By: Gerald L. Maatman, Jr.

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!

By Gerald L. Maatman, Jr.

Seyfarth Synopsis: At 852 pages, Seyfarth’s 15th Annual Workplace Class Action Litigation Report analyzes 1,453 rulings and is our most comprehensive Report ever.

Click here to access the microsite featuring all the Report highlights. You can read about the five major trends of the past year, order your copy of the eBook, and download Chapters 1 and 2 on the 2019 Executive Summary and key class action settlements.

The Report was featured today in an exclusive article in MarketWatch. Click here to read the coverage!

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. Anyone who practices in this area, whether as a corporate counsel, a private attorney, a business execu­tive, a risk manager, an underwriter, a consul­tant, or a broker, cannot afford to be without it. Importantly, the Report is the only publica­tion of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’” Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2019 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 2018 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.

We hope our loyal blog readers will enjoy it!

Executive Summary

The prosecution of workplace class action litigation by the plaintiffs’ bar has continued to escalate over the past decade. Class actions often pose unique “bet-the-company” risks for employers. As has become readily apparent in the #MeToo era, an adverse judgment in a class action has the potential to bankrupt a business and adverse publicity can eviscerate its market share. Likewise, the on-going defense of a class action can drain corporate resources long before the case even reaches a decision point. Companies that do business in multiple states are also susceptible to “copy-cat” class actions, whereby plaintiffs’ lawyers create a domino effect of litigation filings that challenge corporate policies and practices in numerous jurisdictions at the same time. Hence, workplace class actions can impair a corporation’s business operations, jeopardize or cut short the careers of senior management, and cost millions of dollars to defend. For these reasons, workplace class actions remain at the top of the list of challenges that keep business leaders up late at night with worries about compliance and litigation. Skilled plaintiffs’ class action lawyers and governmental enforcement litigators are not making this challenge any easier for companies. They are continuing to develop new theories and approaches to the successful prosecution of complex employment litigation and government-backed lawsuits.

New rulings by federal and state courts have added to this patchwork quilt of compliance problems and risk management issues. In turn, the events of the past year in the workplace class action world demonstrate that the array of litigation issues facing businesses are continuing to accelerate at a rapid pace while also undergoing significant change. Notwithstanding the transition to new leadership in the White House with the Trump Administration, governmental enforcement litigation pursued by the U.S. Equal Employment Commission (“EEOC”) and other federal agencies continued to manifest an aggressive agenda, with regulatory oversight of workplace issues continuing as a high priority. Conversely, litigation issues stemming from the U.S. Department of Labor (“DOL”) reflected a slight pull-back from previous efforts to push a pronounced pro-worker/anti-business agenda. The combination of these factors are challenging businesses to integrate their litigation and risk mitigation strategies to navigate these exposures. These challenges are especially acute for businesses in the context of complex workplace litigation. Adding to this mosaic of challenges in 2019 is the continuing evolution in federal policies emanating from the Trump White House, the recent appointments of new Supreme Court Justices, and mid-term elections placing the Senate in control of Republicans and the House in control of Democrats. Furthermore, while changes to government priorities started on the previous Inauguration Day and are on-going, others are being carried out by new leadership at the agency level who were appointed over this past year. As expected, many changes represent stark reversals in policy that are sure to have a cascading impact on private class action litigation.

While predictions about the future of workplace class action litigation may cover a wide array of potential outcomes, the one sure bet is that change is inevitable and corporate America will continue to face new litigation challenges.

Key Trends Of 2018

An overview of workplace class action litigation developments in 2018 reveals five key trends. First, class action litigation has been shaped and influenced to a large degree by recent rulings of the U.S. Supreme Court. Over the past several years, the U.S. Supreme Court has accepted more cases for review than in previous years – and as a result, has issued more rulings that have impacted the prosecution and defense of class actions and government enforcement litigation. The past year continued that trend, with several key decisions on complex employment litigation and class action issues that were arguably more pro-business than decisions in past terms. Among those rulings, Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) – which upheld the legality of class action waivers in mandatory arbitration agreements – is a transformative decision that is one of the most important workplace class action rulings in the last two decades. It is already having a profound impact on the prosecution and defense of workplace class action litigation, and in the long run, Epic Systems may well shift class action litigation dynamics in critical ways. Coupled with the appointments of Justices Neil Gorsuch and Brett Kavanaugh to the Supreme Court in 2018, litigation may well be reshaped in ways that change the playbook for prosecuting and defending class actions.

Second, the plaintiffs’ bar was successful in prosecuting class certification motions at the highest rates ever as compared to previous years in the areas of ERISA and wage & hour litigation, while suffering significant defeats in employment discrimination litigation. While evolving case law precedents and new defense approaches resulted in good outcomes for employers in opposing class certification requests, federal and state courts issued many favorable class certification rulings for the plaintiffs’ bar in 2018. Plaintiffs’ lawyers continued to craft refined class certification theories to counter the more stringent Rule 23 certification requirements established in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011). As a result, in the areas of wage & hour and ERISA class actions, the plaintiffs’ bar scored exceedingly well in securing class certification rulings in federal courts in 2018 (over comparative figures for 2017). Class actions were certified in significantly higher numbers in “magnet” jurisdictions that continued to issue decisions that encourage or, in effect, force the resolution of large numbers of claims through class-wide mechanisms. Furthermore, the sheer volume of wage & hour certification decisions in 2018 increased as compared to last year, and plaintiffs fared better in litigating those class certification motions in federal court than in the prior year. Of the 273 wage & hour certification decisions in 2018, plaintiffs won 196 of 248 conditional certification rulings (approximately 79%), and lost only 13 of 25 decertification rulings (approximately 52%). By comparison, there were 257 wage & hour certification decisions in 2017, where plaintiffs won 170 of 233 conditional certification rulings (approximately 73%) and lost 15 of 24 decertification rulings (approximately 63%). In sum, employers lost more first stage conditional certification motions in 2018, and saw a reduction of their odds – a decrease of 11% – of fracturing cases with successful decertification motions.

Third, filings and settlements of government enforcement litigation in 2018 did not reflect a head-snapping pivot from the ideological pro-worker outlook of the Obama Administration to a pro-business, less regulation/litigation viewpoint of the Trump Administration. Instead, as compared to 2016 (the last year of the Obama Administration), government enforcement litigation actually increased in 2018. As an example, the EEOC alone brought 199 lawsuits in 2018 as compared to 184 lawsuits in 2017 and 86 lawsuits in 2016. However, the settlement value of the top ten settlements in government enforcement cases decreased dramatically – from $485.25 million in 2017 to $126.7 million in 2018. The explanations for this phenomenon are varied, and include the time-lag between Obama-appointed enforcement personnel vacating their offices and Trump-appointed personnel taking charge of agency decision-making power; the number of lawsuits “in the pipeline” that were filed during the Obama Administration that came to conclusion in the past year; and the “hold-over” effect whereby Obama-appointed policy-makers remained in their positions long enough to continue their enforcement efforts before being replaced in the last half of 2018. This is especially true at the EEOC, where the Trump nominations for the Commission’s Chair, two Commissioners, and its general counsel were stalled in the Senate waiting for votes of approval (or rejection), and one of the two nominees withdrew at year-end due to the delay. These factors are critical to employers, as both the DOL and the EEOC have had a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue. As 2019 opens, it appears that the content and scope of enforcement litigation undertaken by the DOL and the EEOC in the Trump Administration will continue to tilt away from the pro-employee/anti-big business mindset of the previous Administration. Trump appointees at the EEOC and the DOL are slowly but surely “peeling back” on positions previously advocated under the Obama Administration. As a result, it appears inevitable that the volume of government enforcement litigation and value of settlement numbers from those cases will decrease in 2019.

Fourth, the monetary value of the top workplace class action settlements decreased dramatically in 2018. These settlement numbers had been increasing on an annual basis over the past decade, and reached all-time highs in 2017. While the plaintiffs’ employment class action bar and governmental enforcement litigators were exceedingly successful in monetizing their case filings into large class-wide settlements this past year, they did so at decidedly lower values in 2018 than in previous years. The top ten settlements in various employment-related class action categories totaled $1.32 billion in 2018, a decrease of over $1.4 billion from $2.72 billion in 2017 and a decrease of $430 million from $1.75 billion in 2016. Furthermore, settlements of wage & hour class actions experienced over a 50% decrease in value (from $525 million in 2017 down to $253 million in 2018); ERISA class actions saw nearly a three-fold decrease (from $927 million in 2017 down to $313.4 million in 2018); and government enforcement litigation registered nearly a fourfold decrease (from $485.2 million in 2017 down to $126.7 million in 2018). Whether this is the beginning of a long-range trend or a short-term aberration remains to be seen as 2019 unfolds.

Fifth, as it continues to gain momentum on a worldwide basis, the #MeToo movement is fueling employment litigation issues in general and workplace class action litigation in particular. On account of new reports and social media, it has raised the level of awareness of workplace rights and emboldened many to utilize the judicial system to vindicate those rights. Several large sex harassment class-based settlements were effectuated in 2018 that stemmed at least in part from #MeToo initiatives. Likewise, the EEOC’s enforcement litigation activity in 2018 focused on the filing of #MeToo lawsuits while riding the wave of social media attention to such workplace issues; in fact, fully 74% of the EEOC’s Title VII filings this past year targeted sex-based discrimination (compared to 2017, where sex based-discrimination claims accounted for 65% of Title VII filings). Of the EEOC’s 2018 sex discrimination lawsuit filings, 41 filings included claims of sexual harassment. The total number of sexual harassment filings increased notably as compared to 2017, where sexual harassment claims accounted for 33 filings. Employers can expect more of the same in the coming year.

Implications For Employers

The one constant in workplace class action litigation is change. More than any other year in recent memory, 2018 was a year of great change in the landscape of Rule 23. As these issues play out in 2019, additional chapters in the class action playbook will be written.

The lesson to draw from 2018 is that the private plaintiffs’ bar and government enforcement attorneys at the state level are apt to be equally, if not more, aggressive in 2019 in bringing class action and collective action litigation against employers.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2019.

By: Gerald L. Maatman, Jr.Christopher J. DeGroffMatthew 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.

Seyfarth Synopsis: Happy Holiday season to our loyal readers of the Workplace Class Action Blog! Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report. We anticipate going to press in early January, and launching the 2019 Report to our readers from our Blog.

This will be our Fifteenth Annual Report, and the biggest yet with analysis of over 1,400 class certification rulings from federal and state courts in 2018.  The Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We are humbled and honored by the recent review of our 2018 Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. Here is what EPLiC said: “The Report is a must-have resource for legal research and in-depth analysis of employment-related class action litigation. Anyone who practices in this area, whether as a corporate counsel, a private attorney, a business execu­tive, a risk manager, an underwriter, a consul­tant, or a broker, cannot afford to be without it. Importantly, the Report is the only publica­tion of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’” Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2019 Report will analyze 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 2018 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2019 Report will be available on our blog in early January. Happy Holidays!

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: A federal district court in Kansas recently granted the EEOC’s motion for judgment on the pleadings in an ADA lawsuit brought against UPS and an employee union, holding that a policy in Defendants’ collective bargaining agreement where drivers who are disqualified for medical reasons can only be compensated at 90% of their rates of pay for temporary non-driving jobs, while drivers disqualified for non-medical reasons such as DWI’s are compensated at a 100% rate, was facially discriminatory.

This ruling should serve as a wake-up call to employers in regards to ensuring their policies relative to medical disqualifications and compensation are ADA-compliant.

***

Case Background

In EEOC v. UPS Ground Freight, Inc., No. 2:17-CV-2453, 2018 U.S. Dist. LEXIS 125625 (D. Kan. July 27, 2018), the EEOC brought suit under the ADA regarding UPS’s collective bargaining agreement (“CBA”) with its employees’ union, which provided that for employees with CDL’s (commercial drivers’ license) whose CDLs are suspended or revoked for non-medical reasons, including convictions for driving while intoxicated, those employees would be reassigned to non-CDL required (non-driving) work at their full rate (100%) of pay. However, for drivers who become unable to drive due to medical disqualifications, including drivers who are individuals with disabilities within the meaning of the ADA, UPS provided full-time or casual inside work at only 90% of the rate of pay.

The EEOC argued that the language of the CBA established a prima facie case of a discriminatory policy because it paid drivers disqualified for non-medical reasons 100% of their pay rate, while paying drivers disqualified for medical reasons 90% of the appropriate rate of pay for the work being performed. Id. at 5. UPS responded by arguing that judgment on the pleadings was inappropriate because: (1) the EEOC relied upon a selective and erroneous interpretation of the CBA; (2) the CBA contained ambiguities that precluded judgment; (3) “whether the CBA works to the benefit or detriment of a medically disqualified driver depends entirely on the particular factual scenario in each case,” which required the Court to engage in a case-by-case analysis to determine if an employee has been discriminated; and (4) the CBA did not limit the opportunities available to individuals with disabilities, but provided additional opportunities beyond what the ADA required. Id.

The Court’s Decision

The Court granted the EEOC’s motion for judgment on the pleadings.

First, the Court held that the CBA’s language was plain and unambiguous, and further, that it was “immaterial whether medically disqualified drivers have other options; paying employees less because of their disability is discriminatory under any circumstance.” Id. at 5-6. Further, the Court held that the alleged ambiguities that precluded judgment in the EEOC’s favor were attempts to create confusion where none existed. Specifically, the Court opined that UPS’s arguments were “red-herrings because they fail[ed] to address the pertinent issue — pay at less than 100% based on disability.” Id. at 6.

Turning to UPS’s argument that a case-by-case impact analysis was required to show that the policy was facially discriminatory, the Court rejected this argument, explaining that “[a]t the liability stage in a pattern-and-practice claim, the plaintiff must show that unlawful discrimination is part of the employer’s ‘standard operating procedure.’” Id. The Court further explained that under this standard, the government must establish a prima facie case of a discriminatory policy, but it was not required to offer evidence that each individual who may seek relief was a victim of the policy. As such, the Court held that the EEOC met its burden in establishing that the CBA was facially discriminatory.

Finally, the Court rejected UPS’s argument that he CBA did not limit the opportunities available to individuals with disabilities. The Court instead held that UPS did not provide a legitimate reason for paying medically disqualified drivers performing “inside work” less than those disqualified for other reasons under the CBA, and therefore failed to overcome the EEOC’s prima facie case of discrimination. Id. at 7.

In regards to injunctive relief, the Court held that the EEOC demonstrated that its claim warranted a permanent injunction. Id. at 7-8. Noting that monetary damages cannot prevent future harm, the Court opined that “[t]he only ‘hardship’ UPS Freight will suffer is paying medically disqualified drivers more (100% pay rate), which is the same rate it already pays its other, non-disabled employees.” Id. at 8. After further holding that the public interest will not be harmed by a permanent injunction prohibiting UPS from discriminating on the basis of disability, the Court ordered the next collective bargaining agreement is to prohibit the same discriminatory practice. Accordingly, the Court granted the EEOC’s motion for judgment on the pleadings and thereby granted its motion for injunctive relief.

Implications For Employers

For employers who provide alternative work assignments to employees with medical disqualifications, this ruling should serve as an eye-opener. It is crucial that businesses examine the compensation for such employees to confirm they are not being compensated at a disproportionally lower rate than other non-medically disqualified employees who are reassigned. Accordingly, a best practice for employers is to routinely examine their policies regarding medical disqualification and compensation to ensure they are complying with the ADA, in order to prevent EEOC-initiated litigation.

Readers can also find this post on our EEOC Countdown blog here.

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In an EEOC-initiated systemic lawsuit alleging that a senior living and nursing facility operator violated the Americans With Disabilities Act (“ADA”) by failing to offer employees light duty as a reasonable accommodation and ignoring its obligation to engage in an interactive process, a federal district court in California recently granted in part the employer’s motion to dismiss the claims of eight specifically identified claimants, holding that the EEOC failed to sufficiently allege that these individuals had a disability or could perform essential job functions.

For businesses facing EEOC-initiated litigation relative to disability discrimination, this ruling provides a blueprint for attacking such claims at the pleading stage.

***

Case Background

In EEOC v. Prestige Care, Inc., Case No. 1:17-CV-1299, 2018 LEXIS 119305 (E.D. Cal. July 17, 2018), the EEOC brought a systemic lawsuit on behalf of thirteen identified claimants for violations of the ADA. Prestige manages nursing care facilities and senior assisted living facilities in California, Oregon, Washington, Alaska, Idaho, Montana, Nevada, and Arizona. Id. at *3. The EEOC alleged that Prestige implemented and followed policies that violated the ADA, including: (1) a “100% healed/100% fit for duty” return to work policy; (2) not offering light duty as a reasonable accommodation; and (3) ignoring its obligation to engage in an interactive process. Id. The EEOC argued that these policies did not permit reasonable accommodations for qualified individuals.

In its motion to dismiss, Prestige argued that the EEOC’s complaint was deficient as to ten of the thirteen claimants identified by the EEOC since it failed to allege they had impairments that affected a major life activity, or failed to identify essential job functions. Id. Without such allegations, Prestige argued there were no plausible ADA claims with respect to the ten claimants. In response, the EEOC argued that dismissal was inappropriate because the allegations stated plausible claims, including on behalf of unnamed individuals. Further, the EEOC argued that it would be premature to dismiss without the benefit of discovery as to the specific individuals.

The Court’s Decision

The Court granted Prestige’s motion to dismiss the EEOC’s claims as to the eight claimants while denying Prestige’s motion as to two claimants. The Court first addressed the EEOC’s arguments (1) that no challenge with respect to claimants was appropriate because it was not a proxy for any individual claimant or charging party; (2) Rule 23 does not apply to the Commission’s lawsuits or when a § 706 claim is pursued; and (3) the EEOC is not required to identify each member of the class to recover. Id. at *5. Noting that “none of these positions adequately address the issue at hand,” the Court explained that Prestige did not argue that Rule 23 applied in this case, nor did it attempt to impose any of Rule 23’s requirements on the EEOC. Further, Prestige did not argue that the EEOC must identify each person for whom recovery is sought. Rather, Prestige was simply raising the question of how to review the allegations concerning the persons that the EEOC chose to identify. As such, the Court held that when the EEOC pursues a systemic claim under § 706 and chooses to identify additional persons who have suffered some form of disability discrimination, the allegations must plausibly show that those “additional individuals” are protected by the ADA. Id. at *6.

The Court then addressed the sufficiency of the allegations as to each of the ten identified claimants that were the subjects of the motion to dismiss. In moving to dismiss the claims of eight of the ten claimants, Prestige primarily challenged the allegations by arguing (1) the EEOC did not identify or allege that a major life activity was affected; (2) the essential functions of the job were not identified; and (3) there were no indications that the aggrieved individual could have performed the essential functions of the job with or without accommodation. Id. at *8-11. For several claimants, the Court held that while the EEOC would identify a physical impairment in its complaint, for instance, plantar fasciitis, it failed to adequately identify a major life activity that was substantially affected by the condition (such as walking or standing, for the claimant with plantar fasciitis). Id. at *17. Regarding the EEOC’s failure to plead the essential job functions, by way of example, the Court noted that for a laundry worker claimant with PTSD and anxiety, the EEOC failed to identify any essential functions of the job, and therefore could not show she was qualified. Id. at *22. Accordingly, the Court granted the motion to dismiss eight of ten identified claimants.

In denying the motion to dismiss as to two of the ten claimants, the Court explained that the allegations were sufficient to plausibly show that the claimants were “qualified individual[s] with a disability.” Id. at *18-19. For instance, the Court held that for a claimant who disclosed a nerve condition that was adversely affected by standing for longer than 15 minutes and lifting heavy objects, the EEOC alleged that Prestige still hired him as a cook, and therefore believed that he could perform the essential functions of that position. As such, the Court held that dismissal of this claimant as a class member would be inappropriate. Id. at *19. Accordingly, the Court denied the motion to dismiss two of the ten claimants.

Implications For Employers

This ruling provides an excellent framework for employers in regards to attacking disability discrimination claims where the EEOC identifies multiple claimants. Employers can rely on the Court’s analyses relative to (1) how the EEOC often failed to identify a major life activity that was substantially affected by the physical impairment it identified; and (2) how the EEOC frequently failed to provide any information whatsoever about essential job functions in its pleading.

But despite dismissing eight of the ten claimants, it is noteworthy that the dismissals were without prejudice. Id. at *22-23. The Court held that the EEOC may file an amended complaint that addresses and corrects the deficiencies with respect to these eight alleged claimants. As such, even though the employer emerged largely victorious in this battle, the Court nonetheless afforded the EEOC a second bite of the apple to remedy its largely deficient pleading.

Readers can also find this post on our EEOC Countdown Blog here.

 

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  In an ADA action alleging that a maker of train components discriminated against a group of applicants by regarding them as disabled, a federal district court in Illinois granted the EEOC’s partial motion for summary judgment, holding that the company’s decision to deny them work was based on improper tests concerning prospective injuries.

Employers should keep this ruling on their radar when considering medical testing in the job application process.

***

In EEOC v. Amsted Rail Co., No. 3:14-CV-1292, 2017 U.S. Dist. LEXIS 189713 (S.D. Ill. Nov. 16, 2017), Amsted made conditional job offers to thirty-nine applicants (the “Claimants”) for chipper positions, but placed them on medical hold because of abnormal results from a nerve conduction test (“NCT”).  Id. at *2-6.  The EEOC argued that Amsted violated the ADA by not hiring the Claimants on the basis of disability in regards to job application procedures and hiring.  Id. at *7-8.  Amsted justified its refusal to hire the Claimants by asserting there was a higher risk of developing carpal tunnel syndrome (“CTS”) for those with abnormal NCT results.  After both parties cross-moved for summary judgment, Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois granted in part the EEOC’s motion for partial summary judgment, holding that the NCT did not indicate the Claimants’ contemporaneous inability to perform the chipper job, but only a prospective, future threat to their health if they were to perform the job. 

This ruling illustrates that employers must be careful not to make hiring decisions based on the potential of future medical injuries.

Case Background

Amsted employs “chippers” to finish the surfaces of the steel side frames for railcar components.  Id. at *3.  Chippers use pneumatically powered tools, such as 12-pound sledgehammers, to perform their jobs.  The work requires intensive use of the hands and arms, and includes exposure to vibrations.  In 2010 and 2011, during a hiring surge, Amsted offered employment to applicants who had the necessary skills and experience, but the offers were contingent on their passing a medical examination and other tests.  Id.  The medical examination aimed, in part, to determine applicants who were at higher risk of developing CTS, one of the risks of jobs that require intensive use of the hands and exposure to vibrations.  Amsted contracted with an outside medical company to conduct on-site medical exams, which included a medical history questionnaire, measuring vital signs, vision and hearing assessments, a physical examination, and an NCT.

Applicants whose NCT was “abnormal” were put on “medical hold pending further data” regardless of any other information obtained in the examination.  Id. at *4.  This was done because the medical testing company believed abnormal NCT tests indicated that an applicant was “right on the verge of” developing CTS and losing the use of his hand.  Id.  Amsted was aware that applicants were being placed on hold because of an abnormal NCT result and authorized this use of the NCT results.  Applicants who did not return with normal NCT results were not hired.  Amsted did not hire any applicants who did not test normal on an NCT.

The EEOC alleged that Amsted violated the ADA when it denied the Claimants employment on the basis of their disability rather than an individualized assessment.  Id. at *7.  The EEOC argued that an abnormal NCT result was an inappropriate basis for making employment decisions.  It further alleged that Amsted was not concerned with worker safety, but rather with reducing workers’ compensation costs.  Amsted challenged the EEOC’s ability to prove all elements of its ADA case, including that the Claimants were qualified because they did not pose a direct threat.  Id. at *9.  As such, both parties cross-moved for summary judgment. 

The Court’s Decision

The Court granted in part the EEOC’s motion for partial summary judgment.  With the exception of one Claimant, Amsted did not challenge whether the EEOC had sufficient evidence to prove the Claimants were disabled.  Id. at *10.  The Court rejected Amsted’s challenge relative to the lone Claimant, noting that because Amsted conceded it refused to hire the Claimant because it feared he posed a safety risk in light of his prior CTS diagnosis and corrective surgery, no reasonable jury could fail to find that it regarded him as disabled  Id. at *11.  Regarding the element that the Claimants be qualified, the Court opined that the relevant case law established that the qualification question focuses on the individual’s condition at the time of the defendant’s employment decision, regardless of what may happen to the individual in the future.  Id. at *15.

In addition, the Court addressed the adverse employment action element.  Id. at *18.  Amsted argued that the Claimants were not subject to an adverse employment action because they were not rejected for employment but were simply put on medical hold pending receipt of further medical information.  The EEOC argued that Amsted’s placement of Claimants on medical hold was an adverse employment action because it effectively foreclosed future employment as a chipper.  Agreeing with the EEOC, the Court held that “[t]he evidence show[ed] that the Claimants’ placement on medical hold due to an abnormal NCT result was an adverse employment action because it effectively precluded them from being hired.”  Id. at *19. 

Finally, the Court explained that the EEOC must show but-for causation in order to prevail.  Id. at *20.  Amsted argued that the EEOC could not establish a discriminatory intent because the company relied in good faith on medical judgments that the Claimants were unable to safely perform the essential functions of the chipper job or had certain medical restrictions.  The Court rejected this argument, holding that Amsted took the Claimants out of the applicant pool because of its perception that they were disabled.  Accordingly, the Court granted in part the EEOC’s motion for partial summary judgment.

Implications For Employers

In its Strategic Enforcement Plan for Fiscal Years 2017-2021, the EEOC identified eliminating barriers in recruitment and hiring as one of its six enforcement priorities (as we blogged about here).  For employers in industries where an applicant’s medical background may be important, it is crucial for those employers to keep the EEOC’s strategic priorities in mind.  When employers make hiring decisions based on the potential for future injuries, such as the employer here, they significantly increase their likelihood of facing EEOC-initiated ADA litigation.  As such, employers should be exercise caution when implementing medical testing procedures for applicants, and ensure such procedures are lawfully conducted.

Readers can also find this post on our EEOC Countdown blog here.

 

Happy Holiday season to our loyal readers of the Workplace Class Action Blog!

Our elves are busy at work this holiday season in wrapping up our start-of-the-year kick-off publication – Seyfarth Shaw’s Annual Workplace Class Action Litigation Report.

We anticipate going to press in early January, and launching the 2018 Report to our readers from our Blog.

This will be our Fourteenth Annual Report, and the biggest yet with analysis of over 1,350 class certification rulings from federal and state courts in 2017.  The Report will be available for download as an E-Book too.

The Report is the sole compendium in the U.S. dedicated exclusively to workplace class action litigation, and has become the “go to” research and resource guide for businesses and their corporate counsel facing complex litigation. We were again honored this year with a review of our Report by Employment Practices Liability Consultant Magazine (“EPLiC”). Here is what EPLiC said: “The Report is a definitive ‘must-have’ for legal research and in-depth analysis of employment-related class action litigation.  Anyone who practices in this area, whether as an attorney, a business executive, a risk manager, an underwriter, a consultant, or a broker cannot afford to be without it. Importantly, the Report is the only publication of its kind in the United States. It is the sole compendium that analyzes workplace class actions from ‘A to Z.’”  You can read more about the review here.  Furthermore, EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation.

The 2018 Report will analyze 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 2017 for employment discrimination, wage & hour, and ERISA class actions, as well as settlements of government enforcement actions, both with respect to monetary values and injunctive relief provisions.

Information on downloading your copy of the 2018 Report will be available on our blog in early January. Happy Holidays!

By Matthew J. GagnonChristopher J. DeGroff, and Gerald L. Maatman, Jr.

Seyfarth Synopsis: With uncertain times and profound changes anticipated for the EEOC, employers anxiously await what enforcement litigation the EEOC has in store. Although 2016 showed a marked decline in filings, fiscal year 2017 shows a return to vigorous enforcement filings, with a substantial number of filings in the waning days of the fiscal year.

Employers are living in uncertain times. The impact of a Trump Administration and the EEOC’s new Strategic Enforcement Plan (SEP) for fiscal years 2017-2021 are still working themselves out in the FY 2017 filing trends. Nonetheless, one trend has reemerged: a vigorous number of EEOC case filings. It looks like the anemic numbers of FY 2016 were just a bump in the road, as FY 2017 has revealed an increase in total filings, even eclipsing the numbers from FY 2015 and 2014. (Compare here to here and here.) This year, the EEOC filed 202 actions, 184 merits lawsuits and 18 subpoena enforcement actions.

The September filing frenzy is still an EEOC way-of-life, as this past month yet again holds the title for most filings compared to any other month. At the time of publication, 88 lawsuits were filed in September, including 21 in the last two days alone. In fact, the EEOC filed more cases in the last three months of FY 2017 than it did during all of FY 2016. The total number of filings for the remaining months remains consistent with prior years, including a noticeable ramp up period boasting double digit numbers through the summer.

Filings out of the Chicago district office were back up in FY 2017 after an uncharacteristic decline to just 7 total filings in 2016. This year, Chicago hit 21 filings, an enormous increase from last year. This is closer to the total number of Chicago filings in FY 2015 and 2014 (26 in each year). The Los Angeles district office also increased its filings, hitting a high of 22, a substantial jump compared to previous years and the most of any district office in FY 2017. On the other end of the spectrum, the Phoenix district office has seen a notable drop, with only 7 filings compared to 17 in FY 2016.

New SEP, Same Focus

Every year we analyze what the EEOC says about its substantive focus as a way to understand what conduct it is targeting. This year, Title VII takes center stage. Although Title VII has consistently been the largest category of filings, last year showed a dip in the percentage of filings alleging Title VII violations, at only 41%. Nonetheless, this year Title VII has regained its previous proportion, accounting for 53% of all filings. This is on par with FY 2015 and 2014, showing once again that FY 2016 seems to have been an outlier.

Although the 2017-2021 SEP outlined the same general enforcement priorities as the previous version of the SEP (covering FY 2012 to 2016), the new SEP added “backlash discrimination” towards individuals of Muslin/Sikh/Arab/Middle Eastern/South Asian communities as an additional focus. One would expect this focus might increase the number of Title VII claims alleging either religious, racial, or national origin discrimination. However, those filings stayed relatively even, and were even a bit down from previous years. Religious, national origin, and race discrimination claims made up 42% of all Title VII claims, compared to 50% in 2016 and 46% in 2015.

Uncertainty For Equal Pay Claims

With a new administration came a new Acting Chair for the EEOC. President Trump appointed Victoria Lipnic as Acting Chair on January 25, 2017. Employers expected the EEOC’s new leader to steer the EEOC’s agenda in a different direction. Some believed Lipnic was foreshadowing future trends when she made it clear at her first public appearance – hosted by none other than Seyfarth Shaw – that she is “very interested in equal pay issues.” (See here.) And indeed, we have seen a slight uptick in the number of EPA claims filed in FY 2017. In FY 2017, The EEOC filed 11 EPA claims, compared to 6 in 2016, 5 in 2015, and 2 in 2014.

However, on June 28, 2017, President Trump tapped Janet Dhillon as Chair of the EEOC. Dhillon would come to the EEOC with extensive experience in a big law firm and as the lead lawyer at three large corporations, US Airways, J.C. Penney, and Burlington Stores Inc. Although it is too early to know how she could change the direction of the agency if confirmed, it is entirely possible that she could back away from previous goals to pursue equal pay claims more aggressively.

The Trump Administration has also made other moves that may indicate a change in direction with respect to equal pay initiatives. On February 1, 2016, the EEOC proposed changes to the EEO-1 report that would require all employers with more than 100 employees to submit more detailed compensation data to the EEOC, including information regarding total compensation and total hours worked by race, ethnicity, and gender. This was a change from the previous EEO-1 report, which only required employers to report on employee gender and ethnicity in relation to job titles. However, on August 29, 2017, the new EEO-1 reporting requirements were indefinitely suspended. We will have to wait and see whether the slight uptick in EPA claims in FY 2017 was a one-year anomaly.

Implications For Employers

The changes brought by the Trump Administration are still in the process of working themselves down into the rank and file of many federal agencies. The EEOC is no exception. Despite all of the unrest and uncertainty about where the EEOC may be headed, the FY 2017 filing trends largely show a return to previous years, albeit with a slight uptick in EPA claims. Certainly, changes in top personnel will have an impact on how the EEOC pursues its enforcement agenda. Exactly what that impact will be remains to be seen.

Loyal readers know that this post is merely a prelude to our full analysis of trends and developments affecting EEOC litigation, which will be published at the end of the calendar year. Stay tuned for our continued analysis of FY 2017 EEOC filings, and our thoughts about what employers should keep an eye on as we enter FY 2018. We look forward to keeping you in the loop all year long!

Readers can also find this post on our EEOC Countdown blog here.

 

By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  After an employer circulated a letter to 146 employees discussing an employee’s EEOC Charge that alleged discrimination on the basis of his disability in violation of the ADA, a federal district court in Connecticut denied both parties’ motions for summary judgment.

This ruling provides valuable lessons for employers on the risks of widespread internal communication regarding pending EEOC charges.

***

In EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-1416, 2017 U.S. Dist. LEXIS 133918 (D. Conn Aug. 22, 2017), a Day & Zimmerman NPS, Inc. (“DZNPS”) employee filed a charge with the EEOC alleging that DZNPS violated the ADA by denying him a reasonable accommodation.  As part of its investigation of the Charge, the EEOC sought information from DZNPS, including the names and contact information of other DZNPS employees.  Prior to providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 employees that identified the Charging Party by name, and noted that he had filed a charge of discrimination with the EEOC.  The EEOC alleged that by sending the letter, DZNPS retaliated against the employee for filing a charge with the EEOC in violation of the ADA and interfered with the Charging Party and letter recipient employees’ exercise and enjoyment of rights protected by the ADA.

As we previously blogged about here, the Court previously denied DZNPS’s motion to dismiss.  After the EEOC filed a motion for partial summary judgment on its interference claim under the ADA, and DZNPS filed a motion for summary judgment as to the Complaint in its entirety, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied both parties’ motions for summary judgment.

For employers considering whether to communicate internally about the pending EEOC charges, this ruling illustrates they should be careful to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

Case Background

In or around the fall of 2012, DZNPS hired 147 temporary electricians, including the Charging Party, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”).  Id. at *4.  After the Charging Party began training for the position, he provided a doctor’s note to a DZNPS representative indicating that he could not work around radiation.  The note requested a reasonable accommodation.  After receiving the doctor’s note and the request for a reasonable accommodation, DZNPS terminated the Charging Party’s employment.

In October 2012, the Charging Party filed a charge of discrimination with the EEOC, alleging that DZNPS failed to accommodate his disability reasonably and unlawfully terminated his employment.  Id. at *5.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  Id. at *6-7.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator, and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.

The EEOC moved for partial summary judgment on its interference claim under the ADA.  DZNPS moved for summary judgment as to the Complaint in its entirety, arguing that: (1) the EEOC’s legal theories would violate DZNPS’s free speech rights under the First Amendment of the United States Constitution; (2) that the June 2014 letter is protected by the litigation privilege under Connecticut law; (3) that the EEOC cannot, as a matter of law, make out a claim for retaliation under the ADA; (4) that the EEOC cannot, as a matter of law, make out a claim for interference under the ADA; and (5) that the EEOC lacks standing to bring this case under Article III of the United States Constitution.

The Court’s Decision

The Court denied both parties’ motions for summary judgment.  First, the Court rejected DZNPS’s claim that the EEOC lacked Article III standing to bring the case because no punitive or compensatory damages were available to the EEOC.  Id. at *13-14.  The Court noted that DZNPS cited to no legal authority supporting that proposition.  DZNPS also argued that if the Court found that its sending of the letter was either retaliation or interference in violation of the ADA, then the Court would be establishing a content and speaker-based restriction on speech that violated the First Amendment.  The Court rejected this argument on the basis that DZNPS identified no authority supporting its argument that the First Amendment protects speech from a defendant if that speech gives rise to liability under the ADA or other employment discrimination statutes.  Id. at *16-19.  Further, after analyzing Gulf Oil Co. v. Bernard, 452 U.S. 89 (1981), and subsequent cases interpreting Gulf Oil, the Court held that the Gulf Oil line of cases did not prevent courts from imposing restrictions on employer communications in situations where those communications could amount to “coercion” or prevent employees from exercising their rights.  Id. at *20-22.

Turning to the ADA retaliation claim, DZNPS argued that there was no genuine dispute of material fact that the EEOC would not be able to establish the third and fourth prongs of the prima facie case of retaliation under the ADA, either an adverse employment action or a causal connection between the protected activity and the adverse employment action.  Id. at *26-28.  DZNPS also argued that, even if the EEOC showed a genuine dispute of material fact as to the prima facie case for retaliation, the EEOC did not rebut DZNPS’s legitimate non-retaliatory reasons for sending the letter.  The Court found that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable factfinder could determine that such conduct constitutes an adverse employment action.  In regards to DZNPS’s proffered legitimate, non-discriminatory reason for sending the letter, to “minimize business disruption” and notify the recipients that DZNPS had disclosed their “home telephone numbers and addresses . . . to the EEOC,” the Court found that a reasonable jury could also conclude that DZNPS’s explanation was pretextual because the letter did not need to explain that recipients need not speak to the EEOC investigator and that counsel for DZNPS could be present if the recipient chose to speak to the EEOC.  Id. at *34.

Finally, the Court addressed both parties’ motion for summary judgment on the ADA interference claim.  Id. at *35-39.  The EEOC argued that DZNPS interfered with the rights under the ADA of all the letter recipients because a reasonable jury would need to conclude that the letter had a tendency to chill recipients from exercising their rights under the ADA.  Citing its previous order denying DZNPS’s motion to dismiss, where the Court held that the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA, the Court found that a reasonable jury could conclude that the letter could have the effect of interfering with or intimidating the letter’s recipients with respect to communicating with the EEOC about possible disability discrimination by DZNPS.  Accordingly, explaining that because this question should be reserved for the jury, the Court denied both parties’ motions for summary judgment.

Implications For Employers

For employers considering whether to internally disclose information on a widespread basis regarding charges of discrimination filed by employees, this ruling should serve as a cautionary tale.  Further, it illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of motions for summary judgment.  As such, employers should exercise caution when considering when and to whom it should internally disclose information about pending administrative charges.

Readers can also find this post on our EEOC Countdown blog here.