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EEOC Reboots: Expect Fewer, More Thorough Investigations

    The U.S. Equal Employment Opportunity Commission (EEOC) has been in the habit of ending its fiscal year with a bang, filing a flurry of lawsuits that increase the number of its filings over the previous year.

    It’s no surprise, then, that more than half of the EEOC’s 122 lawsuits filed in fiscal year 2012—67—were filed in the last eight weeks of the agency’s fiscal year, which concluded Sept. 30.

    The agency wound up filing well under the 261 cases it filed in fiscal year 2011, and far fewer cases than the 175 cases it filed during the last eight weeks of 2011’s fiscal year.

    Why the sudden drop-off?

    “The EEOC is not asleep at the wheel,” said Gerald Maatman Jr., an attorney with Seyfarth Shaw in Chicago, in an Oct. 19, 2012, interview. “It will not go away. The EEOC is rebooting.”

    Once Bitten, Twice Shy

    You won’t see the reason for the EEOC’s drop-off in an agency press release, Maatman said, attributing the decline to a series of court rulings fining the EEOC for “shooting first, aiming later.”

    The agency filed too many cases that it had not investigated carefully, using discovery to identify victims, he said. After a series of defeats, the EEOC went back to the drawing board and decided to become more careful and selective, especially with systemic cases, he remarked.

    Maatman noted that court-imposed fines against the EEOC for frivolous cases include:

    • EEOC v. Peoplemark, No. 1:08-cv-907, where the U.S. District Court for the Western District of Michigan awarded $751,942 in attorneys’ fees and costs against the commission in 2011.
    • EEOC v. Tricore Reference Laboratories, No. 11-CV-2096, where the 10th U.S. Circuit Court of Appeals in 2012 affirmed a U.S. District Court for the District of New Mexico’s decision awarding $140,571 in attorneys’ fees against the EEOC.
    • EEOC v. Cintas, Nos. 04-40132, 06-12311, where the U.S. District Court for the Eastern District of Michigan in 2011 awarded $2.6 million against the commission in attorneys’ fees and costs.  
    • EEOC v. CRST Van Expedited Inc., 679 F.3d 657, where the 8th Circuit upheld the dismissal of 67 claims brought on behalf of female drivers, concluding that the EEOC failed to reasonably investigate and conciliate the drivers’ claim prior to filing suit. The district court in that case awarded $4.5 million in fees, but the 8th Circuit vacated this award.

    Nevertheless, Maatman called the CRST decision “the most significant litigation defeat of the EEOC” this year. He speculated that the agency did not appeal the case to the Supreme Court because the facts in the case were so bad for the agency that it feared the appeals court ruling would be affirmed and put its litigation program in peril.

    Fewer Systemic Cases

    One of the most notable facts about the 67 cases filed by the agency at the end of fiscal year 2012 was that few of them involved claims of systemic discrimination.

    The EEOC announced its systemic litigation initiative in 2005. It was a way for an agency with a limited budget and attorney manpower to “file big cases against big employers involving big issues” and many employees, Maatman said.

    Ever since 2005, the number of EEOC systemic cases had grown until it was the majority of agency filings. “Small or midsized employers might have gotten the impression that the EEOC sued only big employers” because of the emphasis on systemic cases, he remarked. The mix of cases brought against employers at the end of fiscal year 2012, however, signals that the agency is in the business of suing small and midsize employers again, Maatman cautioned. Large employers shouldn’t take false comfort in the reduction in lawsuits, he said, noting that some systemic discrimination claims still are being filed.

    Longer Investigations

    By pursuing systemic cases aggressively, the agency filed more lawsuits than it could handle effectively, Maatman said.

    In going back to the drawing board, it is likely that the EEOC will be much more thorough in its investigations, he predicted. Investigations will be “like having a tiger by the tail,” Maatman remarked.

    They won’t be just two-months long anymore, but “much longer,” he predicted.

    Focused Attention on Hiring

    Where should employers focus their efforts to head off EEOC investigations and lawsuits?

    Maatman said that the agency’s draft strategic enforcement plan and litigation docket suggest the number one area of concern for employers is to “get hiring right.”

    Employers should reexamine their procedures for hiring, including their recruiting processes, employment tests, training for hiring officials and orientation.

    The EEOC is taking a “very aggressive” stance on employers’ use of criminal background checks, discouraging blanket exclusions of individuals who have been convicted of crimes.

    “Many believe the EEOC is stretching beyond what the law requires,” Maatman said, remarking that the agency’s position has yet to be tested in the courts.

    Allen Smith, J.D., is manager, workplace law content, for SHRM.