High-Stakes EEOC Class Action Litigation in America -- The EEOC’s Systemic Initiative and High-Priority Enforcement Areas: Strategies for Global Employers

Introduction
 
The Equal Employment Opportunity Commission (commonly referred to as the EEOC) is the agency charged with enforcing many of our federal laws prohibiting workplace discrimination in the United States.  In recent years, the EEOC has pursued with vigor its “systemic initiative” – an agency-wide priority to strengthen its approach to investigating and litigating systemic cases.  The EEOC has defined systemic cases as “pattern or practice, policy, or class cases where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.”  The systemic initiative has been gaining steam and looks to continue – earlier this year, the EEOC said it anticipates filing at least 20 new systemic lawsuits in 2012 and again in 2013.
 
This means the EEOC is bringing bigger cases, addressing broader issues, affecting more people, and getting more media attention.  The EEOC’s headline-grabbing initiative is raising the stakes for employers and heightening their interest in staying out of the EEOC’s sights – defending systemic cases is costly, time-consuming, and often involves publicity.  In this article, we will provide an overview of the EEOC, analyse its sweeping systemic initiative and current enforcement trends, and, through that lens, provide employers with compliance strategies to help avoid garnering the attention of the EEOC.   
 
Overview of the EEOC’s Systemic Initiative
 
The EEOC’s systemic initiative was born in 2005 with the creation of a special task force convened to examine the EEOC’s existing systemic program and recommend new strategies.  The Task Force concluded that combating systemic discrimination should be a top priority for the EEOC and that the agency is uniquely able and uniquely positioned to do so. 
 
The Task Force said the EEOC has a “unique ability” to identify systemic cases because it has access to substantial data, including information on employment trends and demographic changes.  It found the EEOC to be “uniquely positioned” to litigate them because: (1) it does not have to meet the stringent requirements of Fed. R. Civ. P. 23 to maintain a class suit; (2) it may be able to bring certain systemic cases that the private bar is not likely to handle for financial reasons; and (3) its nationwide presence permits it to act as a “large yet highly specialised law firm with a unique role in civil rights enforcement.”
 
Since implementation of the initiative, the EEOC has become increasingly aggressive in its pursuit of systemic cases using a “national law firm model.”  At the end of fiscal year 2011, the agency maintained 580 active systemic investigations.  In that same time period, 40% of its systemic investigations resulted in “reasonable cause” findings, and about one-third of lawsuits filed were “multiple victim” suits.
 
Strategies the EEOC is Using to Pursue High-Profile Systemic Cases
 
The EEOC is using a variety of strategies to advance its systemic initiative and increase its inventory of systemic investigations and lawsuits.  Those strategies include:

• Merging the investigation and litigation phases
• Transforming a single charge into a systemic action
• Making nationwide requests for data, including broad e-discovery and HR system data
• Using subpoenas and subpoena enforcement actions to obtain nationwide information from employers
• Partnering with other agencies (like the OFCCP and DOL) to share information

 
These strategies have been effective for the EEOC in many instances, but employers are more frequently challenging them and have had recent success in pushing back on the agency’s expansive and often secretive investigative efforts.  For example, in EEOC v. Burlington Northern Santa Fe Railroad Company, the Tenth Circuit rejected the agency’s use of its subpoena power to build a systemic case.  No. 11-1121 (10th Cir. Feb. 27, 2012).  The court found the subpoena for nationwide employment records was “not relevant” to a case that initially involved just two claims of disability discrimination, both from employees in Colorado.
 
The EEOC’s Leading Enforcement Areas in 2012
 
In addition to its strategy of pursuing larger cases, the EEOC has given particular focus to certain enforcement areas in recent years, many of which lend themselves quite easily to the systemic initiative.
 
Disability Discrimination and Leave Policies:  The EEOC has given special focus to leave of absence policies, particularly to “no fault” leave policies (where an employee is automatically dismissed after using a certain amount of leave).  The EEOC’s position is that such policies should be modified to account for reasonable accommodations that may be needed by an employee on leave.
Hiring Practices:  The EEOC believes it is uniquely positioned to investigate and litigate discriminatory hiring cases on a large-scale basis.  It is looking for industries where protected groups may be underrepresented in certain job categories, with reliance on data obtained during investigations, in EEO-1 reports, and in census studies.
 
Arrest and Conviction Records:  The EEOC has issued updated guidelines providing that criminal record information obtained during background checks cannot be used to screen out applicants, unless the information is related to the field of work in which the candidate is seeking employment.  The EEOC’s focus is on whether use of background checks has a disproportionate impact on certain protected groups.
 
Pay and Promotions:  Again, the EEOC believes it is in a strong position to pursue disparate impact theories relating to pay and promotions, given its ability to obtain nationwide employee data through use of its subpoena power.
 
Gender Discrimination:  The EEOC is giving greater focus to pursuing cases involving discriminatory treatment tied to gender-specific traits like pregnancy and breastfeeding, arguing that such differentiated treatment is gender discrimination. 
 
What If the EEOC Focuses A Systemic Investigation on Your Company?
 
If your company should find itself facing the scrutiny of the EEOC in a systemic investigation, there are a few considerations to bear in mind.  First, if you receive a broad request for information, attempt to gain an understanding of the reason for the request and cooperatively narrow it.  Second, consider providing information to the EEOC in a phased manner and highlight information that may be important, but not requested.  Third, if you receive a subpoena from the EEOC, remember there is a very short five-day response time.  Fourth, be alert to preservation obligations and provide early notice of the need to maintain broad categories of information.  Fifth, involve experienced legal counsel in responding to charges involving a systemic focus – information and documents provided at the outset will influence the course of the investigation and any litigation that may result.
 
Concluding Thoughts
 
The EEOC’s systemic initiative is likely to grow and be with multinational employers for many years to come.  While the particular enforcement trends will surely evolve, the EEOC’s interest in pursuing large cases is not likely to change, particularly in this time of economic challenge.  The EEOC believes it is a wise use of its limited resources to pursue more systemic cases with a greater likelihood of having a broad, deterrent effect.  Employers should remain mindful of the EEOC’s intent to grow its systemic docket and be self-analytical in terms of potential areas for improvement that could be viewed through a “systemic” lens.
 
William C. Martucci and Kristen A. Page are partners in the National Employment Litigation and Policy Group at Shook Hardy & Bacon, L.L.P. in Washington, D.C. and Kansas City, Missouri.  They represent corporate employers exclusively and regularly litigate against the EEOC and defend multi-plaintiff and systemic actions throughout the country.  Concerning Shook, Hardy, & Baco, Chambers USA: America’s Leading Lawyers for Business notes: “A Powerhouse.  Truly one of the best litigation firms in the nation.”