EEOC Year-End Countdown

Briefing For The Big Bucks: CRST Asks U.S. Supreme Court For Attorneys’ Fees From The EEOC

Posted in EEOC Litigation

Bsupremecourty Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

EEOC v. CRST Van Expedited, Inc. is a key case for all employers.

We have been tracking the developments (here, here, here, here, here, here, here, and here) in this case since its inception. Now it has reached the U.S. Supreme Court on the issue of whether attorneys’ fees are appropriate in instances where the EEOC failed to satisfy its pre-suit investigation duties under Title VII, but the employer was not victorious “on the merits.”  In EEOC v. CRST Van Expedited, Inc., 774 F.3d 1169 (8th Cir. 2014), the U.S. Court of Appeals for the Eighth Circuit reversed and remanded a nearly $4.7 million award of attorneys’ fees – the largest fee sanction ever levied against the Commission – to the employer, CRST, finding that the District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations did not constitute a ruling on the merits, and therefore the employer was not a “prevailing party” entitled to a fee award as to those claims.  On remand, the District Court was instructed to individually assess each claim for which it granted summary judgment for CRST on the merits and explain why it deemed that particular claim to be frivolous, groundless, or unreasonable.

Following the decision, CRST petitioned for a rehearing en banc, which was denied on February 20, 2015.  Thereafter, CRST petitioned the U.S. Supreme Court for certiorari, which was granted on December 4, 2015.  On January 19, 2016, CRST submitted its merits brief, which presented the following question to the Supreme Court: whether a dismissal of a Title VII case, based on the EEOC’s total failure to satisfy its pre-suit investigation, reasonable cause, and conciliation obligations, can form the basis of an attorneys’ fee award to the defendant under 42 U.S.C. § 2000e-5(k).

On January 26, 2016, the Equal Employment Advisory Council, National Federation of Independent Business, and Small Business Legal Center filed an amici brief in support of CRST.  Others filing amicus briefs in support of CRST included Americans for Forfeiture Reform (here); Bass Pro Shops Outdoor World, LLC and Tracker Marine Retail, LLC (here); and the U.S. Chamber of Commerce, American Trucking Associations, Inc., and Business Roundtable (here).

Hence, the stage is set for what may well be one of the most important rulings on EEOC litigation in memory.

The Context And The Stakes

On September 27, 2007, the EEOC filed a single count complaint against CRST under Section 706(f) of Title VII on behalf of a female driver and a class of “similarly situated” but unidentified female employees of CRST.  Id. at 10.  The U.S. District Court for the Northern District of Iowa noted that in the course of discovery, “it became clear that the EEOC did not know how many allegedly aggrieved persons on whose behalf it was seeking relief,” and that “the EEOC was using discovery to find them.”  Id. at 11.  CRST successfully moved the District Court for the dismissal of Title VII claims for sexual harassment brought by the EEOC on behalf of several hundred female truckers, after demonstrating that EEOC did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it sought relief at trial before filing the Complaint — let alone issue a reasonable cause determination as to those allegations or conciliate them.

After securing the dismissals and settling the claims of the original charging party, CRST moved for the award of attorneys’ fees and costs.  The District Court granted the motion and directed the EEOC to pay CRST nearly $4.7 million in attorneys’ fees and costs, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII and imposed an unnecessary burden upon CRST and the District Court.  Id. at 18.  However, on appeal the Eighth Circuit held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Id. at 20.  Further, the Eighth Circuit found that that District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”  Id. at 21.  The Eighth Circuit also held that CRST could not satisfy the standard of Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”  Id. (internal quotation omitted).

Following the Supreme Court’s eventual ruling, this case will provide guidance on how employers can pursue attorneys’ fees and costs in the increasingly common instances where the EEOC has abandoned its pre-suit duties required by Title VII.

CRST’s Brief

In its brief, CRST makes two arguments as to why the Eighth Circuit’s decision was improper.  First, CRST argues that the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg, and severely undermines the policy of Section 706(k).  Id. at 23.  In relevant part, Section 706(k) authorizes district courts to award attorneys’ fees to the “prevailing party” in a Title VII case.  Id. at 22.  Christianburg held that fee awards to a prevailing defendant are permissible only if the plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation.”  Id. (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)).  CRST contends that “categorically denying fees in such cases [not decided on the merits] would frustrate the congressional policy choice embodied in Section 706(k): to ensure that plaintiffs who impose unnecessary and unreasonable litigation costs on defendants will bear the costs of their own choices.”  Id. at 24.  Further, CRST notes that “[a]s lower courts applying Christiansburg have repeatedly recognized, that decision to litigate can be unreasonable for many reasons that do not bear on the ultimate merits of the claims — including, for example, when the suit is obviously time-barred or moot.”  Id. at 24.  Accordingly, CRST asserts that the precedent created by the Eighth Circuit’s decision would allow the EEOC to entirely abandon its pre-suit responsibilities with impunity, which would lead to one-sided and inefficient conciliations.  Id. at 25.

Second, CRST posits that even if Congress intended Section 706(k) to limit defendants’ fee awards to cases decided “on the merits,” which it claims Congress did not do, this case would still qualify under that standard.   Id.  CRST notes that “Title VII’s pre-suit requirements are substantive, mandatory conditions that determine whether a court may hold an employer liable in a case brought by the EEOC” and that the “EEOC’s claims were dismissed in this case because the EEOC failed…to first determine whether the allegations that it intended to litigate had sufficient merit to warrant requiring CRST to defend itself in court.”  Id. at 25-26.  Accordingly, given that these pre-suit requirements were elements of the EEOC’s cause of action, CRST argues that it prevailed on the merits when it defeated certain claims by demonstrating that the EEOC did not investigate, find reasonable cause for, or attempt to conciliate any of these claims as required by the statute.  Id. at 42.

Amici Briefs Filed In Support Of CRST

The amici submission filed by the Equal Employment Advisory Council argues that the Eighth Circuit’s decision was contrary to Title VII’s text, policy aims, and purposes and was inconsistent with the Supreme Court’s decision in Christiansburg.  Amici Brief, at 9.  The amici brief notes that while “Title VII expressly authorizes courts to award a prevailing party, ‘other than the Commission or the United States, a reasonable attorney’s fee (including expert fees) as part of the costs ….’ 42 U.S.C. § 2000e5(k)…[i]t places no conditions on the court’s discretion to award such fees, except to specify attorney’s fees are not available if the prevailing party is either the EEOC or another federal government agency.”  Id. at 10.  Accordingly, the amici brief posits that Title VII does not limit the award of attorneys’ fees and costs to parties who have prevailed on the merits, contrary to the Eighth Circuit’s holding.  Id. at 12.

Further, the amici brief asserts the Eighth Circuit misapplied Christianburg, which involved a claim for attorney’s fees based on the dismissal of an EEOC suit on procedural grounds.  Id. at 10-11.  The amici brief argues that the Eighth Circuit “purports to absolve the EEOC of any liability for a prevailing defendant’s attorneys’ fees in cases dismissed based on anything other than a final adjudication of the discrimination claim on the merits, [and] is irreconcilable with Title VII’s plain text and [the Supreme Court’s] interpretation of it in Christiansburg.”  Id. at 11.  Finally, the amici brief describes policy reasons for awarding attorneys’ fees in cases such as this one, noting “in its zeal to litigate large, high profile class-based suits, the EEOC’s enforcement priorities seemingly have focused less on informal resolution of discrimination charges, as contemplated by Title VII, and more on developing and maintaining a broad, class-based litigation docket.”  Id.  As such, contrary to the Eighth Circuit’s holding, amici assert that courts should not tolerate such improper conduct by the EEOC, which would be deterred by entitling prevailing defendants to reasonable attorneys’ fees and costs.

What’s Next

The Supreme Court is set to hear oral arguments on March 28, 2016 before ultimately issuing a final ruling.  Employers should pay close attention to the Supreme Court’s eventual ruling in this case.  While a favorable ruling for CRST would undoubtedly serve as a wake-up call to the EEOC in regards to fulfilling its pre-suit duties, an unfavorable ruling could have an adverse effect on employers as the EEOC could seemingly neglect its pre-suit responsibilities without having to fear any subsequent sanction.  We will keep our loyal blog readers updated as developments occur in this litigation.

Readers can also find this post on our Workplace Class Action blog here.

What Employers Should Know – Listen To The EEOC

Posted in Strategic / Policy Initiatives

calmBy Gerald L. Maatman, Jr.

Today I had the privilege of attending the 24th Annual Employment Practices Liability Insurance Program hosted by the American Conference Institute in New York City (I moderated a session on EEOC litigation).

Constance Barker, one of the five Commissioners at the U.S. Equal Employment Opportunity Commission, gave the keynote address at the Program. Her presentation was fascinating, and focused largely on the future enforcement litigation activities of the EEOC for 2016. As the tag line of the old E.F. Hutton TV commercial suggested, “when the EEOC talks, employers should listen….” Commissioner Barker’s views and pronouncements are important for employers in crafting their workplace compliance strategies.

Focus Of Possible EEOC Activities

Commissioner Barker noted that 2016 is apt to see the EEOC issuing various regulations and guidance as the final year of the Obama Administration winds down. As she said at today’s Program, “expect a lot of activity…” In addition to regulations on GINA, the ADA, and wellness plans, Commissioner Barker asserted that other guidance is likely in the areas of retaliation, joint employer liability, leave policies, and national origin discrimination relative to Muslim workers. Commission Barker advised employers to take a close look at the proposed retaliation guidance, which she termed was “huge, huge, huge…” In particular, she cited the guidance’s expansive view of what constitutes protected activity, and how even discipline over “do not discuss compensation” policies would constitute retaliation (on the premise that discussing pay is protected activity).

Systemic Litigation Targets

Commissioner Barker opined that the healthcare, restaurant, and manufacturing industries would see significant litigation activity in 2016. Moreover, race, gender, pregnancy, and leave issues will be “litigation hot spots” for those industries. With nearly 25% of the EEOC’s docket now focus on systemic litigation involving assertion of claims on behalf of groups of employees, Commissioner Barker said that “leave and accommodation policies” also will be prime targets for systemic litigation.

Commissioner Barker shared the view that certain leave policies are on the EEOC’s litigation radar screen, such as policies that cap leave at a certain number of days; policies that have no accommodation safeguards; “100% healed” policies; and policies prohibiting leave if a worker is not FMLA-eligible.

New Developing Areas

Commissioner Barker also predicted a continuing commitment by the EEOC to “develop the law” on joint employer concepts, LGBT rights, workplace arbitration, and protections for workers in the gig economy. She noted that various agencies – such as the NLRB – have been quite aggressive in expanding traditional notions of employer liability, and that employers should be mindful that the EEOC is sometimes aligned to those views too.

In broader terms, this squarely raises the issue of the proper role and responsibility of the EEOC. Should it enforce the law as written or expand the law to maximize the reach and public policies within employment discrimination prohibitions? Many critics of the EEOC have cited its litigation focus as further evidence that the Commission is an activist agency that is result-oriented and willing to do whatever it takes to pursue litigation enforcement strategies it deems appropriate.

This issue is sure to heat up further in 2016.

Readers can also find this post on our Workplace Class Action blog here.

Mach Mining Part 3: Supreme Court Gem Resurfaces In Southern District Of Illinois

Posted in EEOC Litigation

sealBy Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

Following the U.S. Supreme Court’s landmark decision in Mach Mining v. EEOC, 135 S.Ct. 1645 (2015), which held that a judge may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit, and that the scope of that review is narrow, the litigation was remanded to the U.S. District Court for the Southern District of Illinois for further proceedings consistent with that ruling. Subsequently, the EEOC renewed its motion for partial summary judgment that originally had been denied by the District Court, and filed motions to strike Mach Mining’s evidence regarding the conciliation process. Applying the Supreme Court’s ruling that we previously blogged about here, Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois granted in part the EEOC’s  motions to strike with respect to evidence of communications during conciliation, and granted the EEOC’s renewed motion for partial summary judgment as to Mach Mining’s defense of failure to conciliate. EEOC v. Mach Mining, LLC, No. 11-cv-00879-JPG-PMF (S.D. Ill. Jan. 19, 2016).

This decision is required reading for employers engaged in EEOC investigations, conciliations and enforcement litigation.

Case Background

In 2011, the EEOC filed suit on behalf of a class of female applicants who had applied for non-office jobs at Mach Mining’s Johnston City, Illinois facility. According to the EEOC, Mach Mining “has never hired a single female for a mining-related position,” and “did not even have a women’s bathroom on its mining premises.” Id. at 1. The complaint alleged that since January 1, 2006 Mach Mining engaged in a pattern or practice of unlawful discrimination on the basis of sex, in violation of Title VII. In its answer, Mach Mining asserted the EEOC’s failure to conciliate in good faith under 42 U.S.C. § 2000e-(5)(b) as an affirmative defense to the litigation.

The EEOC moved for partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate. The District Court denied the motion, finding that the EEOC was not entitled to judgment as a matter of law as the EEOC’s pre-suit duty to conciliate was subject to at least some level of judicial review. Id. at 2. The EEOC then filed a motion for reconsideration or, in the alternative, for certification for appeal under 28 U.S.C. §1292(b). The District Court held oral arguments and denied reconsideration of its order, but granted the motion to certify. The Seventh Circuit ultimately reversed and remanded the case back to the District Court for proceedings on the merits. Mach Mining then petitioned for certiorari to the Supreme Court, which was granted.

The Supreme Court heard arguments on January 13, 2015 and decided on April 29, 2015 that, a judge “may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit…[but] the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.” Mach Mining, LLC v. EEOC, 135 S.Ct. at 1649 (2015). The Supreme Court reasoned that narrow judicial review of the EEOC’s pre-suit duty to attempt conciliation prior to litigation was appropriate, given the confidential nature of conciliation and the discretion afforded the EEOC under Title VII to determine how to attempt conciliation.  Accordingly, the judgment of the Court of Appeals was vacated and the matter was remanded back to the Seventh Circuit for further proceedings. The Seventh Circuit then remanded the case back to the District Court for proceedings consistent with the opinion of the Supreme Court.

The EEOC subsequently renewed its motion for partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate, arguing that it had sufficiently demonstrated attempting conciliation with Mach Mining, and compliance with 42 U.S.C. § 2000e-5(b). The EEOC also filed two motions to strike, arguing in the first motion that a portion of Mach Mining’s opposition to summary judgment revealed confidential information about the conciliation process in derogation of 42 U.S.C. § 2000e-5. The District Court previously had denied the EEOC’s attempts to strike this information, agreeing with Mach Mining that the information provided in Mach Mining’s papers was focused on what was missing from the conciliation process, as opposed to what was actually said or done during the process. The EEOC argued in the second motion that portions of Mach Mining’s exhibits and statement of additional undisputed facts in support of its opposition to the EEOC’s motion for partial summary judgment similarly should be stricken.

The District Court’s Decision

The District Court granted the EEOC’s motions to strike, in part, and granted the EEOC partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate.  In doing so, the District Court observed that the Supreme Court provided guidance for limited judicial review of the informal “conference, conciliation, and persuasion” requirement of Title VII, and for what information a court may consider in its review.  The District Court relied on the Supreme Court’s reasoning that a judge “looks only to whether the EEOC attempted to confer about a charge, and not to what happened (i.e., statements made or positions taken) during those discussions.”  Mach Mining, No. 11-CV-00879, at 4. The District Court determined that while substantive details had not been disclosed by Mach Mining in its court filings, nevertheless specifics as to that was “said or done” during the conciliation process were disclosed, and went beyond “whether EEOC attempted to confer about a charge.” Id. at 5. Accordingly, the District Court granted the EEOC’s motions to strike portions of Mach Mining’ opposition papers and supporting exhibit.

The District Court declined to strike, however, portions of Mach Mining’s filings attesting to a letter sent by the EEOC stating that conciliation efforts had failed, as well as the date of the lawsuit. The District Court noted that the EEOC previously had stated that such letters were available for review, that the date of filing was a public record, and that information regarding the EEOC’s fiscal year was also publicly available. Id. at 5-6. Accordingly, the District Court found that the information in these paragraphs did not concern statements made or positions taken during conciliation.

Turning to the EEOC’s renewed motion for partial summary judgment, the District Court referred to a two part test outlined in the Supreme Court’s decision to determine whether the EEOC has complied with the statutory requirement of 42 U.S.C. § 2000e-5(b): (1) the EEOC must inform the employer about the specific allegation, as it typically does in a letter announcing its determination of reasonable cause; and (2) the EEOC must try to engage the employer in an informal method of conference, conciliation, and persuasion. The District Court also emphasized that the scope of the review was narrow, looking only to whether the EEOC attempted to confer about a charge, and not to the statements made or positions taken during those discussions. Id. at 7. The District Court found that the EEOC’s letter of determination that it sent to Mach Mining on September 17, 2010 satisfied the first prong since it described Mach Mining’s alleged improper conduct and identified the aggrieved individuals.

As to the second prong, the District Court described how the EEOC provided Mach Mining with the proper notice, and as evidenced by the declaration of its own employee, the EEOC engaged in oral and written communications with Mach Mining to provide the company with the opportunity to remedy the discriminatory practices. To refute the EEOC’s affidavit, Mach Mining was required to provide an affidavit or other evidence indicating that the EEOC did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim. The District Court determined that the affidavit provided by Mach Mining only indicated that the EEOC did not provide all of the information that Mach Mining requested, and not that it failed to provide the requisite information. Therefore, the District Court held that the EEOC met the second prong of the test set out by the Supreme Court, and granted partial summary judgment to the EEOC. Id. at 10.

It is noteworthy that at the end of its decision, the District Court commented that “[a]lthough § 2000e-5(b) of 42 U.S.C. prohibits the disclosure of ‘anything said or done’ during the informal conciliation process, it does not prohibit disclosure of information obtained during the EEOC’s investigation and such information becomes available through discovery.” Id. This observation signals a significant difference between the EEOC’s pre-suit duties to investigate and to attempt conciliation.

Implications For Employers

Following this decision, employers can expect that in EEOC-initiated litigation, the EEOC will seek the narrowest review possible of its conciliation processes, asserting that this pre-suit condition is satisfied merely by producing a letter of determination, a notice of failure of conciliation, and an affidavit by EEOC personnel. With regard to EEOC pre-suit investigations, employers should be prepared to document the EEOC’s pre-suit investigatory conduct and enforce Title VII’s requirement of an investigation prior to the EEOC’s initiation of litigation. Armed with this decision, the EEOC will likely aim for the minimum threshold of satisfying its conciliation requirements for the foreseeable future.

Readers can also find this post on Seyfarth’s Workplace Class Action blog here.

Seyfarth’s Annual EEOC Litigation Study “Goes Viral”

Posted in EEOC Litigation

With the publication of our Annual Study on EEOC Litigation, the reaction from clients and loyal blog readers has been great. The Study was reported widely by the media too. Our upcoming January 19 webinar on the Study already has over 1,200 participants. It manifests the notion that EEOC litigation is one of those workplace issues that keep executives, corporate counsel, and HR professionals up at night.

LXBN TV recently televised our Study, and we thought our readers would enjoy the show

Readers can also find this post on our Workplace Class Action blog here.

Seventh Circuit Slams The “Brakes” On The EEOC’s Appeal Of AutoZone ADA Defeat

Posted in EEOC Litigation

thCATMS9YBBy Gerald L. Maatman Jr. and Howard M. Wexler

As we have previously noted, the EEOC continues to push the envelope on many fronts, including new theories/arguments in cases brought under Americans With Disabilities Act, 42 U.S.C. § 12101 et seq. (“ADA”), such as its recent attack on wellness plans, discussed here.

Most recently, in EEOC v. Autozone, Inc., No. 15-1753 (7th Cir. Jan. 4, 2016), the Seventh Circuit affirmed the denial of the EEOC’s request for a new trial in a case brought under the ADA where after a five day trial the jury returned a full verdict for the employer. The decision is an interesting read for corporate counsel focused on EEOC litigation and ADA compliance.

Background

In 2009 an employee who worked for AutoZone as a Parts Sales Manager was permanently restricted her from lifting anything with her right arm that weighed over 15 pounds. Id. at 2. One month later AutoZone discharged the employee because it was unable to accommodate her permanent restriction. Id. The employee filed a charge with the EEOC, which, after issuing a probable cause determination, filed suit against AutoZone alleging that it failed to accommodate her lifting restriction and illegally terminated her employment. Id.

A five-day jury trial was held in November 2014. Id. The jury returned a special verdict finding that the EEOC failed to prove by a preponderance of the evidence that the employee was a “qualified individual with a disability or a record of disability at the time that her employment was terminated.” Id. The EEOC subsequently moved for a new trial. In support of its motion, the EEOC argued: (1) the verdict was against the manifest weight of the evidence; (2) the medical evidence established that [the employee] was disabled as a matter of law; and (3) the jury instructions confused the jury. Id. at 3-4. The district court denied the motion.  Id. at 4. Thereafter, the EEOC appealed.

The Seventh Circuit’s Decision

The Seventh Circuit rejected all three grounds advanced by the EEOC in support of the request for a new trial. With respect to its argument that the jury’s award went against the manifest weight of evidence, the Seventh Circuit held that “based on the substantial evidence presented at trial, a rational jury could have concluded that heavy lifting was a fundamental duty of the PSM position, rather than merely a marginal function.” Id. at 7. Since the employee could not lift more than 15 pounds with her right arm, “there was sufficient evidence for a rational jury to find that she could not perform the essential functions of the PSM position. Thus, a rational jury could find that Zych was not a qualified individual with a disability.” Id. at 7-8.

The Seventh Circuit also rejected the EEOC’s request for a new trial based on the district court’s denial of its proposed team concept instruction. The proposed team concept instruction that the district court rejected stated:

In team working environments, where team members per-form tasks according to their capacities and abilities, job functions that are not required of all team members are not essential functions. Where there is no required manner in which employees are to divide the labor, the fact that one team member may not be able to do all the tasks assigned to the team does not mean that person is unable to per-form his or her essential functions.

Id. at 3.

The EEOC argued that this “team concept” jury instruction was permitted in prior cases, and, by denying it, the district court “provided the jury with an incomplete and misleading statement of the law.” Id. at 9. The Seventh Circuit disagreed.  First, it held that, “the EEOC’s proposed team concept instruction was an attempt to have the jury draw an inference that heavy lifting was not an essential function of the PSM position.” Id. at 12. The Seventh Circuit found that, “the district court was not obligated to promulgate such an inference within the jury instructions. Rather, it was proper for the district court to instead allow the EEOC to make its team concept argument to the jury in its closing arguments.” Id. at 13.

Furthermore, the Seventh Circuit found that the district court’s denial of the proposed instruction did not prejudice the EEOC. Id. at 13. Although the district court denied the instruction, the judge nonetheless allowed the EEOC to argue it to the jury during closing arguments. Id. at 13. However, the EEOC chose not to do so. Accordingly, as “the EEOC decided not to present the team concept argument, despite the district court expressly stating that it could, the EEOC cannot now claim that it was prejudiced by the district court’s refusal to admit its proposed jury instruction.”

Implications For Employers

This decision highlights not only the continued push back against the EEOC’s new “theories” of liability in ADA cases, but also the importance of jury instructions at trial and preserving the record if the district court rejects proposed jury instructions. Here, the Seventh Circuit took pains to point out that the district court, while denying its proposed instruction, nonetheless allowed the EEOC to argue the points to the jury during its closing. By the Commission failing to do so, the Seventh Circuit was quick to point out that the EEOC seemed to have voluntarily abandoned its argument, thus belying any claim of prejudice.

Readers can also find this post on our Workplace Class Action blog here.

2015’s Top 5 Most Intriguing Decisions In EEOC-Initiated Litigation (And A Preview Of Our Annual EEOC Litigation Report)

Posted in EEOC Litigation

thetopfiveBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Matthew J. Gagnon

We are pleased to offer our loyal blog readers our analysis of the five most intriguing decisions in 2015 relative to EEOC lawsuits, along with a pre-publication preview of our annual report on developments and trends in EEOC-initiated litigation. That book, entitled EEOC-Initiated Litigation: Case Law Developments In 2015 And Trends To Watch For In 2016, is a thorough analysis of the lawsuits that were filed by the EEOC in FY2015 (spanning October 2014 through September 2015), and the major decisions impacting EEOC litigation. We have analyzed those filings and decisions to bring our readers the most up-to-date examination of trends affecting the EEOC’s enforcement agenda. As always, we believe that the best way for any employer to stay out of the EEOC’s cross-hairs is to develop a deep understanding of its enforcement priorities. We hope that this year’s publication gives employers the tools they need to do exactly that.

This year we have expanded our analysis to look at new case filings and important decisions on an industry-by-industry basis. This year’s book includes individual sections devoted to enforcement trends and significant decisions impacting employers in the retail, hospitality, manufacturing, healthcare, construction/national resources, and business services industries. That analysis can be found here.

The full publication will be offered for download as an eBook. To order a copy, please click here.

We like to end our year with a look back at some of the most interesting decisions of the year. We had no trouble picking those cases for 2015. The U.S. Supreme Court handed down three decisions in 2015 that we believe will significantly impact EEOC-initiated litigation for years to come. There were also some especially intriguing decisions out of the lower courts that we believe shed light on how the EEOC will adjust tactics to pursue its enforcement agenda in 2016 and beyond.

Here is our list of the top five most interesting decisions of 2015.

  1. Mach Mining v. EEOC, 135 S. Ct. 1645 (2015).

Hands down, the most interesting, exciting, and game-changing decision of the year was the U.S. Supreme Court’s decision in Mach Mining v. EEOC. Sometimes we have to guess as to how significantly a single decision will shape the future of EEOC litigation. With Mach Mining, there is no wondering; it will have a major impact. We have devoted a special section of this year’s book to this decision, including a look back at the important cases leading up to it, and the first decisions from the lower courts that offer a glimpse as to how Mach Mining will be applied in the years to come. That section begins here.

What makes this decision so intriguing? It single-handedly dismantled the EEOC’s efforts to immunize its pre-suit conduct from judicial review. The Commission has been arguing for years in lawsuits around the country that judges are simply not authorized to review its pre-suit conduct. That includes the statutorily-required duty to conciliate a charge before bringing suit in court. In theory, meaningful conciliation would allow employers the opportunity to resolve EEOC charges before a lawsuit is filed. In practice, employers too often see the EEOC making a take-it-or-leave-it offer and then proceeding directly to litigation.

The Supreme Court rejected the EEOC’s position, holding that there is a “strong presumption favoring judicial review of administrative action.” Id. at 1651. Indeed, without the power to review the EEOC’s conciliation efforts, “the Commission’s compliance with the law would rest in the Commission’s hands alone.” According to the  Supreme Court, the point of judicial review is “to verify the EEOC’s say-so,” and to “determine that the EEOC actually, and not purportedly” met its obligations. Id. at 1653. But perhaps even more important for employers, the Supreme Court acknowledged that conciliation is a crucial step in realizing Title VII’s legislative goals, which make cooperation and voluntary compliance the “preferred means” of bringing employment discrimination to an end. Id. at 1651.

This decision is still only a few months old, and the lower courts are only just beginning to grapple with its application. Despite the Supreme Court’s strong stance in favor of judicial oversight, it outlined a fairly limited view of what that oversight would look like. Some courts have interpreted the decision narrowly, applying a minimalistic review of the EEOC’s actions. Other courts have taken a more expansive view, scrutinizing how the EEOC conducted its conciliation efforts and sending the Commission back to the drawing board if those efforts did not satisfy what Title VII requires. We will continue to monitor these developments for our loyal blog readers.

  1. Young v. United Parcel Service, Inc., 135 S. Ct. 1338 (2015).

On March 25, 2015, the Supreme Court issued another decision that we expect will have far-reaching effects on EEOC litigation. In Young v. United Parcel Service, Inc., the Supreme Court declined to follow the EEOC’s Enforcement Guidance on Pregnancy Discrimination and Related Issues.. In that guidance, the EEOC had sought to apply a “most-favored nation” approach to reasonable accommodations offered to pregnant employees.

This approach was summarily rejected by the Supreme Court in Young. Although the Supreme Court acknowledged that that the rulings, interpretations, and opinions of an agency charged with enforcing a particular statute are often given deference, here the Court was unimpressed by the thoroughness of the EEOC’s consideration of the issues and declined to give the EEOC’s guidance any weight. This decision leaves employers scratching their heads as to how they should interpret and apply the EEOC’s guidance post-Young. Our more fulsome review of the Young decision and its potential aftermath can be found here.

  1. EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028 (2015).

The Commission’s guidance on religious garb and grooming fared much better before the Supreme Court. In Abercrombie & Fitch Stores, Inc., the Supreme Court held that an employer that is without direct knowledge of an employee’s religious practice can be liable under Title VII for religious discrimination if the need for an accommodation was a motivating factor in the employer’s decision, whether or not the employer knew of the need for a religious accommodation. “[T]he rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.” Id. at 2033. Although the EEOC’s guidance was not specifically mentioned in the Court’s decision, this rule is consistent with the “knowledge” requirement set forth in the EEOC’s guidance.

Like Mach Mining, this is a new decision that the lower courts are only just beginning to apply. Religious discrimination is a hot-button topic for the EEOC, so the repercussions of the Abercrombie decision will be an important issue to watch in 2016 and beyond. Our discussion of Abercrombie and other religious discrimination developments can be found here.

  1. EEOC v. Doherty Enterprises., Inc., No. 14-CV-81184, 2015 U.S. Dist. LEXIS 116189 (S.D. Fla. Sept. 1, 2015).

One of the most interesting decisions in 2015 to come from the lower courts was out of the U.S. District Court for the Southern District of Florida. In EEOC v. Doherty Enterprises., Inc., the court arguably recognized an entirely new cause of action under section 707(a) of Title VII, which would allow the EEOC to bring pattern or practice suits without having to engage in any of the pre-suit obligations mandated by other sections of Title VII. In effect, this would be an end-run around the Mach Mining decision because the question decided in that case – whether courts have the power to oversee how the EEOC satisfies its pre-suit obligations – is irrelevant if the EEOC can skirt those obligations altogether.

The arguments and legislative history that led to this decision are complex but well worth a read. We have included an expanded discussion of this decision in this year’s book plus a discussion of a similar case from the Northern District of Illinois that came to the opposite conclusion (a conclusion that was later affirmed by the Seventh Circuit). That discussion is available here. The EEOC has now persuaded one court that Title VII gives it the authority to bring a pattern or practice claim against employers who “resist” the full enjoyment of the rights provided for by Title VII. If other courts agree with this decision, it could become a powerful new weapon in the EEOC’s enforcement arsenal.

  1. R.G. & G.R. Harris Funeral Homes, Inc., No. 2:14-CV-13710-SFC-DRG (E.D. Mich. filed Sept. 25, 2014).

Finally, we have chosen a decision out of the U.S. District Court for the Eastern District of Michigan as one of our top five most interesting cases of the year. In R.G. & G.R. Harris Funeral Homes, Inc., the EEOC secured its most explicit endorsement to date of its theory that discrimination against transgender employees is tantamount to discrimination on the basis of sex because it is based on an employer’s gender-based expectations, preferences, or stereotypes. This theory has a fascinating history.

As recently as 2010, the EEOC was turning down employees who came to them with charges of transgender discrimination, which even the EEOC did not think were covered by Title VII. But that quickly changed after the EEOC issued its own decision in a case that (arguably) arose out of its own power to hear and decide disputes brought by federal agency employees. This is a particularly interesting “case study” in how the EEOC uses all of the tools at its disposal to expand the law to fit its enforcement priorities. Our readers can read all about it here.

Now, along with its own decision, the EEOC has a federal court decision to point to in support of its new theory. On April 21, 2015, the court in R.G. & G.R. Harris Funeral Homes, Inc. denied the employer’s motion to dismiss the EEOC’s complaint, holding that “even though transgendered/transsexual status is currently not a protected class under Title VII, Title VII nevertheless ‘protects transsexuals from discrimination for failing to act in accordance and/or identify with their perceived sex or gender.’” Id. at 599 (quotations omitted)., The Court went on to observe, however, that the EEOC “appears to seek a more expansive interpretation of sex under Title VII that would include transgendered persons as a protected class,” and noted that “there is no Sixth Circuit or Supreme Court authority to support the EEOC’s position that transgendered status is a protected class under Title VII.” Id.

These decisions and others made 2015 an exceptionally fascinating year for developments in EEOC litigation. And because these decisions often raised more questions than they answered, it portends an even more interesting year to come. We look forward to bringing those developments to our readers’ attention as they happen. We wish all a happy and safe New Year!

Readers can also find this post on our Workplace Class Action blog here.

Seventh Circuit “Releases” CVS From EEOC’s Separation Agreement Attack

Posted in EEOC Litigation

thCATMS9YBBy Gerald L. Maatman Jr. and Howard M. Wexler

As we previously blogged about, most recently here and here, the EEOC has gone on the offensive challenging employer severance agreements. In one such case, the EEOC attacked CVS Pharmacy Inc.’s standard release agreement which contained terms more expansive in favor of employees than the EEOC’s own interpretive guidance, and agreements held enforceable by in key court decisions.  The EEOC’s case against CVS was eventually dismissed on procedural grounds because the EEOC had not met its obligation to conciliate the claims filed in that case, so failed to provide additional guidance on the EEOC’s aggressive theories.

The EEOC appealed its well-publicized defeat in the CVS case and on December 17, 2015 the U.S. Court of Appeal for the Seventh Circuit issued yet another stinging rebuke of the EEOC’s “shoot first aim later” litigation tactics and rejected the EEOC’s appeal.

Case Background

In its Complaint, the EEOC alleged that certain provisions of CVS’s standard severance agreement violated Title VII because they interfere with an employee’s right to file charges, communicate voluntarily with the EEOC and other state agencies, and participate in agency investigations.  Id. at 3.  The case arose out of a former CVS pharmacy manager who was discharged in July 2011. Id. at 2.  She filed a charge with the EEOC, alleging that CVS terminated her due to her sex and race.  Id.  On June 13, 2013, the EEOC dismissed the charge, but it then sent CVS a letter saying that it had reasonable cause to believe that CVS was engaged in a pattern or practice of resistance to the full employment of rights secured by Title VII by virtue of the severance agreements that the charging party and others signed at their terminations. Id. at 4. Specifically, the EEOC claimed that the agreement deterred the filing of charges and interfered with the employee’s ability to communicate voluntarily with the EEOC and other federal and state agencies.   Id.

The District Court dismissed the EEOC’s case on purely procedural grounds, as it was undisputed that the EEOC did not engage in any effort to conciliate prior to bringing suit. Id. at 6. The EEOC argued that it was not required to engage in conciliation procedures because it was not bringing a garden-variety pattern or practice claim under section 707(e), but rather was alleging a pattern or practice of resistance to the full enjoyment of rights created by Title VII.  Id.  That “resistance” claim was brought under section 707(a), which does not mandate the same pre-suit procedures as are required under section 707(e).  Id.

Seventh Circuit’s Decision

On appeal, the EEOC alleged that the District Court “got it wrong” because: (1) Section 707(a) authorizes the agency to bring actions challenging a “pattern or practice of resistance” to the full enjoyment of Title VII rights without following any of the pre‐suit procedures contained in Section 706, including conciliation; (2) CVS’s use of a severance agreement that could chill terminated employees from filing charges or participating in EEOC proceedings constitutes a “pattern or practice of resistance” for purposes of Section 707(a); and (3) a reasonable jury could conclude that the Agreement deterred signatories from filing charges with the EEOC because of its length, small font, and the fact that it is drafted in “legalese,” thus making summary judgment for CVS improper.  Id. at 7.  The Seventh Circuit summarily rejected the EEOC’s first argument, and therefore, did not address the additional grounds set forth by the EEOC in support of its appeal.

With respect to the Commission’s contention that it was not required to engage in any pre-suit procedures, the Seventh Circuit rejected “the EEOC’s … novel interpretation of its powers under Section 707(a) that extends beyond the pursuit of unlawful unemployment practices involving discrimination and retaliation, and that frees the EEOC from engaging in informal methods of dispute resolution as a prerequisite to litigation,” as it   “cites to no case law….nor has any case been found that supports the distinction between the two sections as argued by the EEOC.”  Id. at 11.

Moreover, because the Seventh Circuit found no difference between a suit challenging a “pattern or practice of resistance” under Section 707(a) and a “pattern or practice of discrimination” under Section 707(e), it reasoned that the EEOC must comply with all of the pre‐suit procedures contained in Section 706, including conciliation.  Id. at 12.  As the Seventh Circuit noted, “[i]f we were to adopt the EEOC’s interpretation of Section 707(a), the EEOC would never be required to engage in conciliation before filing a suit because it could always contend that it was acting pursuant to its broader power under Section 707(a). In other words, the EEOC’s position reads the conciliation requirement out of the statute.”  Id. at 14-15.

Implications For Employers

While this stinging defeat for the EEOC in its attempt to attack carefully drafted severance agreements in line with the EEOC’s own interpretive guidance, employers are nonetheless well advised to review their separation agreement terms at issue in this case. While CVS may have won the battle for now,  the EEOC appears to be ready for war and focused on continuing to litigate terms of individual and/or form separation agreements. In doing so, the EEOC’s position attempts to alter existing case law authority governing terms of severance agreements, regardless of the Agency’s own guidance and leading case law interpreting such terms.

Readers can also find this post on our Workplace Class Action blog here.

EEOC’s Request For Another Bite Of The Apple Rejected At “Mach Speed”

Posted in EEOC Litigation

appleBy Gerald L. Maatman Jr. and Howard M. Wexler

We have previously blogged about the impact of the U.S. Supreme Court’s landmark decision in Mach Mining v. EEOC, No. 13-1019 (U.S. April 29, 2015) (most recently here and here).  As we predicted, the true impact of Mach Mining will not be known until federal courts around the country start to weigh in on its utility as a dispositive defense vis-à-vis the Commission’s conciliation obligation.

In an effort to take a mulligan on one of its biggest defeats, the EEOC recently attempted to have the 2009 judgment rendered against it in EEOC v. CRST Van Expedited, Inc. – in which the District Court held (and the Eighth Circuit affirmed) that that EEOC was barred from seeking relief on behalf of 67 individuals because the EEOC “wholly abandoned its statutory duties”  – vacated based on Mach Mining pursuant to F.R.C.P. Rule 60(b)(6).  The EEOC’s motion is all the more interesting given that the U.S. Supreme Court recently granted CRST’s petition for a writ of certiorari as to the Eighth Circuit’s decision reversing the $4.5 million attorney fee award rendered against the EEOC. In this key decision, Judge Linda R. Reade of the U.S. District Court for the Northern District of Iowa denied the EEOC’s motion to vacate the 2009 decision based on Mach Mining on the grounds it failed to establish the requisite “extraordinary circumstances” needed to warrant such extraordinary relief.

Case Background

On September 27, 2007, the EEOC filed its lawsuit “to correct [CRST’s] unlawful employment practices on the basis of sex, and to provide appropriate relief to . . . Starke and a class of similarly situated female employees of [CRST] who were adversely affected by such practices.” Id. On August 13, 2009, the Court found that EEOC was barred from seeking relief on behalf of 67 individuals because the EEOC “wholly abandoned its statutory duties” by: (1) failing to investigate those individuals’ claims until after the EEOC filed the Complaint; (2) not including the 67 individuals as members in the Letter of Determination’s “class” until after the EEOC filed the Complaint; (3) failing to make a reasonable cause determination as to the specific allegations of any of the 67 individuals; and (4) not attempting to conciliate the specific allegations of the 67 individuals prior to filing the Complaint. Id at 2.

While the parties continued to litigate the fee award rendered against the EEOC, the EEOC did not seek U.S. Supreme Court review of the Eighth Circuit’s decision regarding pre-suit requirements.  Shortly after Mach Mining was decided, the EEOC filed a motion for relief pursuant to Rule 60(b)(6) seeking to vacate the Court’s 2009 decision; the Commission asserted that Mach Mining “clarified the EEOC’s pre-suit obligations” and that the Court’s decision dismissing the 67 allegedly aggrieved individuals was contrary to Mach Mining. Id. at 3.

The Court’s Decision

The Court noted that relief under Rule 60 is “an extraordinary remedy for exceptional circumstances” and that “a change in the law that would have governed the dispute, had the dispute not already been decided, is not by itself an extraordinary circumstance warranting Rule 60(b) relief from a final judgment.” Id. 

The Court rejected the EEOC’s argument that Mach Mining “changed the governing law and established the incorrectness of the dismissal of the case.” Id. at 4. First, the Court noted that the issue in Mach Mining was to what extent a Court may inquire into the EEOC’s conciliation process. The so called “class definition” – which was at issue in EEOC v. CRST –  was not a contested issue in Mach Mining. Id. at 4-5. Therefore, the Court held that, “Mach Mining is inapplicable to the instant action, insofar as it concerns inquiry into the specifics of the EEOC’s conciliation process.”

In language that all employers should be sure to keep handy, the Court determined that, “it is the Court’s opinion that Mach Mining’s statement that the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance does not necessarily prevent a Court from dismissing a case where no investigation occurs” as “the issue in Mach Mining was limited to the sufficiency of the EEOC’s conciliation process and the permissible level of judicial inquiry into that process. Mach Mining did not address the appropriate remedy when the EEOC fails to engage in any investigation of claims prior to the conciliation process.” Id. at 5.

In closing, the Court held that “to grant relief in the instant action would open the floodgates for countless other decisions that were issued based on laws that may have changed in the interim. This scenario is the basis for the importance of the finality of judgments and the need for limiting relief under Rule 60(b) to truly extraordinary cases, cases where the denial of relief offends justice.” Id.

Implications for Employers

This decision yet again demonstrates the possible wide-ranging effects of Mach Mining. In this case, the Court rejected the EEOC’s request to vacate a nearly six year old judgment, and as the Court noted, avoided “open[ing] the floodgates for countless other decisions that were issued” prior to Mach Mining.  Furthermore, the Court’s decision is important in that it makes clear what was [and was not] decided by Mach Mining, thus dealing a blow to the EEOC’s attempt to use Mach Mining to its advantage in cases involving not just the EEOC’s conciliation efforts, but its underlying investigation.  Stay tuned as we continue monitor the impact of Mach Mining as we enter 2016!

Readers can also find this post on our Workplace Class Action blog here.

Court Issues Mixed Bag Discovery Decision In EEOC Nationwide Race Discrimination Case

Posted in Discovery

Bbagy Christopher M. Cascino and Gerald L. Maatman, Jr.

In EEOC v. DolGenCorp, LLC d/b/a Dollar General, No. 13-CV-4307 (N.D. Ill.), a case we blogged about previously here, Judge Andrea Wood of the U.S. District Court for the Northern District of Illinois recently decided several discovery issues that have become increasingly common in large-scale, EEOC-initiated disparate impact litigation.

Judge Wood’s ruling is a mixed bag. On the one hand, Judge Wood allowed the EEOC to take discovery on certain background checks performed by Dollar General even though the EEOC did not claim that those background checks had a disparate impact. She also ruled that the EEOC could exceed the presumptive 25 interrogatory limit because the case was nationwide in scope.  She further held that pre-suit statistical analyses performed by the EEOC were protected by the deliberative process privilege. On the other hand, she ruled that EEOC documents subject to the deliberative process privilege may nonetheless be discoverable if an employer can demonstrate a particularized need for the materials that outweighs the EEOC’s need for confidentiality.

Case Background

The EEOC filed suit against Dollar General, alleging that Dollar General’s use of criminal background checks for applicants is discriminatory because it has a disparate impact on African-American job applicants. During the course of discovery, the EEOC sought information regarding other background checks performed by Dollar General. Dollar General refused to turn them over, arguing that the other background checks were not relevant to the EEOC’s claims.

Also during discovery, the EEOC served more than 25 interrogatories on Dollar General. In turn, Dollar General refused to answer four of the interrogatories that exceeded the presumptive 25 interrogatory limit under the applicable local rules.

Finally, Dollar General sought any statistical analyses the EEOC had regarding the purported disparate impact of Dollar General’s background check policy. The EEOC refused to turn its pre-suit analyses over, claiming that they were protected by the deliberative process privilege.

Both parties moved to compel discovery. Magistrate Judge Sheila Finnegan granted the EEOC’s motions to compel and denied Dollar General’s motion to compel. Dollar General subsequently filed Rule 72 objections to Magistrate Judge Finnegan’s report and recommendation.

The Court’s Decision

The Court began by considering whether Dollar General should be compelled to turn over documents regarding other, non-challenged background screening used by Dollar General.  Judge Wood held that the documents were relevant to Dollar General’s business necessity defense.  Id. at 4. Specifically, Judge Wood held that the EEOC was entitled to respond to Dollar General’s business necessity defense by showing that alternative, equally effective background checks were available to Dollar General. The Court found that the non-challenged background screening performed by Dollar General might represent such alternative background checks. Id. at 4-5.

The Court then rejected Dollar General’s argument that the EEOC was required to investigate any background checks it claimed were relevant before filing suit. Id. at 5. The Court held that such investigation would only be necessary if the EEOC was claiming the background checks had a disparate impact. Id. Because the EEOC was not challenging these other background screenings, the Court compelled Dollar General to turn over documents about its other background checks. Id.

The Court then addressed the excess interrogatories. The Court held that the EEOC was allowed to exceed 25 interrogatories because its claim was “nationwide in scope, raise[d] complicated data issues, and involve[d] many different legal and factual areas.” Id. at 7-8.

The Court next considered whether Dollar General could discover the EEOC’s pre-suit statistical analyses of Dollar General’s background check policies. After noting that “[t]he deliberative process privilege protects communications that are part of the decision-making process of a governmental agency,” the Court found that these analyses were protected by the deliberative process privilege because they were performed as the EEOC was determining whether to sue Dollar General. Id. at 8-9.

Nevertheless, the Court held that the EEOC might nonetheless be required to turn the analyses over if Dollar General could demonstrate a “particularized need for the documents that exceeds the EEOC’s need for confidentiality.” Id. at 11. The Court then remanded the issue to the Magistrate Judge so that she could decide whether Dollar General could make such a showing.

Implications For Employers

Employers involved in litigation with the EEOC should be aware of this decision because the EEOC will undoubtedly rely upon it when it seeks discovery regarding non-challenged employment policies and when it seeks to serve excess interrogatories in complex, nationwide cases. The EEOC will also try to use the ruling to shield any pre-suit statistical analyses it performed from discovery. However, employers also can use decision to support discovery gambits vis-à-vis the Commission; even if the EEOC’s pre-suit statistical analyses are protected by the deliberative process privilege, they are nonetheless subject to discovery because of some particularized need.

Readers can also find this post on our Workplace Class Action blog here.

Employers Beware: EEOC’s 2015 Performance And Accountability Report Reaffirms Its Commitment To High Profile, Systemic Litigation

Posted in EEOC Litigation

thCAD0SFA4By Christopher DeGroff, Gerald L. Maatman, Jr., and Jennifer A. Riley

On November 19, 2015, the EEOC released its annual 2015 Performance and Accountability Report (“PAR”). The Report reflects the progress of the EEOC’s continued efforts to meet the enforcement priorities outlined in its 2012 strategic enforcement plan (“SEP”), including its systemic litigation initiative. For employers, this is perhaps the most important document issued by the Commission. In short, it should be required reading for corporate counsel and professionals involved in compliance efforts relative to workplace litigation issues.

In its SEP, among other things, the EEOC underscored its efforts to champion bigger, more media-focused “systemic” cases, including pattern or practice cases where the alleged discrimination “has a broad impact on an industry, occupation, business, or geographic area.” In the SEP, the EEOC set forth a goal to ensure that systemic cases make up at least 20% of its annual litigation docket and at least 22% to 24% of its litigation docket by 2016. (Read more here.)

As background, the PAR is a “scorecard” of sorts for the EEOC. It provides a report on its activities during the past fiscal year, from October 1, 2014 through September 30, 2015, including its progress toward meeting the goals outlined in the SEP, and provides a preview of what we can expect to see from the EEOC in the upcoming months.

In sum, although the Report acknowledges that the EEOC filed fewer systemic lawsuits in FY 2015, the number of systemic investigations and recoveries exceeded FY 2014 levels. Despite significant setbacks in FY 2014 (read more here), the agency’s statistics trumpeted in the PAR show that, rather than backing down, the EEOC was inspired to be even more aggressive in FY 2015.

The EEOC’s Overall Results

The EEOC’s results reflect a mixed bag for employers.  The EEOC’s totals represent a slight increase in charges filed (93,727 in 2013, compared with 88,778 in 2014, and 89,385 in 2015),Monthly-Reports (2) and a slight increase in merits lawsuits (131 in 2013, compared with 133 in 2014, and 142 merits lawsuits in 2015).

However, the EEOC’s report reflects a steady decrease in the number of systemic lawsuits, both in the number filed (21 in 2013, compared with 17 in 2014, and 16 in 2015), and in the number of systemic lawsuits on-going in the court system (54 in 2013, compared with 57 in 2014, and 48 in 2015).

Although the agency completed more systemic investigations in 2015 than it completed in 2014, the EEOC’s numbers did not meet 2013 levels. In 2015, the agency completed more investigations than it completed in 2014, but fewer investigations than it completed in 2013 (300 in 2013, compared with 260 in 2014, and 268 in 2015).  The agency recovered more as a result of those investigations than it recovered in 2014, but less than it recovered in 2013 ($63 million in 2013, compared with $13 million in 2014, and $40 million in 2015).

Charges:   A Bigger Backlog

The EEOC reported that it received 89,385 charges alleging employment discrimination in 2015.  The number was up slightly over the number received in 2014 (88,778), but remains below the record-breaking recession-period numbers that we saw between 2008 and 2013.  During those years, the numbers steadily rose from 95,402 in 2008, to 93,277 in 2009, to 99,922 in 2010, and 99,947 in 2011, before starting a gradual decline to 99,412 in 2012 to 93,727 in 2013.

As of the end of FY 2015, the EEOC had a backlog of 76,408 charges, a slight increase of 750 charges over the backlog at the conclusion of FY 2014.

Settlements: Recoveries Soar

In its Report, the EEOC reported a surge in the total amount of monetary settlements.  Its administrative enforcement program produced $356.6 million from claim resolutions, up over $60 million from the $296.1 million that it collected in FY 2014.  The EEOC resolved 155 merits lawsuits in the federal district courts, for a total monetary recovery of $65.3 million, a substantial increase ($42.8 million) over the $22.5 million that it collected during FY 2014.  In addition, the EEOC resolved 6,360 complaints and secured more than $94.9 million in relief for federal employees and applicants who requested hearings in FY 2015.

Lawsuits: More Suits, Smaller Share Of Systemic Cases

In its 2015 PAR, the EEOC reported that, during fiscal year 2015, the EEOC filed 142 merits lawsuits, including 100 individual suits, and 42 suits involving “discriminatory policies or multiple victims,” of which 16 (or 11%) involved challenges to alleged systemic discrimination. According to the EEOC, in the 16 systemic lawsuits, the EEOC challenged a variety of types of alleged systemic discrimination, including an alleged age-based refusal to hire, a refusal to accommodate religious beliefs, an imposition of unnecessary medical restrictions, and a systematic failure to maintain records.

Whereas these numbers reflect an upward trend in the number of merits lawsuits, the growth of systemic lawsuits was stagnant. In 2013, the EEOC reported that it had filed 131 merits  lawsuits, compared with 133 merits lawsuits in 2014, and 142 merits lawsuits in 2015.  However, in 2013, the EEOC reported that 21 (16%) of those lawsuits were systemic suits, compared with 17 (13%) systemic lawsuits in 2014, and 16 (11%) systemic lawsuits in 2015.  These numbers might explain the agency’s effort in 2015 to report 40 (18.3%) “multiple victim” cases.

At the end of FY 2015, the EEOC had 218 cases on its active district court docket, of which 48 (22%) involved challenges to systemic discrimination. These numbers also reflect a decrease over the past two years.  At the end of FY 2013, the agency had 231 cases on its active docket, of which 54 (23%) involved challenges to systemic discrimination.  At the end of 2014, the agency had 228 cases on its active docket, of which 57 (or 25%) involved challenges to systemic discrimination.

Our “peek behind the numbers” suggests that the Commission’s prosecution of systemic lawsuits has stressed its budget, attorney workloads, and overall capacities. Big cases equate to significant hours of attorney time, and the EEOC’s capacity to file and prosecute an increasing number of systemic lawsuits has hit somewhat of a ceiling or cap due to budgetary and attorney workload limitations.

Systemic Investigations

With respect to investigations in FY 2015, the agency reported that it completed 268 systemic investigations and issued 109 cause findings. It resolved 70 systemic investigations by voluntary conciliation agreements and obtained over $33.5 million in remedies as a result of its systemic initiative.

While reflecting an increase over FY 2014, these numbers still did not achieve the agency’s FY 2013 results. One year ago, the EEOC reported completing only 260 systemic investigations and securing only $13 million in monetary relief. At the end of 2013, the EEOC had launched 300 systemic investigations, resulting in 63 settlements or conciliation agreements, and had recovered approximately $40 million in remedies.

Overall Implications For Employers

Do these numbers mean that the EEOC is backing off its systemic initiative? Not a chance in our view.  Although the EEOC filed fewer systemic lawsuits in FY 2015, the number of 7_Top_HR_Mistakes_Companies_Make_NEW_BANNER (2)systemic investigations and recoveries exceeded FY 2014 levels, and its recoveries represented a climb toward its FY 2013 numbers. As we predicted a year ago, rather than backing down, these numbers signal that the EEOC’s FY 2014 defeats inspired it to more aggressively pursue its agenda.

We expect the EEOC to continue to search for and to initiate systemic investigations to continue this upward trend in 2016. In its FY 2015 PAR, the EEOC continued to highlight its emphasis on “maximizing [its] impact” through its focus on systemic discrimination. The EEOC noted that, at the end of FY 2015, it employed more lead systemic investigators “whose work is dedicated exclusively to development and coordination of systemic investigations,” and more social science research staff.

The EEOC also noted that it continued its efforts to develop means to coordinate systemic investigations across offices. In particular, the EEOC reported that its Systemic Watch List, a software tool that matches ongoing investigations or lawsuits, has “proven integral” to improved coordination. The EEOC also reported that it completed its expansion of the CaseWorks system, a “central shared source of litigation support tools” that facilitate the collection and review of electronic discovery and enable “collaboration” in the development of cases for litigation.

In short, we do not expect the EEOC to back off its systemic initiative in 2016, but to be more aggressive in pursuing those cases that fit within its agenda. So numbers aside, these metrics reflect an agency committed to “big impact” lawsuits that “send a message” to the employer community.

Readers can also find this post on our Workplace Class Action blog here.