Seyfarth Synopsis: Stepping into a new year always gives one a chance to reflect on the lessons and trends of the prior year. In that spirit, we are pleased to present our annual selections for the five most intriguing developments in EEOC litigation during 2019, as well as a preview of our annual report on developments and trends in EEOC-initiated litigation. This year’s book, entitled EEOC-Initiated Litigation: FY 2019, examines the EEOC’s filings in 2019, and analyzes the significant legal decisions and trends impacting EEOC litigation in 2020. We hope that employers will benefit from this deeper dive into how the EEOC’s priorities play out in litigation, and in the process, undertake optimal compliance strategies during FY 2020 and beyond.
The EEOC prosecutes dozens of cases across the country annually guided by its strategic enforcement priorities and objectives. Each year, we analyze those new case filings and legal decisions handed down by courts across the country. That analysis sheds light on new areas of focus for the EEOC’s ever-changing enforcement agenda. Our analysis is published in a comprehensive yearly report entitled EEOC-Initiated Litigation: FY 2019. In the report, we outline how the Commission interpreted and pursued its objectives this year and identify noteworthy trends.
Our goal is to assist clients in utilizing this information to ensure compliance with existing laws, and to protect themselves against becoming future targets of enforcement. Our annual report is designed for HR professionals, corporate counsel, and other corporate decision-makers. We hope that it continues to provide useful and helpful commentary and analysis.
Now, without further ado, we are pleased to present our list of the top five most intriguing developments of 2019:
Intriguing Development 1: LGBT Discrimination Reaches The Supreme Court
The U.S. Supreme Court heard oral arguments for three cases relating to LGBT employee protections including R.G. & G.R. Harris Funeral Homes, Inc. v. EEOC, Bostock v. Clayton County, Georgia, and Altitude Express, Inc. v. Zarda.
In these three cases, the Supreme Court will finally decide whether transgender and sexual orientation discrimination are prohibited under Title VII as forms of sex discrimination. Harris Funeral Homes involves a claim of transgender discrimination. Bostock and Zarda involve claims of sexual orientation discrimination. All three were argued on the same day – the first week of the Supreme Court’s 2019 term – in two arguments (Bostock and Zarda were argued together). During oral argument, the Supreme Court’s four liberal justices appeared to voice support for a broader interpretation of Title VII, which would include these types of discrimination, while the Court’s conservative Justices expressed concern that it should be Congress, not the courts, that make this determination.
However, one of the newest conservative Justices, Justice Gorsuch, called this a “really close” question, and at times appeared sympathetic to the view that discrimination on the basis of gender identity or sexual orientation is necessarily discrimination on the basis of sex. It is therefore impossible to predict how the Supreme Court will rule on this issue. However, when these cases are decided, they will likely have a significant impact on the American workforce and society at large.
Intriguing Development 2: Limits To EEOC’s Attempts To Police Employers’ Use Of Arrest And Conviction Records
On April 25, 2012, the EEOC issued its enforcement guidance concerning the use of arrest and conviction records in employment decisions. That guidance purported to direct employers across the country that they may not deny someone employment due to criminal history information without considering the nature and gravity of the offense, the time passed since the conviction or completion of the sentence, and the nature of the job held or sought. That guidance was immediately challenged in court by the State of Texas, which argued that it had standing because it was an employer subject to the guidance just like any other employer.
In State of Texas v. EEOC, the Fifth Circuit held that the EEOC is limited in its rulemaking and enforcement powers with respect to Title VII; it may issue procedural regulations implementing Title VII, but it may not promulgate substantive rules. According to the Fifth Circuit, the guidance was a final agency action and a substantive rule subject to the Administrative Procedure Act’s notice and comment requirement, and that the EEOC overstepped its authority in issuing the guidance as it did. The end result – the Fifth Circuit ruled that the EEOC may not treat the guidance as binding in any respect. This decision could have a lasting impact on the EEOC’s rulemaking authority, and how it approaches that authority.
Intriguing Development 3: Preemptive Disability Determination Theory Blocked
In 2019, the Eleventh Circuit held that an employer’s fear that an employee might contract Ebola during a planned, future trip to Ghana, could not give rise to a claim of disability discrimination. In EEOC v. STME, LLC, the Commission argued that the employee should be regarded as having a disability because her employer believed that she would become disabled in the future. However, the Eleventh Circuit held that the “regarded as having” a disability prong of the ADA requires that a disability be a present physical or mental impairment. That prong did not extend to an employer’s belief that an employee might contract or develop an impairment in the future. In other words, there is no disability discrimination when an employee does not have a disability at the time of termination.
Intriguing Development 4: Joint Employment And Temporary Workers
In EEOC v. Global Horizons, Inc., the Ninth Circuit held as a matter of first impression that it would apply the common law agency test to determine joint employer liability under Title VII. Further, the Ninth Circuit expressly rejected application of the test applied to determine joint-employer liability under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act because those statutes intentionally expanded the definition of employment beyond the common law understanding.
Under the common law test, the principal guidepost is the extent of control that the putative employer exercises over the details of the work of the putative employee. Applying that conception of joint employment, the Ninth Circuit reversed the decision of the District Court, which held that fruit growers employing foreign guest workers in their orchards were not responsible for issues relating to those employees’ housing, transportation, and meals. According to the Ninth Circuit, because the foreign guest worker program places the obligation of providing those benefits on the owners of the farms where the temporary foreign workers work, the fruit growers retained control over those aspects of employment.
Intriguing Development 5: The Whirlwind Of EEOC Pay Data Collection
On March 4, 2019, in National Women’s Law Center v. Office of Management and Budget, the U.S. District Court for the District of Columbia vacated the Office of Management and Budget’s decision to stay implementation of the Obama-era rule that required employers to submit to the EEOC detailed pay data as part of their EEO-1 reporting obligations. That rule had come under fierce opposition by pro-business groups, prompting the OMB, per its authority under the Paperwork Reduction Act, to stay the rule as one of the first regulatory reversals under the Trump administration. But the District Court held that the OMB’s decision to stay the regulation was unsupported by any analysis and lacked the reasoned explanation that the administrative procedure act requires.
The District Court then ordered the EEOC to resume pay data collection under the Obama-era rule for the 2017 and 2018 reporting years. The District Court continues to monitor and exercise control over the EEOC’s efforts to collect this information, and on October 29, 2019, the court ordered the EEOC to continue its collection activities through January 31, 2020. The end result is that the EEOC at the end of this process will have access to two years of pay data from a broad swath of employers across the country. What, if anything, it chooses to do with that data once that collection is complete, is anyone’s guess, and one of the issues employers should look out for in FY 2020 and beyond.
Summing It All Up
FY 2019 presented a series of challenges for the EEOC. Between a four-month political stalemate resulting in a loss of quorum, and a roughly one-month government shutdown, the Commission was not firing on all cylinders for a significant part of the year. However, despite these setbacks, the EEOC has continued to pursue aggressive litigation and close out settlements at high rates. New political appointees at the EEOC are now settled into their roles. This means that FY 2020 is likely to finally reveal the changes in the EEOC’s strategic direction employers can expect under the Trump administration.
We will of course continue to monitor these developments. And we look forward to sharing our thoughts and analysis in the year to come.
Readers can also find this post on our Workplace Class Action blog here.