Employers shouldn’t be fooled by the latest Equal Employment Opportunity Commission report showing that the U.S. government is filing fewer lawsuits against companies. In fact, says veteran employment lawyer Gerald Maatman Jr., the number of systemic discrimination investigations has increased four-fold.
“Dealing with the EEOC is a very high-stakes situation,” said Maatman, a partner at Seyfarth Shaw in Chicago and New York. “Should these cases not settle—and most don’t—they will be filed as court suits in 2013 or 2014. The pipeline is chock full.”
Maatman spoke with CorpCounsel.com after the EEOC this week released its Performance and Accountability Report for the 2012 fiscal year [PDF]. The report shows that the agency filed only 122 lawsuits in FY 2012, down from 261 in 2011. (Find more analysis of the EEOC report by Maatman and his colleagues here.)
Commission chair Jacqueline Berrien introduced the report, saying the lower numbers reflect the EEOC’s refocused efforts “in recent years on the efficient and effective enforcement of the nation’s equal employment laws.”
But Maatman said the figures also illustrate a growing criticism by federal courts over the agency’s litigation tactics.
“The EEOC rushed in 2009 and 2010 to file some lawsuits without doing its homework,” the defense lawyer said, “and judges called them on it. What it did in 2012 is ratchet back the lawsuits filed . . . but overall activity is up.”
That’s why simply reading the report can give a false sense of what’s really going on, according to Maatman. Employers need to do a closer study and realize that while the number of filings is down, the recoveries are up because the agency is pursuing suits more aggressively and thoughtfully.
In 2012, the EEOC secured a historic monetary recovery of $365 million through is private sector administrative enforcement—the highest level of monetary relief ever, according to the agency.
Administrative enforcement includes mediation, settlements, withdrawals with benefits, and conciliation. About 10 percent of the recovery amount—or $36 million—came from investigations of systemic charges of discrimination, four times the amount received in the previous fiscal year.
The largest settlement, totaling $11 million, involved the Fortune 500 company YRC Inc. (formerly Yellow Transportation Inc.). Settled on June 29, the complaint alleged that “the trucking giant subjected black employees at a Chicago facility to a racially hostile working environment, and discriminatory terms and conditions of employment. The EEOC had evidence of multiple hangmen’s nooses, racist graffiti, and harsher discipline and scrutiny of black employees.”
The company strongly disputed the charges, but it resolved the case by consent decree. Besides the payment, YRC also agreed to retain consultants to examine its discipline and work assignment procedures and recommend changes to prevent racial disparities.
In a statement at the time of settlement, Kelly Walls, senior vice president of human resources at YRC, said: “There may be isolated instances of improper conduct in any workplace, but the allegations in these cases did not reflect the real working environment . . . The company had many factual and legal defenses to the claims, including evidence refuting the most scandalous allegation.”
Walls went on to say that YRC settled the cases “to bring the lawsuits to an end, and to avoid further legal fees and costs.”
But David Lopez, general counsel at the EEOC, had his own take on the issue. In a statement released upon settlement, he said: “This case, with evidence of hangman’s nooses, vile racist graffiti, and race-based work assignments, proves that even after these many years, there is work to be done to eradicate pernicious racial hatred and discrimination. We . . . will continue [such prosecutions] until this toxic workplace behavior is eradicated.”
Maatman said he expects to see fewer such cases in the future.
In the past, he said, the agency concentrated its cases on failures to promote minorities and women, or to pay them equally. “Now the bulk of investigations are looking at systemic discrimination in hiring—at the gateways to employment, at the impediments or criteria that employers are using,” he explained.
He anticipates a growing number of cases in the next two years related to discrimination against job applicants based on the use of criminal background checks. The EEOC sees these checks as ways to discriminate against African American and Latino job applicants, he said.
“Employers say they have an interest in hiring people who they feel are safe to interact with customers and other employees,” Maatman said. But the EEOC has issued guidance restricting background checks.
“There’s not a lot of case law on it right now,” Maatman added, but he warned employers to watch for it to develop over the coming months.
See also: “City Councils, EEOC Grapple with Employment Protections for Ex-Convicts,” CorpCounsel, October 2012.
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