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Safeguarding Against EEOC Systemic Enforcement
According to the Equal Employment Opportunity Commission's 201216 Strategic Enforcement Plan, the number of discrimination charges filed since the onset of the economic downturn has increased dramatically. Faced with these conditions, the EEOC concluded that the most efficient way to target discrimination is to find and pursue large"systemic"cases. In fiscal year 2011 the EEOC conducted 580 systemic investigations, filed 84 systemic lawsuits, and settled 35 systemic cases for a total of $9.6 million.
Recent experience has shown that no charge is immune from the EEOC's search for systemic litigation. For example, in a single disability and age failure-to-hire charge, the EEOC requested nationwide data regarding preemployment tests that were neither taken nor complained of by the charging party. In another single charge of hiring discrimination at one facility, the EEOC's first request for information sought hiring data for all the employer's facilities nationwide over a three-year period.
So how did we get here? For decades, attorneys counseled employers to respond to individual charges of discrimination with the magic phrase "pursuant to our consistently applied policy." This "magic phrase" tended to discourage EEOC investigations because the agency had little interest in, and insufficient resources to support, investigating claims involving a large class of employees. The agency would have to subpoena and comb through thousands of paper records with no guarantee of finding violations.
This magic phrase is now magic in a bad wayit may open the door to systemic investigations regarding all individuals who were potentially affected by the "consistently applied" policy. Technology has greatly aided the effort. Most large corporations today maintain employment records in retrievable, sortable, electronic format. Data for a nationwide workforce can easily fit on a thumb drive and can be sorted, reviewed, and analyzed with just a few keystrokes.
Statisticians will tell you (and the EEOC knows) that larger data sets are more likely to raise red flags and produce statistical indicators of disparate impact. Unfortunately for employers, larger data sets can significantly multiply employers' monetary liability and lead to larger settlements (e.g., $9.6 million in fiscal year 2011).
There are some standard preemptive defenses that employers can institute to ward off the sorts of charges that might lead to an EEOC investigation. And make no mistake about it, nearly every charge presents a possible springboard for the EEOC to conduct a widespread investigation and initiate costly and disruptive systemic litigation. So employers must change how they evaluate and respond to charges, even those involving a single alleged victim. To protect yourself, you should consider the following:
In addition, do not wait for the charge to arrivethink ahead and take the following measures to reduce potential liability:
Specific EEOC/Office of Federal Contract Compliance Programs investigations and audits, multiple employee internal complaints, and plaintiffs' lawsuits may each be legally unfounded, but they do often signal that something is wrong in the workplace. The mere fact that an employee believes the company is capable of discriminating against him or her suggests that management of the company's image may be inadequateor worse. One effective way to reduce discrimination allegations is to create a comprehensive diversity and inclusion ("D&I") programa proactive effort with substantially greater value than merely as a defense to discrimination claims. Employers should conduct independent, objective assessments of their workplaces. Here are a few tips to get employers started:
Forward-thinking companies need to understand why their EEOC charge volume is rising, settlement costs are increasing, discrimination litigation is escalating, OFCCP audits are more frequent, or their internal complaint systems are showing disturbing upward trends. A proactive assessment of their D&I programs will highlight both strengths and weaknesses, and provide the basis for critical solutions designed to bridge gaps, create a business-savvy D&I environment, and reduce the likelihood of employment discrimination exposure.
The EEOC has ushered in a new era of systemic discrimination enforcement. Employers cannot afford to wait for an agency claim, OFCCP audit, private plaintiffs' lawsuit, or bad press. You need to proactively assess your selection procedures, statistical trends, compensation, and D&I programs and make changes now. By following the tips noted above, you will be well on your way to anticipating, avoiding, or successfully defending systemic discrimination claims, and protecting your company and its hard-earned reputation for maintaining a fair and productive workplace.
Weldon H. Latham, Mickey Silberman, and Richard S. Cohen are partners with Jackson Lewis. Latham chairs the firm's Corporate Diversity Counseling Group; Silberman chairs its Affirmative ActionOFCCP Practice Group. Cohen advises employers on all aspects of employment law.