CHICAGO, IL (January 22, 2014) – Littler, the world’s largest employment and labor practice representing management, has released its Annual Report on EEOC Developments – Fiscal Year 2013. The Report highlights the performance over the past year by the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for enforcement of the United States’ equal employment laws.

Approximately one year ago, the EEOC approved its Strategic Enforcement Plan in which it outlined its priorities and plan to engage in “targeted enforcement” and focus on “systemic discrimination.” Such investigations and litigation addresses 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.” (Though 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.)

According to Littler’s Report, based on systemic investigations, the EEOC recovered $40 million for charging parties and others during FY 2013.  While this was a $4 million increase from the prior year, this should be contrasted with FY 2012 in which the EEOC underscored that it recovered four times the amount recovered in FY 2011. The EEOC completed work on 300 systemic investigations (cases with at least 20 expected class members), in which 63 resulted in “reasonable cause” determinations that the policies were discriminatory in nature.

“Once again, these statistics continue to be of great concern to the employer community,” said Barry Hartstein, executive editor of the Report and co-chair of Littler’s EEO & Diversity Practice Group. “This is the third consecutive year in which our report found that over 35 percent of the systemic investigations resulted in a “reasonable cause” determination, compared to the fact that such findings are typically issued in less than five percent of charges that the EEOC investigates. These statistics highlight the fact that systemic investigations create risk for the employer community.”

Hartstein noted that this finding is also significant because the EEOC recently prevailed in a decision before the U.S. Court of Appeals in Chicago, in which the Seventh Circuit ruled that the EEOC’s conciliation efforts following a reasonable cause finding are not subject to review by the courts. “This means that the courts in the Seventh Circuit will not “second guess” the EEOC’s decision to file suit against an employer, even if it takes an unreasonable position in the conciliation process,” added Hartstein.

In FY 2013, the EEOC also launched a “Systemic Watch List,” a software application designed to identify charges and litigation against the same employer around the country involving similar issues. Hartstein states, “The EEOC clearly is attempting to leverage technology to facilitate cross-office communication and improve the efficiency of the agency.”

Littler’s Report identifies the six priorities focused on by the EEOC based on its “targeted enforcement” efforts: (1) eliminating systemic barriers in recruitment and hiring; (2) protecting immigrant, migrant and other vulnerable workers; (3) addressing emerging issues, including  the Americans with Disabilities Act (ADA), LGTB (lesbian, gay, bisexual and transsexual individuals) coverage under Title VII and accommodating pregnancy; (4) enforcing equal pay laws; (5) preserving access to the legal system and (6) preventing harassment through enforcement and targeted outreach.

Among the 231 lawsuits on its active docket at the end of FY 2013, 100 lawsuits (43.4%) of all matters involved multiple victim lawsuits, which included 54 (23.4%) systemic lawsuits (i.e. involving 20 or more employees).

Littler’s Report reviews other developments involving the EEOC. It also points out that with the continued logjam in Congress and current Democratic controlled Commission, during the coming months the EEOC can be expected to pursue its agenda with renewed vigor, including an increased focus on ADA and reasonable accommodation issues, pursuing issues related to hiring procedures and practices,  placing increased attention on equal pay and other emerging issues, such as strengthening accommodation obligations for pregnant workers and providing LGBT protection under Title VII.

Other developments less favorable for the EEOC include:

• For the second year in a row, there was a dramatic reduction in the number of lawsuits filed by the EEOC. During FY 2013 and FY 2012, the EEOC filed 131 and 122 “merits” lawsuits, respectively; this is in stark contrast to the prior five years in which the number of lawsuits ranged between 250 and 336 lawsuits per year.
• The EEOC continued its practice of filing a majority of its lawsuits within the last two months of the EEOC’s fiscal year (i.e. August and September) – the EEOC filed 70 lawsuits, which made up 47% of the lawsuits filed during this two month period.
• While one of the EEOC’s top priorities has been employment practices that the agency views as hiring barriers, the EEOC suffered setbacks in two major cases by the agency. In one case, the EEOC alleged that credit history was a discriminatory hiring barrier against African Americans. In another, it alleged that both criminal and credit history were hiring barriers against African Americans, Hispanics and males (although the EEOC dropped the claim against Hispanics following discovery in the case). The EEOC lost both cases on summary judgment prior to trial and both cases are now on appeal.
• The EEOC’s criminal history guidelines, issued in April 2012, have been subject to attack by various State Attorney Generals and currently are being challenged in federal court by the Texas Attorney General based on Texas law, which allows certain state agencies to prohibit the hiring of convicted felons to ensure they do not hold positions of public trust.
• The EEOC has also been challenged concerning its “good faith” in the conciliation process prior to filing suit. In one case, the court the stayed the litigation because the EEOC denied the employer an extension to respond to a $6.5 million demand with its “best offer” within nine days and then filed suit against the employer.  In another case, the court dismissed the lawsuit based on the failure to identify class members prior to filing suit.
• The EEOC has also been subjected to various attorneys’ fee awards based on court findings that the EEOC  pursued cases that lacked merit and/or based on improper practices by the EEOC: (1) In a sexual harassment case in Iowa, a district court ordered the agency to pay $4.7 million in attorneys’ fees and costs for pursing “unreasonable or groundless” pattern or practice and individual claims against an employer; (2) the U.S. Court of Appeals affirmed the district court’s finding of more than $750,000 in fees and costs against the EEOC for pursuing a lawsuit of alleged race discrimination based on an employer’s purported blanket policy of not hiring applicants with a criminal record, which the EEOC continued to pursue despite documents produced during the case which showed that not to be the case; (3) a federal appeals court affirmed an attorneys’ fee award  ($140,571.62) in an ADA case and criticized the agency for continuing to pursue an ADA case it either knew or should have known was baseless; (4) a federal district court ruled against the EEOC for unreasonable delay based on seven years having passed between the charge filing date and the date the EEOC filed suit, entered summary judgment in favor of the employer and awarded over $189,000 in attorneys’ fees and costs; and (5) the EEOC also was sanctioned for its tactics during the course of a sexual harassment lawsuit in which it failed to produce required discovery and caused unnecessary delays in the discovery process.

View a complete summary of noteworthy EEOC settlements in Littler’s Annual Report on EEOC Developments.

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 is the collective trade name for an international legal practice, the practicing entities of which are separate and distinct professional firms. For more information visit: www.littler.com.