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

Seyfarth Synopsis: In the latest battle of the multi-year showdown between the State of Texas and the EEOC – whereby Texas asserted that the EEOC’s 2012 “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII” (“Guidance”) interfered with its authority to limit the hiring of felons – the U.S. Court of Appeals for the Fifth Circuit affirmed most  parts of an injunction that the U.S. District Court for the Northern District of Texas entered in favor of Texas, which blocked the EEOC and the U.S. Department of Justice (“Defendants”) from enforcing the Guidance.  State of Texas v. EEOC et al., No. 18-10638, 2019 U.S. App. LEXIS 23498 (5th Cir. Aug. 6, 2019).

This ruling serves as a major roadblock for the EEOC in circumstances where the Commission attempts to infringe upon states’ rights by issuing an administrative guidance, and can further be considered a game-changer in the criminal background check litigation landscape.

* * *

Case Background

As we have blogged about extensively in the past (here, here, here, and here), in April 2012 the EEOC issued the Guidance citing data which suggested that blanket bans on hiring individuals with criminal records disproportionately impacted minorities.  Id. at *2.  Texas brought two causes of action against the EEOC after an individual who had been rejected for a State job filed a complaint with EEOC, challenging Texas’s no-felon hiring policy as having a disparate impact in violation of Title VII.  In the first cause of action, brought under the Declaratory Judgment Act (“DJA”), Texas asked for “a declaration of its right to maintain and enforce its laws and policies that absolutely bar convicted felons (or particular categories of convicted felons)” from specified jobs.  Id. at *7.  Texas also asked for an injunction that EEOC and the Attorney General “cannot enforce the interpretation of Title VII that appears in its Felon-Hiring Rule, nor . . . issue right-to-sue letters pursuant to that rule.”  Id.  In the second cause of action, brought under the Administrative Procedures Act (“APA”), Texas sought to set aside the Guidance, arguing that it exceeded the EEOC’s power under Title VII; was promulgated without notice and comment in violation of the APA; and was substantively unreasonable.

After the District Court dismissed the case for want of subject matter jurisdiction, a divided Fifth Circuit panel reversed, holding that Texas had Article III standing to challenge the Guidance, and that the Guidance was a final agency action eligible for judicial review under the APA.  Id. at *7-8.  However, the Fifth Circuit later withdrew its opinion, vacated the judgment, and remanded, noting that the District Court did not have a chance to apply the U.S. Supreme Court’s decision in United States Army Corps of Engineers v. Hawkes Co., 136 S. Ct. 1807 (2016), which held that the issuance of judicial determinations produced “legal consequences.”  Id. at *12.

On remand, the District Court denied the EEOC’s renewed motion to dismiss for lack of jurisdiction, and following cross-motions for summary judgment, the District Court dismissed Texas’s DJA claim, “declin[ing] to declare that Texas has a right to maintain and enforce its laws and policies that absolutely bar convicted felons (or certain categories of convicted felons) from serving in any job the State and its Legislature deems appropriate.”  Id. at *8-9.  The District Court also declined to enjoin the EEOC from issuing right-to-sue letters.  Regarding the APA claim, the District Court granted Texas’s motion for summary judgment in part and denied the EEOC’s motion, holding “that the Guidance . . . is a substantive rule issued without notice and the opportunity for comment.”  Id.  As such, the District Court enjoined both the EEOC and the Attorney General from enforcing the EEOC’s interpretation of the Guidance against the State of Texas until the EEOC complied with the notice and comment requirements under the APA for promulgating an enforceable substantive rule.  The District Court did not reach the questions of whether the EEOC has the power to promulgate a substantive rule interpreting Title VII, or whether the Guidance was substantively unreasonable.  The EEOC appealed, and Texas cross-appealed.

The Fifth Circuit’s Decision

In its recent ruling, the Fifth Circuit affirmed the District Court’s injunction, and vacated and dismissed Texas’s DJA claim.  Id. at *32.  First, the Fifth Circuit noted that it must decide two jurisdictional issues, including: (1) whether the Guidance was a final agency action subject to review; and (2) and whether Texas had standing to challenge the Guidance.  Id. at *9.  Regarding whether the Guidance was a final agency action, the Fifth Circuit noted that whether an action binds the agency is evident “if it either appears on its face to be binding[] or is applied by the agency in a way that indicates it is binding,” and further, that courts have looked for mandatory language to determine whether an agency’s action binds it and accordingly gives rise to legal consequences. Id. at *11 (citation omitted).

After conceding that the Guidance binds the EEOC staff to an analytical method in conducting Title VII investigations and directs their decisions about which employers to refer for enforcement actions, Defendants argued that legal consequences did not flow from the Guidance for three reasons.  First, Defendants argued that because EEOC had no power to bring a Title VII enforcement action against Texas, its Guidance has no legal consequences for the State.  Citing Hawkes, the Fifth Circuit rejected this argument, noting that legal consequences may flow from an “agency action even if “no administrative or criminal proceeding can be brought for failure to conform” to the action.  Id. at *16 (citation omitted).  Second, the EEOC argued that any legal consequences flow from Title VII, not the Guidance, because the Guidance’s interpretation of Title VII disparate impact liability has force of law only if a court presiding over an enforcement action agrees with the Guidance. The Fifth Circuit rejected this argument, holding whether the agency action binds the agency indicates whether legal consequences flow from that action.  d. at *18. Third, Defendants argued that the Guidance does not, and could not, create a safe harbor guaranteeing that the Attorney General will not sue an employee.  The Fifth Circuit also rejected this contention, explaining that whether the Guidance is final agency action does not hinge on whether a private or public employer challenges it, and that such an approach “would flout the Supreme Court’s repeated instruction to approach finality flexibly and pragmatically.”  Id. at *19. The Fifth Circuit thus held that the Guidance was a final agency action that it had jurisdiction to review.

 

Next, the Fifth Circuit addressed whether Texas had standing to sue the EEOC and the Attorney General to challenge the legality of the Guidance.  As the party invoking federal jurisdiction, the Fifth Circuit opined that Texas must establish Article III standing by showing that it has suffered an injury that is “concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling.”  Id. at *20.   The Fifth Circuit held that because it was the object of the Guidance and had suffered multiple injuries as a result, Texas had constitutional standing.  In reaching this conclusion, the Fifth Circuit held that the Guidance deemed unlawful the hiring practices of multiple Texas agencies by rejecting across-the-board felon hiring screens, and it faced the possibility of investigation by EEOC and referral to the Attorney General for enforcement proceedings if it failed to align its laws and policies with the Guidance.  Id. at *21-22.

 

After finding that it had jurisdiction, the Fifth Circuit further addressed Defendants’ challenges to the scope and phrasing of the injunction.  Texas contended that the EEOC lacked power to promulgate the Guidance at all, and that instead of barring enforcement until the Guidance goes through notice and comment rulemaking, the District Court should have enjoined Defendants from treating the Guidance as binding.  Id. at *28-29.  The Fifth Circuit agreed that the Guidance was a substantive rule subject to the APA’s notice-and-comment requirement and that EEOC thus overstepped its statutory authority in issuing the Guidance, a conclusion that “follow[ed] naturally from its holding that the Guidance is a final agency action.”  Id. at *29-30.  However, the Fifth Circuit noted that the notice-and-comment aspect implied that the Guidance would stand if it went through that rulemaking process, which is used to promulgate substantive rules.  Accordingly, because the Guidance was a substantive rule, and the text of Title VII and precedent confirm that EEOC lacks authority to promulgate substantive rules implementing Title VII, the Fifth Circuit modified the injunction by striking the clause “until the EEOC has complied with the notice and comment requirements under the APA for promulgating an enforceable substantive rule.”  Id. at *30.

Finally, the Fifth Circuit clarified that because an injunction must be framed so that those enjoined will know what conduct the court has prohibited, “to avoid any confusion,” it modified, “the injunction to clarify that EEOC and the Attorney General may not treat the Guidance as binding in any respect.”  Id. at *31.  In addition, the Fifth Circuit declined to consider the merits of Texas’s DJA claim since it affirmed the injunction.

Implications For Employers

This victory is a feather in the cap for state employers relative to the EEOC’s attempt to use an administrative guidance as a means to challenge state law.  Although many of the legal battles in this showdown between the State of Texas and the EEOC have involved heavy doses of procedure, this ruling provides an excellent blueprint for how to attack the EEOC when it promulgates substantive rules implementing Title VII, and those rules condemn state law.

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

 

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

Seyfarth Synopsis:  After a federal magistrate judge in California ordered the EEOC to provide written discovery responses relative to the substance its pre-suit investigation of a sex discrimination charge in EEOC v. Chipotle Mexican Grill, Inc., No. 17-CV-5382, 2019 U.S. Dist. LEXIS 129046 (N.D. Cal. Aug. 1, 2019), the EEOC objected to the order and sought review; thereafter, the district judge granted EEOC’s motion for relief from the magistrate judge’s order. The Court found that the requested evidence was protected by the deliberative process privilege, and therefore, that the EEOC did not have to respond to the discovery request.

For employers who are defending against EEOC-initiated litigation, this ruling serves as yet another roadblock in terms of seeking discovery regarding the Commission’s pre-suit investigation.

* * *

Case Background

A former employee filed a charge against Chipotle alleging he was subjected to sexual harassment, retaliation, and discharge.  Id. at *1-2. Before filing suit, the EEOC issued to Chipotle a determination finding reasonable cause to believe that it violated Title VII.  In the course of discovery, the parties agreed to provide written responses to each other’s 30(b)(6) deposition notices instead of producing witnesses.  The EEOC did not substantively respond to five of these topics (Topics 10-14), invoking in part the governmental deliberative process privilege in response to each.  The EEOC argued that Chipotle was not entitled to the requested information because “[t]he substance of the EEOC pre-suit investigation is not judicially reviewable” and therefore not relevant, and that the information was protected by the deliberative process privilege. Id. at *2-3.

Magistrate Judge van Keulen sided with Chipotle and ordered the EEOC to respond to Topics 10–14. Specifically, the Magistrate Judge found that Chipotle sought only “the determinative facts and evidence that support the specific findings of the EEOC,” and that they did “not seek any privileged information.” Id. at *3. The Magistrate Judge surmised that in making its Determination, the EEOC likely “(1) conducted an investigation; (2) identified relevant facts; (3) evaluated those facts; and (4) reached its conclusions.” Id. The Magistrate Judge held that Topics 10–14 were targeted only at the “identified relevant facts” step and not at the EEOC investigation of or evaluation of those facts. Id. The Magistrate Judge concluded that “[t]he EEOC has not identified a privilege that protects the facts that support findings because there is none.” Id. The Magistrate Judge thus ordered the EEOC to respond to these topics. Thereafter, the EEOC filed its motion for relief from a non-dispositive pretrial order of the Magistrate Judge.

The Court’s Decision

The Court granted the EEOC’s motion for relief from a non-dispositive magistrate judge order, and held that the EEOC was not required to respond to Topics 10-14. First, the Court addressed the EEOC’s argument that the Magistrate Judge’s order was contrary to law because Chipotle requested topics seeking information that was protected by the deliberative process privilege.  The Court explained that the deliberative process privilege shields from disclosure intra-governmental communications relating to matters of law or policy, and that its purpose is to protect the quality of governmental decision-making by “maintaining the confidentiality of advisory opinions, recommendations, and deliberations comprising part of a process by which governmental decisions and policies are formulated.” Id. at *4 (citations and quotations omitted). The Court thus held that the Magistrate Judge failed to apply this law by apparently failing to consider whether the sought “factual material was so interwoven with the deliberative material that it was not severable.” Id. at *5.

Turning to the Magistrate Judge’s holding that no privilege “protects the facts that support findings,” the Court held this was an incorrect statement of law. Id. Citing the relevant case law, the Court noted that the deliberative process privilege protects facts if they are “so interwoven with the deliberative material” that “the unveiling of factual materials would be tantamount to the publication of the evaluation and analysis of the multitudinous facts conducted by the agency.” Id. Because the Magistrate Judge did not consider whether revelation of the “identified relevant facts” would be tantamount to revelation of the deliberative process, the Court held that her holding was contrary to law.

Next, the Court addressed Chipotle’s request that the EEOC explicitly disclose only those facts that underpin the determinations, and implicitly to exclude those facts that were not pertinent to the decision. The Court rejected this approach, holding that by disclosing the facts on which it based its conclusions, EEOC would be required to provide Chipotle unwarranted insight into how those facts played into the EEOC’s decision-making process, and that the deliberative process privilege protects such a disclosure.

Having found the deliberative process privilege may apply, the Court then analyzed whether Chipotle nevertheless demonstrated that disclosure of the materials was warranted.  Noting that the deliberative process privilege was a qualified privilege, the Court applied the Ninth Circuit’s four non-exclusive factors that courts may consider in determining whether the litigant has met this requirement: “(1) the relevance of the evidence; (2) the availability of other evidence; (3) the government’s role in the litigation; and (4) the extent to which disclosure would hinder frank and independent discussion regarding contemplated policies and decisions.”  Id. (citation omitted).  The Court held that disclosure was not appropriate under this multi-factor balancing test because, perhaps most importantly, the evidence sought was not relevant to this case.  Further, the Court opined that relevant evidence was available to Chipotle through other avenues, including through produced documents from and investigative file, interview notes for four witnesses, and deposition testimony of the interviewees.

Accordingly, the Court held that although “this litigation is serious and the Government is a litigant in the case, these factors do not tip the balance in favor of disclosure given that the requested evidence is irrelevant with respect to the claims and that forcing EEOC to disclose its deliberative process in cases such as this might chill administrative officers from conducting a fulsome investigation in such circumstances.” Id. at *7.The Court thus granted the EEOC’s motion for relief from a non-dispositive magistrate judge order, and held that the EEOC was not required to respond to Topics 10-14.

Implications For Employers

For employer who are embroiled in EEOC-initiated litigation, the discovery process can be challenging in regards to unearthing evidence from the EEOC’s pre-suit investigation. This ruling will not make that task any easier, and the Commission will almost certainly use it in future discovery-related briefing.

Nonetheless, the Court did provide employers with some alternative avenues to discover facts about the EEOC’s pre-suit investigation, for instance, by requesting interview notes and subsequently deposing the interviewees. Employers should thus be creative when crafting discovery strategies in EEOC-initiated litigation.

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

By Gerald L. Maatman, Jr., Christopher DeGroff, and Michael Jacobsen

Seyfarth Synopsis: Who sits as Chair of the EEOC unquestionably has a significant impact for all employers interacting with the Commission. At long last, the U.S. Senate has voted to confirm Janet Dhillon for the post, nearly two years after President Trump’s administration nominated her. How the new leadership at the Commission will impact broader EEOC policy positions remains to be seen.

On May 8, 2019, the Senate voted 50 to 43 to confirm Janet Dhillon as Chair of the U.S. Equal Employment Opportunity Commission. The vote was a long time coming, as Dhillon was first nominated by the Trump White House back in June 2017, and cleared the Senate Committee on Health, Education, Labor and Pensions (the “HELP Committee”) in October 2017, only to be approved by the HELP Committee again in February 2019 after her nomination had been returned to the President due to the government shutdown.        

Dhillon comes to the EEOC with over 25 years of experience in the private sector. When she was nominated for the position of Chair, she had served for two years as Executive Vice President, General Counsel, and Corporate Secretary of national retailer Burlington Stores, Inc. Before joining Burlington, Dhillon led the legal departments of two other large corporations, US Airways and JC Penney. She also practiced as an attorney with Skadden, Arps, Slate, Meagher & Flom LLP for 13 years before going in-house. In addition to her legal career, Dhillon is one of the Founding Board Members of the Law Women LEAD Board at UCLA, where she earned her J.D. in 1991 and was ranked first in her class.

Given her background, many employers hope that Dhillon will take a “business friendly” approach as EEOC Chair. Indeed, last month, the U.S. Chamber of Commerce and numerous other business organizations sent a letter to Senate Majority Leader Mitch McConnell pressing for Dhillon’s confirmation. On the other hand, groups and organizations such as the NAACP had opposed Dhillon’s nomination in light of the business friendly approach she might take.

We can gather some insight into how Dhillon may proceed from her public statements. Dhillon has suggested in her testimony to the HELP Committee that she views litigation as a “last resort” for the EEOC, “believe[s] that most employers want to be law-abiding,” and that the EEOC should continue “providing tools to employers” to assist with compliance. These comments could telegraph that Dhillon intends to take a practical approach to enforcement decisions that takes into account what impact they will have on workers, companies and industries, even in the wake of the agency’s aggressive pursuit of its strategic priorities under the current administration thus far.

Additionally, Dhillon’s confirmation as Chair could usher in some change with respect to policy. During her confirmation hearing in September 2017, Dhillon stated that she was personally opposed to employment discrimination against members of the LGBTQ community, but she did not commit to upholding the EEOC’s interpretation of Title VII’s prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation; instead, she stated that was a question for the courts.

The Trump administration’s “outside-the-beltway” selection of Dhillon was consistent with its other somewhat non-traditional appointment announcements related to the EEOC. Shortly after Dhillon was nominated, Daniel Gade, a non-attorney and veteran of the Iraq War, also was tapped to serve on the Commission, although he withdrew his name in December 2018 after his nomination stalled. In December 2017, President Trump nominated Obama-appointee Chai Feldblum to be reappointed as a Commissioner. That announcement was subsequently criticized by conservatives, and Senate Republicans ultimately blocked Feldblum’s nomination. And last year, the White House nominated Sharon Fast Gustafson – a longtime solo practitioner who has represented primarily employees – to fill the position of General Counsel at the EEOC. Gustafson still awaits confirmation.

As Chair, Dhillon will be taking over from Victoria Lipnic, who was named Acting Chair of the EEOC by President Trump in January 2017 following the departure of Jenny Yang, the Chair during the Obama Administration.

Implications For Employers

As detailed in our other reports, the EEOC’s enforcement efforts have remained robust under the current administration, and the agency has continued to post significant results. Employers certainly should not expect the EEOC’s overall direction and enforcement efforts to shift dramatically with Dhillon as Chair, but, as noted above, we may see some changes in the agency’s approach to both policy and litigation enforcement under her leadership. As our readers know, we will diligently monitor and report on these developments as they unfold over the course of Dhillon’s tenure, both in terms of key events and emerging trends.

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

Seyfarth Synopsis:  A federal district court in Arkansas recently denied an employer’s motion for summary judgment on two EEOC-initiated ADA claims – in EEOC v. Crain Automotive Holdings LLC, No. 4:17-CV-627, 2019 U.S. Dist. LEXIS 62513 (E.D. Ark. Apr. 11, 2019) –  for failure to provide a reasonable accommodation and discharge based on disability, following a supervisor’s comments to an employee that “it was not working out” and to take care of herself after the employee’s hospitalization. Id. at *1. For employers and management personnel, this ruling illustrates how courts might find seemingly innocuous comments to be direct evidence of discrimination, thus raising the stakes in ADA litigation initiated by the EEOC.

Case Background

In EEOC v. Crain Automotive Holdings LLC, an employee of Crain who suffered from anxiety, depression, and panic attacks began experiencing chest pains and went to the emergency room, fearing she was having a heart attack. Id. After two days of treatment, she ultimately reported back to work. Upon her return, she began experiencing a panic attack and left work, after she emailed her supervisor.  When she returned to work a few days later, she met with two supervisors and was terminated. According to the employee, the supervisors told her that “it was not working out” due to her health problems and that she needed to take care of herself.  Id.

The EEOC brought a lawsuit on behalf of the employee alleging that Crain violated the Americans With Disabilities Act, as amended by the Americans with Disabilities Act Amendments Act of 2008 (“ADA”) because it: (1) failed to provide a reasonable accommodation for the employee, and (2) that it discharged her because of her disabilities.

Crain moved for summary judgment on both of the EEOC’s claims, arguing that: (i) the employee was not disabled under the ADA; (ii) even if the employee was disabled, she could not have been fired because of her disability since Crain did not know about it; and (iii) the EEOC had no direct evidence of discrimination, and under the McDonnell-Douglas framework, the disability claim could not survive.

The Court’s Decision

The Court denied Crain’s motion for summary judgment on both of the EEOC’s claims. First, the Court rejected Crain’s argument that the employee was not disabled within meaning of the ADA, noting that she had been diagnosed with anxiety, depression, and panic attacks. Id. at *4-5. Crain supported its position by arguing that she had been able to perform other demanding activities, such as handling her parents’ estates, and further noted that she did not have constant panic attacks. The Court rejected Crain’s position, holding that a reasonable jury could find that the employee was disabled within the meaning of the ADA based on her testimony regarding the difficulty caused by her impairments. Id. at *6.

Crain further argued that even if the employee was disabled, she could not have been fired because of her disability since Crain did not know about it. Id. at *6-7. In response, the EEOC presented the following evidence: on Tuesday, the employee told her supervisor she had experienced chest pains the day before; on Wednesday, the employee told her supervisor she had anxiety, depression, and had suffered a panic attack; on Friday, the employee emailed her supervisor before leaving work, saying “I can’t do this” because she was “still hurting too bad,” and further, she emailed another supervisor explaining that she had had a heart catheterization, which was supported by a doctor’s note attached to that email. Id. at *7. The Court held that taking all these facts as true, a reasonable jury could infer that at the time the employee was fired the following week, Crain knew about her anxiety, depression, and panic attacks.

Finally, Crain argued that the EEOC had no direct evidence of discrimination, and under the McDonnell-Douglas framework, the disability claim could not survive. The Court noted that when the employee met with two supervisors in order to discuss why she had left work early the previous Friday, she was terminated. The employee testified that at this meeting, a supervisor told her that “due to [her] health, it wasn’t going to work out and [she] should take time for [her]self.” Id. at *8. The Court held that this comment was direct evidence of discrimination, as opposed to falling within the categories of “stray remarks in the workplace, statements by non-decision-makers, and statements by decisionmakers unrelated to the decisional process,” which would have precluded the comments from being considered direct evidence of discrimination. Id. at *9 (citation omitted). The Court further held there was no reason to suspect that the suggestion that the employee should take care of her health or take time for herself was made “with the intent of attempting to preserve and promote” her, as she was fired in the same conversation. Id. Accordingly, the Court denied Crain’s motion for summary judgment as to the discriminatory discharge claim.

Turning the EEOC’s failure to accommodate claim, the Court noted that the employee emailed a doctor’s note to a supervisor, and that the doctor’s note stated that she needed three weeks off work. The Court held that because Crain did not follow up whatsoever on the recommendation contained in the doctor’s letter before firing the employee, the EEOC generated a genuine dispute of fact on whether the employee requested an accommodation  Accordingly, the Court denied Crain’s motion for summary judgment as to the failure to accommodate claim.

Implications For Employers

This ruling serves as cautionary tale for employers regarding both the handling of employee health issues and comments made by supervisory personnel during terminations. In instances where employees present doctors’ notes, as was the case here, employers must be diligent to review those and properly provide any necessary accommodations.

Further, although the comments made during this employee’s termination – “it wasn’t going to work out” and “[she] should take time for [her]self” may seem innocent in nature – the Court here analyzed those comments in the context of the employee’s condition and recent attendance history, and found that such remarks constituted direct evidence of discrimination. Id. at *8-9.  Employers should thus be prudent to educate supervisors and other relevant personnel about carefully selecting their words during termination and disciplinary situations, especially in instances involving health issues.

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

By: Michael Jacobsen, Christopher DeGroff, and Gerald L. Maatman, Jr.

Seyfarth Synopsis:  On April 10, 2019, the EEOC released its comprehensive enforcement and litigation statistics for Fiscal Year 2018.  The release arrived a few months later than usual – likely due to the recent government shutdown – but still packed a punch in several respects, including to the back-drop on retaliation and sex discrimination charges in the midst of the #MeToo movement, the number of merits lawsuits filed, and significant monetary recoveries, as well as a reduced charge inventory.  It is a must-read for all employers.

On April 10, 2019, the EEOC released its comprehensive enforcement and litigation statistics for Fiscal Year 2018 (available here).  In addition to enforcement and litigation activity, the data breaks down charge statistics by allegation and state – showing which charges are being filed the most and where.  Although the dip in total charges filed certainly stands out, so does the prominence of retaliation and sex discrimination charges in the #MeToo era.  The statistics are somewhat of a “report card” on the Commission’s activities, and also illustrates the continued increase in the number of lawsuits filed by the EEOC overall, as well as the number of systemic lawsuits filed specifically, and touts the substantial monetary recoveries that the EEOC continues to reel in from employers.  The data also mark the EEOC’s accomplishments in reducing its charge inventory.

Charges Are Down Overall

In total, 76,418 charges were filed in FY 2018.  Not only is this down from 84,254 charges in FY 2017, but FY 2018 saw the third fewest charges filed for all fiscal years going back to FY 1997 according to the EEOC’s data, above only FY 2006 (with 75,768 charges) and FY 2005 (75,428).  Further putting FY 2018’s drop to 76,418 charges in perspective, the number of charges filed exceeded 80,000 every other year starting in FY 2007, by 8,000 to 19,000 in most of them.

Consistent with this overall decline, there was a decrease in almost every category of charges in FY 2018 from FY 2017, with the exceptions of some modest increases in Equal Pay Act and genetic information charges at the very bottom of the list.  The category that decreased the most was race, by 3,928 charges – or almost 14% – from FY 2017 to FY 2018.

While generally down, however, these numbers are still sizable.  And outreach to the agency was consistent with prior years, as well, with the EEOC reporting that it addressed 519,000 calls to its toll-free number and more than 200,000 inquiries to its field offices in FY 2018, roughly in the ballpark of 540,000 calls and 155,000 inquiries in FY 2017, respectively.

Texas And Florida Are Still Hot

Looking at the states where the most charges were filed, the hot spots largely remained the same in FY 2018 as in FY 2017.  In fact, 9 out of the top 10 states in FY 2017 also made the cut for FY 2018, except for Alabama knocking Tennessee out of the number 10 spot. As in FY 2017, Texas (with 7,482 charge receipts) and Florida (with 6,617 charge receipts) were the top two states for charges in FY 2018.

Texas and Florida should come as no surprise, given their relative populations according to the most recent census data (found here). But population is not everything.  For example, Georgia (at number 3) surpasses states with higher populations, and Illinois and Pennsylvania each have more filings than New York.  And, although one might expect California to be number one given that it is the most populous state, its strong state discrimination statute tends to claim charges that may otherwise have been filed with the federal agency. Indeed, in FY 2018, California was only in sixth place for the number of charges filed.

Retaliation Charges Remain In First, With Sex Discrimination A Notable Second

In total, 39,469 retaliation charges were filed with the EEOC in FY 2018.  As has been the case for the past five years, this made retaliation the most frequently filed charge in FY 2018.  Also noteworthy, retaliation charges crept over the 50% marker in FY 2018, continuing a steady annual increase from 42.8% of the total charges filed in FY 2014.

Behind retaliation were sex, disability and race charges, each approximately 32% of the total charges filed with the EEOC.  (As the EEOC notes, the percentages total more than 100 because some charges allege multiple bases.)

Sex discrimination charges (which would include pregnancy discrimination, gender discrimination, and sexual harassment) were particularly notable in that they edged out disability and race charges by a tenth of a percent to claim the number-two spot, after being the fourth most frequently filed charge in FY 2017.  Breaking down the data for sex charges further, there were 7,609 sexual harassment charges filed with the EEOC in FY 2018, making for a sizable jump of 13.6% over the prior fiscal year.

No doubt, these trends in sexual discrimination and retaliation charges were fueled by the “significant impact of the #MeToo movement,” as noted by Acting Chair Victoria A. Lipnic.  Indeed, the EEOC’s commitment in this area has not wavered in light of the increased visibility of workplace sexual harassment resulting high-profile media coverage in 2018.  As reported previously, the 41 sexual harassment lawsuits filed by the EEOC in FY 2018 marked a 5-year high.  And the EEOC also reported a total recovery of $56.6 million for alleged victims of sexual harassment in FY 2018.

EEOC Keeping Its Foot On The Gas

Overall, the statistics show that the EEOC filed 199 merits lawsuits in FY 2018, up from 184 merits lawsuits filed in FY 2017.  While not as dramatic a spike from the year before – in which the EEOC more than doubled the number of merits lawsuits it filed compared to the prior fiscal year – the appreciable growth in FY 2018 on top of that jump should not be overlooked.  The EEOC reports that 117 of those lawsuits were on behalf of individuals, 45 were non-systemic suits with multiple victims, and another 37 were systemic claims.

The EEOC labels a case as “systemic” if it “has a broad impact on an industry, company or geographic area.”  As such, these cases pose heightened exposure.  In terms of percentages, systemic lawsuits accounted for about 18.5% of the total number of filings, which is consistent with prior years (16% of all merits lawsuits in FY 2017 and 20% in FY 2016).  Looking at the numbers, however, the 37 systemic lawsuits filed in FY 2018 was up from 30 that the EEOC filed in FY 2017, 18 in FY 2016 and 16 in FY 2015.  As with the number of merits lawsuits filed, the number of systemic lawsuits may not have risen quite as dramatically as it did in FY 2017.  Nevertheless, employers should pay attention as the number continues to rise in FY 2018 even in the wake FY 2017’s spike.  Clearly, the EEOC is not shying away from pursuing these “bet-the-company” cases.

The EEOC boasted substantial recoveries to boot.   Specifically, the EEOC secured more than half a billion dollars ($505 million) in total relief for alleged discrimination victims in FY 2018.  This marks a substantial increase from $484 million in FY 2017 and $482.1 million in FY 2016.

Bringing Down The Backlog

Another priority of the EEOC in recent years has been reducing the large backlog of pending charges, which had been a longstanding issue for the agency.  In FY 2018, the EEOC resolved 90,558 charges.  This was down from 99,109 charges resolved in FY 2017 and 97,443 charges in FY 2016.  Nevertheless, the EEOC still decreased its charge inventory by 19.5%, to 49,607 in FY 2018, following up on FY 2017, in which the EEOC decreased its charge inventory by 16.2% to 61,621.  Indeed, as Acting Chair Lipnic noted for FY 2018, the data reflected the “lowest inventory of private sector charges in a dozen years.”  The EEOC attributed its success in this area to new strategies for prioritizing charges and resolving them more efficiently, and with the assistance of enhanced technology.

Implications For Employers

Despite the dips in overall charges filed, the EEOC’s enforcement efforts remain robust, and the EEOC continues to get results, as demonstrated by its recovery statistics.  And, by reducing its backlog, the EEOC is freeing up its resources for further enforcement efforts.  As noted in our other reports, clearly the EEOC is aggressively pursuing its strategic goals under the current administration.  Employers should keep an eye on these statistics, especially with retaliation and sex discrimination issues firmly in the forefront.  And, by continuing to set the culture in their workplaces through leadership and accountability, along with sound human resources practices such as sharp written policies, comprehensive training and robust response protocols, employers can guard against these issues, which clearly are not going away.

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 Workplace Class Action blog here.

 

By Gerald L. Maatman, Jr., Christopher J. DeGroff, Matthew J. Gagnon and Alex W. Karasik

Seyfarth SynopsisOn November 15, 2018, the EEOC released its annual Performance and Accountability Report (‘PAR”) for Fiscal Year 2018 (here) – a year-end report card of sorts, and a critical publication for employers to consider as they analyze the EEOC’s activities over the past year, and its anticipated direction for the future.

In its first year under the Strategic Plan for Fiscal Years 2018 through 2022 (“Strategic Plan” or “Plan”) (blogged about here), the EEOC reported significant increases in its outreach efforts and enforcement actions, as it highlighted new intake procedures, extensive training programs, and aggressive litigation.  Particularly noteworthy was the EEOC’s track-record relative to workplace sexual harassment litigation, which has become a top priority as the #MeToo movement has spotlighted the issue. 

The 2018 PAR is a “must read” for corporate counsel, as it provides valuable insights into the agency’s mission, as well as warnings that employers should heed. 

Raking In Recoveries

In FY 2018, the EEOC recovered more than $505 million for alleged discrimination victims.  This represents a significant jump from $484 million in FY 2017 (see more here), and $482.1 million in FY 2016 (see more here).  But while the total monetary relief figure ballooned, the relief obtained through mediation, conciliation, and settlement declined from $355.6 million in FY 2017 to $354 million in FY 2018.  Conversely, litigation recoveries jumped to $53.6 million in FY 2018 from $42.4 million in FY 2017 (the FY 2016 and 2015 numbers were $52.2 million and $65.3 million respectively, more closely mirroring this year’s figures).

Firing Up The Filings

The EEOC reported filing 199 merits lawsuits in FY 2018, a slight uptick from the 184 merits lawsuits it filed in FY 2017.  This included 117 suits on behalf of individuals, 45 non-systemic suits with multiple victims, and 37 systemic suits.  The EEOC labels a case “systemic” if it “has a broad impact on an industry, company or geographic area.”

For employers, the 37 systemic lawsuits is a particularly noteworthy figure.  In FY 2017, the Commission filed 30; in FY 2016 it filed 18; and in FY 2015 it filed 16.  The acceleration in systemic lawsuits illustrates that the EEOC is not backing down on its agenda of aggressively litigating “bet-the-company” cases.  Given the heightened financial exposure in systemic litigation, this is one trend employers should certainly heed.

Making Its Mark In The #MeToo Movement

Workplace harassment has never been more in the forefront of the EEOC’s focus than it is today.  The EEOC’s PAR emphasized that it reconvened the Select Task Force on the Study of Harassment in the Workplace for a public meeting, “Transforming #MeToo into Harassment-Free Workplaces,” to examine difficult legal issues and to share innovative strategies to prevent harassment.  The Commission reported that it recovered a whopping $70 million for the victims of sexual harassment through administrative enforcement and litigation in FY 2018, up dramatically from $47.5 million in FY 2017.  Unquestionably, given the increased visibility of workplace sexual harassment based on various high-profile media coverages in 2018, the Commission has turned up the heat on investigations and litigation in this area.

Balancing The Backlog

For several years, the EEOC has been working through its significant backlog of pending charges.  As EEOC Acting Chair Victoria Lipnic noted in the PAR, “[s]oon after I became Acting Chair in 2017 I made addressing the backlog a priority, and as an agency, we began to share strategies that have been particularly effective in dealing with the pending inventory, while ensuring we are not missing charges with merit.”  Chair Lipnic has made good on her word, noting the EEOC dramatically reduced its pending inventory in FY 2018 to 49,607 charges, a decrease of 19.5% from FY 2017 and 34% from FY 2015.  One area that remains ripe for improvement, however, is the backlog of Freedom of Information Act requests, as the PAR reports that the EEOC’s FOIA backlog increased by 185% at the end of FY 2017, but only decreased by 7% in FY 2018.

Portal To The Future

As part of its mission to facilitate the intake process, the launch of a nationwide online inquiry and appointment system as part of the EEOC’s Public Portal resulted in a 30% increase in inquiries and over 40,000 intake interviews.  These figures come as a result of the Commission’s recent commitment to enhance its Digital Charge System and allow technological advances to ease the burden caused by an increased volume of activity.

The Commission additionally noted that its outreach programs reached more than 398,650 workers, employers, their representatives and advocacy groups this past fiscal year at more than 3,900 events conducted by the EEOC.  This reflects the EEOC’s commitment to preventing workplace harassment through proactive measures, while simultaneously increasing public awareness about the mission of the Commission.

Implications For Employers

There were those who believed the EEOC’s enforcement efforts would downshift under the current administration.  Our year end reports, and the EEOC’s own PAR report card, demonstrates quite the opposite.  The EEOC has made it clear that it is ramping up across the board, not slowing down.  This includes a significant increase in filings, recoveries, and outreach efforts.  The EEOC’s PAR is a helpful resource for employers to chart the danger areas in today’s tumultuous political and social environment.  We will continue to report on the EEOC’s enforcement trends.  Stay tuned.

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

By: Mark Wallin, Christopher DeGroff, and Gerald Maatman, Jr.

Seyfarth Synopsis:  The EEOC operates with limited resources, yet has the daunting responsibility of enforcing an alphabet soup of anti-discrimination laws.  The EEOC has become quite savvy at leveraging the press as a pulpit for publicizing its agenda, especially in litigation.  An employer need only visit the EEOC’s website to understand the role of media statement’s in the Commission’s enforcement process.

In the life-cycle of EEOC initiated litigation, the agency will almost invariably issue two media statements: one issued when the suit is filed, and another when the suit is resolved.  But not all media statements are the same.  Depending on the posture of the case, whether the case theories align with the EEOC’s strategic goals, and even how the EEOC views the employer, media statements can vary dramatically.  This post discusses what employers can expect from these releases, including typical language, elements, and timing.   

EEOC’s Publicity Philosophy

The EEOC has acknowledged that press coverage is part of its deterrent message and mission.  Notably, the Commission’s 2006 Systemic Task Force report provides that the “EEOC engage[s] in high impact litigation and publicity efforts that change the workforce status of affected groups and/or improve employment policies, practices, or procedures in affected workplaces.”  (See also opening statement of Sen. Alexander regarding the Commission’s apparent strategy, in filing certain lawsuits, to “achieve a maximum amount of publicity.”)

The EEOC’s litigation media statement is one of the tools in the Commission’s toolbox that it will wield with an aim to achieve its strategic enforcement goals.

Often Two Media Statements During The Course Of EEOC Initiated Litigation

In the life of a lawsuit initiated by the EEOC, there will ordinarily be two media statements. The first will be published when the suit is filed, and the second if the case is resolved.  Although all media statements published upon filing of a suit will have roughly the same cadence and tone, those published upon resolution can vary greatly.

Initial Media Statement

A media statement issued at the outset of the litigation tends to have a stern tone, regarding the alleged actions of the employer.  The statement will lead off with a general assertion of the legal claims lodged against employer, including the statute at issue.  For example, the statement may declare that a female employee suffered through a hostile work environment at the hands of her supervisor, in violation of Title VII.  The statement will then go on to recite the key allegations of discrimination, harassment, or retaliation proffered in the complaint.  These allegations are often delivered as fact, not issues that will be proven – or not – during the litigation.  Often times the statement will also describe the employer, perhaps sharing a website, states of operation, and a brief description of the work done by the business. Finally, the applicable District Director and/or one of the trial attorneys for the matter will offer a quote in the nature of a sound bite concerning the allegations, which will emphasize the Commission policy underlying its prosecution of the lawsuit.  In the most recent batch of EEOC filings, for instance, which occurred in September, combating sexual harassment and discrimination (“me too”) is the most common EEOC policy articulated. It is not surprising that many employers who have been the subject of the EEOC’s media statements have deemed the Commission’s tactics to be unfair and designed to apply extra-judicial pressure to settle litigation.

Media Statement Upon Resolution

When a suit is resolved, typically through an agreed upon consent decree (but occasionally after a rare trial win), the EEOC will publish yet another media statement.  The tone and content of this statement, however, can vary from highly aggressive to fairly measured, and can even verge on “friendly.”  The direction taken by the EEOC in this statement will depend largely on the resources devoted to the litigation, how contentious the litigation was, as well as whether the claims and allegations at issue align with the Commission’s strategic goals.  Some insight into the Commission’s process can be found in the Regional Attorney’s manual, published here. Notably, before the resolution of “significant litigation” a Regional Attorney is required to advise the Office of the General Counsel.  The Commission defines “significant” to mean a lawsuit “expected to involve significant monetary or injunctive relief”; “a favorable jury verdict or court decision”; or resolution which “is likely to receive national or significant local attention due to the notoriety of the defendant, ongoing media interest in the lawsuit and/or issues involved, or other factors that may have spurred significant media scrutiny.”  Whether or not the litigation is deemed “significant” may well play a role in the tone of the media release as well.

The more resources expended, and the more closely aligned the claims are with the Commission’s strategic goals, the more likely the EEOC will publish an aggressive media statement.  The hallmarks of such a statement will be not only the recitation of the most salacious of the allegations, but also a detailed description of the monetary and programmatic relief obtained in the consent decree.  For example, in a recent matter involving an Illinois restaurant, the EEOC’s media statement set forth that “numerous employees … were routinely sexually harassed by coworkers and managers, including offensive sexual comments, groping, physical threats, and, in one instance, attempted forced oral sex with a management employee.” The statement went on to detail the programmatic relief, followed by harsh admonishments from a Regional Attorney and District Director, specifically:

“Employers are responsible for preventing workplace harassment – and their failure to do so hurts both their employees and their bottom line,” said Andrea G. Baran, Regional Attorney for the EEOC’s St. Louis District. “Business owners and CEOs must be proactive and involved in making sure all managers and employees understand that harassment will not be tolerated, harassers will be punished, and those who report harassment will be protected from retaliation. Prevention starts at the top.”

Moving down the spectrum, the Commission may take a more measured tone where the litigation is less protracted and the claims are not necessarily consistent with its strategic goals. For instance, in a recent ADA case settled by the EEOC concerning an employer’s alleged discriminatory termination of a disabled employee, which had been pending less than a year, the media statement provided scant details concerning the claims brought. Further, after a short description of the programmatic relief contained in the lone statement of a Regional Attorney was far more benign:

“This settlement is both strong and just,” said Rudy Sustaita, regional attorney for the EEOC’s Houston District Office. “[The employer] has given us every indication that it intends to comply with the ADA in the future.”

And on occasion, it will even boarder on “friendly” — including a statement of appreciation to the employer for its cooperation in resolving the litigation. In a suit brought in Wisconsin, filed and settled within five months, the Commission was quoted as stating:

“We thank [the employer] for its commitment to settle this case before the sides incurred significant costs and its willingness to ensure a level playing field for its pregnant employees seeking job modifications, including light duty work, otherwise available to non-pregnant employees,” said EEOC Chicago Regional Attorney Gregory M. Gochanour. “The EEOC will continue to enforce the federal laws so that all pregnant employees have the same opportunities as non-pregnant employees to contribute to our thriving economy,” said Julianne Bowman, the EEOC’s District Director for the Chicago District Office.

Although “friendly” media statements are the exception, not the rule, the EEOC is more likely to publish such a statement to incentivize other employers to similarly resolve enforcement actions.

A Word On Conciliation Media Statements

Historically, the EEOC has generally issued media statements for lawsuits only, as conciliation is intended to be a confidential process.  Indeed, one of the chief reasons for employers to engage in pre-suit conciliation is the carrot of confidential resolution.  Interestingly, however, we have seen a trend of the EEOC issuing presumably agreed-upon media statement for matters settled in conciliation.  Accordingly, the employer has a degree of leverage in negotiating these publications.  As one might imagine, conciliation media statements are, thus, more positive in tone. Further, on occasion, the employer may also make a statement, which at minimum disclaims any liability — something rarely, if ever, allowed in a litigation media statement.

Elements Of A Media Statement

Regardless of the tone, EEOC media statements are consistent in their basic elements and structure.

First, there will be a headline crafted to be eye-catching, such as “Paramount Mailing Company Punished Female Employees for Complaining About Abuse, Federal Agency Charges.”  Below is a word cloud, highlighting the most common words and phrases employed by the EEOC in its 2018 headlines.  Not surprisingly, in the current environment, “Sexual” and “Harassment” play prominently.

Second, the media statement will include a statement of claims, describing the complained of discrimination, harassment, and/or retaliation, including factual and legal allegations.  The more aggressive press releases will set forth the most sensational and detailed allegations, whereas the measured versions may state the allegations in more bland terms, which can sometimes be so vague that it is difficult to divine what the claims were based upon in the first place.

Third, the Commission will include quotes from the relevant District Director and possibly a Regional Attorney involved in the litigation.  The tone of the EEOC’s quotes can vary greatly, depending on, among other things, the importance of the issue to the Commission’s strategic goals, the duration of the litigation, and resources expended.  Excluding conciliation media statements, on very rare occasions, the EEOC may allow a quote from the employer on the resolution of the lawsuit.  Although it is unlikely the Commission will agree to such a statement, if the litigation and settlement proceed amicably, it is certainly worth attempting to negotiate the point.

Finally, the media statement will conclude with a statement of the EEOC’s mission (e.g. “The EEOC advances opportunity in the workplace by enforcing federal laws prohibiting employment discrimination”).  Additionally, where applicable, the statement will indicate where the resolved litigation is among the EEOC’s strategic goals — “[p]reventing workplace harassment through systemic litigation and investigation is one of the six national priorities identified by the Commission’s Strategic Enforcement Plan (SEP).”  Media statements that make note of the SEP are more likely to be among the more aggressive.

Emerging Issues With Media Statements

As the Commission media strategy has evolved, it has made continued efforts to increase its audience and distribution of these statements for maximum effect. The EEOC has also been known to conduct press conferences announcing a new suit or trumpeting an EEOC victory. But now the EEOC also publishes many of its media statements on social media, like Twitter.  It has also taken to issuing relevant media statements in multiple languages depending upon the employees and employer at issue. For as long as the EEOC places a priority on publicity, it will no doubt continue to search for new ways to increase their audience.

Implications for Employers

For employers who find themselves involved in an EEOC enforcement action, it is important not to lose sight of the Commission’s use of its media statement as both carrot and stick.  The EEOC places considerable value on shining a spotlight on its enforcement efforts, especially those which advance its strategic goals.  While it is unlikely that the Commission will allow the employer too much say in the issued statement, when negotiating resolution with the EEOC, where possible, employers should use the Commission’s goal of publicity as a possible bargaining chip to achieve the best possible outcome for the inevitable media statement.  Moreover, by understanding the Commission’s strategic goals, employers will gain a greater awareness of what tone and tenor the EEOC’s statement will take upon resolution, and can prepare accordingly.

 

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

By Christopher J. DeGroffMatthew J. Gagnon,  Gerald L. Maatman, Jr., and Kyla J. Miller

Seyfarth Synopsis: The uncertainty of a new administration’s impact on the EEOC that plagued FY 2017 is fading, but the results are not what some would expect. Not only has the EEOC brought a mountain of filings compared to the last four years, but also the agency has demonstrated a clear focus on sex-based discrimination and sexual harassment in the workplace in light of #MeToo, even surpassing FY 2017 numbers.

With a full fiscal year under its belt, the Trump Administration’s impact on EEOC-initiated litigation is still uncertain. With two Republican Commissioners and the General Counsel position still unconfirmed, it is difficult to discern if things will truly be “business as usual” under Trump or if those appointments, once confirmed, will change agency course. One thing is certain: the EEOC’s litigation program is not slowing down any time soon. Just as the waning months of FY 2017 showed a marked increase in filings, FY 2018 turned up the heat even more. Filings are up more than ever, with sex discrimination filings and #MeToo filings – i.e., complaints of sexual harassment – eclipsing previous years.

The total number of filings in FY 2018 demolished FY 2015 and 2016, and even surpassed FY 2017. (Compare here to here and here). This year, the EEOC filed 217 actions, 197 merits lawsuits and 20 subpoena enforcement actions.

Predictably, the EEOC waited until the last minute to push filings, with this past month showing the most filings compared to any other month this fiscal year. At the time of publication, 84 lawsuits were filed in September, including 45 in the last 3 days alone.  Notable this year, however, was the “ramp up” period in June, July and August, which accounted for 63 of the total filings. Almost half of those cases were brought in August. The total filings for the remaining months remain low, with the number of filings in October through February failing to hit double digits.

Filings in Chicago, Philadelphia and Los Angeles continue to top the charts, with 21, 21, and 17 total filings, respectively. These numbers remain relatively consistent to FY 2017, which showed 21 filings in Chicago, 19 in Philadelphia, and 22 in Los Angeles. On the lower end, the St. Louis and Memphis numbers were modest, with only 7 filings in St. Louis and 8 filings in Memphis. Of the remaining districts, the Phoenix and New York district offices rebounded after a slow FY 2017, each filing 6 more lawsuits in FY 2018 as compared to last year.

Sex Discrimination Takes Center Stage

Each fiscal year we analyze what substantive theories the EEOC is targeting. This year, Title VII claims remained the largest category of filings, on par with FY 2017, which boasted 53% of all filings. In FY 2018, Title VII filings accounted for 55% of all filings. Although FY 2016 showed a dip in Title VII filings at 41%, this year’s Title VII filings beat out FY 2015 and FY 2014 as well.

With a new Strategic Enforcement Plan in place to guide litigation activity for FY 2018-2022, many expected some shift in focus based on two notable changes from the old plan. Specifically, the new plan pledged to address discriminatory practices against those who are Muslim or Sikh, or individuals of Arab, Middle Eastern, or South Asian descent. Additionally, the new plan aims to expand the EEOC’s equal pay priority to include compensation discrepancies for race, ethnicity, age, and disability – moving beyond the EEOC’s focus on sex-based pay disparities. In fact, we have actually seen a decrease in Equal Pay Act filings, which could reflect the EEOC’s renewed focus on equal pay issues that affect other protected groups, which would not fall under the jurisdiction of the Equal Pay Act.

One trend has emerged this year – compared to FY 2017, race filings have decreased by 6 filings – with 18 filings in FY 2018 compared to 24 filings in FY 2017.

Perhaps the most striking trend of all is the substantial increase in sex-based discrimination filings, primarily the number of sexual harassment filings. As predicted, #MeToo added fuel to this area of the EEOC’s agenda, with 74% of the EEOC’s Title VII filings this year targeting sex-based discrimination. Compare this to FY 2017, where sex based discrimination accounted for 65% of Title VII filings. Of the FY 2018 sex discrimination filings, 41 filings included claims of sexual harassment. 11 of those filings were brought in the last three days of the fiscal year alone. The total number of sexual harassment filings was notably more than FY 2017, where sexual harassment claims accounted for 33 filings.

EEOC’s #MeToo Harassment Filing Surge

Implications For Employers

The dramatic increase in filings should be an eye-opener for employers in an era when many thought the EEOC might be hitting the brakes. Instead, the EEOC is increasing its enforcement activity, with a particular focus on sex discrimination and sexual harassment. The EEOC still strongly advises employers should update and aggressively enforce their EEO Policies. Now, more than ever, employers need to be on top of their game to avoid becoming the next target of EEOC-initiated litigation.

As most of our loyal readers know, this blog is merely a preview of the more extensive analysis of EEOC trends and developments affecting EEOC litigation that we publish at the end of the calendar year. Stay tuned for our in-depth analysis of FY 2018 filings, and particular danger areas for employers in this shifting political climate.

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

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 Workplace Class Action blog here.