EEOC Damage Awards Rise in Spite of Steady Numbers

Close to 100,000 discrimination charges were filed by employees to the Equal Employment Opportunity Commission (EEOC) during the fiscal 2012, signaling that employers must keep up their guard to avoid being drawn into costly and potentially damaging litigation. As in recent years, the largest categories of employment discrimination accusations were retaliation (38%), race (34%), and sexual discrimination, including sexual harassment and pregnancy (31%). In releasing detailed data about complaints, the EEOC provides practical insights into potential trouble spots.

Although the specific number of complaints made to the EEOC last year (99,412) was down by half a percent from fiscal 2011, it was a banner year for the EEOC in terms of “monetary recovery” from employers through its administrative process. The EEOC collected $365 million, the largest amount ever.

Sexual discrimination complaints rose by 6.4% from last year, while retaliation claims remained essentially even and race discrimination charges dropped by 5.3%. A table showing the total discrimination charges filed last year, and three previous years, can be viewed below.

Recent Cases

The EEOC publicizes its successful cases in hopes of letting employers know, in specific terms, what kind of “discrimination” can lead to lawsuits. Here are two recent examples:

  • A retail store (“America’s Thrift Stores of Alabama”) will pay $50,000 in a case involving a failure to make a reasonable accommodation for one employee with a joint medical condition. That employee requested a change of duties from a job that involved lifting and reaching. The EEOC persuaded a court that the employer had an illegal blanket policy of refusing to make adjustments to job duties for employees whose conditions were non-work related.
  • A fast food franchise (Fries Restaurant Management) paid a $25,000 settlement after refusing to accommodate an employee whose religious beliefs required that she wear a skirt on the job in lieu of the standard pants uniform. As the EEOC explained, “the Civil Rights Act of 1964 prohibits religious discrimination and requires employers to make reasonable accommodations to employees’ and applicants’ sincerely held religious beliefs as long as this does not pose an undue hardship.”

Despite the massive annual tally of employee discrimination charges, a small percentage of accusations filed by employees result in actual litigation since many cases are settled. However, that is no grounds for complacency. As explained below, receiving a letter from the EEOC, no matter how meritless an accusation appears to be, requires prompt and specific action.

Responding to the EEOC

What should your company do if you are notified by the EEOC that a complaint has been filed?

If you receive a notice, it means that an individual has accused your company of violating the law and the EEOC is investigating whether there is reasonable cause to go forward with the charges. If you respond to the charges honestly and expeditiously, you could avoid a costly discrimination lawsuit down the road. At the worst, you will be able to lay the groundwork for a solid defense.

Frequently, EEOC notifications contain only a few short paragraphs relating to the alleged incident. Don’t be misled by the brevity of the initial statement. Spend time with your attorney developing a comprehensive response to the complaint.

Don’t reply, don’t do anything related to the subject of the letter, and don’t communicate with the employee or employees involved in the letter without first consulting with an attorney familiar with employment law.

Here are seven steps that can help improve the likelihood of success:

1.      Provide all the facts that you have at your disposal. In responding, be as detailed as possible in presenting the circumstances surrounding the allegation. However, don’t go into rambling explanations.

Also, explain the reasons why your company acted in the manner in which it did. The best way to thwart subsequent legislation is to convince the EEOC investigators that there were valid and justifiable business reasons for your actions.

2.      Establish the setting. It is important to share details about your business that are not commonly known. For example, it may be critical for your operation to have a customer service desk fully staffed at all times. If you fire or discipline a customer service worker who is habitually tardy or regularly fails to show up without a good excuse, demonstrate how this affects your business. Do not make assumptions that everyone knows the exact nature of your business.

3.      Document your position. When possible, support your version of the events through written records. Begin with sections of the company manual that could have a bearing on the allegations. Use documentation such as sales reports, attendance records and personnel files to prove your point. Print out relevant e-mail messages that indicate your concerns or actions were justified. Make sure that all relevant records are preserved – especially those that are stored electronically. Ensure the accuracy of statements is verified by other employees who do not have a vested interest in the outcome.

4.      Rely on precedents. You may be able to convince the EEOC that you did not illegally discriminate against an employee if you can show that you consistently used the same approach in a nondiscriminatory manner. For instance, if you terminate a female employee for certain acts of misconduct and the employee claims sexual discrimination, document other instances where male employees lost their jobs for exhibiting the same or similar behavior.

5.      Use common sense. Information pertaining to the complaint should strictly be handled on a “need-to-know basis,” especially if the employee involved in the charge still works for the company. Be polite and cooperative when questioned by the EEOC investigators and instruct other staff members to do the same.

6.      Check your company’s insurance policies. Many liability policies cover claims relating to an employer’s discriminatory practices. Generally, such a policy requires you to contact the insurer right away when a claim arises. If you don’t act swiftly, your coverage for the claim may be denied – including all legal damager relating to the initial claim.

7.      Seek expert legal guidance. The EEOC notification may be the first step in a long string of legal proceedings your company will face. Therefore, you should protect your company’s best interests from the outset and obtain legal assistance in preparing your company’s response. Your attorney can interview witnesses and investigate mediation. Ask your attorney how to proceed if federal investigations come to your workplace asking to speak with staff members. Finally, coordinate efforts with your legal and human resources advisers to put on the best defense you can.

EEOC Charge Statistics

FY 2000

FY 2006

FY 2011

FY 2012

Total Charges

79,896

75,768

99,947

99,412

Race

28,945

27,238

35,395

33,512

36.2%

35.8%

37.0%

33.7%

Sex

25,194

23,247

28,534

30,356

30.7%

31.1%

30.1%

30.5%

National Origin

7,792

8,327

11,833

10,883

8.3%

9.9%

11.4%

10.9%

Religion

1,939

2,541

4,151

3,811

2.1%

2.6%

3.5%

3.8%

Color

1,290

1,241

2,832

2,662

0.9%

1.4%

2.1%

2.7%

Retaliation – All Statutes

21,613

22,555

37,334

37,836

22.6%

27.5%

32.3%

38.1%

Retaliation – Title VII only

19,753

19,560

31,429

31,208

20.3%

25.2%

28.3%

31.4%

Age

16,008

16,548

23,465

22,857

19.6%

21.5%

23.2%

23.0%

Disability

15,864

15,575

25,742

26,379

22.4%

20.4%

21.4%

26.5%

Equal Pay Act

1,270

861

919

1,082

1.4%

1.5%

1.0%

1.1%

Genetic Information

N/A*

N/A*

245

280

N/A*

N/A*

N/A*

0.3%

*The Genetic Information Non-Discrimination Act was passed in 2008.