Practical Considerations for General Counsel to Decrease Liability & Manage EEOC Investigations

Practical Considerations for General Counsel to Decrease Liability & Manage EEOC Investigations Eric S. Dreiband, Partner, Jones Day 202.879.3720 esdreiband@jonesday.com

Eric S. Dreiband, Partner, Jones Day Speaker Info Eric Dreiband represents companies in all aspects of civil rights, employment discrimination, whistleblower, and wage and hour investigations, litigation, and counseling. Eric previously served as the general counsel of the U.S. Equal Employment Opportunity Commission. He directed the federal government's litigation of Title VII of the Civil Rights Act of 1964 and several other federal employment antidiscrimination laws. He also issued the Regional Attorneys' Manual, which established the policies of EEOC's litigation program. Prior to his EEOC service, Eric served as deputy administrator of the U.S. Department of Labor's Wage and Hour Division. He directed the federal government's enforcement of the Fair Labor Standards Act, the Family and Medical Leave Act, and other laws. For his contribution to the DOL's efforts to update its overtime regulations, he received the Secretary of Labor's Exceptional Achievement Award. Eric also received the Secretary of Labor's Compliance Assistance Award for leading the DOL's efforts to increase compliance with the federal child labor laws. From 1997 to 2000, Eric served in the Office of Independent Counsel Kenneth W. Starr. The Federal Deposit Insurance Corporation awarded him a special commendation after he led the investigation and successful prosecution of a former associate attorney general of the United States.

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Practical Considerations For General Counsel to Decrease Liability & Manage EEOC Investigations Eric Dreiband esdreiband@jonesday.com AGENDA Strategies for Responding to EEOC m. ). EEOC Successes, Failures & Likely Future Trends in Systemic Cases 2 1

EEOC Investigations Charge Of Discrimination Commissioner s Charges Directed Investigations Equal Pay Act Age Discrimination in Employment Act 3 On-Site Investigations Infrequent Negotiate Timing Duration Sequence of witnesses Witness preparation Conduct during on-site investigation 4 2

Resolutions Relationship with investigator Political solutions Avoid scorched-earth strategies 5 Resolutions Mediation Predetermination settlement Cause finding Conciliation 6 3

Conciliation Process Letter of Determination Conciliation Re-arguing the merits Conciliation Agreement Scope of Litigation Make a record 7 Retaliation Conduct during investigation EEOC Litigation Priority Communication with investigator 8 4

Obtaining Information From The EEOC Communicate with the investigator Post-Investigation Freedom of Information Act Compliance Manual Section 83 9 EEOC Litigation Regional Attorney s Manual www.eeoc.gov EEOC Individual and Class Cases Settlement Consent decree practice Confidentiality Scope of Release Injunction 10 5

EEOC s Strategic Enforcement Plan December 2012 Fiscal Years 2013-2016 Priorities: Eliminating systemic barriers in recruitment and hiring Immigrant, migrant, and other vulnerable workers Emerging issues : ADA Amendments Act; Lesbian, Gay, Bisexual, and Transgender issues; pregnancy and forced unpaid leave Compensation & gender Access to the legal system retaliation & releases Harassment 11 EEOC s Strategic Enforcement Plan Prioritization of charges Category A charges will be those that raise priority issues Individual disability, harassment and retaliation charges will only be included in Category A if they present strong vehicles for development of the law. Priority issue and systemic cases will be given precedence for litigation. Delegation of litigation authority to the General Counsel. 12 6

Recruitment and Hiring Exclusionary policies and practices Channeling/steering of individuals into specific jobs Use of screening tools Pre-employment tests Criminal history and credit background checks Date of birth screens on online applications 13 EEOC & Criminal Background Checks Focus on disparate impact Race & National Origin Blanket prohibitions on hiring convicted felons may generate EEOC interest. EEOC has pursued employers that have broad prohibitions on hiring applicants with conviction records. 14 7

EEOC Guidance on Consideration of Arrest & Conviction Records Issued on April 25, 2012 Cites national conviction statistics Flips the burden of proof by placing the burden on employers Affirmative defense - job related for the position in question and consistent with business necessity. 15 EEOC Guidance on Consideration of Arrest & Conviction Records Two circumstances when an employer will meet the defense: The employer validates per the Uniform Guidelines on Employee Selection Procedures The employer develops a targeted screen considering at least The nature of the crime The time elapsed The nature of the job AND then provides an opportunity for an individualized assessment for people excluded by the screen to determine whether the policy as applied is job-related and consistent with business necessity. 16 8

Criminal Background Checks Pepsi Beverages -- $3.13 million settlement with EEOC alleged that practice of rejecting individuals with arrest records or convictions for minor offenses had adverse impact against African American applicants. EEOC v. Peoplemark, Inc. (W.D. Mich. 2011) Dismissed and EEOC sanctioned because employer offered employment to many convicted felons. EEOC v. Freeman (D. Md. 2013) Dismissed because EEOC did not offer admissible statistical evidence of adverse impact; EEOC alleged discrimination against Hispanics, men and African Americans. 17 Credit Checks EEOC asserts that using credit history data in hiring decisions can have an adverse impact against minorities. EEOC v. Kaplan Higher Education Corp., Case No. 1:10 CV 2882, 2013 BL 21834 (N.D. Ohio Jan. 28, 2013), appeal pending. Alleged defendants' use of credit reports in the hiring process has an unlawful disparate impact on Black applicants. Court granted summary judgment in favor of the defendant. race rating used by EEOC s expert was not reliable EEOC failed to prove adverse impact 18 9

LGBT Coverage Macy v. Holder, EEOC Appeal No. 0120120821, 2012 WL 1435995 (E.E.O.C. Apr. 20, 2012) Discrimination against a federal employee because of transgender status is discrimination because of sex and therefore presents a cognizable claim under Title VII. Strategic Enforcement Plan Lesbian, Gay, Bisexual, and Transgender protections as they may apply 19 ADA Amendments Act and EEOC Regulations EEOC regulations Emphasize broad scope of protection. Available at www.eeoc.gov and 29 C.F.R. Part 1630 Violation occurs when a covered entity takes a prohibited action because of an actual or perceived impairment that is not both transitory and minor. 20 10

Physical or Mental Impairment Regulations Any physiological disorder or condition, cosmetic disfigurement, or anatomical loss affecting one or more body systems Any mental or psychological disorder Examples Neurological or reproductive disorder Immune and circulatory systems Emotional or mental illness Learning disabilities 21 Major Life Activities Regulations Operation of bodily functions covered: Immune system; Normal cell growth; Cardiovascular; Respiratory; Brain; Reproductive; Endocrine; Musculoskeletal Impairments that are episodic or in remission will qualify if the impairment would substantially limit a major life activity when active Epilepsy Asthma Diabetes Bipolar disorder Major depressive disorder Mitigating measures may not be considered to disqualify an individual except ordinary eyeglasses or contact lenses 22 11

No per se list EEOC Regulations & Specific Disabilities Non-exhaustive list of impairments that will in virtually all cases be found to impose a substantial limitation on a major life activity Individualized assessment should be particularly simple and straightforward Examples that will virtually always qualify: Deafness; Blindness; Intellectual disability (formerly termed mental retardation); Missing limbs and impairments that require a wheelchair; Cancer; Cerebral Palsy; HIV; Epilepsy; Muscular dystrophy; Posttraumatic stress disorder; Diabetes; Major depressive disorder; Schizophrenia; Obsessive compulsive disorder; Bipolar disorder 23 Leave Policies & the Americans with Disabilities Act EEOC contends that employers must modify attendance and leave policies to provide disabled employees with additional leave unless: Another accommodation would allow the employees to perform the essential functions of their position; or Granting additional leave would cause an undue hardship. EEOC may issue new guidance about the ADA and leave policies. Courts do not always agree with EEOC. 24 12

EEOC & Leave EEOC v. Sears Roebuck & Co., No. 04 C 7282 (N.D. Ill Sept. 29, 2009) EEOC alleged that Sears violated ADA by automatically discharging employees after one year of workers compensation leave. Settled for $6.9 million and other relief 25 EEOC & Leave EEOC v. United Parcel Service, Inc., Civil Action No. 09-C-5291 (N.D. Ill) EEOC alleges that UPS violated ADA by firing employees who exceeded a 12-month leave policy. Pending 26 13

EEOC & Leave EEOC v. Verizon, Case 1:11-cv-01832-JKB (D. Md. 2011) EEOC alleged that Verizon maintained attendance plans that failed to accommodate certain individuals with disabilities Settled for $20 million and other relief 27 EEOC & Pay Equity EEOC has enforcement authority for pay claims under Title VII and Equal Pay Act. Several EEOC offices have started audits under the Equal Pay Act EEOC can start investigation without a charge. 28 14

EEOC & Pay Equity EEOC may require employers to submit pay data to EEOC. Paycheck Fairness Act Would authorize this approach. Stalled. National Academy of Science evaluated data sources, methodological requirements, and appropriate statistical techniques for the measurement and collection of employer pay data. August 2012 Report questioned EEOC s ability to handle the data 29 EEOC s Other Priorities Age Discrimination EEOC s Guidance on Reasonable Factors Other Than Age Protecting Older Workers Against Discrimination Act - Legislation to Overturn Gross v. FBL Financial Group Waivers and Releases Overly broad waivers identified as an issue in Strategic Enforcement Plan Family and Caregiving Responsibilities January 2011 issued Employer Best Practices for Workers with Caregiving Responsibilities. EEOC has given increased attention to discrimination against caregivers, which EEOC asserts may be largely rooted in stereotypes based on gender and/or race. 30 15

Procedural Issues How broad a subpoena can the EEOC enforce? What is the proper scope of an EEOC lawsuit based on the Commission s pre-suit investigation? Has the EEOC satisfied its duty to engage in good faith conciliation before filing a lawsuit? 31 EEOC Subpoena Authority Title VII confers on the EEOC the power to issue administrative subpoenas during investigations. Respondent who oppose subpoena must file a petition to revoke or modify the subpoena File with the District Director who issued the subpoena Must be filed within 5 days of receipt of subpoena Failure to file petition may foreclose ability to oppose subpoena enforcement. Petition process is not available for Age Discrimination in Employment Act and Equal Pay Act cases. 32 16

EEOC Subpoena Cases EEOC v. Randstad, 685 F.3d 433 (4th Cir. 2012) Fourth Circuit Court of Appeals reversed district court order denying enforcement of EEOC subpoena EEOC v. Kronos, Inc., 694 F.3d 351(3d Cir. 2012) On case s 2nd visit to the Third Circuit, Court reversed and remanded for yet further consideration of EEOC subpoena Involves third-party administrative subpoena to vendor that develops assessment tests. 33 EEOC Conciliation If the Commission determines after [its] investigation that there is reasonable cause to believe that the charge is true, the Commission shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion. 42 U.S.C. 2000e-5(b) Recently, the EEOC has come under fire for failing to satisfy its pre-suit duties. 34 17

EEOC s Failure to Investigate EEOC v. Dillard s Inc., 2011 BL 184685 (S.D. Cal. 2011) EEOC investigated discrimination in one store. EEOC s conciliation efforts focused on two individuals who worked at that one store. EEOC then filed a nationwide class action against the retail chain. The Court dismissed the nationwide suit based on the failure to provide notice to the company and/or conciliate the broader claims and allowed the EEOC to proceed only on claims as to the one store. 35 EEOC s Sue First, Ask Questions Later Strategy EEOC v. CRST Van Expedited, Inc., 679 F.3d 657 (8th Cir. 2012) Sexual harassment class action. District court dismissed claims on behalf of 67 class members because the EEOC failed to investigate or attempt to conciliate their claims before EEOC sued. 8th Circuit affirmed. District court sanctioned EEOC $4.7 million for violating EEOC s pre-suit investigation and conciliation requirements 36 18

More Sue First, Ask Questions Later Cases EEOC v. Swissport Fueling, Inc., No. CV-10-02101- PHX-GMS, 2013 BL 4628 (D. Ariz. Jan. 07, 2013) Dismissed claims for 21 claimants not identified before EEOC sued EEOC v. The Original HoneyBaked Ham Co. of Georgia, Inc., No. 1:11-cv-02560-MSK-MEH, 2013 BL 10024 (D. Colo. Jan. 15, 2013) court limited EEOC s case to one supervisor who allegedly sexually harassed women. 37 Deference to EEOC EEOC v. Cintas Corp., 699 F.3d 884 (6th Cir. 2012), petition for cert. pending Failure to hire sex discrimination case District court Dismissed EEOC s nationwide claim and limited the case to the State of Michigan. Dismissed EEOC s claims for 13 individuals because EEOC did not investigate or conciliate the claims before EEOC sued. Sixth Circuit reversed EEOC satisfied its pre-suit obligations. It is inappropriate for a district court to inquire into the sufficiency of the Commission s investigation. 38 19

EEOC S ADMINISTRATIVE PROCEDURE ACT ARGUMENT EEOC claims that its pre-suit conciliation process is not subject to judicial review because the Administrative Procedure Act commits concliation to EEOC s discretion and makes it unreviewable. Several courts have rejected EEOC s position and none have accepted it. EEOC v. Mach Mining is pending before the U.S. Court of Appeals for the Seventh Circuit and may decide this issue. 39 Questions 40 20