than 3,600 outreach events, which also represented a record high for the agency. The DOL also returned to its historical practice (abandoned during the Obama Administration) of issuing opinion letters, which allows employers and employees alike to seek formal guidance from the WHD on some of the most challenging wage & hour issues. In 2018, the WHD issued nearly 30 such letters, which addressed tipped employees, the salary basis test, volunteer status, travel time obligation, and pay required by the FMLA, among a number of other topics.
This past year also brought the return of another program – the WHD’s supervision of wage & hour back pay awards following an employer’s self-audit or similar practice. Early in the year, the DOL announced the Payroll Audit Independent Determination (“PAID”) program. The PAID program allows employers to identify potential violations, the affected employees, the relevant time frame, and the amounts due, and then present that information to the WHD, in addition to some additional certifications regarding compliance. Upon review by the DOL, the back wages are paid, and, if the employee accepts the back wages, the employee waives his or her right to a private right of action. That waiver, however, is limited to the scope of the issues and timeframe. Initially launched as a six-month pilot program, the PAID program was extended for an additional six months, thereby keeping this option open for employers well into 2019.
Not to be outdone, the National Labor Relations Board (“NLRB”) also undertook an ambitious agenda in 2018. It reconsidered well-settled NLRB principles on joint employer rules and representative elections, entertained the possibility of extending the protections of the National Labor Relations Act (“NLRA”) to college athletes, and litigated novel claims seeking to hold franchisors liable for the personnel decisions of franchisees. By the end of the year, however, the Trump Administration’s appointees began to roll-back NLRB precedents and positions that had been espoused during the Obama Administration, such as a reversal of the expansive view of joint employer liability, allowing more deference to employer workplace rules, and eliminating protections for obscene, vulgar, and inappropriate activity under the NLRA.
Implications For Employers
Despite predictions to the contrary, the EEOC has continued its “business as usual” aggressive litigation despite two years under the Trump administration. Changes are, however, afoot. The Senate has still not confirmed two Trump-nominated Republican Commissioners, including one who is set to become Chair of the Commission, or Trump’s pick to be the EEOC’s General Counsel. (One of those nominated to be a Commissioner, Daniel Gade, recently withdrew from consideration on December 21, 2018, citing the delays in the nomination process as the reason.) Eventually, the impact of the injection of new decision makers will be felt, perhaps dramatically. That makes it especially important for employers to monitor these developments in 2019. Of course, we will have our ear to the ground, and look forward to sharing our thoughts and prognostications with our readers throughout the new year!
The Top Five Most Intriguing Developments Of 2018 In EEOC-Initiated Litigation (And Preview Of Our Annual EEOC Litigation Report)
By: Gerald L. Maatman, Jr., Christopher J. DeGroff, Matthew J. Gagnon, and Kyla J. Miller
Seyfarth Synopsis: We are once again pleased to offer our readers an analysis of the five most intriguing developments in EEOC litigation in 2018, in addition to a pre-publication preview of our annual report on developments and trends in EEOC-initiated litigation. This year’s book, entitled EEOC-Initiated Litigation: FY 2018, provides a comprehensive examination of the EEOC’s FY 2018 filings, and the major decisions handed down this year in pending EEOC litigation.
Each year, we conduct a thorough analysis of new lawsuits filed by the EEOC and major case decisions handed down by courts across the country in EEOC litigation. Our goal is to identify key trends regarding new areas of focus for the EEOC and significant procedural or substantive developments in EEOC litigation. We package those trends and developments into one comprehensive volume, EEOC-Initiated Litigation: FY 2018, which we provide to our clients so they can use that information in structuring their compliance programs and to avoid becoming a target of the EEOC’s enforcement agenda. Our annual report is targeted towards HR professionals, corporate counsel, and other corporate decision-makers.
This year, we have analyzed trends and developments in light of the strategic priorities identified by the EEOC itself in its Strategic Enforcement Plan. Over the years, we have consistently found that those strategic priorities guide the EEOC’s actual enforcement agenda. How the EEOC has interpreted and defined its agenda in light of those priorities is one of the key insights that we hope to provide in our annual report.
The full publication will be offered for download as an eBook. To order a copy, please click here.
As always, we like to take a moment at the end of the year to reflect on what we consider to be the most intriguing EEOC-related decisions and developments of the year. Here is our list of the “top five” most intriguing developments of 2018.
Intriguing Developments 1 and 2: Pleading Tactics
A pair of cases decided under the ADA brought some interesting insight into the relative advantages and disadvantages the EEOC enjoys at the pleading stage.
In EEOC v. UPS Ground Freight, Inc., the EEOC took the unusual and aggressive step of arguing, in a motion for judgment on the pleadings, that the language of a collective bargaining agreement established a prima facie case of a discriminatory policy under the ADA because it paid drivers disqualified for medical reasons less than what it paid drivers disqualified for non-medical reasons. The Court granted the EEOC’s motion, and issued a permanent injunction against the company, holding that the agreement’s language was plain and unambiguous, and that no case-by-case analysis was required because the language itself was enough to establish that unlawful discrimination was part of the employer’s “standard operating procedure.” This decision is remarkable for a number of reasons, but perhaps most especially because of the EEOC’s unusually aggressive – and successful – tactic to establish a prima facie case of liability at the very outset of the case. Employers should be wary of the EEOC using this tactic in future cases.
In EEOC v. Prestige Care, Inc., however, the EEOC did not fare so well. The EEOC sued Prestige Care on behalf of 13 identified claimants for violations of the ADA, arguing that the employer followed policies that did not permit reasonable accommodations for qualified individuals. In a motion to dismiss, the employer argued that the EEOC’s complaint was deficient as to ten of the 13 claimants because it failed to allege they had impairments that affected a major life activity, or failed to identify essential job functions, and therefore had not alleged that they had plausible ADA claims. The EEOC argued that it was not required to do so because it has the unique and broad authority to bring lawsuits in its own name on behalf of a group of unnamed individuals. The Court disagreed, holding that the EEOC is not immune to normal pleading requirements. When the EEOC identifies additional victims who have allegedly suffered disability discrimination, it must plausibly allege that those individuals are protected by the ADA. In other words, despite the often lopsided relationship between employers and the agency during the investigative stage, the parties are on equal footing in the court system.
Intriguing Developments 3 and 4: LGBT Discrimination, The Debate Rages On
For the past several years, the EEOC has maintained that discrimination on the basis of sexual orientation or gender identity is a form of sex discrimination prohibited by Title VII because it is tantamount to discrimination for failure to adhere to perceived gender stereotypes. The U.S. Department of Justice under the Trump administration has conspicuously broke with the EEOC, arguing in a number of amicus briefs that Title VII does not cover those forms of LGBT discrimination. Nevertheless, the EEOC and private plaintiffs continue to rack up victories on this front. In Zarda v. Altitude Express, Inc., the Second Circuit ruled en banc that Title VII prohibits discrimination on the basis of sexual orientation. The Second Circuit has now joined the Seventh Circuit, the EEOC, and a number of district and administrative courts across the country that have interpreted Title VII to extend its prohibition of sex discrimination to sexual orientation.
Will the Supreme Court step in? With the federal circuits divided on this issue, not to mention the vastly divergent interpretations of Title VII by the agencies entrusted to enforce Title VII, many observers considered this issue ripe for review by the U.S. Supreme Court. And, in fact, the Supreme Court had set a date in November of 2018 to decide whether to grant review of three cases, including Zarda, which had addressed this issue. In November of 2018, the Supreme Court delayed consideration of that issue and then, abruptly, removed it from its calendar altogether. The original date had been set in September of 2018, before the bruising confirmation fight over Justice Kavanaugh. Some have speculated that this is evidence that the Supreme Court is trying to avoid controversial cultural issues during Kavanaugh’s first term to allow time for the dust to settle from his confirmation battle. In the meantime, employers are forced to contend with a confusing patchwork of interpretations regarding the scope of Title VII that can vary from Circuit to Circuit, and from District to District.
Intriguing Development 5: The #MeToo Movement Surges
Our last pick as a top 5 development of the year is actually an aggregation of the dozens of cases the EEOC filed alleging sexual harassment. As we previously reported here, one of the most striking trends of FY 2018 has been the huge spike in sex-based discrimination filings, especially those alleging sexual harassment. Lest there be any doubt as to whether this represents a significant shift in priorities, on October 4, 2018, just four days after the end of the EEOC’s 2018 fiscal year, the agency took the unusual step of announcing its preliminary FY 2018 sexual harassment data. Employers usually must wait until the EEOC releases its Performance and Accountability Report in mid-November to see that kind of data. The EEOC trumpeted filing 66 harassment lawsuits in FY 2018, 50% more than FY 2017. Given the intense focus on this issue, we strongly suspect that this trend is here to stay for the foreseeable future.
Despite predictions to the contrary, the EEOC has continued its “business as usual” aggressive litigation despite two years under the Trump administration. Changes are, however, afoot. The Senate has still not confirmed two Trump-nominated Republican Commissioners, including one who is set to become Chair of the Commission, or Trump’s pick to be the EEOC’s General Counsel. (One of those nominated to be a Commissioner, Daniel Gade, recently withdrew from consideration on December 21, 2018, citing the delays in the nomination process as the reason.) Eventually, the impact of the injection of new decision makers will be felt, perhaps dramatically. That makes it especially important for employers to monitor these developments in 2019. Of course, we will have our ear to the ground, and look forward to sharing our thoughts and prognostications with our readers throughout the new year!
Readers can also find this post on our EEOC Countdown blog here.
An Agency Building Momentum: EEOC Report Card Touts Millions In Recoveries, Committed Focus On Sexual Harassment
By Gerald L. Maatman, Jr., Christopher J. DeGroff, Matthew J. Gagnon and Alex W. Karasik
Seyfarth Synopsis: On November 15, 2018, the EEOC released its annual Performance and Accountability Report (‘PAR”) for Fiscal Year 2018 (here) – a year-end report card of sorts, and a critical publication for employers to consider as they analyze the EEOC’s activities over the past year, and its anticipated direction for the future.
In its first year under the Strategic Plan for Fiscal Years 2018 through 2022 (“Strategic Plan” or “Plan”) (blogged about here), the EEOC reported significant increases in its outreach efforts and enforcement actions, as it highlighted new intake procedures, extensive training programs, and aggressive litigation. Particularly noteworthy was the EEOC’s track-record relative to workplace sexual harassment litigation, which has become a top priority as the #MeToo movement has spotlighted the issue.
The 2018 PAR is a “must read” for corporate counsel, as it provides valuable insights into the agency’s mission, as well as warnings that employers should heed.
Raking In Recoveries
In FY 2018, the EEOC recovered more than $505 million for alleged discrimination victims. This represents a significant jump from $484 million in FY 2017 (see more here), and $482.1 million in FY 2016 (see more here). But while the total monetary relief figure ballooned, the relief obtained through mediation, conciliation, and settlement declined from $355.6 million in FY 2017 to $354 million in FY 2018. Conversely, litigation recoveries jumped to $53.6 million in FY 2018 from $42.4 million in FY 2017 (the FY 2016 and 2015 numbers were $52.2 million and $65.3 million respectively, more closely mirroring this year’s figures).
Firing Up The Filings
The EEOC reported filing 199 merits lawsuits in FY 2018, a slight uptick from the 184 merits lawsuits it filed in FY 2017. This included 117 suits on behalf of individuals, 45 non-systemic suits with multiple victims, and 37 systemic suits. The EEOC labels a case “systemic” if it “has a broad impact on an industry, company or geographic area.”
For employers, the 37 systemic lawsuits is a particularly noteworthy figure. In FY 2017, the Commission filed 30; in FY 2016 it filed 18; and in FY 2015 it filed 16. The acceleration in systemic lawsuits illustrates that the EEOC is not backing down on its agenda of aggressively litigating “bet-the-company” cases. Given the heightened financial exposure in systemic litigation, this is one trend employers should certainly heed.
Making Its Mark In The #MeToo Movement
Workplace harassment has never been more in the forefront of the EEOC’s focus than it is today. The EEOC’s PAR emphasized that it reconvened the Select Task Force on the Study of Harassment in the Workplace for a public meeting, “Transforming #MeToo into Harassment-Free Workplaces,” to examine difficult legal issues and to share innovative strategies to prevent harassment. The Commission reported that it recovered a whopping $70 million for the victims of sexual harassment through administrative enforcement and litigation in FY 2018, up dramatically from $47.5 million in FY 2017. Unquestionably, given the increased visibility of workplace sexual harassment based on various high-profile media coverages in 2018, the Commission has turned up the heat on investigations and litigation in this area.
Balancing The Backlog
For several years, the EEOC has been working through its significant backlog of pending charges. As EEOC Acting Chair Victoria Lipnic noted in the PAR, “[s]oon after I became Acting Chair in 2017 I made addressing the backlog a priority, and as an agency, we began to share strategies that have been particularly effective in dealing with the pending inventory, while ensuring we are not missing charges with merit.” Chair Lipnic has made good on her word, noting the EEOC dramatically reduced its pending inventory in FY 2018 to 49,607 charges, a decrease of 19.5% from FY 2017 and 34% from FY 2015. One area that remains ripe for improvement, however, is the backlog of Freedom of Information Act requests, as the PAR reports that the EEOC’s FOIA backlog increased by 185% at the end of FY 2017, but only decreased by 7% in FY 2018.
Portal To The Future
As part of its mission to facilitate the intake process, the launch of a nationwide online inquiry and appointment system as part of the EEOC’s Public Portal resulted in a 30% increase in inquiries and over 40,000 intake interviews. These figures come as a result of the Commission’s recent commitment to enhance its Digital Charge System and allow technological advances to ease the burden caused by an increased volume of activity.
The Commission additionally noted that its outreach programs reached more than 398,650 workers, employers, their representatives and advocacy groups this past fiscal year at more than 3,900 events conducted by the EEOC. This reflects the EEOC’s commitment to preventing workplace harassment through proactive measures, while simultaneously increasing public awareness about the mission of the Commission.
Implications For Employers
There were those who believed the EEOC’s enforcement efforts would downshift under the current administration. Our year end reports, and the EEOC’s own PAR report card, demonstrates quite the opposite. The EEOC has made it clear that it is ramping up across the board, not slowing down. This includes a significant increase in filings, recoveries, and outreach efforts. The EEOC’s PAR is a helpful resource for employers to chart the danger areas in today’s tumultuous political and social environment. We will continue to report on the EEOC’s enforcement trends. Stay tuned.
Readers can also find this post on our EEOC Countdown blog here.
What Is Hot And What Is Not At The EEOC
Seyfarth Synopsis: As we approach the start of the holiday season, employers should be mindful of the inherent risk that accompanies holiday parties and other seasonal events. Notably, in light of the U.S. Equal Employment Opportunity Commission’s (“EEOC”) year-end filing numbers, employers must take extra caution to stay off the EEOC’s radar. In today’s video, Associate Alex Karasik and Partner Jerry Maatman analyze the EEOC’s 2018 fiscal year trends, and discuss how employers can avoid becoming the target of an EEOC-initiated lawsuit.
In its first full year under the Trump Administration, to the surprise of many observers who thought the EEOC’s filing numbers would decline after a busy FY 2017, the EEOC continued to increase its filing numbers. In fact, the Commission filed 15 more lawsuits in FY 2018 as compared to last year, and more than twice as many as the final year under the Obama Administration in FY 2016. Additionally, per a recent EEOC press release, the Commission announced it recovered $505 million for victims of workplace discrimination this year, an increase of over $20 million in comparison to FY 2017.
However, overshadowing the general increase in filing activity was the EEOC’s considerable surge in lawsuits alleging sexual harassment. This trend was well-chronicled not only by major news outlets, but also by the EEOC itself through the issuance of a rare press release just days after the end of its fiscal year. In this press release, the EEOC publicized its 41 sexual harassment filings, as well as a 12% increase in sexual harassment charges and approximately $70 million recovered for victims of workplace sexual harassment.
For a full breakdown of the EEOC’s 2018 filing activity, check out our annual blog post on this topic.
Tips For Employers During The Holiday Season
As the weather cools down and employer risk heats up with annual holiday parties, business leaders must be attentive to all activities within the workplace. It is important to remember that even though holiday parties often include festive accompaniments such as music and alcohol, these events are an extension of the workplace and should be treated as such. Put simply, employers are liable for any inappropriate behavior that occurs at a holiday party.
Therefore, clear reporting procedures are especially important for business during this time. This makes the holiday season a perfect time to redistribute written policies and conduct employee and bystander training on workplace harassment. Furthermore, managers and HR personnel must be diligent in immediately addressing, reporting, and documenting any incident that may be considered unlawful behavior in the workplace.
For a full overview of the EEOC’s FY 2018 trends and further advice for employers, be sure to watch Jerry and Alex’s explanation in the video above. Remember to stay tuned to our blog, as we will soon be publishing a full analysis of the EEOC’s Performance and Accountability Report (“PAR”) as soon as it is released.
EEOC’s “Mission Accomplished” – The Anatomy Of An EEOC Media Statement
By: Mark Wallin, Christopher DeGroff, and Gerald Maatman, Jr.
Seyfarth Synopsis: The EEOC operates with limited resources, yet has the daunting responsibility of enforcing an alphabet soup of anti-discrimination laws. The EEOC has become quite savvy at leveraging the press as a pulpit for publicizing its agenda, especially in litigation. An employer need only visit the EEOC’s website to understand the role of media statement’s in the Commission’s enforcement process.
In the life-cycle of EEOC initiated litigation, the agency will almost invariably issue two media statements: one issued when the suit is filed, and another when the suit is resolved. But not all media statements are the same. Depending on the posture of the case, whether the case theories align with the EEOC’s strategic goals, and even how the EEOC views the employer, media statements can vary dramatically. This post discusses what employers can expect from these releases, including typical language, elements, and timing.
EEOC’s Publicity Philosophy
The EEOC has acknowledged that press coverage is part of its deterrent message and mission. Notably, the Commission’s 2006 Systemic Task Force report provides that the “EEOC engage[s] in high impact litigation and publicity efforts that change the workforce status of affected groups and/or improve employment policies, practices, or procedures in affected workplaces.” (See also opening statement of Sen. Alexander regarding the Commission’s apparent strategy, in filing certain lawsuits, to “achieve a maximum amount of publicity.”)
The EEOC’s litigation media statement is one of the tools in the Commission’s toolbox that it will wield with an aim to achieve its strategic enforcement goals.
Often Two Media Statements During The Course Of EEOC Initiated Litigation
In the life of a lawsuit initiated by the EEOC, there will ordinarily be two media statements. The first will be published when the suit is filed, and the second if the case is resolved. Although all media statements published upon filing of a suit will have roughly the same cadence and tone, those published upon resolution can vary greatly.
Initial Media Statement
A media statement issued at the outset of the litigation tends to have a stern tone, regarding the alleged actions of the employer. The statement will lead off with a general assertion of the legal claims lodged against employer, including the statute at issue. For example, the statement may declare that a female employee suffered through a hostile work environment at the hands of her supervisor, in violation of Title VII. The statement will then go on to recite the key allegations of discrimination, harassment, or retaliation proffered in the complaint. These allegations are often delivered as fact, not issues that will be proven – or not – during the litigation. Often times the statement will also describe the employer, perhaps sharing a website, states of operation, and a brief description of the work done by the business. Finally, the applicable District Director and/or one of the trial attorneys for the matter will offer a quote in the nature of a sound bite concerning the allegations, which will emphasize the Commission policy underlying its prosecution of the lawsuit. In the most recent batch of EEOC filings, for instance, which occurred in September, combating sexual harassment and discrimination (“me too”) is the most common EEOC policy articulated. It is not surprising that many employers who have been the subject of the EEOC’s media statements have deemed the Commission’s tactics to be unfair and designed to apply extra-judicial pressure to settle litigation.
Media Statement Upon Resolution
When a suit is resolved, typically through an agreed upon consent decree (but occasionally after a rare trial win), the EEOC will publish yet another media statement. The tone and content of this statement, however, can vary from highly aggressive to fairly measured, and can even verge on “friendly.” The direction taken by the EEOC in this statement will depend largely on the resources devoted to the litigation, how contentious the litigation was, as well as whether the claims and allegations at issue align with the Commission’s strategic goals. Some insight into the Commission’s process can be found in the Regional Attorney’s manual, published here. Notably, before the resolution of “significant litigation” a Regional Attorney is required to advise the Office of the General Counsel. The Commission defines “significant” to mean a lawsuit “expected to involve significant monetary or injunctive relief”; “a favorable jury verdict or court decision”; or resolution which “is likely to receive national or significant local attention due to the notoriety of the defendant, ongoing media interest in the lawsuit and/or issues involved, or other factors that may have spurred significant media scrutiny.” Whether or not the litigation is deemed “significant” may well play a role in the tone of the media release as well.
The more resources expended, and the more closely aligned the claims are with the Commission’s strategic goals, the more likely the EEOC will publish an aggressive media statement. The hallmarks of such a statement will be not only the recitation of the most salacious of the allegations, but also a detailed description of the monetary and programmatic relief obtained in the consent decree. For example, in a recent matter involving an Illinois restaurant, the EEOC’s media statement set forth that “numerous employees … were routinely sexually harassed by coworkers and managers, including offensive sexual comments, groping, physical threats, and, in one instance, attempted forced oral sex with a management employee.” The statement went on to detail the programmatic relief, followed by harsh admonishments from a Regional Attorney and District Director, specifically:
“Employers are responsible for preventing workplace harassment – and their failure to do so hurts both their employees and their bottom line,” said Andrea G. Baran, Regional Attorney for the EEOC’s St. Louis District. “Business owners and CEOs must be proactive and involved in making sure all managers and employees understand that harassment will not be tolerated, harassers will be punished, and those who report harassment will be protected from retaliation. Prevention starts at the top.”
Moving down the spectrum, the Commission may take a more measured tone where the litigation is less protracted and the claims are not necessarily consistent with its strategic goals. For instance, in a recent ADA case settled by the EEOC concerning an employer’s alleged discriminatory termination of a disabled employee, which had been pending less than a year, the media statement provided scant details concerning the claims brought. Further, after a short description of the programmatic relief contained in the lone statement of a Regional Attorney was far more benign:
“This settlement is both strong and just,” said Rudy Sustaita, regional attorney for the EEOC’s Houston District Office. “[The employer] has given us every indication that it intends to comply with the ADA in the future.”
And on occasion, it will even boarder on “friendly” — including a statement of appreciation to the employer for its cooperation in resolving the litigation. In a suit brought in Wisconsin, filed and settled within five months, the Commission was quoted as stating:
“We thank [the employer] for its commitment to settle this case before the sides incurred significant costs and its willingness to ensure a level playing field for its pregnant employees seeking job modifications, including light duty work, otherwise available to non-pregnant employees,” said EEOC Chicago Regional Attorney Gregory M. Gochanour. “The EEOC will continue to enforce the federal laws so that all pregnant employees have the same opportunities as non-pregnant employees to contribute to our thriving economy,” said Julianne Bowman, the EEOC’s District Director for the Chicago District Office.
Although “friendly” media statements are the exception, not the rule, the EEOC is more likely to publish such a statement to incentivize other employers to similarly resolve enforcement actions.
A Word On Conciliation Media Statements
Historically, the EEOC has generally issued media statements for lawsuits only, as conciliation is intended to be a confidential process. Indeed, one of the chief reasons for employers to engage in pre-suit conciliation is the carrot of confidential resolution. Interestingly, however, we have seen a trend of the EEOC issuing presumably agreed-upon media statement for matters settled in conciliation. Accordingly, the employer has a degree of leverage in negotiating these publications. As one might imagine, conciliation media statements are, thus, more positive in tone. Further, on occasion, the employer may also make a statement, which at minimum disclaims any liability — something rarely, if ever, allowed in a litigation media statement.
Elements Of A Media Statement
Regardless of the tone, EEOC media statements are consistent in their basic elements and structure.
First, there will be a headline crafted to be eye-catching, such as “Paramount Mailing Company Punished Female Employees for Complaining About Abuse, Federal Agency Charges.” Below is a word cloud, highlighting the most common words and phrases employed by the EEOC in its 2018 headlines. Not surprisingly, in the current environment, “Sexual” and “Harassment” play prominently.
Second, the media statement will include a statement of claims, describing the complained of discrimination, harassment, and/or retaliation, including factual and legal allegations. The more aggressive press releases will set forth the most sensational and detailed allegations, whereas the measured versions may state the allegations in more bland terms, which can sometimes be so vague that it is difficult to divine what the claims were based upon in the first place.
Third, the Commission will include quotes from the relevant District Director and possibly a Regional Attorney involved in the litigation. The tone of the EEOC’s quotes can vary greatly, depending on, among other things, the importance of the issue to the Commission’s strategic goals, the duration of the litigation, and resources expended. Excluding conciliation media statements, on very rare occasions, the EEOC may allow a quote from the employer on the resolution of the lawsuit. Although it is unlikely the Commission will agree to such a statement, if the litigation and settlement proceed amicably, it is certainly worth attempting to negotiate the point.
Finally, the media statement will conclude with a statement of the EEOC’s mission (e.g. “The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination”). Additionally, where applicable, the statement will indicate where the resolved litigation is among the EEOC’s strategic goals — “[p]reventing workplace harassment through systemic litigation and investigation is one of the six national priorities identified by the Commission’s Strategic Enforcement Plan (SEP).” Media statements that make note of the SEP are more likely to be among the more aggressive.
Emerging Issues With Media Statements
As the Commission media strategy has evolved, it has made continued efforts to increase its audience and distribution of these statements for maximum effect. The EEOC has also been known to conduct press conferences announcing a new suit or trumpeting an EEOC victory. But now the EEOC also publishes many of its media statements on social media, like Twitter. It has also taken to issuing relevant media statements in multiple languages depending upon the employees and employer at issue. For as long as the EEOC places a priority on publicity, it will no doubt continue to search for new ways to increase their audience.
Implications for Employers
For employers who find themselves involved in an EEOC enforcement action, it is important not to lose sight of the Commission’s use of its media statement as both carrot and stick. The EEOC places considerable value on shining a spotlight on its enforcement efforts, especially those which advance its strategic goals. While it is unlikely that the Commission will allow the employer too much say in the issued statement, when negotiating resolution with the EEOC, where possible, employers should use the Commission’s goal of publicity as a possible bargaining chip to achieve the best possible outcome for the inevitable media statement. Moreover, by understanding the Commission’s strategic goals, employers will gain a greater awareness of what tone and tenor the EEOC’s statement will take upon resolution, and can prepare accordingly.
Readers can also find this post on our EEOC Countdown blog here.
Federal Court Rules That An EEOC Lawsuit Is Not Barred By Bankruptcy Code’s Automatic Stay
By Gerald L. Maatman, Jr. and Michael L. DeMarino
Seyfarth Synopsis: The government’s anti-discrimination watchdog can be extremely aggressive in pursuing discrimination claims, including pursuing those claims after an employer files for bankruptcy. Normally, after a bankruptcy petition is filed, the Bankruptcy Code’s automatic stay enjoins other actions against the debtor. But in EEOC v. Tim Shepard M.D., PA d/b/a Shepherd Healthcare, 17-CV-02569 (N.D. Tex. Oct. 11, 2018), the U.S. District Court for the Northern District of Texas sided with the EEOC and concluded that the EEOC’s Title VII lawsuit fell within an exception to the Bankruptcy Code’s automatic stay. This case is a good reminder that the Bankruptcy Code’s protections do not necessarily stave off an EEOC action. Importantly, the EEOC often will not back down from a fight simply because its target filed a bankruptcy petition, and depending on the nature of the EEOC action, it may fall within an exception to the automatic stay.
The Decision
In EEOC v. Tim Shepard M.D., PA d/b/a Shepherd Healthcare, 17-CV-02569 (N.D. Tex. Oct. 11, 2018), the EEOC filed suit in the U.S. District Court for the Northern District of Texas for alleged violations of Title VII of the Civil Rights Act of 1964. After a year of litigation, the defendant filed a voluntary petition under Chapter 7 of the Bankruptcy Code. As a result of the bankruptcy proceeding, the court entered an automatic stay under 11 U.S.C. § 362 and administratively closed the EEOC’s action.
The Bankruptcy Code’s automatic stay provides fundamental protection to a debtor in a bankruptcy by automatically enjoining certain actions against the debtor. The purpose of the automatic stay is to preserve the bankruptcy estate so that it can be orderly distributed to creditors.
Although the court stayed and administratively closed the EEOC’s enforcement action, the EEOC filed a motion to reopen the case, arguing that its discrimination lawsuit fell within the governmental unit or police and regulatory exception to the automatic stay found in 11 U.S.C. § 362(b)(4). Section 362(b)(4) provides that the filing of a bankruptcy petition “does not operate as a stay” of:
the commencement or continuation of an action or proceeding by a governmental unit . . . to enforce such governmental unit’s . . . police and regulatory power, including the enforcement of a judgment other than a money judgment, obtained in an action or proceeding by the governmental unit to enforce such governmental unit’s . . . police or regulatory power.
11 U.S.C. § 362(b)(4).
Because Fifth Circuit has not addressed whether an EEOC enforcement action under Title VII falls within Section 362(b)(4)’s exception to the automatic stay, the court explained that it “must assess whether the EEOC’s primary purpose for bringing this action is to protect public policy and welfare as opposed to adjudicating private rights or represents an attempt to recover property from [the defendant’s] bankruptcy estate.” Id. at 2. The court then analyzed the nature of the lawsuit and the relief sought to make this determination.
Specifically, the court found that the EEOC was primarily seeking a permanent injunction and that there was no indication that it was protecting a pecuniary interest in the bankruptcy estate. In addition, the court highlighted that the EEOC was vindicating the public interest by seeking to prevent discrimination in the workplace. Based on these findings, the court concluded that the EEOC’s primary purpose for bringing the action was to protect public policy and welfare. Thus, the court held that the EEOC’s action was not subject to the Bankruptcy Code’s automatic stay.
Implication For Employers:
This case is a valuable reminder for employers that the EEOC will not be deterred by the threat, or filing of, a bankruptcy petition. Employer’s facing bankruptcy and enforcement actions should assess whether the EEOC’s action will likely be an exception to the automatic stay. As this case makes clear, if the EEOC is primarily seeking injunctive relief, there is a good chance that the Bankruptcy Code’s automatic stay will not enjoin the EEOC’s enforcement action.
The EEOC Puts The Pedal To The Metal: FY 2018 Results Show Increase In Filings, With #MeToo Lawsuits Adding Fuel To The Agenda
By Christopher J. DeGroff, Matthew J. Gagnon, Gerald L. Maatman, Jr., and Kyla J. Miller
Seyfarth Synopsis: The uncertainty of a new administration’s impact on the EEOC that plagued FY 2017 is fading, but the results are not what some would expect. Not only has the EEOC brought a mountain of filings compared to the last four years, but also the agency has demonstrated a clear focus on sex-based discrimination and sexual harassment in the workplace in light of #MeToo, even surpassing FY 2017 numbers.
With a full fiscal year under its belt, the Trump Administration’s impact on EEOC-initiated litigation is still uncertain. With two Republican Commissioners and the General Counsel position still unconfirmed, it is difficult to discern if things will truly be “business as usual” under Trump or if those appointments, once confirmed, will change agency course. One thing is certain: the EEOC’s litigation program is not slowing down any time soon. Just as the waning months of FY 2017 showed a marked increase in filings, FY 2018 turned up the heat even more. Filings are up more than ever, with sex discrimination filings and #MeToo filings – i.e., complaints of sexual harassment – eclipsing previous years.
The total number of filings in FY 2018 demolished FY 2015 and 2016, and even surpassed FY 2017. (Compare here to here and here). This year, the EEOC filed 217 actions, 197 merits lawsuits and 20 subpoena enforcement actions.
Predictably, the EEOC waited until the last minute to push filings, with this past month showing the most filings compared to any other month this fiscal year. At the time of publication, 84 lawsuits were filed in September, including 45 in the last 3 days alone. Notable this year, however, was the “ramp up” period in June, July and August, which accounted for 63 of the total filings. Almost half of those cases were brought in August. The total filings for the remaining months remain low, with the number of filings in October through February failing to hit double digits.
Filings in Chicago, Philadelphia and Los Angeles continue to top the charts, with 21, 21, and 17 total filings, respectively. These numbers remain relatively consistent to FY 2017, which showed 21 filings in Chicago, 19 in Philadelphia, and 22 in Los Angeles. On the lower end, the St. Louis and Memphis numbers were modest, with only 7 filings in St. Louis and 8 filings in Memphis. Of the remaining districts, the Phoenix and New York district offices rebounded after a slow FY 2017, each filing 6 more lawsuits in FY 2018 as compared to last year.
Sex Discrimination Takes Center Stage
Each fiscal year we analyze what substantive theories the EEOC is targeting. This year, Title VII claims remained the largest category of filings, on par with FY 2017, which boasted 53% of all filings. In FY 2018, Title VII filings accounted for 55% of all filings. Although FY 2016 showed a dip in Title VII filings at 41%, this year’s Title VII filings beat out FY 2015 and FY 2014 as well.
With a new Strategic Enforcement Plan in place to guide litigation activity for FY 2018-2022, many expected some shift in focus based on two notable changes from the old plan. Specifically, the new plan pledged to address discriminatory practices against those who are Muslim or Sikh, or individuals of Arab, Middle Eastern, or South Asian descent. Additionally, the new plan aims to expand the EEOC’s equal pay priority to include compensation discrepancies for race, ethnicity, age, and disability – moving beyond the EEOC’s focus on sex-based pay disparities. In fact, we have actually seen a decrease in Equal Pay Act filings, which could reflect the EEOC’s renewed focus on equal pay issues that affect other protected groups, which would not fall under the jurisdiction of the Equal Pay Act.
One trend has emerged this year – compared to FY 2017, race filings have decreased by 6 filings – with 18 filings in FY 2018 compared to 24 filings in FY 2017.
Perhaps the most striking trend of all is the substantial increase in sex-based discrimination filings, primarily the number of sexual harassment filings. As predicted, #MeToo added fuel to this area of the EEOC’s agenda, with 74% of the EEOC’s Title VII filings this year targeting sex-based discrimination. Compare this to FY 2017, where sex based discrimination accounted for 65% of Title VII filings. Of the FY 2018 sex discrimination filings, 41 filings included claims of sexual harassment. 11 of those filings were brought in the last three days of the fiscal year alone. The total number of sexual harassment filings was notably more than FY 2017, where sexual harassment claims accounted for 33 filings.
EEOC’s #MeToo Harassment Filing Surge
Implications For Employers
The dramatic increase in filings should be an eye-opener for employers in an era when many thought the EEOC might be hitting the brakes. Instead, the EEOC is increasing its enforcement activity, with a particular focus on sex discrimination and sexual harassment. The EEOC still strongly advises employers should update and aggressively enforce their EEO Policies. Now, more than ever, employers need to be on top of their game to avoid becoming the next target of EEOC-initiated litigation.
As most of our loyal readers know, this blog is merely a preview of the more extensive analysis of EEOC trends and developments affecting EEOC litigation that we publish at the end of the calendar year. Stay tuned for our in-depth analysis of FY 2018 filings, and particular danger areas for employers in this shifting political climate.
Readers can also find this blog post on our EEOC Countdown blog here.
Fourth Circuit Sides With EEOC: Back Pay Damages Are Mandatory Under The ADEA
By Gerald L. Maatman, Jr., Michael L. DeMarino and Rebecca S. Bjork
Seyfarth Synopsis: Although back pay has been awarded in Age Discrimination in Employment Act (ADEA) cases for quite some time, few courts have specifically addressed whether these damages are discretionary or mandatory. In EEOC v. Baltimore County., No. 16-2216, 2018 WL 4472062, at *1 (4th Cir. Sept. 19, 2018), the Fourth Circuit answered this straightforward question and held that retroactive monetary awards, such as back pay, are mandatory legal remedies under the ADEA. Because the ADEA incorporates the provisions of the Fair Labor Standards Act (FLSA) that make back pay mandatory, the Fourth Circuit concluded that district courts lack discretion to deny back pay once ADEA liability is established. The key takeaway from this decision is that now more than ever, employers should take steps to minimize exposure to ADEA violations and, if ADEA liability is established, to explore available set offs to back pay awards.
Background
In EEOC v. Baltimore County, the EEOC brought a lawsuit on behalf of two retired corrections officers and a group of similarly-situated employees at least 40 years of age. The EEOC alleged that the County’s pension plan, known as the Employee Retirement System (“ERS”), required older employees to pay more toward their retirement than younger employees, for the same retirement benefits.
The district court granted summary judgment in favor of the EEOC, finding that because the different contribution rates charged to different employees is explained by age rather than pension status, age is the “but-for” cause of the disparate treatment, and the ERS violated the ADEA. On appeal, the Fourth Circuit affirmed and remanded the case to the district court for consideration of damages. We previously blogged about the district court’s decision here and the Fourth Circuit’s decision here.
On remand, the district court considered the EEOC’s claims for retroactive monetary relief – which was in the form of back pay. Ultimately, the district court rejected the EEOC’s bid for these damages, concluding that it had the discretion under the enforcement provision of the ADEA, 29 U.S.C. § 626(b), to wholly deny back pay. Thereafter, the EEOC appealed.
The Fourth Circuit’s Decision
On appeal, the County argued that the district court properly exercised its discretion under the ADEA, 28 U.S.C. § 626(b), to deny the EEOC an award of back pay. The Fourth Circuit rejected this contention. Instead, the Fourth Circuit agreed with the EEOC that because back pay is a mandatory legal remedy under the FLSA, and because the ADEA incorporates the FLSA’s liability provisions, the district court lacked the discretion to decline to award back pay.
Specifically, the Fourth Circuit reasoned that “[b]ecause Congress adopted the enforcement procedures and remedies of the FLSA into the ADEA, we construe the ADEA consistent with the cited statutory language in and judicial interpretations of the FLSA.” Id. at *3. “Back pay,” the Fourth Circuit continued, “is, and was at the time Congress passed the ADEA, a mandatory legal remedy under the FLSA.” Id. The Fourth Circuit reinforced this conclusion, noting that the ADEA’s “legislative history further suggests that Congress consciously chose to incorporate the powers, remedies, and procedures of the FLSA into the ADEA.” Id.
Implication For Employers:
This long-running case demonstrates the complexities and potential pitfalls employers face while trying to navigate the ADEA. Employers should take care to review and consider their justifications for retirement plans that have variable contribution rates for employees based on age. More broadly, this decision demonstrates that damages for ADEA violations can quickly add up if back pay awards are permanently on the table.