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'Quality not Quantity' Could Spell Tougher EEOC Cases

 

Employers that find themselves in court opposite the EEOC will have a harder time defending their employment decisions, experts say. But it also means employers should have more opportunities to resolve some charges before a ruling is issued.

 

Monday, November 5, 2012
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When the U.S. Equal Employment Opportunity Commission finished up its 2012 fiscal year in September, an interesting statistic was part of its wrap-up. For 2012, the EEOC filed half as many lawsuits as it had in 2011. That may sound like good news for employers, but it actually reflects a change of direction for the EEOC.

EEOC Commissioner Chai Feldbaum, in fact, recently tweeted that employers can expect "quality over quantity" in EEOC lawsuits in the months and perhaps even years ahead. According to Gerald Maatman, Jr. and Christopher DeGroff, partners at the Seyfarth Shaw law firm, the dramatic drop in filings reflects the agency's focus on more winnable cases, so employers should not read the lower number as a sign the EEOC is weakening.

"With fewer cases to litigate, and more resources to allocate to those matters, we expect the government will be an even more formidable litigation opponent for employers," Maatman says.

"We have already seen an EEOC that is learning how to litigate complex cases smarter and more efficiently," adds DeGroff.

According to Seyfarth Shaw, the total number of cases filed in fiscal year 2012 was approximately 122, less than half of the 2011 total of 261. Maatman and DeGroff point out that in this year's "red zone" - the last eight weeks of the EEOC's fiscal year, when it files more lawsuits than any other period - the EEOC filed 67 cases, barely more than a third of the 175 cases the agency filed during the same period in 2011.
Also, Maatman and DeGroff note that the agency's 2013 fiscal year reveals an agency that is charging "out of the gates," with several new filings in October, during what is historically a quiet month for the agency.

Kim Seten, a partner in Constangy, Brooks & Smith's Kansas City office, says another factor that may have led to the more-focused EEOC approach is that the agency suffered some very public losses in the last year, where courts chided the agency and levied fines for a type of "file first/ask questions later" approach.

"Employers can expect that going forward, at least in the short term, the EEOC will take on cases that it feels have a higher chance of success and that could lead to good publicity for the agency," Seten says. "This means that not only will the agency be filing lawsuits that already are difficult to defend [against], the agency also will be able to focus its litigation resources on fewer cases."

According to Seten, both of these factors mean that employers that find themselves in court opposite the EEOC will have a harder time defending their employment decisions. Conversely, the agency's decision to file fewer lawsuits should result in more opportunities for employers to resolve "for-cause" finding charges by using "conciliation" (the EEOC's alternative dispute resolution process) or even informally directly with an employee before the cause finding is issued and a case ends up in litigation or on the EEOC's short list.

Seten also notes that the EEOC also has not seen a significant budget increase in 2013 over 2012. And after the November elections, if there is a change in administrations, it is possible that the EEOC could see its budget reduced, perhaps significantly.

"This certainly would cause the agency to once again reevaluate its strategy and likely focus on an even more select number of cases," she says. "Employers also could expect a transition period while the agency reexamines its agenda and decides if it intends to shift any of its existing strategy."

On the flip side, she says, while there is no guarantee the EEOC would see an increase in budget if the current administration remains in office after November, it certainly is a possibility. And, if a budget increase happens, employers can expect to see the number of lawsuits filed by the agency to increase once again and can expect investigators to be more aggressive.

DeGroff says HR executives should not only be informing senior management on the new EEOC litigation docket numbers, they also should be discussing the agency's strategic enforcement plan for 2012-2016, which, even in preliminary drafts, outlines a "short list" of things to be thinking about. He adds that, while the final EEOC final strategic plan won't be released until November, early iterations point to three specific areas -- ADA and pregnancy issues, along with a focus on "vulnerable" employees -- that will be getting the EEOC's strongest attention.

"The EEOC will be focusing on hiring cases, regardless of the class," DeGroff says. "Naturally, the EEOC sees itself as uniquely positioned to bring those types of cases, more so than private attorneys."

As a practical point, he adds, HR should be focusing on hiring and auditing existing hiring processes to determine if there are any "wrinkles and holes" and if there are, they should be eliminated.

"Employers must be focused on testing and background checks as part of hiring," he says. "It is critical to make sure tests are validated and relevant to the open jobs."

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David Gevertz, an employment lawyer and vice chair of Baker Donelson's Labor & Employment Department, says the first thing HR executives must do is take the time to study the EEOC's three main enforcement areas for 2012-2016.

For example, employers that hire workers who fall into the EEOC's "vulnerable" category -- young women, legal immigrants and general low-wage workers - should revisit their hiring and discrimination policies and procedures.

"I would start reviewing policies and do a meaningful analysis to guard against any systemic charges," he says, adding that one industry particularly vulnerable to these worker categories is hospitality. For example, restaurants tend to hire younger people, any number of whom are subject to financial pressures and are not financially empowered.

"Supervisors in these situations often are unlike managers in other industries," he says. "They often are promoted from within and come up in less than an ideal mentoring relationship, with very little training. The key is to ensure that you do not have an environment where you can be accused of systemic discrimination. "

The other challenge for the employers that hire from these worker pools, Gevertz adds, is that by the nature of the supervisor/worker relationship, subordinates can be retaliated against in ways that are different than in, say, a white collar environment. As such, they are much harder to defend against should a lawsuit be filed.

"It is very difficult to reconstruct why someone was asked to work a certain shift or remain a back-of-the-room employee," he says. "There is not the sort of paperwork you will find in most businesses."

Matt Scott, head of the employment law section of the Kendall Law Group in Dallas, focuses exclusively on representing individuals in employment discrimination, retaliation, wrongful termination and overtime/equal pay lawsuits. Scott, himself a former defense attorney, says the EEOC was already moving in its current direction of fewer cases since 2009, when it began filing larger cases and trying to maximize its exposure as well as recoveries.

"It is a trend that began with the new administration," Scott says. "EEOC lawsuits are so far and few between that if you are an employer and have an EEOC case, you already have a big problem."

Scott adds that the EEOC's decision to use its resources to choose better cases has little overall impact on plaintiffs.

"It's a continuation of an ongoing trend," he says. "The recent EEOC has become much more aggressive with the lawsuits they file and at making everyone more aware of any successes than in the past. My view is that this doesn't really change anything."

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