The EEOC Is Serious About Systemic Enforcement, and These Cases Are A Pain!

 We have increasingly warned employers about the EEOC’s increased focus on “systemic litigation.”  While the systemic program started in 2006 under the Bush Administration, the Obama Administration has really embraced it.

 Systemic-based cases are those where the EEOC believes “corporate wide” hiring or other policies have an illegal discriminatory effect on certain protected classes, even though not intentional.  Even where the employer prevails, the EEOC’s focus on nationwide hiring or disciplinary policies can involve hundreds of thousands of pages of documents and the involvement of experts.  Six and seven-figure legal bills are not uncommon. For more information on the EEOC systemic initiative, check the EEOC Systemic Enforcement page as well as these  Fisher & Phillips EEOC systemic enforcement articles and a recent article providing Criminal record check guidance.  You may also want to visit the EEOC’s Strategic Enforcement Plan.

 Folks … this process is about as burdensome as responding to a class action lawsuit, and the EEOC’s easy ability to expand a single employee EEOC charge to a nationwide focus is frightening.  Even after almost years as a labor lawyer, I am shocked at the lack of limits on the EEOC’s ability to turn a single seemingly routine case into a near-class action.  The case need not be dramatic or loathsome.  Have I adequately conveyed my sense of alarm?  This process troubles me as much as anything I have recently experienced.

 Ironically, the sequestration is expected to increase the EEOC’s focus on systemic cases as the EEOC seeks to most efficiently use declining resources.  A March 12 BNA article concluded that many EEOC offices believe that “where there is smoke with one EEOC charge, there has to be fire in discrimination against a group of employees.”  In other words, the thought process is “let’s consider whether any isolated charge may actually be the indication of a dark corporate wide effort.”  The BNA article describes the concern of some attorneys “that the EEOC has adopted a “quality over quantity approach.”  

 Importantly, “money talks,” and as you can see from the following excerpts from the 2006 EEOC Systemic Task Force Report, the Agency is doing everything it can to “incentivize” Investigators and Supervisors to find systemic cases…

• Incentives (to EEOC Investigators) . EEOC should create incentives through performance plans and other means to encourage the field to: successfully identify, investigate and litigate systemic cases ….
• EEOC should address staffing needs to ensure the success of a nationwide systemic program, including creating a number of GS-13 Lead Systemic Investigator and GS-12 Systemic Litigation Analyst positions in the field and filling expert positions within the Office of Research, Information and Planning (ORIP) and Research and Analytic Services (RAS) to support the field’s systemic program….

I think that we can safely assume that opportunities for incentives and promotions will motivate investigators and their bosses.

In addition, the EEOC is taking steps to coordinate between offices and use resources more effectively against national companies, which previously have only had to deal with a single EEOC office’s approach…

• Districts should develop and submit to headquarters Systemic Plans that specify the steps each district will take to identify and investigate systemic discrimination and that describe how this work will be accomplished.
• Districts with significant systemic experience should partner with other districts,… the Systemic Plans should ensure a coordinated, national approach to combating systemic discrimination.
• EEOC should staff systemic lawsuits based on the needs of the case, rather than based on the office where the case arose.  ….
• Headquarters should support the field’s systemic program through assistance with partnering, coordination, and legal and data analysis.

 How Should an Employer respond?

 Our first concern is that many sophisticated employers consider unfounded EEOC charges to simply be “a cost of doing business,” and do not involve counsel on their response to the EEOC.  Where a case shows the potential or indications that it may become a systemic case or where the EEOC sends a document request seeking   policy documents, it is essential that the employer retain counsel to analyze being provided to the EEOC.  Where counsel is involved only after a “Cause Finding” or well into the investigation, the client may have missed the opportunity to take steps which could limit exposure.  Therefore, a prudent employer will obtain assistance as soon as it receives the tell-tale evidence request.

 My friend and law partner, Hagood Tighe, along with other members of our Columbia, South Carolina office, has been involved with many systemic cases.  Hagood says that when investigators ask questions about the following, these may be an indication that the EEOC may be heading toward an expansion into a systemic investigation:

• Policies or selection criteria to sites beyond the one referenced in the Charge
• Data involving applicants or positions beyond those specified in the Charge
• Pre-employment test “validation studies”
• How the selection criterion is relevant to job performance
• HR database information

 In anticipation of such claims, Hagood  recommended that multi-location employers consider involving employment counsel on all EEOC charges, or at least when a selection process is implemented.  It is becoming more and more common that a simple response to an EEOC charge leads to a systemic investigation.  Seemingly innocent statements regarding consistent application of policies can lead to such investigations, especially if the policies are those on the EEOC red flag list – such as policies on criminal background checks, credit checks, testing, etc.

 Hagood reminds employers that the EEOC seems to be especially closely focusing on background checks, including criminal record reviews, since it implemented its new approach, as described in a recent article by our Columbia associate, Matt Korn.  Another good article analyzes why and when to seek such data, as does this link.