Client Bulletin #361

Since its inception, the EEOC has struggled with where it should focus its resources: investigations, enforcement, or mediation. In yet another change of direction, the EEOC recently announced that it will focus on investigating and litigating so-called “systemic” discrimination cases.

Because “systemic” is a synonym for “class-wide,” the significance of the new initiative cannot be overstated. The agency will take a number of steps to achieve its goal, including the following: (1) beefing up its information systems so that all of its offices nationwide can share information and guidance; (2) hiring more statisticians, who can analyze employers’ data; (3) communicating with the plaintiffs’ bar and community organizations to identify companies that might have problems; (4) communicating with other federal agencies – especially the OFCCP and the U.S. Department of Labor – to coordinate efforts; and (5) providing “incentives” – including good performance reviews and money – to field investigators and their superiors who identify and pursue class-wide claims.

The recommendations that resulted in the EEOC action came about as a result of a task force consisting of upper-level EEOC employees who consulted with EEOC field offices, state fair employment practices agencies, academics, private plaintiffs’ and defendants’ attorneys, and public interest organizations including the Society for Human Resources Management and the AFL-CIO. If you would like to read the entire 74-page Systemic Task Force Report, click here.

What does this mean for employers? First, it means that employers will no longer be able to rely on previous pronouncements of commission policy pledging not to use every charge of discrimination as a "fishing expedition" to support class-wide findings of discrimination. The last time the EEOC focused on systemic discrimination, employers who thought they were defending individual charges were frequently hit with EEOC determinations finding "like and related" un-alleged class-wide discrimination based on information innocently and in good faith furnished to the EEOC.

The net effect of this change in focus by the agency we fear will result in more time-consuming and costly investigations. We can expect broad requests for information even though the underlying charge may be narrow, as well as more “behind-the-scenes” research about the employer’s history, its employment statistics, and other charges that may have been filed against the employer. The relationship between the agency and employers will probably become more adversarial, as employers object to certain requests for information and the agency doggedly pursues it.

Perhaps all this investigation will create a tremendous, paralyzing backlog at the agency, as occurred the last time they focused on systemic discrimination. But with the sophisticated information technology that is now available, paralysis is not likely.

Employers should be more careful than ever in preparing statements of position and submitting other information in response to EEOC charges. If they do not already do so, they should proactively monitor their company’s performance – as opposed to facility-wide – with respect to hiring, promotions, and terminations, and alert counsel if there appears any basis for a “systemic” allegation. Employers who are federal contractors should already be doing this as part of their affirmative action compliance obligation.

Employers should also be aware that the Federal Rules of Civil Procedure governing (and limiting the availability of) class actions do not apply to actions brought by the EEOC.

If you have any questions regarding the EEOC’s new initiative, need assistance in identifying or resolving “systemic” issues, or simply need assistance in responding to an EEOC charge, please feel free to contact any member of Constangy’s Litigation Practice Group, or the Constangy attorney of your choice.

If you have questions or need assistance in amending your wage deduction policies in light of these amendments, feel free to contact any attorney in Constangy’s Asheville or Winston-Salem, NC, offices, or the attorney of your choice.

Constangy, Brooks & Smith, LLC has counseled employers, exclusively, on labor and employment law matters since 1946. The firm represents Fortune 500 corporations and small companies across the country. More than 100 lawyers work with clients to provide cost-effective legal services and sound preventive advice to enhance the employer-employee relationship. Offices are located in Georgia, South Carolina, North Carolina, Tennessee, Florida, Alabama, Virginia, Missouri, and Texas. For more information about the firm's labor and employment services, visit www.constangy.com, or call toll free at 866-843-9555. 

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