Systemic investigations, hiring scrutiny and pregnancy discrimination are among the trends at the U.S. Equal Employment Opportunity Commission that employers should be looking out for in the coming year, according to attorneys at Littler Mendelson PC.
A report issued by Littler analyzes and examines key statistics from the EEOC’s Performance and Accountability Report for fiscal year 2015. The PAR includes statistics relating to EEOC charge activity and litigation over the past fiscal year, which ended Sept. 30, 2015.
“The EEOC reached major milestones in FY 2015, between its 50th anniversary, the 25th anniversary of the Americans with Disabilities Act and the agency’s involvement in three Supreme Court cases that brought significant implications for employers across the country,” said Barry Hartstein, the report’s executive editor 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.”
“The EEOC’s focus on systemic investigations is the most significant trend for employers to monitor,” according to Hartstein. While the dramatic uptick in the total monetary recovery from systemic charges seems alarming at first glance, the amount is in line with the amounts recovered by EEOC in FY 2012 and FY 2013 of $36.2 million and $40 million, respectively, he said. “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.”
Based on its review of the FY 2015 case developments involving EEOC investigations and litigation dealing with the agency’s “national priorities,” Littler recommends that employers take the following EEOC developments and trends into consideration in preparing for FY 2016:
- Continued Focus on Systemic Investigations
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 5th Circuit case, EEOC v. Bass Pro Outdoor World LLC, which will determine whether EEOC can seek compensatory and punitive damages and jury trials based on Section 706 of Title VII, or whether EEOC will be limited by Section 707 of the Act that expressly refers to “pattern or practice” actions.
- Continued Scrutiny of Hiring Policies and Practices
Although recent litigation has focused on employer’s used of applicant’s criminal history, 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.
- Expansion of Pregnancy Discrimination Claims
EEOC’s guidance after Young v. UPS makes clear that failing to accommodate pregnant employees may expose employers to Americans with Disabilities Act claims based on temporary disabilities caused by pregnancy. 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 impacts pregnant workers.
- Evolution of Religious Discrimination Claims
The scope of reasonable accommodation for religious practices likely will 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.
- Broad Interpretation of LGBT Rights in the Workplace
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, EEOC will seek to protect such workers based on the prohibition of sex discrimination.
- Ongoing Scrutiny of ADA Claims
Over the past several years, EEOC has filed more ADA lawsuits than any other type of discrimination claim. In light of this focus, employers should expect EEOC to closely monitor three areas during FY 2016:
- 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 EEOC will create risk for employers, with EEOC v. Flambeau as one pending case to closely watch.
- Increased Attention to Equal Pay
EEOC Chair Jenny Yang has underscored 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. 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.
- Increased Focus on Investigations in the Absence of Charges of Discrimination
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 EEOC’s largest pending age discrimination lawsuits, EEOC v. Texas Roadhouse, stems from a “directed investigation.” Further, based on EEOC’s “pattern or practice” authority, challenges to releases and/or arbitration agreements also may be brought 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. EEOC has been using this authority aggressively by challenging release and arbitration agreements in federal court. As an example, in EEOC v. Doherty, the court has fully endorsed EEOC’s approach; however the 7th Circuit soon will decide whether EEOC must first engage in conciliation prior to filing suit.
- Harassment in the Workplace
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, EEOC will continue to vigorously investigate harassment charges.
- Potential Impact of Mach Mining on the Conciliation Process and EEOC Investigations
While the Supreme Court in Mach Mining ruled that judicial review of 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 EEOC’s approach to conciliation. So far, in one case in which EEOC allegedly made a “take or leave it proposition,” EEOC v. Ohio Health, the district court took strong exception with EEOC’s conduct. In another case, EEOC v. Jet Stream, in which 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 EEOC’s approach to conciliation. In EEOC v. Sterling Jewelers, the Second Circuit also relied, in part, on Mach Mining in concluding there should be only limited review of EEOC’s investigation process, based on lawsuits initiated by the commission.
The report, Looking Backward and Forward: A Review of Key EEOC Developments, Successes and Failures in FY 2015 and What to Watch For in FY 2016, is available on the firm’s website. In addition, Littler will release a comprehensive review of key EEOC statistics, regulatory developments and litigation initiated by EEOC in its Annual Report on EEOC Developments: Fiscal Year 2015, to be published in early 2016.