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.

th870JF4SQBy Gerald L. Maatman, Jr., Christopher DeGroff, Matthew Gagnon, and Alex W. Karasik

Seyfarth Synopsis: The EEOC recently released its annual Performance and Accountability Report for the fiscal year 2016, a must-read for employers regarding statistical data on EEOC litigation. Continuing a trend from recent years, the EEOC has reaffirmed its commitment to targeting companies in high-profile systemic litigation, albeit with uninspiring results.

+++

On November 16, 2016, the EEOC released its annual 2016 Performance and Accountability Report (“PAR”) (the Report is here). The PAR highlights the progress of the EEOC’s continued efforts to meet the performance goals that are articulated in its 2012 Strategic Enforcement Plan (“SEP”), including its systemic litigation initiative. As the saying goes, the numbers speak volumes.

The PAR functions as a statistical “scorecard” for the EEOC. It provides a report on its activities during the past fiscal year, from October 1, 2015 through September 30, 2016, including its progress toward meeting the goals outlined in the SEP. While the PAR typically provides a preview of what we can expect to see from the EEOC in the upcoming months, this year’s edition notably avoids speculating as to the future of the EEOC under a new President.

The EEOC’s Overall Results

The EEOC reports that it increased the number of charges resolved to 97,443 charges, up 6.5% from the 91,503 last year. In FY 2014 and FY 2015, the EEOC received 88,778 and 89,385 charges respectively, so the number of charges filed is up slightly over past years.

One of the major goals the EEOC identified in its 2012 SEP was to increase 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.)  In FY 2016, the EEOC asserts it “meets or exceeded” five of the seven measures outlined in the SEP, while it “partially met” the other two.

The EEOC noted that it filed 18 systemic lawsuits in FY 2016, which represents a slight increase from 17 in 2014 and 16 in 2015.  Nevertheless, the number of pending systemic cases declined slightly, with 47 cases on its litigation docket (versus 54 in FY 2013, 57 in  FY 2014, and 48 in  FY 2015). Finally, the EEOC reports it recovered approximately $38 million in relief for victims of systemic discrimination (down from $40 million in FY 2015, but up from $13 million in FY 2014).

Charges: Breezin’ Through The Backlog

The EEOC reduced the charge workload by 3.8% to 73,508, a 3,100 charge reduction compared with FY 2015.  As of the end of FY 2015, the EEOC had a backlog of 76,408 charges, which was an increase of 750 charges over the backlog at the conclusion of FY 2014. The EEOC also noted that it responded to over 585,000 calls to its toll-free number and more than 160,000 inquiries to field offices.

The EEOC resolved over 15,800 discrimination charges through the agency’s administrative processes – comprised of settlements, mediations, and conciliations. This included 273 resolutions of systemic investigations, obtaining more than $20.3 million in remedies. The agency’s mediation program achieved a success rate of over 76%. Regarding conciliation, the EEOC notes that its success rate has remained at 44% over the past two fiscal years.

Settlements: Slowing Down

The EEOC secured more than $482.1 million in total relief in FY 2016. For victims of discrimination in private, state and local government, and federal workplaces, the EEOC obtained $347.9 million through mediation, conciliation, and settlements, again a slight decrease from the $356.6 million it collected in FY 2015 (but an increase from the $296.1 million that it collected in FY 2014). Litigation recoveries also decreased, as the EEOC recovered $65.3 million in FY 2015 while recovering only $52.2 million in 2016.

Lawsuits: Less Litigation

The number of lawsuits filed by the EEOC took a sharp decline, dropping from 142 merits lawsuits (including 100 individual suits, and 42 suits involving discriminatory policies or multiple victims) in FY 2015 to only 86 lawsuits in FY 2016 (including 58 individual suits and 29 suits involving multiple victims or discriminatory policies). Further, at the end of the fiscal year, the EEOC had 165 cases on its active docket. At the end of FY 2015, the EEOC had 218 cases on its active district court docket. This data illustrates how the EEOC has refocused its agenda to put its eggs into ever larger baskets.

Systemic Investigations

The number of systemic investigations completed by the EEOC remained the same. In FY 2016, EEOC field offices resolved 273 systemic investigations and obtained over $20.5 million in remedies in those resolutions (with 71 of the FY 2016 resolutions resulting from successful conciliations). In addition, the agency issued reasonable cause determinations finding discrimination in 113 systemic investigations. By comparison, in FY 2015, the agency reported that it completed 268 systemic investigations; issued 109 cause findings; and resolved 70 systemic investigations by voluntary conciliation agreements, obtaining over $33.5 million in remedies as a result of its systemic initiative.

Accordingly, although the EEOC completed roughly the same number of systemic investigations in FY 2015 and FY 2016 and issued a similar number of reasonable cause determinations in those years, FY 2016 collected a substantially lower amount of money as a result of these larger pattern and practice cases.

Implications For Employers

While the numbers confirm our predictions from 2015 (here) and 2014 (here) that the EEOC would continue its pursuit of high-profile systemic litigation, whether that agenda has been a success is an open question. For example, the EEOC’s financial recoveries have not markedly increased. If and how the EEOC adjusts its tactics to adapt to the incoming Trump administration remains to be seen. If that administration moves in a more employer-friendly direction, or restricts the EEOC’s funding, that could cause the EEOC to rethink its priorities and  its approach to its enforcement program.

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

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.

 

 

EEOC CoverFor all our loyal blog readers – our Annual EEOC-Initiated Litigation Webinar is scheduled for Monday, March 23, 2015. Click here to register and attend.

Our readers have given us wide-ranging feedback since the launch of our annual EEOC litigation study, EEOC-Initiated Litigation: Case Law Developments In 2014 And Trends To Watch For In 2015. This publication is a definitive source of information that focuses exclusively on EEOC-related litigation (click here to order a copy). Our webinar will provide a comprehensive review of these workplace litigation trends and provide attendees with updates on 2014 rulings and trends developing thus far in 2015.

The book’s Co-Authors Gerald L. Maatman, Jr. and Christopher J. DeGroff, co-chairs of the firm’s Complex Discrimination Litigation practice group, will lead this interactive discussion.

Substantive trends to be discussed are:

  • The EEOC’s Systemic Initiative – Still Alive and Kicking – Increasing focus on bigger, more complex, and more media-driven cases was prevalent in 2014.
  • The Commission’s Priorities – ADA, Sex/Pregnancy, and hiring cases remain chart-toppers for the EEOC in FY 2014.
  • Location, Location, Location – The “where” is an important question for EEOC activity, and makes a difference in the types of cases brought and how aggressively they are pursued.
  • EEOC Challenges and What They Mean for Employers – How EEOC setbacks in 2014 may translate to evolving legal tactics in 2015.
  • Where We Go From Here – Our predictions for EEOC enforcement activity in 2015, both substantive and tactical.

The webinar will be held on Monday, March 23, 2015:

1:00 p.m. to 2:00 p.m. Eastern

12:00 p.m. to 1:00 p.m. Central

11:00 a.m. to 12:00 p.m. Mountain

10:00 a.m. to 11:00 a.m. Pacific

Speakers: Christopher J. DeGroff and Gerald L. Maatman, Jr. of Seyfarth Shaw

Registration: There is no cost to attend this program, please click here to register and attend.

By Gerald L. Maatman, Jr. and Jennifer A. Riley

On November 18, 2014, the EEOC released its 2014 Performance and Accountability Report (“PAR”).  The Report is an annual scorecard of sorts for the EEOC. It reflects the progress of the EEOC’s continued efforts to follow enforcement priorities outlined in its 2012 strategic enforcement plan (“SEP”) (read more here), including its systemic litigation initiative.

The Report ought to be required reading for any corporate counsel involved in compliance efforts relative to workplace laws. Upon reviewing the Report, one might ask if the Commission is doing its job in fair and effective fashion.

By way of background, the launch of the SEP underscored the EEOC’s 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.

In its 2014 PAR, the EEOC reported that it has continued to implement its SEP and has met, partially met, or exceeded its target results.  Or so the Commission claims…

The EEOC’s Overall Results

The EEOC’s results reflect a mixed bag for employers, with fewer systemic lawsuits filed (17 in 2014, compared with 21 in 2013), but more on-going systemic lawsuits in the court system (57 in 2014, compared with 54 in 2013), and far more pre-lawsuit settlements (78 in 2014, compared with 63 in 2013).

Overall, we do not expect the EEOC to back off its systemic initiative in 2015, and 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.

Lawsuits

In its 2014 PAR, the EEOC reported that, in fiscal year 2014, the EEOC filed 133 merits lawsuits, 17 (13%) of which were systemic suits.  At the end of fiscal year 2014, the agency had 228 cases on its active docket, of which 57 (or 25%) involved challenges to systemic discrimination.  As a percentage, this represents the largest proportion of systemic suits on the EEOC’s active docket since tracking began in 2006. Yet, at the same time, the numbers are down, not up. One explanation is that the EEOC has pursued expensive, time-consuming cases, and it lacks the resources to increase its docket.

Systemic Investigations

With respect to investigations, the agency reported that it, in fiscal year 2014, it completed 260 systemic investigations.  The EEOC resolved 78 (30%) of those by voluntary agreements, including 34 pre-determination settlements before any findings of discrimination and 44  conciliation agreements.  The EEOC secured $13 million in monetary relief.

These numbers are down from fiscal year 2013 in several categories.  In 2013, the EEOC reported that it had filed 131 merits lawsuits, 21 (16%) of which were systemic suits.  At the end of fiscal year 2013, the EEOC had 231 cases on its active docket, of which 54 (23%) involved challenges to systemic discrimination.  And, by the end of 2013, the EEOC had launched 300 systemic investigations, resulting in 63 settlements or conciliation agreements that recovered approximately $40 million.

According to the PAR, based on the volume of systemic charges currently in investigation, the EEOC expects the quantity of systemic lawsuits and their representation on its total docket to remain high.  As defense counsel in many of these cases, we sense the EEOC means what it says.

Pushing-The-Envelope Activities

As we discussed in previous blog posts (read more here), the SEP also reinforced the Commission’s efforts to continue addressing emerging and developing legal theories.  To that end, in 2014, the EEOC launched a series of novel attacks that sought to expand the reach of Title VII.  Those efforts, to put it mildly, met some resistance.  One view is that these efforts to “push-the-envelope” backfired, and represented wasteful expenditures of time and costs, with little to nothing to show for it.

For example, most notably, on October 7, 2014, in EEOC v. CVS Pharmacy, Inc., Case No. 14-CV-863 (N.D. Ill.), Judge John Darrah of the U.S. District Court for the Northern District of Illinois dismissed the EEOC’s efforts to challenge provisions of CVS’s settlement agreements, holding that there is no separate cause of action for “resisting” employment laws.  (Read more here.)  On November 6, 2014, in EEOC v. Honeywell International, Inc., Case No. 14-CV-4517, 2014 U.S. Dist. LEXIS 157945 (D. Minn. Nov. 6, 2014), Judge Ann Montgomery of the U.S. District Court for the District of Minnesota denied the EEOC’s request for a preliminary injunction to prevent Honeywell from levying penalties against employees who refuse to participate in Honeywell’s corporate wellness program.  (Read more here.)

Thus far, the EEOC has experienced more defeats than successes when it comes to expanding the frontiers of employment discrimination laws.

Implications For Employers

Although the EEOC filed fewer systemic cases in fiscal year 2014, and completed fewer systemic investigations, it settled a higher number of systemic cases pre-litigation — but for less money.  We expect the trends revealed by the 2014 numbers to continue.  We expect the EEOC to continue to search for and to initiate systemic investigations, but to focus its efforts and invest its resources on those cases that it views as priority cases, including those that seek to expand the reach of Title VII.  In spite of several stunning defeats, we do not expect the EEOC to back down on its systemic initiative in 2015.  Rather, we anticipate that those defeats will inspire the EEOC to more aggressively pursue those actions that fit within its agenda.

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

By Christopher DeGroff, Kevin Fritz, and Gerald L. Maatman, Jr.

The EEOC’s reach once again exceeded its grasp in its failed lawsuit against growers in the U.S. District Court for the Eastern District of Washington. In EEOC v. Global Horizons, Inc., 11-CV- 3045, 2014 WL 2207866 (E.D. Wash. May 28, 2014), the Court tossed out the EEOC’s discrimination claims of two of the three defendants in a human-trafficking case over the treatment of Thai workers that has spanned years and was the subject of considerable media attention when it was first filed. Our prior posts on the case are herehere and here. A look at the anatomy and disposition of the case is useful for all employers facing EEOC systemic litigation.

Background

The case began in 2011 when the EEOC sued two growers, Green Acre Farms and Valley Fruit Orchards, and their labor contractor, Global Horizons, on behalf of hundreds of alleged trafficking victims. Our readers have been tracking the case since it first grew roots, and the latest development is a classic example of the EEOC’s sue first, aim later philosophy.

In ruling on the growers’ motions for summary judgment, the Court examined the hostile work environment, constructive discharge, and retaliation claims against the growers. Specifically, the Court reviewed whether a worker was subjected to unwelcome conduct based on race or national origin that was sufficiently severe and pervasive to alter employment conditions and create an abusive working environment. The Court also reviewed the work environment provided by the growers and claims of retaliation against employees who complained about working conditions.

Judge Edward F. Shea granted the growers’ summary judgment on all of the EEOC’s Title VII liability claims against them. In doing so, the Court found that the work environment provided by the farms was not so “intolerable” that a reasonable person would have felt compelled to just walk away from the job, and that the EEOC failed to show there was a single worker who could sustain a timely retaliation claim. The Court’s decision is a clear showing that when the EEOC makes assertions of systemic discrimination, it cannot reach so far without first planting the necessary evidence to grow the assertions. The Court’s decision now leaves farm labor contractor Global Horizons, Inc. as the sole defendant in the case.

Sour Grapes

One other issue was front and center in the summary judgment briefing – whether the EEOC had attempted to resolve the case in good faith before resorting to litigation in the courthouse. The growers said the answer to this question was a resounding no.  The Court, however, looked to the Seventh Circuit’s recent EEOC v. Mach Mining, LLC decision, deciding it was not the Court’s place to review those conciliation efforts, even though other federal courts had done so in the past.  Circuit splits like this make it difficult to assess the strength and merit of lawsuits. As we previously blogged, because of the importance of this issue, both the EEOC and employers are requesting that the Supreme Court resolve what is now an even greater disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

Implications For Employers

EEOC v. Global Horizons stands as a reminder to employers that the fact that the EEOC alleges systemic allegations does not make it so. The unfortunate consequence to those who find themselves in the EEOC cross-hairs is that they may need to endure years of costly litigation and media scrutiny to vindicate their cause. Fighting the good fight can pay off, as it did here.

As for the EEOC’s obligation to fulfill its mandate to informally attempt to resolve these expensive cases before they are filed, the jury remains out.  The EEOC insists that federal courts should simply take the government’s word for it when it says it has negotiated in good faith – a position many employers know first-hand is problematic.

Check back soon to see how Global Horizons, Inc. fairs in the next round, and whether the Supreme Court elects to finally take a bite at the Mach Mining apple.

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