Littler Report Analyzes EEOC Developments and Trends to Watch in 2016

(November 30, 2015) – Littler, the world’s largest employment and labor law practice representing management, has issued a report analyzing the Equal Employment Opportunity Commission’s (EEOC) annual Performance and Accountability Report (PAR). Released in November 2015, the PAR includes statistics relating to EEOC charge activity and litigation over the past fiscal year, ending September 30, 2015. The Littler report examines key statistics from the PAR and provides a forecast of trends to watch in 2016.

“The EEOC reached major milestones in FY 2015 between its 50th anniversary, the 25th anniversary of the Americans with Disabilities Act (ADA) and the agency’s involvement in three Supreme Court cases that brought significant implications for employers across the country,” said Barry Hartstein, executive editor of the report and co-chair of Littler’s EEO & Diversity Practice Group. “We are watching the agency’s priorities very closely and expect to see an uptick in activity next year around a number of trends, particularly systemic investigations and increased scrutiny of hiring policies, pregnancy discrimination and equal pay, among others.”

Ongoing Focus on Systemic Investigations, Uptick in Reasonable Cause Determinations

In comparison to recent PARs, in FY 2015, the EEOC:

  • Completed slightly more systemic investigations (268 in 2015 compared to 260 in 2014)
  • Recovered significantly more from the resolution of systemic investigations ($33.5 million in 2015 compared to $13 million in 2014)
  • Issued reasonable cause determinations in 99 of the 268 systemic investigations in FY 2015 (36 percent), which is in a range similar to the number of reasonable cause findings in FY 2014 and FY 2013 (45% and 35%, respectively). This is to be contrasted with general EEOC statistics referring to reasonable cause findings being issued in less than 5% of the charges filed with the agency.

“The EEOC’s focus on systemic investigations is the most significant trend for employers to monitor,” said Hartstein. “While the dramatic uptick in the total monetary recovery from systemic charges may be alarming at first blush, the amount is in line with FY 2012 and FY 2013 when the EEOC obtained $36.2 million and $40 million, respectively. More troublesome is the continued increased likelihood of a reasonable cause finding based on a systemic investigation, as such determinations are likely to lead to litigation by the EEOC if the matter is not resolved in the conciliation process.”

Increased Backlog of Private-Sector Charges

While the PAR showed a minor increase in the number of discrimination charges (89,895 in FY 2015 compared to 88,878 in FY 2014), the level of charge activity has actually decreased over the past few years. However, the EEOC’s backlog of private-sector charges has continued to increase (in FY 2015, it rose to 76,408 charges from 75,935 in FY 2014).

“While the increased backlog in private-sector charges was modest, the EEOC has previously identified its charge inventory as a ‘major challenge’,” said Hartstein. “The EEOC explained the backlog by referring to the impact of ‘losing experienced investigators’ and the need to ‘ensure high quality standards for charge processing.’ However, as in years past, the agency acknowledged that it faces a fundamental challenge in efficiently processing the pending inventory of private-sector charges while improving the quality of processing.”

Filed Lawsuits Down, but Increased Focus on Multi-Victim and ADA Lawsuits

In FY 2015, the EEOC:

  • Filed fewer lawsuits: While the 142 merits lawsuits filed in FY 2015 are at a similar level to those filed in FY 2012 through FY 2014, this is in sharp contrast to the number of suits filed in prior years (250 or more).
  • Focused on multi-victim lawsuits: 42 of the 142 lawsuits filed in 2015 involved multiple victims. More concerning is that approximately 40% of cases currently on the EEOC’s active docket (88 out of 218 cases) involve multiple-victim lawsuits.
  • Concentrated majority of claims under the ADA: Of the 142 lawsuits filed by the agency during FY 2015, the largest number involved claims under the ADA (37 percent or 53 lawsuits).

Top Ten Trends to Watch in 2016

  1. Continued Focus on Systemic Investigations
    The EEOC has not been reluctant to expand individual charges into systemic investigations and the agency’s favorable track record in making broad-based requests for information through subpoena enforcement actions also has further strengthened. One significant case to watch is the pending Fifth Circuit case, EEOC v. Bass Pro Outdoor World LLC, which will determine whether the EEOC can seek compensatory and punitive damages and jury trials based on Section 706 of Title VII or whether the EEOC will be limited by Section 707 of the Act that expressly refers to “pattern or practice” actions.
  2. Potential Impact of Mach Mining on Conciliation Process and EEOC Investigations
    While the Supreme Court in Mach Mining ruled that judicial review of the EEOC’s conciliation efforts would be limited, the court nevertheless held that EEOC “must engage the employer in some form of discussion” to resolve the matter. During the coming year, the key will be whether the court’s limited review will impact the EEOC’s approach to conciliation. So far, in one case in which the EEOC allegedly made a “take or leave it proposition,” EEOC v. Ohio Health, the district court took strong exception with the EEOC’s conduct. In another case, EEOC v. Jet Stream, in which the EEOC rejected an individualized settlement approach and instead focused on settlement for “aggrieved individuals” who had not yet been identified, the court refused to examine the EEOC’s approach to conciliation. In EEOC v. Sterling Jewelers, the Second Circuit also relied, in part, on Mach Mining in concluding there only should be limited review of the EEOC investigation process, based on lawsuits initiated by the EEOC.
  3. Continued Scrutiny of Hiring Policies and Practices
    While recent litigation has focused on criminal history, the EEOC also has been closely scrutinizing other pre-employment hiring practices that may create barriers for individuals with protected status, including any pre-employment testing engaged in by employers.
  4. Expansion of Pregnancy Discrimination Claims
    The EEOC’s guidance after Young v. UPS makes clear that failing to accommodate pregnant employees may expose employers to Americans with Disabilities Act (ADA) claims based on temporary disabilities caused by pregnancy. The EEOC also has emphasized that employers may be subject to disparate impact claims to the extent that an employer policy, such as eligibility for and/or limits on leave, unfairly impact pregnant workers.
  5. Evolution of Religious Discrimination Claims
    The scope of reasonable accommodation for religious practices will likely receive increased attention over the coming year. Care must be taken with both grooming and appearance policies and issues of requested time off, including breaks for religious practices. In dealing with the latter issue, a case to closely monitor is EEOC v. JBS, currently pending in federal court in both Nebraska and Colorado.
  6. Broad Interpretation of LGBT Rights in the Workplace
    The EEOC has stated in unequivocal terms that it views discrimination based on sexual orientation “necessarily an allegation of sex discrimination under Title VII.” Thus, despite the failure of Congress to amend Title VII to include discrimination on the basis of sexual orientation and/or gender identity, the EEOC will seek to protect such workers based on the prohibition of sex discrimination.
  7. Ongoing Scrutiny of ADA Claims
    Over the past several years, the EEOC has filed more ADA lawsuits than any other type of discrimination claim. In light of this focus, employers should closely monitor three areas during FY 2015:
    • Employers with inflexible leave policies will continue to face a high risk of EEOC litigation
    • Employers that fail to engage in an interactive process in handling requests for reasonable accommodation will be vulnerable to potential litigation
    • Employer wellness policies that are not viewed as “voluntary” by the EEOC will create risk for employers, with EEOC v. Flambeau as one pending case to closely watch
  8. Increased Attention to Equal Pay
    EEOC Chair Yang has underscored the pay disparity between the average earnings of women and men and the agency will very likely place increased attention on equal pay issues during the coming year. The EEOC’s ability to initiate “directed investigations” focusing on equal pay without a discrimination charge even being filed also raises the stakes for employers in this area.
  9. Increased Focus on Investigations in the Absence of Charges of Discrimination
    The EEOC has statutory authority to initiate age discrimination and Equal Pay Act investigations even in the absence of a charge of discrimination. In fact, one of the EEOC’s largest pending age discrimination lawsuits, EEOC v. Texas Roadhouse, stems from a “directed investigation.” Further, based on the EEOC’s “pattern or practice” authority, challenges to releases and/or arbitration agreements may also arise in the complete absence of a charge of discrimination when the agency is claiming that an employer is “engaged in a pattern or practice of resistance to the full enjoyment of any of the rights” under Title VII. The EEOC has taken an aggressive approach in initiating lawsuits in the absence of a charge by challenging release and arbitration agreements in federal court actions filed in Chicago and Miami, respectively. As an example, in EEOC v. Doherty, the court has fully endorsed the EEOC’s approach, however the Seventh Circuit will soon decide whether the EEOC must first engage in conciliation prior to filing suit.
  10. Harassment in the Workplace
    The EEOC has established a successful track record in litigating harassment cases over the past fiscal year and has set up a special task force to address the ongoing concern of harassment in the workplace. This provides a clear signal to employers that during the coming year, the EEOC will continue to vigorously investigate harassment charges.

In addition to the report released today, Littler will provide a comprehensive review of key EEOC statistics, regulatory developments and litigation initiated by the EEOC in its Annual Report on EEOC Developments: Fiscal Year 2015, which will be published in early 2016.

About Littler

Littler is the largest global employment and labor law practice, with more than 1,000 attorneys in over 70 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.