Annual Report On EEOC Developments - Fiscal Year 2012

INTRODUCTION

Over the years, Littler has provided periodic reports on significant cases, regulatory developments and other activities involving the Equal Employment Opportunity Commission (EEOC or "the Commission"). While such guidance is intended to update employers on significant EEOC developments as they arise, we believe that employers can also benefit from an annual update and overview of key EEOC developments. This Annual Report on EEOC Developments – Fiscal Year 2012 (hereafter "Report"), our second annual report, is designed as a comprehensive guide to significant EEOC developments over the past fiscal year.

A substantial portion of this year's Report focuses on the EEOC's systemic initiative. On February 22, 2012, the EEOC issued its Strategic Plan for Fiscal Years 2012-2016, which underscores that over the next several years a significant emphasis will be placed on systemic investigations and related litigation. The EEOC has defined systemic cases as "pattern or practice, policy and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic location." The EEOC provided more specific details concerning the areas it will focus on in its Strategic Enforcement Plan, which was approved by the Commission on December 17, 2012.

Part One of the Report provides an overview of EEOC charge activity, litigation and settlements over the past year, including highlighting the types and location of lawsuits filed by the Commission. As anticipated, there has been a continued focus on systemic and multiple victim investigations and lawsuits filed by the EEOC. Significant settlements also are highlighted. This year we are highlighting settlements reported by the EEOC that exceeded $1 million stemming from conciliation or court settlements. We also have added two new appendices in this year's Report – a list and summary of appellate cases in which the EEOC has been involved as the appellant or as an amicus and a list of select dispositive motions decided on the merits in litigation where the EEOC was a party.

In Part Two, key regulatory developments are reviewed, including the Commission's activities beyond formal regulatory efforts, and areas in which the EEOC plans to devote its attention over the coming year. Aside from discussion of the EEOC's Strategic Plan, as supplemented by the Strategic Enforcement Plan, the Report highlights the Commission's updated Guidance on criminal history and new rules discussing the "reasonable factor other than age" (RFOA) defense under the Age Discrimination in Employment Act (ADEA). References are made to more comprehensive Littler updates and/or reports for in-depth discussion of the topic, as applicable. Anticipated trends also are discussed.

Part Three reviews EEOC investigations, particularly as part of the Commission's systemic initiative, and the basis for the EEOC's broad based authority. The Report summarizes recent administrative subpoena enforcement actions at the district court level and decisions by the appellate courts. Issues addressed include EEOC requests for information involving: (1) broad geographic coverage and (2) confidential information. Other noteworthy developments discussed include EEOC efforts to communicate ex parte with former managers, burdensomeness challenges, and jurisdictional disputes. Appendix D to this report also includes a list and summary of all subpoena enforcement actions initiated by the Commission over the past year.

Part Four highlights key court cases, again focusing primarily on systemic and class-type cases, and addresses a number of topics, including: (1) pleading deficiencies raised by employers and recent EEOC attacks on employer responses to complaints; (2) unreasonable delay and use of the laches defense; (3) statutes of limitations cases involving both pattern or practice claims and other types of cases; (4) employer challenges based on the EEOC's alleged failure to meet its conciliation obligations prior to filing suit; (5) intervention-related issues; (6) class discovery and general discovery issues in EEOC litigation, as filed by employers and the EEOC; (7) favorable and unfavorable summary judgment rulings and lessons learned; and (8) trial related issues.

We are hopeful that this Report serves as a useful resource for employers in their EEOC compliance activities and provides helpful guidance when faced with litigation involving the EEOC.

1. OVERVIEW OF EEOC CHARGE ACTIVITY, LITIGATION AND SETTLEMENTS

   1. Review of Charge Activity, Backlog and Benefits Provided

      On November 19, 2012, the EEOC announced the publication of the FY 2012 Performance and Accountability Report (referenced herein as the "EEOC 2012 Annual Report").1 As discussed in its 2012 Annual Report, during FY 2012 the Commission again received nearly 100,000 charges, with the past three years involving a record number of charges in the Commission's 47-year history.2 Since FY 2006, there has been a dramatic increase in the level of charge activity, except for a minor dip in FY 2009, as shown by the following:3

      The Commission reported a "significant reduction" in its inventory of charges, its "backlog," having reduced its inventory from 78,136 charges to 70,312 charges. The Commission also resolved a total of 111,139 charges in FY 2012, thus resolving more charges than those filed at the agency during the past fiscal year.

   2. Continued Focus on Systemic Investigations and Litigation

      In March 2006, as part of the EEOC's Systemic Task Force Report, the Commission reported that "combating systemic discrimination should be a top priority at [the] EEOC and an intrinsic, ongoing part of the agency's daily work." While the EEOC had been involved in systemic investigations long before the Task Force was formed, the Commission clearly has been committed to expanding this initiative since 2006. The EEOC's Systemic Task Force defined systemic cases as "pattern or practice, policy and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic location."

      The EEOC's 2012 Annual Report focuses in many respects on the Commission's new Strategic Plan for Fiscal Years 2012 through 2016, approved by the Commission on February 22, 2012, which "reiterated the importance of [the] systemic enforcement program as a top agency priority."4 The EEOC 2012 Annual Report outlines the resources devoted to strengthening the systemic program, including:

      Leveraging technology to facilitate cross-district communication and sharing of information and data, including: (1) the use of a "Systemic Portal" – an internal EEOC systemic website and (2) the development of a Systemic Watch List, which draws from the EEOC's Integrated Management System (IMS) that tracks private sector charges and litigation with details on the applicable company and a wide range of other related data; Conducting advanced systemic training for more than 25 percent of its field attorneys; Deploying experts in the fields of statistics, industrial technology and labor market economics within headquarters and throughout the field; Expanding usage of the CaseWorks system, which provides a central shared source of litigation support tools that facilitate the collection and review of electronic discovery in order to support greater collaboration in development of cases for litigation; and Providing a litigation advisory team tasked with providing legal advice, developing litigation strategies, and providing hands on support in systemic lawsuits.5 C. Systemic Investigations – Comparison Between FY 2011 and FY 2012

      A review of the Commission's Annual Reports in FY's 2011 and 2012 demonstrates that although there was a slight increase in the number of systemic investigations, there was a dramatic increase in terms of results achieved:6

      The Commission underscored the impact of its systemic initiative during FY 2012, explaining, "The $36 million recovered in systemic resolutions this year is four times the amount recovered in FY 2011."9 While not mentioned in the EEOC 2012 Annual Report, a "reasonable cause" finding was reached in nearly 40% of the systemic investigations in FY 2011, compared to a "reasonable cause" finding typically being made in less than 5% of all EEOC charges.10 The Commission also commented that "there was a focus on promoting coordination of field activities to ensure that investigations across districts that involve common issues are handled collaboratively, bringing greater efficiencies and reinforcing the national enforcement agency model."11 The Commission pointed to the "strong collaboration between the enforcement and legal staff in all aspects of systemic work."12 The EEOC also has been strategic based on the number of actual lawsuits filed, compared to the number of charges in which there was a "reasonable cause" finding.

      It should be noted that there was a decrease in the number of Commissioner charges issued between FY 2011 and FY 2012 – 47 Commissioner charges were filed in FY 2011 compared to 12 new Commissioner charges in FY 2012.

      As discussed elsewhere in this Report, in the section devoted to subpoena enforcement activities, the Commission has continued to seek assistance from the courts during the course of various investigations, particularly systemic investigations. For FY 2012, the Commission referred to having filed 33 "subpoena enforcement and other actions." This was a decrease from FY 2011 in which 39 "subpoena enforcement and other actions" were filed.13 The decrease may stem, in part, from the EEOC's known "track record" in frequently prevailing when filing subpoena enforcement actions.

      In support of its strategic initiative, the Commission reports that there was more interagency coordination. Particularly noteworthy are cross-agency efforts involving equal pay and the EEOC's role on the National Equal Pay Enforcement Task Force. As an example, in FY 2012, the...