Littler Issues Annual Report on EEOC Developments

Report Highlights Major EEOC Results and Setbacks in 2014

CHICAGO, IL (January 5, 2015) – Littler, the world’s largest employment and labor practice representing management, has released its Annual Report on EEOC Developments – Fiscal Year 2014. The report provides a comprehensive guide to significant developments over the past year for the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for enforcement of the United States’ equal employment laws. It also offers a forecast of key issues to watch in 2015.

Systemic Discrimination Investigations Fall, but Reasonable Cause Determinations on the Uptick

In December 2012, the EEOC approved its Strategic Enforcement Plan which included a plan to engage in “targeted enforcement,” as well as focus on broad-based investigations and related litigation, to address “systemic discrimination.” This includes alleged discriminatory patterns or practices of discriminatory conduct and/or discriminatory policies that have a “broad impact on an industry, profession, company or geographic location.”  

According to Littler’s report, the EEOC fell dramatically short in its systemic investigations initiative compared to FY2013. The agency:

  • Completed fewer systemic investigations (260 in 2014 compared to 300 in 2013)
  • Recovered less despite more settlements (in 2014, $13 million in monetary relief was recovered through 78 voluntary agreements compared to $40 million recovered through 63 voluntary agreements in 2013)
  • Filed fewer systemic lawsuits (17 in 2014 compared to 21 in 2013)

Despite the statistics outlined above, employers should note that the risk of a “reasonable cause” finding of discrimination increased when an employer was faced with a systemic investigation. A determination of reasonable cause by the EEOC is significant as it is often followed by an attempt to conciliate the issues of discrimination in the case and a strong likelihood of litigation by the EEOC if the matter is not resolved in the conciliation process, particularly with systemic investigations. The agency issued reasonable cause determinations in 118 of 260 systemic investigations in FY 2014 (45%), compared to 106 reasonable cause determinations based on 300 systemic investigations in FY 2013 (35%).

“While the drop in systemic discrimination investigations may bring some relief to employers, the increase in reasonable cause determinations is an area to watch in 2015,” said Barry Hartstein, executive editor of the report and co-chair of Littler’s EEO & Diversity Practice Group. “Reasonable cause findings are typically issued in less than five percent of charges that the EEOC investigates, however our report found that such determinations were issued in 45% of systemic investigations. This finding underscores the fact that systemic investigations create significant risk for the employer community.” 

Looking ahead to 2015, another noteworthy finding of the report was the high percentage of systemic discrimination cases on the active docket. Among the 228 lawsuits on its active docket at the end of FY 2014, 88 (46%) involved multiple victim lawsuits, which included 57 (25%) systemic lawsuits (i.e. those involving 20 or more employees).

2014 Brought Major Setbacks for the EEOC

Hartstein noted that the report also revealed that “the EEOC has suffered numerous setbacks in its systemic investigations initiative based on cases the agency has taken to litigation, as shown by its focus on ‘failure to hire’ cases.”

The EEOC already lost one major case on appeal, EEOC v. Kaplan Higher Education Corporation, et al., when the Sixth Circuit affirmed dismissal of a case challenging the use of credit checks. A second case, EEOC v. Freeman, involving the use of both credit and criminal background checks is on appeal to the Fourth Circuit after the EEOC lost on summary judgment. Both cases involved reliance on the same expert.

Regardless of the outcome in EEOC v. Freeman, Hartstein predicts the EEOC will be “going back to the drawing board and rethinking their reliance on certain experts in disparate impact cases,” which focus on neutral employment practices that allegedly have a disparate impact on certain protected groups (e.g. African Americans and Hispanics).

The EEOC also lost a significant equal pay case in EEOC v. Port Authority of NY and NJ, in which the Second Circuit issued a harshly worded opinion. The opinion stated, “We conclude that the EEOC’s failure to allege any facts concerning the attorneys’ actual job duties deprives the Court of any basis from which to draw a reasonable inference that the attorneys performed ‘equal work,’ the touchstone of an EPA claim.” A closer question may be at stake in the religious accommodation case in EEOC v. Abercrombie, which the EEOC lost on appeal in the Tenth Circuit and will be heard by the U.S. Supreme Court on February 24, 2015.

At the district court level, the EEOC lost cases involving overbroad complaints (EEOC v. Sterling Jewelers), a pattern or practice claim involving alleged religious discrimination (EEOC v. JBS USA) and challenges to an employer release that allegedly restricted access to the EEOC (EEOC v. CVS Pharmacy, Inc.), to name a few.

The EEOC also had unfavorable results with fee awards in the amount of $189,113.50 and $751.942.48 against the agency being affirmed by the Fourth and Sixth Circuits in EEOC v. Propak Logistics, Inc. and EEOC v. Peoplemark, respectively.

Questions Remain in Select EEOC Decisions from 2014

While the agency initially scored a major win in EEOC v. Mach Mining when the Seventh Circuit determined that the EEOC’s conciliation efforts prior to bringing suit would not be challenged by the court, the U.S. Supreme Court granted certiorari and will hear oral argument in the case on January 13, 2015.

On December 22, 2014, in EEOC v. CRST Van Expedited, Inc., the EEOC also had a favorable reversal of a $4,694,442.14 fee award against the agency by a three judge panel in the Eighth Circuit, which reversed and remanded the case for further findings. However, based on the remand, the EEOC still remains at risk for an award of attorneys’ fees to the employer. As significantly, despite nearly a decade of litigation in which the EEOC sought relief on behalf of 154 individuals, and at one point as many as many as 270 “similarly situated” female employees, the EEOC lost the entire litigation, except the claim of the original charging party which the EEOC and the employer agreed to resolve for $50,000.

Littler’s “Top Ten List” of EEOC developments to watch in 2015 is below.

View the full Annual Report on EEOC Developments

* Note: While the EEOC provides data on an annual basis, Littler’s Annual Report on EEOC Developments examines recent developments from an employer’s perspective and serves as a resource for employers in their compliance activities when faced with investigations or litigation involving the EEOC.

Littler’s Top Ten List of EEOC Developments to Watch in 2015

During Fiscal Year 2015, key EEOC developments to watch include:

  • Conciliation Obligations of the EEOC Prior to Filing Suit - The U.S. Supreme Court’s upcoming ruling on the nature and extent of the EEOC’s obligations during the conciliation process in Mach Mining
  • Employer Obligations Involving Pregnant Workers - An employer’s obligations involving pregnancy leave under the Pregnancy Discrimination Act based on the upcoming ruling by the U.S. Supreme Court in Young v. UPS, as well as the nature and extent to which the courts will obligate employers to make reasonable accommodations to pregnant workers under the Americans with Disabilities Act (ADA)
  • EEOC Challenges to Hiring Barriers - Various cases involving hiring barriers, including the impact of the Fourth Circuit’s decision in EEOC v. Freeman involving the use of criminal history in the hiring process, as well numerous cases of alleged intentional discrimination in the hiring process involving race, national origin, age and sex discrimination
  • Scope of Reasonable Accommodation Under the ADA - The courts’ approach to required accommodation under the ADA, including whether the courts will begin to challenge required attendance on the job based on cases such as EEOC v. Ford Motor Company, currently pending before the Sixth Circuit
  • Required Accommodations Involving Religion - The scope of reasonable accommodation involving religious discrimination based on the U.S. Supreme Court’s upcoming decision in Abercrombie and whether an individual has to make a specific request for an accommodation in circumstances where an employer arguably has enough information to believe there may be a potential conflict between the individual’s religious practices and employer policies
  • EEOC Challenges to Wellness Programs - The manner in which the courts will reconcile the Affordable Care Act’s encouragement to develop wellness programs to help contain medical costs versus the EEOC’s focus on the “voluntariness” of participation in such programs
  • Nature and Extent of Rights of LGBT Workers Under Title VII - The nature and extent to which courts adopt the view of the EEOC and expand the rights of LGBT workers under Title VII, despite the absence of legislation to cover sexual orientation and sexual identity
  • Challenges to Releases and/or Arbitration Programs - Challenges to employer releases by the EEOC in litigation similar to EEOC v. CVS (in which the EEOC’s claim was dismissed on technical grounds based on the failure to conciliate prior to filing suit) and/or arbitration programs (e.g. EEOC v. Doherty Enterprises (S.D. FL)) to the extent the EEOC believes such employer documents allegedly interfere with access to EEOC processes
  • “Directed Investigations” under the Equal Pay Act (EPA) and Age Discrimination in Employment Act (ADEA) and Related Litigation – Potential broad-based investigations of alleged equal pay violations under the EPA and/or age discrimination under the ADEA without a charge of discrimination even being filed against an employer, based on the EEOC’s authority to conduct “directed investigations”
  • Scope of Permitted Pattern or Practice Litigation against Employers - Continued pattern-or-practice litigation by the EEOC, including harassment litigation, and the extent to which a lawsuit by the EEOC will be limited based on the scope of its investigation and/or the failure to identify purported victims prior to bringing suit

About Littler

Littler is the largest global employment and labor law practice, with more than 1,000 attorneys in over 60 offices worldwide. Littler represents management in all aspects of employment and labor law and serves as a single-source solution provider to the global employer community. Consistently recognized in the industry as a leading and innovative law practice, Littler has been litigating, mediating and negotiating some of the most influential employment law cases and labor contracts on record for over 70 years. Littler Global is the collective trade name for an international legal practice, the practicing entities of which are separate and distinct professional firms.