Are Your EEO Practices Sick? An Update on EEOC and OFCCP Enforcement Trends
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1 Maryland Healthcare Human Resources Association Presentation April 16, 2014 Are Your EEO Practices Sick? An Update on EEOC and OFCCP Enforcement Trends 1
2 Introductory Statement THE MATERIALS CONTAINED IN THIS PRESENTATION WERE PREPARED BY THE LAW FIRM OF JACKSON LEWIS P.C. FOR THE PARTICIPANTS OWN REFERENCE IN CONNECTION WITH EDUCATION SEMINARS PRESENTED BY JACKSON LEWIS P.C. ATTENDEES SHOULD CONSULT WITH COUNSEL BEFORE TAKING ANY ACTIONS AND SHOULD NOT CONSIDER THESE MATERIALS OR DISCUSSIONS THEREABOUT TO BE LEGAL OR OTHER ADVICE. 2
3 About The Firm Jackson Lewis is dedicated to representing management exclusively in workplace law and related litigation. With 55 offices and more than 770 attorneys nationwide, the firm has a national perspective and sensitivity to the nuances of regional business environments. Guided by the principle that a positive work environment results in enhanced morale and increased productivity, the firm devotes a significant portion of its practice to management education and preventive programs. This approach helps limit exposure to grievances, charges and lawsuits. 3
4 About Lynn A. Clements Lynn is a Shareholder in Jackson Lewis Baltimore office. Lynn s practice focuses on counseling and advising clients on OFCCP and EEO compliance issues and other workplace laws, with a particular focus on helping clients manage potential systemic discrimination issues and complex administrative investigations. From , Lynn held several senior level policy positions at the DOL and EEOC, including serving as Counsel to Vice Chair Naomi Earp and Acting Director of Policy at OFCCP. 4
5 Agenda EEOC Update o Strategic Enforcement Plan o Review of Hot Button Enforcement Issues o How to Respond to An EEOC Investigation OFCCP Update o When are healthcare providers covered? o New Section 503 and VEVRAA regulations o What To Expect During an OFCCP Compliance Review What To Expect From EEOC And OFCCP In 2014 What To Work On Proactively 5
6 EEOC s Strategic Enforcement Plan Investigation of systemic barriers in recruitment and hiring, including pre-employment tests & assessments: Criminal History Background Checks Credit Checks Personality Profiles Behavioral Assessments Cognitive Ability Tests Structured Interviews Physical Requirements Systemic pay discrimination 6
7 EEOC s Strategic Enforcement Plan Addressing emerging and developing issues o ADA reasonable accommodations and employer defenses. o Accommodating pregnancy-related limitations (Title VII and ADA). o Seeking protection for lesbian, gay, bisexual and transgender individuals under Title VII. Preserving access to the legal system (examine overly broad settlement waivers) Protecting immigrant, migrant and other vulnerable workers 7
8 EEOC s Focus On More Bang For The Buck The Agency s number one enforcement priority is identifying and remedying systemic discrimination. o Systemic discrimination involves a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area. Fiscal Year 2012 Systemic Cases Represented 20% of EEOC s Active Litigation Docket EEOC s Projection for Fiscal Year 2016 Increase to 22-24% 8
9 How Does EEOC Identify Systemic Discrimination Charges In reaction to complaints of systemic discrimination (very rare) Commissioner-initiated charges (very rare) By converting individual-based charges to systemic investigations Inadvertent disclosures of widespread practices or policies What used to be a winning response to charges now often opens the systemic door: We treated the Charging Party just like all other applicants. The action taken was pursuant to the Company s consistently applied policy. 9
10 The Fruits Of The EEOC s Labor During FY 2013, the agency received 93,727 private sector discrimination charges, a drop of from the levels recorded in prior three fiscal years. EEOC also resolved 14,000 fewer charges than it had during FY o Result of systemic discrimination investigation investigations taking longer o Employee furloughs caused by sequestration and 16-day partial government shutdown o Hiring freeze in place since January
11 EEOC FY 2013 Litigation FY Total of 134 lawsuits filed, with 48 filed in last month.
12 EEOC FY 2013 Litigation
13 EEOC Hot-Button Issue: Disability Discrimination Fixed leave and attendance policy cases Essential functions o What are they? o Attendance? Punctuality? Shift work? Overtime? Medical inquiries o Overbroad requests, use of information, and testing issues Terminations because of disability 13
14 EEOC Hot-Button Issue: Background Checks The EEOC is focusing on employer use of inflexible criteria to disqualify job applicants based on: o Criminal History o Credit History o Educational Background o Unemployment EEOC s launch of systemic investigations targeting hiring policies and practices with blanket exclusions, citing adverse impact on members of protected classes Significant rise in EEOC and private class action litigation 14
15 Recent EEOC Criminal Background Check Cases EEOC v. Kaplan Higher Education Corp. (6 th Cir. No ) EEOC v. Freeman, (4 th Cir. No ) Problems with EEOC s theory o EEOC s position is Do as I say but not as I do o EEOC relied on employer data from different period than that covered by actual lawsuits. o EEOC failed to identify specific practice or policy at issue. o EEOC expert not reliable. 15
16 EEOC Hot-Button Issue: Steering The EEOC sued employer for failing to hire women for operative positions (such as selector, receiving clerk, driver, yard jockey, driver trainee, forklift operator, and transportation supervisor) The EEOC sued tire and muffler company for failing to hire women as Managers, Assistant Managers, Mechanics, Tire Installers, and similar jobs because of their sex. The EEOC sued a restaurant for failing to hire people age 40 and older for front of the house positions. The EEOC sued a retailer, claiming that it did not hire people because of their race (African-American or black) or national origin (Hispanic or Latino) and that the employer retaliated against employees who complained about discrimination. 16
17 EEOC Hot-Button Issue: Pregnancy Discrimination Federal legislation proposed; numerous state legislative developments Forcing employees to quit due to pregnancy or potential harm to baby Unequal treatment because of pregnancy Derogatory remarks about pregnancy Refusal to provide accommodations Rescinding job offer due to pregnancy 17
18 Strategies For Responding To EEOC Charges Consider mediation if the charge involves application of a company-wide policy. Talk to the investigator he or she is your best friend. Be careful when responding to a charge of discrimination o Attaching generally-applicable policies o Providing comparator data o Share only what you need to share o Be careful when responding to the separate RFI attached to some charges of discrimination. 18
19 Strategies For Responding To EEOC Charges Object to requests beyond the location/position/time frame in the Charge Submit only what is reasonably related to charge For data requests, run analyses prior to submission o Helps determine how strenuously to object o Helps determine what compromise options are available Then negotiate scope of inquiry o Knowing what the statistics show will allow you to compromise and submit broader data with no statistical red flags 19
20 Strategies For Responding To EEOC Charges Be prepared to challenge an EEOC subpoena o Must file petition to revoke with EEOC within 5 days of receipt o Challenge is an opportunity for others at EEOC to review investigation Above all - always tell the story you want to tell, not the story the EEOC wants to hear o Consider providing more information than what the EEOC has asked for. o Make an individualized case about each complainant when possible do not accept the EEOC s theory that the class can be looked at as a homogenous group 20
21 Conciliating With The EEOC Statutory Duty On Part of EEOC Typical: High Monetary Demand with Little Information Employer Has a Right to Core Information to Assess the Value of the Potential Lawsuit EEOC v. Bloomberg L.P., 751 F. Supp. 2d 628 (S.D.N.Y. 2010) ( In a complex case like this one, the EEOC cannot, when the employer reasonably asks for information to formulate a monetary counteroffer, make substantial monetary demands and require employers simply to pay up or face a lawsuit. ) 21
22 EEOC Conciliation: A Shield and A Sword? o EEOC v. CRST Van Expedited, Inc. (8th Cir. 2012) Conciliation is at the heart of Title VII ; EEOC prohibited from suing on behalf of 67 alleged victims never identified before Complaint filed. o EEOC v. Swissport Fueling, Inc. (D. Ariz. 2013) - EEOC prohibited from asserting harassment claims on behalf of individuals never identified before Complaint filed. o EEOC v. Mach Mining, LLC, 121 FEP Cases 327, 2013 BL (7th Cir. 2013) EEOC s pre-suit efforts to conciliate a charge are not subject to judicial review and employers can t seek dismissal of discrimination claims on grounds the EEOC failed to conciliate in good faith. 22
23 Are You A Federal Contractor Or Subcontractor? Receipt of federal grants for educational/ research, does NOT create coverage Medicare Part A & B do NOT create coverage; coverage pursuant to Medicare Part C & D unclear March 14, 2014 announcement of 5 year moratorium for TriCare employers Providing health care services to federal employees MAY or MAY NOT create coverage Must consider other sources of coverage, such as direct contracts with government agencies 23
24 OFCCP s Revised Section 503 and VEVRAA regulations The new regulations are game-changers o Pre-employment requirement to solicit disability and veteran status from applicants o Establish disability goals by job group and monitor progress toward goal obtainment o Establish hiring benchmark for veterans o Annual, written assessment of effectiveness of outreach program o Required changes to your forms, processes, job advertisements, purchase orders, and vendor agreements o Longer recordkeeping requirements (3 years) 24
25 Tick Tock: What Is The Timeline For Compliance? March 24, 2014 Section 503 and VEVRAA regulations effective; all non-subpart C items must be implemented by all contractors. Contractors may choose phased in compliance for all Subpart C requirements. Allows contractor to delay implementation until next full plan year after effective date. o Example 1 Contractor A has a July 1 plan year. Must comply with all requirements by July 1, o Example 2 Contractor B has a February 1 plan year. Must comply with all requirements by February 1,
26 It s A Tough Time To Be A Federal Contractor February 28, 2013: OFCCP Issues New Compensation Discrimination Directive February 12, 2014: Minimum Wage Executive Order o Will require federal contractors to pay all workers at least $10.10 per hour o DOL must issue regulations by October 14, 2014 April 8, 2014: Memo Directing DOL To Collect Pay Data o DOL must publish proposed regulations within 120 days that would require federal contractors and subcontractors to annually submit to OFCCP pay data by race and gender 26
27 It s A Tough Time To Be A Federal Contractor April 8, 2014: Amendment to EO to prohibit pay secrecy Prohibits discrimination or retaliation against any employee or applicant because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. DOL must issue proposed regulations within 160 days 27
28 What Else Did OFCCP Just Do? OFCCP mailed a huge wave of Advance Audit Notification Letters (CSALs) in early 2014 o Total # of establishments (locations) on this round: 2,193 o # of companies: 918 o # of industries: 17 based on 2-digit NAICS code o # of CMCEs (corporate): 40 o Total # of audits per company: OFCCP is planning to cap at 35 28
29 Current Focus Of OFCCP Audits Increased focus on current technical obligations: o Purchase Orders o State job postings o Mental/physical restrictions in job descriptions and when updated o Evidence of alternative application process if using online system o Accommodation examples o Evidence of Good Faith Outreach Efforts Pay Discrimination Issues 29
30 What To Expect From EEOC And OFCCP In 2014 Systemic risks to administering leaves of absence, with continued attacks on fixed leave and no fault attendance policies Use of Qualification Standards Under-employment claims o Failure to explore accommodations that may have reduced or eliminated need for leave o Increased scrutiny of light duty policies Increased scrutiny of all types of medical inquiries o Post-offer, pre-employment exams o Fitness for duty and return to work programs o 100% healed policies o Overbroad medical inquiries 30
31 What To Expect From EEOC And OFCCP In 2014 Focus on recruitment and hiring practices o Use of criminal background information o Potential guidance on credit checks o Hiring will continue to be OFCCP s bread and butter o Review of effectiveness of outreach efforts by OFCCP Pregnancy discrimination Pay discrimination o Particular focus of OFCCP DOL Implementation of President s Executive Orders 31
32 What To Work On Proactively In 2014 Review and update policies and processes o Criminal background and other pre-employment inquiries o Treatment of pregnant employees o ADA accommodation policy and process o Leave and attendance issues Review and update job descriptions and qualification standards Conduct (or do not conduct) self-audits on pay, promotion, hiring 32
33 What To Work On Proactively In 2014 Review and enhance diversity recruitment efforts Training regarding reasonable accommodation process and use of disability status information Review and revamp process for responding to EEOC charges and OFCCP audits Consider arbitration program (does not bind the EEOC or OFCCP) Review and update severance and release agreements 33
34 Questions? 34
35 Stay Up To Date Stay up to date on the latest EEOC and OFCCP enforcement issues: Consider signing up for our blogs A source of insights, news and strategy on OFCCP and EEOC enforcement matters 35
36 Thank You! 36
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