Category Archives: EEOC

EEOC Actively Enforces Equal Pay Violations

Contributed by Jonathon Hoag, November 28, 2017

The EEOC’s Strategic Enforcement Plan (SEP) for Fiscal Years 2017-2021 identified “Equal Pay” as a priority area that demands focused attention. The EEOC’s recent press releases show it is actively fulfilling this strategic mission.

gender equality

Gender equality scale

In the third scenario, the EEOC obtained a judgment against a pizza restaurant for violating the Equal Pay Act. Two high school friends-one male and one female-applied to be “pizza artists” and both were hired. However, the female applicant received $0.25 less an hour in starting pay. When she realized this discrepancy, she contacted the restaurant to complain. In response, the restaurant withdrew the offers of employment to both individuals. The EEOC’s attorney referenced the vast amount of recent news related to sexual harassment and stated unequal pay is simply another form of sex discrimination in the workplace. Further, the EEOC stressed that it will continue to thoroughly investigate and enforce equal pay requirements.

Bottom Line

The overwhelming media coverage of sexual harassment and unequal treatment in the workplace reinforces that employers must make equal treatment a top priority. Periodic review of policies and practices, with attention to pay policies, remains critical to limit employer exposure to lawsuits alleging unequal pay or treatment.

Spoliation and the Dangers of Failing to Preserve Evidence

Contributed by Carlos Arévalo, September 12, 2017

In a case pending in the U.S. District Court for the Southern District of Florida, Equal Employment Opportunity Commission v. GMRI Inc., the EEOC recently argued that a restaurant chain acted in bad faith, and should be sanctioned for “spoliation” of evidence because, the EEOC claimed, it intentionally destroyed hiring data. It argued the destruction of evidence “prejudice[d] EEOC by opening the door for GMRI to attack EEOC’s statistical and anecdotal evidence, and to rely upon otherwise impermissible [defendant] favorable proxy data.”

investigate documents

Investigate and analyze magnifying glass and stack of documents

Among the allegedly destroyed evidence are emails the EEOC claimed would have established the fact that the managers for the defendant were instructed to hire “young.” In addition, the defendants are said to have intentionally shredded paper applications and interview booklets used for new restaurant openings that would have supported the EEOC’s allegations that the company had a pattern or practice of failing to hire applications over the age of 40. In response, GMRI argued that the EEOC is looking at sanctions because it has failed to find any evidence of age discrimination.

In a different case that has been pending in Colorado since 2010, the EEOC secured sanctions against an employer for its failure to produce records it claimed had been destroyed. In Equal Employment Opportunity Commission v. JBS USA LLC, the EEOC claimed that a meat-processing company failed to reasonably accommodate Muslim workers’ requests for prayer breaks. JBS asserted an undue burden affirmative defense throughout the case, arguing production line slowdowns and downtime would have been caused by allowing prayer breaks to Muslim employees. The EEOC sought discovery from JBS about its undue burden affirmative defense, specifically, all reports or data showing all dates and times the fabrication lines on any and all shifts were stopped, as well as the speed of the lines.

After years of maintaining these records were destroyed, JBS produced a number of reports it found in a warehouse; however, more records presumably stored in boxes at the warehouse could not be located. The Court sanctioned JBS for the loss or destruction of documents directly relevant to JBS’s allegations of undue hardship. The critical problem for JBS, as the Court noted, was the fact that JBS management knew “within a year” after downtime records were created that they were relevant to the EEOC investigation, yet still failed to set them aside for use in the litigation.

What is the lesson to be learned? 

EEOC v. GMRI Inc., teaches that the EEOC may claim spoliation and pursue sanctions against a defendant, even (or perhaps particularly) where the evidence does not readily support the EEOC’s allegations of discrimination. EEOC v. JBS USA, LLC provides an important lesson for businesses regarding the preservation of documents in ongoing litigation. As noted above, the critical problem for JBS was that JBS management knew downtime records were relevant yet still failed to preserve them.

Both cases illustrate the importance of immediately implementing Litigation Holds. Employers must, as a matter of course, establish appropriate procedures and work with staff, IT professionals, and legal counsel to ensure all relevant evidence is preserved.  Failure to preserve evidence may deprive defendant of an otherwise viable defense.

Supreme Court Clarifies That Limited Appellate Review Applies To EEOC Subpoena Enforcement

Contributed by Steven Jados, May 2, 2017

The Supreme Court’s recent McLane Company v. EEOC decision addresses the constraints placed on appellate review of actions to enforce or quash broadly written Equal Opportunity Employment Commission (EEOC) subpoenas. The case arose from a supply chain company’s requirement that employees in certain physically demanding positions pass a physical examination prior to returning to work from medical leave. The company terminated an employee who failed the exam three times while attempting to return to work after taking maternity leave.

gavel

Gavel

The employee filed a discrimination charge with the EEOC, and the EEOC eventually issued a subpoena to the company seeking, among other things, the names, social security numbers, and last known contact information for all employees, nation-wide, who had been asked to take the physical exam at issue. The company refused to comply with the subpoena, and the EEOC filed actions against the company in the Arizona federal district court to enforce the subpoena.

Federal law gives the EEOC the authority to issue subpoenas that are “relevant” to a charge of discrimination and “reasonable.” The meanings of relevant and reasonable are often unclear—and employers that have been the target of EEOC-issued subpoenas know all too well the EEOC’s tendency to use subpoenas to transform what may be minor employee complaints into nationwide investigations.

When facing a wide-ranging EEOC subpoena, employers must carefully decide how much to push back on the EEOC by making objections to the subpoena and refusing to comply. As the McLane case demonstrates, an employer’s refusal to comply with the EEOC’s subpoena carries the risk that the EEOC will file an action in federal court to compel the employer’s compliance.

In McLane, the Arizona district court ruled against the EEOC, in relevant part, and the EEOC appealed to the Ninth Circuit Court of Appeals. The ninth circuit conducted an entirely new review of the matter, and overruled the district court. The case then went to the U.S. Supreme Court, which ruled that the ninth circuit should not have conducted an entirely new review of the matter. Instead, according to the Supreme Court, appellate courts reviewing orders on EEOC subpoenas should only decide whether the lower court abused its discretion in ruling upon the subpoena. Generally speaking, a court abuses its discretion only when it makes a serious error of judgment, such as applying the wrong legal standard or ignoring an essential element of a legal claim.

Because the abuse of discretion standard is difficult to meet, the McLane decision may cause the EEOC to re-evaluate its subpoena strategy, and issue subpoenas more narrowly tailored to facts actually relevant to the underlying charge of discrimination. Whether the EEOC changes its strategy or not, McLane also demonstrates that companies must make the strongest, most comprehensive objections possible at the earliest stage of the subpoena response because, in practical terms, the application of the abuse of discretion standard means the company may only have one true chance to challenge an EEOC subpoena in court.

Properly Accommodating Pregnant Employees in Hazardous Workplaces

Contributed by Steven Jados, March 2, 2017

The settlement of a recent pregnancy discrimination lawsuit brought by the Equal Employment Opportunity Commission (EEOC) against RTG Furniture Corp., provides a valuable reminder to employers that even well-intentioned limitations placed on pregnant employees are likely to violate Title VII and, where applicable, state laws that prohibit pregnancy discrimination.

pregnant-employeeAccording to the EEOC’s allegations in the lawsuit, within days of being hired, a new employee informed RTG that she was pregnant, but that she had no work restrictions and could perform all aspects of the job. The job required the employee to use certain chemicals to repair furniture. The same day the employee disclosed her pregnancy, RTG management allegedly met with her and confirmed that she was pregnant. During that same meeting, a manager allegedly showed the employee the can of a chemical used in the workplace, and discussed the warning written on the can, which essentially stated that the contents could pose a danger to pregnant women and their unborn children. At the conclusion of that discussion, RTG allegedly terminated the new employee.

Now, it is important to remember that allegations in an EEOC lawsuit are, of course, not necessarily true—and the fact that the case settled, likewise, does not mean the EEOC’s allegations are the truth. Nevertheless, this case provides the useful instruction that employers generally cannot terminate pregnant employees or refuse to hire pregnant applicants, even if the job involves exposure to hazards that are particularly dangerous with respect to pregnancy.

This case also provides the opportunity to discuss the proper approach for employers concerned about exposing pregnant employees to potentially hazardous workplace conditions. Step one, of course, is: don’t terminate employees just because they are pregnant. Instead, employers concerned about exposing pregnant employees to harmful workplace conditions should have policies in place—in employee handbooks, for example—that inform employees, upon hire or even earlier, of the potential risks of the job. And if those risks are greater for pregnant employees, the policies should make clear that pregnant employees should feel free to request accommodations or otherwise bring any questions or concerns to human resources or other appropriate members of management.  Additionally, when an employee informs the company that she is pregnant, the company should take that opportunity to reiterate, in writing, the particular risks of the work environment, and remind the employee of her right to request a pregnancy-related accommodation.

If a pregnant employee wishes to continue doing her job, despite knowing and assuming whatever risks there may be, employers generally do not have the right to take any action that would adversely affect the employee’s job. Moreover, it is especially important for employers to recognize that in addition to federal law protections, there may also be state and local laws that provide additional protections or accommodation requirements for pregnant employees and applicants.

Bearing all of that in mind, employers concerned about exposing pregnant employees to workplace hazards or their obligations to accommodate a pregnant employee should consult with experienced labor and employment counsel to evaluate the hazards in the workplace, and ensure that all policies and notices to pregnant employees are drafted appropriately, and communicated properly.

EEOC To Reconsider Pay Data Collection

Contributed by Jonathon Hoag, February 14, 2017

income-savingsOn September 29, 2016, the Equal Employment Opportunity Commission (EEOC) announced it finalized regulations that require employers to include employee pay data in annual EEO-1 reports. The pay data is required for 2017 reports, which are due March 31, 2018. That is, employers with 100 or more employees are now required to include aggregate W-2 income by gender, race, ethnicity, and job group on their EEO-1 reports.  The rule was harshly criticized by employers, who place hope in the Trump administration to undo the regulations.

On January 25, 2017, President Trump designated Victoria Lipnic as the EEOC’s acting chair. Commissioner Lipnic voted against the pay data collection rule and recently indicated this is the type of government action President Trump wants to halt. Changes to the rule would require a vote from the Commission. Prior to the March 31, 2018 deadline for first collection of pay data, President Trump will have the opportunity to nominate two EEOC Commissioners. The nominations require Senate confirmation, so it is uncertain when new EEOC Commissioners will be in place. However, once the EEOC has a Republican majority, it is widely anticipated that the pay data rule will be rolled back, if not eliminated.

Aside from the pay data regulations, employers should note that Commissioner Lipnic announced that the EEOC’s core strategic enforcement plan is not expected to change significantly under the Trump administration. The EEOC’s systemic program will remain a priority as will its focus on workplace harassment charges. The EEOC may reign in broad attacks on the employer community, but it will likely remain an active agency under the Trump administration.

Stay tuned for updates on any changes to the pay data rule and how the EEOC is operating and enforcing rules under the new administration.

EEOC’s Tweet Reminds Employers of its Stated Interest in Protecting Gig Economy Workers

Contributed by Allison Sues, January 10, 2017

15198483 - employment contract document form with penOn January 6, 2017, the United States Equal Employment Opportunity Commission’s (EEOC) twitter account confirmed the federal agency’s interest in “gig economy” workers. “Gig economy” workers refer to individuals working in modern, flexible employment structures that contract with an employer for a short-term project or on a job-by-job basis, rather than working in traditional, long-term relationships with a single employer. For example, gig economy workers generally reference temporary workers, freelancers, independent contractors, and staffing agency workers.

The EEOC’s January 6, 2017 tweet referenced a recent legal decision from across the pond regarding gig economy workers. In that case, a British woman working as a bicycle courier for a large courier firm claimed she should be classified as an employee of the firm rather than as self-employed, a distinction that under British law would entitle her to employee work benefits, including holiday pay, sick pay and payment at or above the minimum wage. After considering the degree of control the firm exercised over its bicycle couriers, the British tribunal ruled in the bicycle courier’s favor, finding her to be an employee.

The EEOC’s tweet echoes the EEOC’s Strategic Enforcement Plan (SEP), which was released in October 2016 and was previously covered on this blog on January 3, 2017. The EEOC’s SEP specifically identified the following as a priority for the agency: “[c]larifying the employment relationship and the application of workplace civil rights protections in light of the increasing complexity of employment relationships and structures, including temporary workers, staffing agencies, independent contractor relationships and the on-demand economy.” The EEOC has repeatedly made it clear that it intends to scrutinize and target the gig economy workforce to ensure those workers are not improperly overlooked when it comes to fair employment practices, including compliance with federal anti-discrimination, harassment, retaliation and wage laws.

Employers utilizing any sort of short-term or “gig economy” workers should be aware of the EEOC’s priority and not automatically assume the protections afforded under Title VII, the Americans with Disabilities Act, and the Age Discrimination in Employment Act do not extend to on-demand or short-term workers. Employers must also ensure they are properly classifying workers under the Fair Labor Standards Act in light of the recent surge of lawsuits in the United States alleging that gig economy workers have been improperly classified as independent contractors rather than employees. Employers should consider a variety of factors put forth by the U.S. Department of Labor and courts in determining appropriate classifications, including, but not limited to, whether the worker operates or works for an independent business, the worker’s degree of control and independence over his or her work, the permanency of the work relationship, the worker’s investment in work resources, the dependency of the worker’s business on the relationship and the extent to which the work performed is an integral part of the employer’s business. Finally, remember that classifying a worker as an independent contractor based on “industry standard,” is not a defense to a misclassification claim.

EEOC Quietly Updates Strategic Enforcement Plan for 2017-2021

Contributed by Noah A. Frank, January 3, 2017

The EEOC’s new Strategic Enforcement Plan (SEP) highlights its enforcement priorities and alerts employers to areas most likely to attract the EEOC’s investigative eye, including the types of charges the EEOC is most likely to litigate on a complainant’s behalf.

The EEOC recognizes that employment law is continuously developing and that related practices are continuously evolving.  As a result, this SEP is intended to reflect current issues. This new four year SEP (which remains in effect until superseded, modified or withdrawn by vote of a majority of members of the Commission) emphasizes:

  1. 41191023_sEliminating Barriers in Recruitment and Hiring.  As with the prior SEP, this priority includes exclusionary policies and practices such as “channeling or steering” persons into particular positions due to a protected trait, restrictive application processes, and screening tools for employment.
  1. Protecting Vulnerable Workers – Including Immigrant or Migrant Workers, and Underserved Communities from Discrimination. The focus is on discriminatory policies including job segregation, unequal pay, and harassment. The shift here is to underserved communities.
  1. Addressing Emerging and Developing Issues. Despite many courts’ attempts to rein in the EEOC, the agency recognizes the following developing issues worthy of particular scrutiny: age and religious discrimination; coverage of LGBT persons under Title VII; disability discrimination, including qualification standards, inflexible leave policies, and temporary workers; accommodating pregnancy-related limitations; issues related to workers engaged on-demand (gig economy), including through staffing agencies, and  independent contractor relationships; and “backlash discrimination” against Muslim/Sikh/Arab/Middle Eastern/South Asian communities.
  1. Enforcing Equal Pay Laws.  Previously focused on gender-based discrimination, the EEOC expanded this priority to all protected classes.  In light of this, employers may see claims of willful protected class discrimination added to wage and hour disputes.
  1. Preserving the Exercise of Rights under the Law. The EEOC is targeting policies and practices that discourage or prohibit individuals from exercising their rights or disrupt investigative or enforcement efforts. This includes vague and overbroad waivers and provisions in settlement agreements that prohibit filing EEOC charges or assisting in the investigation or prosecution of claims. Unlike the prior SEP, this SEP removes “retaliatory actions” due to the EEOC’s inconsistent application, shifting the focus to “Significant Retaliatory Practices” that effectively dissuade others from exercising rights (e.g., terminating the HR Manager for investigating a complaint to send a message to other employees to not complain in the first place).
  1. Preventing Systemic Harassment. The EEOC’s focus includes prevention programs (training and outreach) to deter future violations.

Starting 2017 on the Right Foot

Because state and local administrative agencies (e.g., city and county civil rights departments) often follow the EEOC’s lead, all employers, regardless of size, should take note of the EEOC’s stated priorities. An audit of human resources practices and policies should be part of your 2017 New Year’s (legal) resolutions.