By Gerald L. Maatman, Jr.

Seyfarth Synopsis: Our previous blog post gave our readers an in-depth look at class action settlement developments in 2019, the fourth trend of this year’s Workplace Class Action Report (“WCAR”).  In terms of the top ten largest settlement among substantive areas of class action litigation, the monetary value of major case resolutions remained low in 2019. In fact, as compared to 2017, top settlement numbers have declined by more than a billion dollars. Today, Seyfarth partner Jerry Maatman explains the factors influencing this dramatic change, as well as what employers can expect regarding class action settlements in 2020.  Watch Jerry’s analysis in the video below!

 

Seyfarth Exclusive! In Person Event & Live Webinar

You are invited to join Erin Mulvaney, Senior Legal Reporter at Bloomberg Law, and Seyfarth Partner Gerald (“Jerry”) L. Maatman, Jr. for a panel discussion marking the release of Seyfarth’s 16th Annual Workplace Class Action Litigation Report. Click here to register. For those of you in the Midwest, please join us in person, meet Erin and network with like-minded attendees.

As we move into a shifting landscape of policy and litigation developments, employers are seeking insights to prepare for the challenges of the future workplace. At this important event, the presenters will provide their analyses of significant class action litigation trends of 2019, and a look ahead to likely developments in 2020. Jerry will also discuss the top class action rulings in 2019 and hot topics for 2020, including key trends in class certification, government enforcement litigation, and the U.S. Supreme Court.

In Person Panel Discussion:

Thursday, February 13th

11 a.m. – Noon Program
Noon – 1 p.m. Lunch

Seyfarth Shaw LLP
233 South Wacker Drive
Suite 8000
Chicago, Illinois 60606

Webinar:

Thursday, February 13th

Noon – 1 p.m. Eastern
11 a.m. – Noon Central
10 a.m. – 11 a.m. Mountain
9 a.m. – 10 a.m. Pacific

Register today to attend!

By Gerald L. Maatman, Jr., Thomas E. Ahlering, and Alex S. Oxyer

Seyfarth Synopsis: On January 29, 2020, Facebook announced that it had reached a settlement with plaintiffs in a class action brought under the Illinois Biometric Information Privacy Act (the “BIPA”) in the U.S. District Court for the Northern District of California. The settlement represents one of the largest payouts in a case brought under the BIPA since the law was passed in 2008. However, as the case against Facebook was not reflective of typical litigation brought under the BIPA, companies and their counsel should not be used it as a yardstick to value the majority of BIPA settlements moving forward.  

Wednesday’s settlement puts an end to the largest BIPA case filed to date. Though the settlement included a hefty price tag, the Facebook litigation was an unusual case filed under the BIPA in both class size and subject matter and should not necessarily serve a guidepost for BIPA settlements in the future.

Case Background

In In Re Facebook, plaintiffs alleged that Facebook violated the BIPA when it unlawfully collected and stored biometric data on Facebook users without prior notice or consent. Plaintiffs’ claims arose out of Facebook’s “Tag Suggestions” function, which identifies other Facebook users through scanning uploaded photographs. Plaintiffs alleged that Facebook created and stored digital representations of people’s faces based on the geometric relationship of facial features unique to each individual.

The case was originally filed as three separate lawsuits in the U.S. District Court for the Northern District of Illinois. After the parties stipulated to transfer the cases to the Northern District of California, the Court consolidated the three suits into one class action complaint and Facebook moved to dismiss, asserting that the plaintiffs lacked standing under Article III to bring the suit because the collection of biometric information without notice or consent did not result in “real-world harms,” “such as adverse employment or even just anxiety.” Facebook’s motion to dismiss was denied. The District Court held that the plaintiffs had standing because they were never offered the opportunity to withhold consent from the storage of biometric data. The District Court also certified a class of “Facebook users located in Illinois for whom Facebook created and stored a face template after June 7, 2011.” Patel v. Facebook, Inc., 932 F.3d 1264, 1269 (9th Cir. 2019).

Facebook subsequently appealed the denial of the motion to dismiss and the class certification order to the U.S. Court of Appeals for the Ninth Circuit. In Patel v. Facebook, Inc., 932 F.3d at 1277, the Ninth Circuit affirmed the District Court’s decision in August 2019, holding that plaintiffs had alleged a harm sufficient to confer standing and that the class had been appropriately certified. Facebook then appealed the decision up to the U.S. Supreme Court, which denied certiorari last week on January 22, 2020. See Facebook, Inc. v. Patel, No. 19-706, 2020 WL 283288 (Jan. 21, 2020).

The Settlement

Facebook disclosed the settlement of the In Re Facebook case in conjunction with its quarterly financial results on January 29, 2020. Facebook’s disclosure indicated that, under the settlement agreement, Facebook will pay $550 million to eligible class members and plaintiffs’ attorneys. The parties have not yet released any additional information about the settlement, which follows closely on the heels of the Supreme Court’s decision last week not to hear Facebook’s appeal.

Implications For Illinois Companies

While the size of this settlement should certainly be noteworthy to companies doing business in Illinois, it is not reflective of the typical value of settlements for BIPA cases. The class certified in In Re Facebook included all Facebook users located in Illinois for whom Facebook created or stored a face template after June 2011. Extrapolating from the Plaintiffs’ allegations, the class could have presumably included millions of members, each of whom may have been awarded statutory damages ranging from $1,000 to $5,000 under the BIPA had Facebook proceeded to trial. Further, Facebook’s alleged use of the biometric information was much different than the typical BIPA case, which usually involves fingerprint or retina scans for payroll or security purposes.

However, despite the unique posture of the Facebook lawsuit, this significant settlement amount may exacerbate an already growing trend in privacy lawsuits being filed across the nation, with Illinois serving as a hotbed for such litigation under the BIPA (we have previously discussed the rise in BIPA lawsuits and the onset of other biometric privacy legislation here). Companies conducting business in Illinois and utilizing biometric information (such as fingerprint scans, retina scans, or, like Facebook, facial mapping or imaging, among other types) should be mindful that they are aware of and compliant with the requirements of the BIPA.

Seyfarth Synopsis: As measured by the top ten largest case resolutions in various workplace class action categories, overall settlement numbers increased slightly in 2019, but as compared to the last several years, it was one of the lowest overall yields for settlements after those values plummeted to their lowest level ever in 2018. After settlement numbers were at an all-time high in 2017, those numbers fell dramatically. In sum, the ability of the plaintiffs’ bar to monetize their class action filings hit a significant wall.

As measured by the top ten largest case resolutions in various workplace class action categories, overall settlement numbers increased slightly in 2019, as compared to 2018.

After settlement numbers were at an all-time high in 2017, those numbers fell dramatically in 2018, and then leveled off over the past year. In sum, the ability of the plaintiffs’ bar to monetize their class action filings hit a proverbial wall over the past two years.

This trend harkened back to the U.S. Supreme Court’s decision in Wal-Mart, Inc. v. Dukes in 2011. By tightening Rule 23 standards and raising the bar for class certification, Wal-Mart made it more difficult for plaintiffs to certify class actions, and to convert their class action filings into substantial settlements.

These barriers became more formidable in 2018 with the Supreme Court’s ruling in Epic Systems v. Lewis, which upheld the validity of class action waivers in mandatory workplace arbitration agreements.

The “Wal-Mart/Epic Systems” phenomenon is still being played out, as well as manifesting itself in settlement dynamics. It is expected that the force of this barrier will be felt more profoundly in 2020. Considering all types of workplace class actions, settlement numbers in 2019 totaled $1.34 billion.

This compared to settlements in 2018, which totaled $1.32 billion.

These totals, however, decreased significantly from 2017 when such settlements topped $2.72 billion and in 2016 when such settlements totaled $1.75 billion.

The following graphic shows this trend:

 

In terms of the story behind the numbers, the breakouts by types of workplace class action settlements are instructive.

In 2019, there was a significant downward trend for the value of settlement of government enforcement litigation, employment discrimination claims, and workplace statutory class actions. In contrast, there were significant increases across-the-board for resolutions of class actions involving wage & hour class and collective actions, as well as ERISA class actions.

This phenomenon is shown by the following chart for 2019 settlement numbers:

By type of case, settlements values in workplace statutory class actions and government enforcement cases experienced the most significant decreases.

The top ten settlements in the private plaintiff statutory class action category (e.g., cases brought for breach of contract for employee benefits, and workplace antitrust laws and statutes such as the Fair Credit Reporting Act or the Worker Adjustment and Retraining Notification Act) totaled $319.65 million, which represented a large drop-off from 2018 when such settlements totaled $411.15 million, and still further from $487.28 million in 2017 (but an increase from $114.7 million in 2016).

The following chart tracks these figures:

The pattern for employment discrimination class action settlements likewise followed a slight downward trend in 2019. The top ten settlements totaled $139.20 million, as compared to $216.09 million in 2018 and $293.5 million in 2017. The comparison of the settlement figures with previous settlement activity over the last decade is illustrated in the following chart:

In 2019, the value of the top ten largest employment discrimination class action settlements of $139.2 million was the fourth lowest figure since 2010, and largely aligned with the trend that started in 2011 (after Wal-Mart was decided) that showed decreases in settlement amounts over three years of that four-year period.

This trend did not hold for wage & hour class action settlements. The value of those settlements in 2019 nearly doubled from the previous year. In 2019, the value of the top ten wage & hour settlements was $449.05 million as compared to $253.18 million in 2018. This was a slight decrease from 2017, when the value of the top ten settlements spiked at $574.49 million, which was the second highest annual total in wage & hour class actions ever.

On a comparative basis, 2019 settlements were the fourth highest annual total over the past decade.

When coupled together, the two-year period of 2016 and 2017 saw over $1.2 billion in the top wage & hour settlements. Adding 2018 and 2019 settlements, corporate America saw over $2 billion in wage & hour settlements over the past four years. Further, this is most telling in examining the last four years, for 2016 represented almost a quadrupling (after two years of declining numbers in 2013 and 2014) in the value of the top wage & hour settlements as compared to 2014. Given the ruling in Epic Systems in 2018, settlement numbers more likely to follow a downward trajectory in 2020.

This trend is illustrated by the following chart:

Relatedly, the top ten settlements in government enforcement litigation experienced a steep downward arc, as they decreased to $57.52 million, which was a drop from $126.7 million in 2018. This compared to the figure of $485.2 million in 2017. That being said, these numbers were slightly above the three year trend from 2014 to 2016 when governmental enforcement litigation settlements trended under $100 million for three years running. This trend is illustrated by the following chart of settlements from 2011 to 2019:

ERISA class action settlements rose slightly in 2019. The top ten settlements totaled $376.35 million, which topped the 2018 total of $313.4 million. Relatively, however, ERISA settlements in 2019 were still well below prior years, as those totals were $927 million in 2017 and $807.4 million in 2016.

Further, given that ERISA class action settlements for the two-year period of 2016 and 2018 were a combined $1.73 billion, the figure for 2019 on balance shows a lower conversion rate for the plaintiffs’ bar.

This trend is illustrated by the following chart of settlements from 2011 to 2019:

Settlement trends in workplace class action litigation are impacted by many factors.

Implications For Employers:

In the coming year, settlement activity is apt to be influenced by developing case law interpreting U.S. Supreme Court rulings such as Epic Systems, the Trump Administration’s labor and employment enforcement policies, case filing trends of the plaintiffs’ class action bar, and class certification rulings.

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

Seyfarth Synopsis:  The EEOC recently released its enforcement and litigation statistics for Fiscal Year 2019. Notably, the statistics indicate that 2019 saw the lowest number of charges filed in over 20 years, though there was almost no perceptible dip in retaliation charges. For example, despite the #MeToo movement remaining prevalent in 2019, the number of sex discrimination charges fell to their lowest number since 1997. However, monetary benefits recovered through mediation, conciliation, and settlement jumped in some areas, including for charges alleging sexual harassment.

On January 24, 2020, the EEOC released its comprehensive enforcement and litigation statistics for Fiscal Year 2019 (available here). In addition to enforcement and litigation activity, the data breaks down charge statistics by allegation and state – showing which charges are being filed and where. The dip in the number of charges that employers saw in 2018 continued through 2019, with the number of charges reaching its lowest point since 1997. The prominence of sex discrimination charges seen in 2018 due to the #MeToo movement all but disappeared, with sex discrimination charges falling from the second-most filed charge to the fourth, dropping to their lowest number in over 20 years. 

Charges Are Down Overall

In total, 72,675 charges were filed in FY 2019. Not only is this down from the 76,418 charges that were filed in FY 2018, but also FY 2019 saw the fewest charges filed for all fiscal years going back to FY 1997 (the second lowest, 75,428 charges, occurred in FY 2005). Putting this number in perspective, the number of charges filed exceeded 80,000 per year in every year from FY 2007 until FY 2018, sometimes by wide margins.

Consistent with this overall decline, there was a decrease in almost every category of charges in FY 2019 as compared to FY 2018, with the exception of some very modest increases in charges alleging “color” discrimination (a separate protected class under Title VII) and violations of the Equal Pay Act. The categories that decreased the most were age and sex discrimination, by almost 1,600 and 1,100 charges, respectively. It should be noted, however, that this does not necessarily mean that fewer individuals are reaching out to the EEOC. This dip could be attributed, at least in part, to the agency’s implementation of new charge intake procedures in an effort to increase efficiencies. 

Texas And Florida Are Still Hot Spots; Illinois Falls From The Top Five

Looking at the states where the most charges were filed, the hot spots largely remained the same in FY 2019 as in FY 2018. Like FY 2018 and FY 2017, Texas (with 10.2 % of all charges filed) and Florida (with 8.2%) were the top two states for charges in FY 2019.

Texas and Florida are no surprise, given their relative populations. But population is still not everything when it comes to charges. For example, Georgia (at number 3) surpasses states with higher populations, and Pennsylvania (tied with California for fourth) has more filings than New York. Notably, Illinois fell out of the top five states this year, moving from fifth to sixth place with 5.4% of all charges filed.

Retaliation Charges Remain In First, With Disability Discrimination Charges Moving To Second

In total, 39,110 retaliation charges were filed with the EEOC in FY 2019. As has been the case for over five years, this made retaliation the most frequently filed charge in FY 2019. Behind retaliation were disability, race, and sex discrimination charges, each alleged in approximately 32%-33% of the charges filed with the EEOC. As the EEOC’s report noted, the percentages total more than 100 because some charges allege multiple bases of discrimination.

Disability discrimination was the second-most-often alleged theory of discrimination, seeing the highest percentage of charges filed since 1997 at 33.4%. Race discrimination came in a close third. Interestingly, sex discrimination charges (which would include pregnancy discrimination, gender discrimination, and sexual harassment) fell from the number two slot in FY 2018 back to the fourth most frequently filed charge, which was where it was in FY 2017. The #MeToo movement remained a prevalent media topic in FY 2019, so this drop in charges cannot be chalked up to decreased visibility.

Although the raw numbers do not provide any explanation, one would hope that the increased public scrutiny on this issue has led to greater adoption of effective measures to address sex discrimination, which are having an actual impact in the workplace.

EEOC Saw A Slight Dip in Overall Recoveries But Increases In Particular Areas

As we reported here, FY 2019 saw a slight drop in recoveries by the EEOC. During FY 2019, the EEOC recovered more than $486 million for alleged discrimination victims. This represents a 4% decrease from $505 million in FY 2018 and is roughly on par with the $484 million recovered during FY 2017. In particular, the relief obtained through mediation, conciliation, and settlement declined marginally from $354 million in FY 2018 to $347 million in FY 2019. Further, litigation recoveries dropped to $39.1 million in FY 2019 from $53.6 million in FY 2018 (the FY 2017 and 2016 numbers were $42.4 million and $52.2 million respectively).

Despite the overall marginal decrease in recoveries, FY 2019 saw recoveries in some particular areas increased. For example, relief obtained through mediation, conciliation, and settlement for sex harassment charges surged from $56.6 million in FY 2018 to $68.2 million in FY 2019. Recoveries for race discrimination-based charges similarly increased, jumping from $71.3 million in FY 2018 to $79.8 million in FY 2019.

Implications For Employers

Despite the dips in the overall number of charges, the EEOC’s enforcement efforts show no sign of waning. Employers should treat these statistics as an early warning system that shows where the Commission’s enforcement efforts may be heading next – to that end, it is notable that retaliation and disability discrimination issues are firmly in the forefront. By continuing to set the culture in their workplaces through leadership and accountability, along with sound human resources practices, employers can guard against these issues and avoid hefty settlements and litigation with the EEOC.

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: Download Seyfarth’s 16th Annual Workplace Class Action Litigation Report eBook – it analyzes 1,467 rulings and is our most comprehensive Report ever at 800 pages.

The Report has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. The 2020 Report analyzes rulings from all state and federal courts – including private plaintiff class actions and collective actions, and government enforcement actions –  in the substantive areas of Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act, and the Class Action Fairness Act of 2005. It also features chapters on EEOC pattern or practice rulings, state law class certification decisions, and non-workplace class action rulings that impact employers. The Report also analyzes the leading class action settlements for 2019 for employment discrimination, wage & hour, ERISA class actions, and statutory workplace laws, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

The Workplace Class Action Litigation Report eBook is fully searchable and readers can easily access it from any computer or mobile device.

Click here to download the eBook today!

 

By: Gerald L. Maatman, Jr.

Seyfarth Synopsis: Yesterday’s blog closely analyzed another busy year on the governmental enforcement front, with a key focus on the U.S. Equal Employment Opportunity Commission (“EEOC”). Today, the Workplace Class Action Report (WCAR) video series continues with Seyfarth partner Jerry Maatman’s explanation of the third trend of 2019, governmental enforcement litigation. In addition to discussing enforcement priorities over the past several years, Jerry will discuss how unique challenges have impacted governmental enforcement litigation in 2019 and what to expect for 2020. Watch in the link below!

 

 

 

 

Seyfarth Synopsis: The 2019 annual report on developments and trends in EEOC-initiated litigation is now available as an eBook. This year’s book, entitled EEOC-Initiated Litigation: FY 2019, examines the EEOC’s filings in 2019, and analyzes the significant legal decisions and trends impacting EEOC litigation in 2020. We hope that employers will benefit from this deeper dive into how the EEOC’s priorities play out in litigation, and in the process, undertake optimal compliance strategies during FY 2020 and beyond.

 The EEOC-Initiated Litigation eBook is fully searchable and readers can easily access it from any computer or mobile device.

Click here to download the eBook today!

 

Seyfarth Synopsis: The third key trend from our 16th Annual Workplace Class Action Litigation Report involves governmental enforcement litigation, including an overview of priorities and filings by the EEOC, the U.S. Department of Labor, and the National Labor Relations Board.  Read the full breakdown below!

On the governmental enforcement front, the past several years have demonstrated that the Trump Administration and its appointed officials at the EEOC have not appreciably deviated from the Commission’s spirited pursuit of litigation filings and settlements.

This past year, however, posed unique challenges beyond the control of the EEOC. The Commission is a five-seat agency that has operated without a full panel of five Commissioners for the entirety of the Trump Administration.  When former Commissioner Chai Feldblum’s term expired at the end of last year, the result was a lack of quorum on the Commission, which hobbled the EEOC’s efforts to pursue its mission. Although President Trump had re-nominated Commissioner Feldblum for another term, she was not confirmed by the Senate due to her perceived views on LGBT issues. This resulted in an empty Commissioner seat and a loss of quorum for roughly one-third of the year. Either by coincidence or as a result, the pace of EEOC lawsuit filings and settlements slowed significantly. Despite this setback, there was only a modest 4% reduction in aggregate recoveries relative to the totals from 2018, thereby demonstrating the Commission’s commitment to resolving disputes expediently.

Although the total number of new lawsuits filed by the EEOC decreased, when considered on a percentage basis, the distribution of cases filed in terms of the theory of discrimination alleged remained broadly consistent compared to 2018. Title VII and ADA cases once again comprised the majority of cases filed by the Commission. This suggests that the priorities and patterns of government enforcement litigation have not shifted dramatically under the Trump Administration. During 2019, the new agency appointees were installed during the latter half of the year, which inevitably will result in delayed policy changes. Compounded by the lack of quorum at the Commission for part of this past year, additional time may be necessary for the EEOC to incubate and execute fundamental changes to enforcement priorities. Stepping into a new year with the new EEOC officials in place and a quorum at the Commission, 2020 may finally reveal what changes are in store for governmental enforcement litigation.

During 2019, the Commission filed 144 merits lawsuits and 8 subpoena enforcement actions. This is a stark decline relative to the 197 merits suits and 20 subpoena enforcement actions of 2018, which constituted an over 30% reduction in total actions commenced by the Commission year over year. This past year also marked the third year of the EEOC’s 2017-2021 Strategic Enforcement Plan (“SEP”), which was implemented to guide enforcement activity. 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

The Commission maintains discretion to interpret and pursue these priorities as it deems appropriate. While the priorities are defined, they are broad and apply to an expansive landscape of issues. For example, the EEOC has consistently focused on the protection of lesbian, gay, bisexual, and transgender individuals as a primary emerging and developing issue in the workplace. The EEOC’s efforts in this area have resulted in a body of case law across many jurisdictions, which holds that discrimination against transgender individuals or on the basis of sexual orientation is a form of discrimination prohibited by Title VII. This issue is set to be decided once and for all by the U.S. Supreme Court in a trio of high-profile cases, R.G. & G.R. Harris Funeral Homes v. EEOC, Altitude Express, Inc. v. Zarda, and Bostock v. Clayton County, Georgia Harris Funeral Homes was brought by a transgender woman who was terminated after putting her employer on notice of her forthcoming transition. Zarda and Bostock involve sexual-orientation discrimination. The issues at stake even divide government policy-makers, for the U.S. Department of Justice under President Trump filed briefs with the Supreme Court stating that Title VII protections do not extend to transgender and sexual orientation discrimination, confirming the Administration’s position on this issue.

Additionally, the EEOC issued landmark determinations addressing digital bias in July 2019, which it has identified as an emerging trend and a potential barrier in recruitment and hiring. The EEOC has especially targeted on-line advertising that uses algorithms that have the potential to allow employers to deliberately target and exclude certain classes of people by age, gender, and race when disseminating job advertisements. The Communications Workers of America filed discrimination charges against 66 employers for engaging in discriminatory advertising on Facebook, alleging that their advertising excluded women and older workers from receiving the job ads. Of the employers charged, seven were subject to an EEOC finding of “reasonable cause” to believe that the employers violated Title VII and/or the ADEA. While findings of reasonable cause do not affirmatively indicate that the employers violated federal law, they do provide insight as to how the EEOC is apt to analyze claims of digital bias in the years ahead.

In its FY 2019 Congressional Budget Justification, the EEOC stated that one of its strategic objectives is to prevent employment discrimination through education and outreach. This was reiterated in the inaugural Agency Financial Report (“AFR”) released on November 15, 2019. The EEOC conducts both free and fee-based events targeting particularly vulnerable communities that may be unfamiliar with employment law protections (i.e., low-skilled workers, new immigrant workers, etc.). This past year, the White House also launched the Initiative on Asian-Americans and Pacific Islanders and the Initiative on Historically Black Colleges and Universities. In conjunction with the White House programs, the EEOC hosted outreach events involving over 100,000 participants nationally. Based on statements made throughout the AFR, the Commission is expected to further expand its outreach efforts in 2020.

The EEOC has also prioritized initiatives to mitigate sexual harassment in the workplace that rose to prominence through the #MeToo movement. The EEOC now offers a customizable fee-based harassment prevention training for supervisors. Furthermore, the Commission held an Industry Leaders Roundtable discussion on harassment prevention. Prominently highlighted was the hospitality industry, resulting in a published statement by leaders of that industry committing themselves to various safety measures, including furnishing employees with security devices and trainings to improve hotel safety for employees and guests. The EEOC’s continued focus on #MeToo claims is reflected in its filing numbers as well. Of the 2019 Title VII filings, 68% arose out of claims of sex-based discrimination.

Arguably, the most significant step the EEOC has taken in the last few years relating to its priority of ensuring equal pay for all workers is its attempted modifications to the EEO-1 reporting obligations. Employers with more than 100 employees, and federal contractors or sub-contractors with more than 50 employees, are required to collect and provide to the EEOC demographic information (gender, race, and ethnicity) in each of ten job categories. Under the Obama Administration, the EEOC tried to expand those reporting obligations to include salary and wage data. Shortly after President Trump’s inauguration, those changes were stayed by the Office of Management and Budget (“OMB”). In 2019, a federal district court unexpectedly ordered those changes reinstated – for a time – finding that the OMB’s decision to stay those regulations was “arbitrary and capricious.” Ultimately, it was held that the EEOC must complete 2017-2018 pay data collection, according to the Obama-era rules, by January 31, 2020. When completed, that collection will provide the Commission with data regarding potential pay disparities across gender, race, and ethnicity. Whether and to what extent it will make use of this data to guide its enforcement efforts remains to be seen.

The EEOC also changed how it will report its financial and performance results. In November of 2019, it announced that the new AFR will replace the combined Performance Accountability Report (“PAR”) that was customarily published annually in November. The EEOC explained in the 2019 AFR that it will separate the information that had been contained in the combined PAR into two separate reports. The AFR will continue to be published in November and will focus on financial results and a high-level discussion of performance results. A new Annual Performance Report will be published in February of 2020 in coordination with the EEOC’s Congressional Budget Justification, which will provide a more detailed analysis of performance results. The 2019 AFR provided a snapshot of FY 2019 performance highlights, including the following:

  • The Commission reported a 12.1% decrease in the backlog of pending charges as compared with the previous year. The total number of pending private sector charges was 43,850 – the lowest reported backlog number in 13 years.
  • The EEOC secured approximately $486 million in relief for victims of discrimination through litigation and pre-litigation investigations. This represented a significant decrease from the total relief figure of $505 million for 2018, and was closely aligned with the recovery total of $484 million for 2017.
  • The total relief figures in 2019 included $347 million for victims of employment discrimination in private sector and state and local government workplaces through mediation, conciliation, and settlements, a slight decrease from the $354 million obtained in 2018.
  • Recoveries through litigation dropped significantly. The EEOC secured $39.1 million in litigation recoveries on behalf of charging parties and other aggrieved individuals this past year, as compared to the $53.5 million in recoveries in 2018. The 2019 number reflects a significant drop from the last several years as well as compared to 2015 ($65.3 million), 2016 ($52.2 million), and 2017 ($42.4 million).

Furthermore, the EEOC has continued to focus on #MeToo issues with more intensity than ever before over the past three years. In 2019, the EEOC reported a 14% increase in claims of sexual harassment. In turn, the Commission filed 28 lawsuits that advanced #MeToo-type allegations. This is a drop-off from the filings of sex discrimination lawsuit filings in 2018, when 41 cases included claims of sexual harassment. The total number of sexual harassment lawsuit filings in 2019 was closer to the total in 2017, where sexual harassment claims accounted for 33 lawsuit filings. Nonetheless, the 2019 lawsuit filing patterns reflected a consistent focus on workplace harassment litigation.

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.

With a confirmed Wage & Hour Administrator and a new Secretary of Labor, the WHD was in full swing in 2019. This year, WHD had a record-setting enforcement program, with a focus on improvement and expansion of its data-driven approach. By targeting relevant industries and sectors, WHD was able to deploy its resources in an effective manner, resulting in back wage recoveries of $322 million.

The WHD was not, however, singularly tasked with enforcement. Indeed, its 3,700 educational outreach events represent another record for the agency. In addition, WHD issued more than a dozen opinion letters, providing valuable guidance on such critical issues as overtime exemptions, independent contractors in the gig economy, rounding, commissioned sales, and regular rate of pay.

The year also saw WHD with a busy regulatory agenda. The WHD issued a final regulation increasing the salary threshold for the FLSA’s white-collar overtime rule and exemptions, and is expected to issue final rules providing much needed clarity on computing the regular rate of pay and establishing joint employment.

The WHD has also proposed revisions to the fluctuating workweek method of computing overtime and a number of provisions related to tipped employees, both of which are anticipated to be finalized in 2020.

Not to be outdone, the National Labor Relations Board (“NLRB”) also undertook an ambitious agenda in 2019. It swung the pendulum back toward more conservative views of labor laws, and in certain respects, peeled back on Obama-era Board precedents. 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

Given the change in leadership at the EEOC and the DOL that took place during 2019, it seems reasonable to expect that employers will see more changes to those agencies’ enforcement priorities in 2020 that are more in line with the Trump Administration’s business-friendly priorities. Overall, employers may be able to look forward to less aggressive enforcement of employment-related laws and regulations by the EEOC, the DOL, and the NLRB.

Seyfarth Synopsis: Our recent blog post closely examined pivotal rulings by the U.S. Supreme Court in 2019, which was the second trend of the 16th Annual Workplace Class Action Litigation Report (WCAR). Today in the WCAR video series, watch Seyfarth partner Jerry Maatman’s analysis of the Supreme Court’s significant rulings in 2019. In addition to providing an overview of a groundbreaking year at the Supreme Court, Jerry also previews what employers should expect from the Court in 2020. Watch our video in the link below!