Jumpstarting the Stalled March toward EEO: Eight Sparks (and Counting!)

Eight (and Counting!) Sparks to Jumpstart the Stalled March toward Equal Employment Opportunity 

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The March toward equal employment opportunity (EEO) passed its 50-year mile marker on July 2, 2014, the 50th anniversary of the passage of Title VII of the Civil Rights Act of 1964 (Title VII).  As predicted, the EEOC staged a big celebration, without offering any insights about our progress at this milestone. Recently, the Society of Human Resources Management (SHRM) blazed on the cover of its flagship publication, HR Magazine, “Celebrating 50 Years of Progress”, touting how Title VII “changed the face of the American workplace” . . .  again without actually examining how far the March toward EEO has actually progressed.  When we measure what matters, however, Title VII’s 50th anniversary leaves little cause for celebration.

We have more work to do . . . the familiar refrain for EEOC Commissioners, employee-side trial lawyers, governmental administrators, advocates and policymakers. True enough.  But, responsible advocacy and policymaking require us to evaluate whether our work has WORKED, to any degree.  That is, instead of celebrating “progress,” we should be asking:

  • Have our methods, initiatives, approaches to eliminating workplace discrimination and fostering equal employment opportunity actually reduced discrimination against and increased opportunity for Title VII’s intended beneficiaries; AND,
  • What can we do differently, and better, to deliver on Title VII’s promises for the generations marching behind us?

Progress: Measuring What Really Matters

Money: A Poor Proxy for Progress

For at least the past two fiscal years, the EEOC has measured its efficacy by the amount of money collected from employers to resolve discrimination allegations. In both FY2012 and in FY2013, the EEOC has characterized its historic collections from employers–$365.4m and $372.1m, respectively—as evidence of “enforcing the law more effectively.”  Employer settlement payouts, however, make a poor proxy for progress, given the absence of any reasonable, logical or practical nexus between employer settlement payouts and the EEOC’s mandate to end discrimination and foster equal opportunity.

By focusing on settlement payouts as a proxy for EEO progress, the EEOC has recalibrated its entire enforcement machine around maximizing money.  EEO Legal Solutions’ survey of 780 practitioners (e.g., HR, in-house counsel, EPL adjusters) regarding their experiences in the EEOC mediation program revealed that EEOC mediators understand employers’ cost-of-defense concerns, hammering cost-of-defense as the most often invoked reason to settle EEOC disputes. Worse, this national survey also showed that EEOC mediators then regularly brandished the EEOC’s enforcement weapons (e.g., cause determinations, systemic investigations, prosecutions), certainly to scare employers into higher-than-necessary cost-of-defense settlements.  Thus, because MONEY is the metric that matters, the EEOC’s administrative enforcement methods have focused more on wealth redistribution rather than, again, advancing the mandate to reduce discrimination and promote opportunity.

Toward More Meaningful Measurements

When we focus on more meaningful measurements of progress, a troubling picture emerges: real progress toward equal employment opportunity has stalled for most of Title VII’s intended beneficiaries.  In Part I, Measuring What Matters at Title VII’s 50th Anniversary, we looked at unemployment rates among racial and ethnic groups.  We reviewed Gallup polls and federal sector employment reports. We analyzed EEOC charge receipt data and enforcement statistics.  We tapped into the databases of Catalyst.org for international EEO statistics. We also teamed up with our friends at Biddle Consulting Group in Folsom, California, analyzing the EEOC’s own EEO-1 data to measure the pace and trajectory of women and minorities toward achieving top jobs (Official/Manager), across industries.

We learned that despite earlier gains, women have not made significant strides toward greater representation in the Official/Manager ranks over the past decade; since 1998, the percentage of women holding these top jobs has hovered around 8%, graphically depicting a long flat line. Our findings comport with those reported by Catalyst.org: women make up nearly half of the workforce, but less than 10% actually reach the top.   Women of color have fared particularly poorly in achieving management jobs.

Our findings regarding “Minorities” reveal just why we cannot logically or legitimately lump everyone together in a single “Minority” group.  Although the pace appears [too] slow, Latinos have made progress toward achieving Official/Manager positions, a slight upward trajectory that we found encouraging. Equally encouraging, Asian Americans, a classification that includes people of Asian and Middle Eastern descent, have significantly narrowed the gap with Whites in attaining Official/Manager positions, showing a steady increase since 2002.  African-Americans have lost ground since 2008, however, and have fallen behind Latinos, in their march toward inclusion at the top; unemployment still hits the African-American community the hardest.  Given the historic election of President Barack Obama, and the appointment of Jacqueline Berrien, a former NAACP attorney, as Chair of the EEOC, this finding startled us, and deserves further analysis.   Fortunately, after a long battle under the Freedom of Information Act (FOIA), the EEOC has agreed to make a broader swatch of historic EEO-1 data available for academic research.

Has Our Work . . . WORKED?

When we evaluate measurements of progress that actually matter–e.g., unemployment, advancement, international leadership–responsible policymaking requires us to wonder whether our WORK (i.e., the current enforcement scheme) has actually worked (i.e., delivered the desired results).  Data shows that while this enforcement scheme may not have delivered the desired results (i.e., increased opportunity, decreased discrimination), it produced the intended one—namely, a full wealth redistribution loop between employers, insurance carriers, defense attorneys, and employee-side lawyers in which little changes except money changing hands.   Indeed, under our current enforcement model—i.e., EEOC administrative enforcement and prosecutions, and private civil litigation under the Civil Rights Act of 1991 (CRA 1991)—money counts as progress, while actual progress toward equal employment opportunity has stalled.

CRA 1991, like analogous enforcement schemes in several states such as California and Colorado, significantly increased the remedies available to employees accusing employers of workplace discrimination—e.g., compensatory/punitive damages, attorneys’ fees, jury trials.   In pressing for CRA 1991’s passage now nearly 25 years ago, trial lawyer groups lobbied stakeholders and Congress with this pledge:

Make employment discrimination disputes ‘worth it’ for us to prosecute by ratcheting up the available remedies against employers, and employers will stop discriminating and then equal employment opportunity will flourish. 

After its passage, CRA 1991’s punitive, litigation-based model (i.e., the stick) initially worked.  Smart employers, appreciating the significant risk and expense of discrimination disputes, started constructing internal HR infrastructure designed to prevent and defend against them.  A highly profitable cottage industry of HR and AA consultants, employment law boutiques, national workplace defense firms, and training vendors sprung up around the risk of discrimination disputes.  Most employers got the message, and took affirmative steps to protect themselves from the sting of CRA 1991’s enhanced damages and skewed attorneys’ fee awards.

And, of course, where there is risk, the insurance industry provides a remedy: over the past 25 years, Employment Practices Liability Insurance (EPLI) has proliferated among employers, largely out of sheer necessity.  Without EPLI, most employers simply cannot afford the suffocating expense of non-recoverable defense fees, let alone the risk of an adverse judgment with the automatic order to pay plaintiff’s attorneys’ fees—i.e., amounts often exceeding six figures. By design, EPLI took the sting out of CRA 1991’s stick, covering defense costs, settlements and judgments.  As a result, employers now treat allegations of intentional discrimination like any other insured (and unavoidable) business risk, which effectively eliminates incentives to modify behavior and rehabilitate workplaces.  Because of EPLI, CRA 1991 no longer stings.

Besides, EEO disputes arising out of legitimate everyday personnel actions have become so pervasive, many employers now legitimately wonder whether they really can prevent them.  After all, discrimination is difficult to prove, but easy to allege, and the allegation itself (untrue as it may be) immediately triggers a cost-of-defense conversation that many employers have cynically characterized as “extortion”—i.e., I need to pay this terminated employee and her attorney $35K to settle EEOC allegations because I cannot afford the non-recoverable cost of proving that I did NOT discriminate in the first place???  At that point, the EEO dispute ends in the usual way:  with a check from the employer’s EPLI carrier to the employee’s attorney.  Money changed hands, but nothing really changed.

The more we evaluate CRA 1991’s efficacy at this historic milestone, the clearer it becomes that this enforcement model no longer works, by itself or at an acceptable pace, to advance the March toward real equal employment opportunity.  In fact, as a self-loathing lawyer myself, I fear that with CRA 1991 and similar state schemes like Colorado’s HB-1136, we entrusted the March to lawyers, and lawyers have done what lawyers often do: find a way to make money on a problem without actually solving it.

Eight Sparks (and Counting) to Jumpstart Our March

Ending discrimination and securing equal employment opportunity for the generations marching behind us should become our singular purpose as we pass this historic milestone in July, 2014.  Thus far, our methods have centered on legal processes and “solutions”—i.e., CRA 1991, analogous state remedial enhancements, and other legislation that creates new workplace claims for private litigation enforcement.  These legislative schemes come from attorneys for the benefit of attorneys, and are deeply rooted in institutionalized myopia; after all, as famed psychologist Abraham Maslow once observed, “He who is good with a hammer thinks everything is a nail.”  At EEO Legal Solutions, however, not all the solutions are “legal,” the natural byproduct of our faith in the SUPERIORITY of multicultural and multidisciplinary approaches to problems.   The sparks that will jumpstart our March will come from many sources, places, and disciplines.

We intend to build on this work for years to come, especially as we near CRA 1991’s 25th anniversary in November, 2016.  We urge practitioners from a variety of fields to contemplate other “sparks”, both within their organizations and the global business village, to stimulate progress toward EEO on the ground (e.g., workplaces, schools, arts/cultural/sports organizations), where it matters most.   Some sparks may never fully catch fire or light the path.  But we must be willing to experiment with (and evaluate) a variety of initiatives, instead of blindly adhering to a legal enforcement model that stopped working a while ago.

1.  Measure What Matters

Start here.  In evaluating the efficacy of any intervention to address a measurable social problem like inequitable employment opportunity, we start by visualizing success, as Dr. King did in his landmark “I Have a Dream” speech in August, 1963.  Once fulfilled, what does the dream of equal employment opportunity look like? Title VII’s architects and proponents certainly never dreamed that employer monetary payouts would one day measure our progress.  Instead, they likely dreamed about (a) the advancement of minorities/women toward top jobs, especially in government; (b) comparable unemployment rates among racial groups; (c) improved perceptions of racial equality/opportunity in the workplace; and (d) maybe even EEO leadership among other industrialized nations, to name only a few desired (and measurable) outcomes.

Stakeholders (e.g., employers AND civil rights advocates) must demand that the EEOC stop counting employer payouts as progress and start providing more meaningful, accurate benchmarks.  After all, the EEOC controls a mountain of EEO-1 data from which academics and researchers can draw valuable conclusions about our progress toward equal employment opportunity.  When we measure and focus our attention, efforts, research and resources on what matters (e.g., unemployment, advancement, leadership), desired outcomes will follow.

2.  Focus on the Fixes, Not the Fights and Factions

Title VII’s passage ended one chapter of a civil rights struggle that bore many hallmarks of battle and cultural warfare.  Growing up in St. Louis, Missouri in the late 1960’s and 1970’s, the language of battle and of fighting for civil rights became deeply entrenched in my psyche too.  These ideas guided my legal and social work studies at Washington University in St. Louis, and regrettably, followed me to the EEOC in 1997 as a young (surely insufferable) EEOC Trial Attorney, eager to rid the world of its “isms”.

Once at the EEOC, however, I quickly realized that this rhetoric of “battle,” “fighting,” and “changing hearts and minds through litigation” often just masks, in the most Machiavellian sense, baser impulses like ego and greed.  Today, very few civil rights “gladiators”—i.e., attorneys willing to champion EEO cases without a guaranteed payday—actually remain, a reality that became disturbingly apparent during the passage of Colorado’s HB-1136 in 2013.  Since CRA 1991, trial and employee-side lawyers have made EEO about money, under the guise of “fighting for civil rights.”  After all, if these “gladiators” cared as much about EEO and civil rights as money, then their willingness to prosecute these claims would not have depended so dearly on CRA 1991’s and HB-1136’s passage.

No civil rights movement has ever succeeded without allies.  Photographs from the March in August, 1963 depict people of all colors, ages, religions, sizes, gender, etc. coming together for the singular purpose of leveling the playing field for future generations.  Today, however, CRA 1991’s highly adversarial victim/villain model squanders opportunities to build on shared values among the employer and civil rights communities, particularly among HR, AA/EEO, and recruiting professionals.

Rampant “tribalism” among civil rights villages and academic researchers has become another great obstacle in the March.  Unlike the unity of 50 years ago, today’s civil rights movement has Balkanized into discrete factions, each “fighting” for the rights of minorities that look, think and act just like themselves, without building bridges between them. Academics have also proven notoriously tribal, eschewing input from other disciplines, as well as the business community where real reform takes place.  Meanwhile, other well-meaning civil rights advocates have become so focused on this concept of an on-going FIGHT that they have completely neglected the FIX—i.e., ways to measure and promote equal opportunity.  The path forward requires greater collaboration among businesses, attorneys, governmental agencies, academics, and civil rights leaders, and a unified focus on the fixes, not just fights and factions.

3.  Demand that the EEOC, As A Federal Law Enforcement Agency, Provide Accurate and Complete Information to Stakeholders

EEO Legal Solutions has long criticized the EEOC’s longstanding press policy of releasing information only about its new lawsuit filings, settlements, and occasional wins. By releasing information only about its successes and new filings, the EEOC paints an extremely distorted portrait of the actual enforcement landscape. In our CRA 1991 climate, employers must parse through varying iterations of EEO law, further complicating everyday personnel decisions.  Can employers trust the EEOC to tell them the full truth about the success or failure of its various enforcement initiatives, prosecutions, or legal interpretations?  Further, even for EEOC supporters, the idea of a federal enforcement agency telling stakeholders only what it wants them to know should conjure up the word “propaganda.”    As a law enforcement agency, the EEOC has an obligation to provide an accurate depiction of the actual legal landscape: when it wins, loses, and gets sanctioned.

4.  Provide Affordable (or FREE) Compliance Resources

Unlike other administrations, the Obama EEOC has devoted few, if any, resources to providing FREE (or affordable) training to employers.  The EEOC’s upcoming 2014 Excel Conference in San Diego, California, costs well over $1,300, excluding airfare, fees that most strapped corporate training budgets simply cannot bear.  The EEOC offers no FREE webinars for employers, even though technology makes webinars affordable for hosts (i.e., less than $10,000) and easily accessible for participants.   And, the EEOC has done a poor job partnering with local HR, chamber and business organizations on compliance programming, even though most employers welcome guidance, more here.  Thus, employers obtain most of their information about EEO compliance from Biglaw marketing departments.  We, and other organizations like Biddle Consulting Group Institute (BCGi), strive to fill this informational gap through FREE, skill-based webinar programming, but the EEOC can, and should, fulfill this important role, as it has done in the past.  After all, modeling HR and EEO excellent outcomes actually works better than prosecuting discriminatory ones.

5.  Partner with Employers on the Development of an Ombudsman Program

Trial and employee-side lawyers often retort that CRA 1991’s privatized litigation model is all we have; what else is there?, assuming the question rhetorical.  In reality, the U.S. Department of Labor (DOL) has proven far more successful at partnering with employers on initiatives that incentivize positive employment outcomes instead of simply prosecuting bad ones.  In the Affirmative Action arena, each administration has used its “power of the purse” (i.e., the carrot) to require employers wanting or having federal contracts to monitor its applicant flow, prepare reports, and submit to affirmative action audits of its hiring practices, as in Executive Order 11246.  Indeed, the Obama administration has contemplated using its power to award government contracts to prohibit discrimination against Gay, Lesbian, Bisexual, and Transgender (GLBT) employees, absent the votes to secure actual legislation. This executive “purse power” (i.e., linking EEO outcomes to incentives like government contracts) has far more power to reform the workplace than the prospect of litigation, where an insurance company pays the bill and assumes the risk anyway.

The DOL has also created far more effective liaisons with other agencies and volunteers to address specific workplace concerns.  As one example, to promote reemployment after military deployment, the DOL has united with the Department of Defense and retired military and community volunteers to spearhead an Ombudsman program as part of Employer Support of the Guard and Reserve (ESGR).  ESGR’s sole function is to intervene quickly in and resolve workplace disputes potentially arising under the Uniformed Service Employment and Reemployment Rights Act (USERRA).  This ombudsman approach actively seeks to preserve employment by quickly acquainting employers with clear, accessible, and affordable compliance resources on USERRA’s requirements.  If, however, the volunteer ombudsman cannot resolve the dispute, the aggrieved employee may file a charge with VETS of the DOL, which will conduct a substantive investigation and provide relief.  And, compared to EEO-based litigation, USERRA disputes in federal court are extremely rare.  Under this collaborative, ombudsman approach, everyone wins: the employee keeps her job and/or has access to meaningful redress in the DOL, while the employer avoids the staggering cost of litigation.

These more collaborative enforcement models have long existed within the DOL and its sub-agencies (e.g., OSHA, OFCCP), and show promise for the quick, cost-effective resolution of workplace EEO disputes without litigation, and with a focus on reinstatement and job preservation.  Under our CRA 1991 model, reinstatement seldom enters the settlement equation for one reason only: trial and employee-side “gladiators” cannot take a contingency fee on reinstatement, thereby reducing virtually every EEO dispute to a cold-cash transaction where nothing changes except money changing hands.  Likewise, given the EEOC’s emphasis on MONEY as the measure of its success and our progress, large monetary settlements count more than employee reinstatements, a measurement that the EEOC does not even track.  Our methods for ensuring equal employment opportunity should be inherently employment preserving. 

6.  Invest in Inclusiveness and Start Young

By the time the next generation reaches the workforce, it is already too late: the opportunity to convince a young girl with a disability, an immigrant, a homeless kid, a gang member, a transgender teen, or learning-challenged tough guy that they BELONG at the PowerTable has long passed.  For that reason, we must invest in opportunities to promote inclusiveness at all levels.   And, we must start young.

Each year, EEO Legal Solutions partners with Junior Achievement to provide a “PowerTable” experience for several young stars that shone particularly bright during its annual Business Week camp each summer.  At a local power-event in the business community, these young stars get to network with politicians and business leaders, eat dry chicken, and hear incredible entrepreneurial stories of failure and recovery.

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For everyone, the experience is powerful.  The young stars learn that if you can see it, you can BE it and that they BELONG at the PowerTable.  For the grown-ups, the PowerKids model the value of an inclusive community of leaders.  But more than anything else, the experience of just hobnobbing at a local power-event breeds more opportunity, generating even greater prospects for mentoring, networking, collaborating, and even summer jobs. This small investment in inclusiveness works, and gives economic minorities the tools they need to break through glass ceilings and other barriers en route to their goals, business or otherwise.

7.   Where Feasible, Let Technology Foster Greater Workplace Flexibility and Opportunity

For parents, flexibility means opportunity.  Still today, women assume the primary caregiving role in the family, a reality that is changing as more men opt to stay home. Thus, for many women, more flexible work arrangements over the past 25 years could have made the difference between keeping and quitting their careers.

Technology has torn down workplace walls and redefined how (and WHEN) work gets done, something the next generation of high professional already knows. Recently, a professor friend from Harvard observed, “Gone are the days of the panicked campus; these kids are writing their papers and studying for exams at the beach somewhere.” If these kids can ace their Harvard exams and papers while working at the beach, they will, no doubt, expect, demand and/or create similar flexibility in their workplaces. And for women (that is, parents) flexibility opens up a world of opportunity.

8.     Tie Progress to Profits: The Business Case

Years of representing employers have yielded many important insights, but none greater than this one: if you want to change how business thinks about business, you must make the BUSINESS (i.e., greater profitability, decreased risk/cost) case.  Civil rights gladiators, EEOC Commissioners and careerists, and policymakers overlook this obvious, but important principle of effective advocacy: to be persuasive, you must first learn the language.  As the March advances, we must make the BUSINESS, not the social justice or “karmic” case, for equal employment opportunity and inclusive decision-making.

As research clearinghouses like Catalyst.org gain strength and recognition, the business case for workplace multiculturalism and inclusive decision-making comes into sharper focus.   Organizations with inclusive and flexible policies, with excellent track records for promoting women/minorities, and with higher percentages of women/minorities in leadership positions PERFORM BETTER on several key business metrics, including profitability.  These more progressive companies understand that attracting and retaining TOP TALENT means creating a welcoming and flexible work environment for its greatest asset, its PEOPLE, to flourish.  They also understand that diverse decision-makers make encompassing, well-rounded and inclusive decisions that cover more bases and by extension, benefit and/or or appeal to more people.

Years ago, my family visited Mesa Verde National Park in southwestern Colorado, recommended for everyone’s Bucket List.  As we toured the ruins, I overheard our guide say, “You can tell that the ancient Puebloans started to interact with other cultures because their civilization then advanced so quickly.”  I blinked hard, and asked her to repeat herself.  She spoke the same words, this time suspiciously and really slowly. You just brilliantly summed up the BUSINESS CASE for multiculturalism, inclusive decision-making and equal employment opportunity, I sputtered.  The answer, or at least one of them, comes from Anthropology.

When we humans interact with other cultures (even other academic disciplines), we learn.  We grow.  We advance, on matters ranging from the sublime (i.e., That theology inspires and resonates with me!) to the mundane (i.e., I did not know chicken could taste so good!).  At the risk of sounding trite, our strength as a nation derives from our DIFFERENCES, and our uniquely American ability to marshal a wide variety of multicultural and multidisciplinary perspectives to solve our most pressing social problems, particularly the stalled march toward equal employment opportunity.

As progressive companies continue to prosper, they will serve as a positive example to other employers: if you want to remain competitive, you must (a) invest in an inclusive workforce and C-suite; (b) mentor economic minorities to pave the pathways to top jobs; and (c) use technology to retain top [parent] talent, to name just a few “sparks.” Once employers fully understand the economic benefits of equal employment opportunity (i.e., the carrot), the “stick” of privatized litigation enforcement will become obsolete.

Over the next 50 years, the march toward EEO must focus on the FIXES of the future, not the FIGHTS perpetuated by lawyers for the benefit of lawyers.  We still have a long way to go before fulfilling Dr. King’s dream and Title VII’s promises, but the path forward requires greater collaboration, less litigation.  Our progress toward equal employment opportunity depends on it.   Please join the conversation.

Merrily Archer, Esq., M.S.W.

July 2, 2014

For Carly, Sophie, Ezra and Daemo

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Under the Surface of EEOC Enforcement

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Earlier this week, the U.S. Equal Employment Opportunity Commission (EEOC) asked the U.S. Supreme Court (SCOTUS) to grant Mach Mining LLC’s petition for certiorari, following its Seventh Circuit victory in December, 2013, here.  In EEOC v. Mach Mining LLC, the Seventh Circuit sided with the EEOC, holding that courts lack the authority to adjudge the adequacy of the EEOC’s pre-litigation conciliation efforts.  According to the EEOC, its administrative enforcement activities (e.g., mediation, investigation, determination, and conciliation) are immune from court scrutiny under the “government deliberative process privilege,” including the question of whether the EEOC has fulfilled its four statutory “conditions precedent” prior to initiating prosecution—e.g., charge, investigation, determination, and conciliation.

While the EEOC seeks a SCOTUS ruling that its enforcement activities are shielded from court (and public) oversight, Congress has also recently raised questions about the adequacy of the EEOC’s mandatory conciliation efforts prior to initiating litigation against employers. In the context of the EEOC’s budget request, a report from the House appropriations committee expressed concern that the EEOC has not, in fact, been conciliating with employers in good faith, and demanded some accountability:

Conciliation.—The Committee is concerned with the EEOC’s pursuit of litigation absent good faith conciliation efforts. The Committee directs the EEOC to engage in such efforts before undertaking litigation and to report, no later than 90 days after enactment of this Act, on how it ensures that conciliation efforts are pursued in good faith.

May 8, 2014 House Report.

As a former EEOC litigator (1997 – 2000) and longtime EEO defense attorney who successfully battles the EEOC, I worry that Congress’s budgetary control now stands as the ONLY means to hold the EEOC accountable for (1) the pain it unnecessarily inflicts upon employers; (2) more meaningful and realistic measurements of progress toward EEO; and (3) “law enforcement” that looks an awful lot like advocacy.  After all, the EEOC refuses to disclose any information about its investigations, decision-making processes, negotiations, and conciliation efforts.  In fact, even getting the EEOC to adhere to its own statutory disclosure obligations under the Freedom of Information Act (FOIA) involves much struggle, here. And now, the Seventh Circuit has slammed shut a possible judicial window into these super-secret EEOC administrative processes. But for Congress’s control of the EEOC’s purse strings, do employers have any recourse from an abusive administrative agency that measures its “efficacy” in the amount of money it collects from them?

The Dangers and Damages Occur Below the Surface

In addition to “government deliberative process privilege,” the EEOC also relies heavily on the statutory confidentiality built to Title VII of the Civil Rights Act of 1964 (“Title VII”) to resist disclosing any information about its administrative charge handling unless and until the matter becomes public with the filing of a lawsuit.  See § 706(b) of Title VII, 42 U.S.C. §2000e-5(b).  The combined effect of statutory confidentiality and “government deliberative process privilege” is an administrative process that occurs in secret, again, unless and until the EEOC (or the Charging Party) initiates a lawsuit in U.S. District Court.   Most charges, the EEOC would surely agree, never see the light of a courtroom; on the contrary, for most EEOC-related disputes, the real action (e.g., mediation, investigation, determination, conciliation) occurs below this surface of confidentiality and government deliberative process, like a dangerous iceberg.

Consider, for example, the monetary burden on employers.  For at least the past two fiscal years, the EEOC has measured its efficacy by the amount of money it has collected from employers to resolve discrimination allegations: in both FY2012 and in FY2013, the EEOC has characterized its historic collections from employers–$365.4m and $372.1m, respectively—as evidence of “enforcing the law more effectively.”   According to the EEOC’s FY2013 Performance and Accountability Report (PAR), however, litigation accounted for only $39m of this historic take, whereas the EEOC’s Mediation (ADR) and Enforcement (e.g., investigator settlements, conciliations) programs took in the most money, as depicted in Figure 1.   Thus, employers feel the real financial impact of the EEOC’s enforcement activities in these confidential/privileged administrative processes, where questionable investigations, unfounded reasonable cause determinations, and perfunctory conciliations never reach the surface and public light.  How can an agency of the federal government inflict this much pain, with such little transparency?

Figure 1

EEOC Collections FY2013

 If Mediations, Then [a fortiori] Conciliations

Earlier this month, we released the results of our year-long survey of practitioners (e.g., HR, attorneys, EPL adjusters) regarding their experiences in EEOC mediations, ultimately hitting 780 responses.  Notably, we recently learned of other organizations that are using online surveys and social media to explore what happens to Respondents (e.g., employers, school districts) in these secret, administrative processes. Given how fiercely the EEOC and other federal agencies resist scrutiny, surveys and social media may be the only way to peek behind this iron curtain of carefully guarded secrecy.   We have other projects planned; please stay tuned.

Our EEOC mediation survey probed whether EEOC mediators made (or did not make) specific representations to employers in the mediation process; we then tested these representations against published EEOC information, including enforcement statistics.  Over 80% of practitioners reported that EEOC mediators emphasized the cost-of-defense when encouraging them to settle regardless of charge merits, here.  What impact, therefore, would threats of EEOC enforcement activity have on employers’ cost-of-defense expectations and by extension, settlement deliberations?

In fact, over 70% of practitioners reported mediator threats of reasonable cause determinations and prosecutions.  Worse, over 60% reported that EEOC mediators even raised the specter of expensive, lengthy systemic investigations if the matter did not get resolved.  After presenting these findings, we highlighted how improbable those outcomes were under the EEOC’s own Priority Charging Handling Procedures (PCHP) and published enforcement statistics.

Our ultimate conclusion shocked some, angered others, and resonated with MOST practitioners who have represented employers in EEOC mediations over the past few years:  EEOC mediators stress cost-of-defense, and then brandish  the EEOC’s enforcement powers (e.g., cause determinations, systemic investigations and prosecutions) to drive up employer settlement payouts.   For that reason alone, EEOC mediations are not “neutral” or a “wonderful opportunity to settle,” as the EEOC would have employers believe.  On the contrary, our findings expose EEOC mediations as a vehicle to ratchet up the one measurement that the EEOC counts as progress—i.e., employer settlement money.  We have questioned (and will continue to question) whether (a) wielding federal enforcement weapons to effectuate private settlements is a responsible use of governmental power; and (b) this accuse-and-settle enforcement scheme has actually worked to foster equal employment opportunity, here.

Nevertheless, if employers encounter exaggeration and bullying in the EEOC’s mediation process, what fate must befall them in the EEOC’s conciliation process?  Unfortunately, even experienced practitioners often misuse these terms interchangeably: unlike mediation, conciliation occurs after the EEOC has issued a reasonable cause determination to believe that a statutory violation has occurred and after the EEOC has technically taken a position adverse to the employer; by contrast, the EEOC takes an ostensible “neutral” stance in mediation, although our survey casts doubt on that representation too.

Based on our EEOC mediation survey (as well as my own experiences WITH and AGAINST the EEOC), I envision a conciliation process fraught with threats of prosecution, paired with cost-of-defense monetary demands far exceeding six figures, take it or leave it.  And, the EEOC has offered clues that this vision of the conciliation process may be accurate.  In its 2012 PAR, the EEOC credited the close collaboration between EEOC’s Legal and Enforcement Units for the record amount of employer settlement monies “obtained” in the conciliation process:

Of particular note was the increased number of charges resolved through successful conciliations, with 1,591 in FY 2012 compared with 1,351 in FY 2011, an 18 percent increase. The increase in conciliations reflects an emphasis on even closer consultation between the Commission’s investigators and attorneys.

 FY2012 EEOC PAR, “Enforcing the Law More Effectively,” here.  As most practitioners quickly discover, the EEOC exercises its prosecutorial discretion through the General Counsel (Legal), not the Commission (Enforcement), such that the presence of an EEOC Trial Attorney in the conciliation process would certainly signal an intent to prosecute—i.e., the intended effect.  Under these circumstances, most employers would opt to settle in the still-confidential conciliation process rather than face a long EEOC prosecution, suffocating defense fees, and a brand-bashing EEOC press release.

Indeed, Congress needs to probe FURTHER the EEOC’s conciliation efforts, focusing on not only matters that reach the surface of litigation, but more importantly, on those conciliation negotiations that remain hidden below the surface of governmental deliberative process privilege and confidentiality.   If the courts cannot (or will not) provide this appropriate oversight and check on the EEOC’s use of executive power, then employers have nowhere to turn but Congress.  Dig deeper . . .

The EEOC Exposed: Does the Emperor Have Clothes?

The Obama EEOC has behaved more like an advocacy group than a federal law enforcement agency.  EEOC Commissioner Chai Feldblum has publicly stated that the EEOC’s job is to interpret the anti-discrimination laws entrusted to its enforcement, which raises some fundamental “separation of powers” and “checks-n-balances” questions about our tripartite system of government.  In effect, this EEOC’s “interpretive” law enforcement bent is like a cop pulling you over and saying

Under my novel, untested and possibly incorrect view of the law, you have just violated the law.  Now, you can pay $500K to prove me wrong, or you can settle for $250K now.

The EEOC possesses tremendous enforcement powers (e.g., to issue subpoenas, to investigate, to render determinations, to conciliate, to prosecute, to demand injunctive relief) that inflict pain on employers, even though it may be advancing novel legal theories and junk statistical methods.  In EEOC v. Kaplan (credit reports), the EEOC’s investigation, conciliation, and prosecution proceeded based on a statistical analysis that a federal judge, once the case reached the surface of litigation, tossed out as inherently unreliable.  Likewise, in EEOC v. Freeman (criminal background checks), a federal judge also tossed out the EEOC’s statistical analysis for “egregious errors” and extreme “academic dishonesty.” Read more here.  The employers in Kaplan and Freeman likely spent millions in non-recoverable defense fees fending off these EEOC incursions, incursions that were not grounded in competent facts and legal precedent.

In an EEOC prosecution that I defended a few years ago under the Americans with Disabilities Act (ADA), EEOC v. Picture People, I set out to prove that the EEOC conducted absolutely no investigation whatsoever into the essential functions of a retail sales position at the nucleus of its five-year campaign against a photography retailer.  An inevitable discovery dispute ensued after I issued a 30(b)(6) deposition notice to the EEOC—e.g., government deliberative process, burden to the government.  After a lengthy hearing, the U.S. magistrate judge ordered the EEOC to answer “contention interrogatories” about the investigative evidence undergirding its Determination that a deaf/mute person was “qualified” to perform a high-octane retail sales position requiring strong verbal communication skills.  The EEOC’s responses reveal an alarmingly perfunctory and partisan “investigation” that failed to take into account even the most basic employer prerogatives built into the ADA.  The EEOC’s prosecution ultimately failed—e.g., dismissed on summary judgment, affirmed en banc at the 10th Circuit.  This employer, however, endured five years of EEOC litigation, six figures in attorneys’ fees, and governmental “brand-bashing” at an incalculable cost, based on an incompetent (or simply arrogant) EEOC investigation and erroneous interpretation of the ADA.

Any governmental effort to resist transparency must be opposed in a free society. Experience teaches me that under this cloak of governmental deliberative process privilege and confidentiality lie legitimate opportunities to critique the EEOC’s competency and long-term efficacy, just based on the litigation that has recently reached the surface. In Picture People, the EEOC resisted transparency to conceal an incompetent investigation; in Kaplan, the EEOC cited government deliberative process to hide, among other botches, the reality that it engaged in the same hiring practice (i.e., credit scores) for which it was prosecuting this employer.  In fact, two extremely well-respected legal academics, Margo Schlanger of University of Michigan School of Law and Pauline Kim of Washington University School of Law, have recently published their longitudinal analysis of the EEOC’s litigation program, ultimately questioning its value as a tool to reform the workplace, here. If the EEOC’s litigation program—i.e., the cornerstone of our entire EEO enforcement model—is just another ineffective, bureaucratic burden, then all stakeholders (but particularly employers) should start asking fair cost-benefit questions about an administrative process so shrouded in secrecy.

Now that some courts have abdicated any oversight role in holding the EEOC accountable, only Congress’ “power of the purse” can pry open a window into the EEOC’s treatment of employers.  Given the EEOC’s resounding court defeats “above the surface,” employers must demand and/or find ways to CREATE more transparency into the EEOC’s super-secret administrative processes, or continue PAYING the consequences.

Merrily S. Archer, Esq., M.S.W., May 29, 2014

Of Course EEOC Mediations Are (or Should Be) Different!

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In response Fox Rothschild’s republication of our EEOC Mediation Survey, a handful of practitioners weighed in: (a) one claimed that EEOC mediations are just like private ones;  (b) a contract EEOC mediator insisted he would never make the misrepresentations specifically identified in our survey; and (c) another practitioner reported he has had only positive experiences with his local EEOC mediators, here.

The first point—i.e., EEOC mediation are just like private mediations—merits a more substantive response, below.  As for the other two, the sheer volume of responses (780) and strength of the findings (e.g., over 70% of reporting threats of “reasonable cause” determinations and prosecutions) account for one-off, individual experiences.  That is, we designed a quick survey to elicit the feedback of numerous practitioners, not just the vocal ones, and to draw statistically supportable conclusions, not just report our opinions and personal experiences.  We’re delighted that some practitioners have reported good experiences, but the whole point of a survey is to develop an understanding broader than anecdotes.

Further, our survey did not intend to measure “satisfaction,” on the rationale that participants could simultaneously report satisfaction and evidence of mediator deception.  For that reason, we asked only whether EEOC mediators made a specific representation, and then juxtaposed those findings against published EEOC information.

Three Ways EEOC Mediations Are (or Should Be) Different from Other EEO Mediations

Unlike Private Mediators (or Magistrate Judges), EEOC Mediators Represent a Federal Agency that Wields Broad Enforcement Authority and Prosecutorial Discretion

Our survey revealed that EEOC mediators regularly threaten employers with “reasonable cause” determinations (73.7%), prosecutions (70%), and even systemic investigations (61%).  We then tested these representations against the EEOC’s own Priority Charge Handling Procedures (PCHP), and clarified that if any of these enforcement outcomes were LIKELY, the EEOC would not have routed the charge to the ADR program in the first place.  We also compared these representations to the EEOC’s own enforcement data, noting a considerable gap between their reported frequency and REALITY.

Unlike a private mediator (or even a judge), the EEOC was entrusted with numerous enforcement powers—e.g., to investigate, to issue subpoenas, to render determinations, and to prosecute employers.  Most of these activities occur below the surface, out of public view and under the heavy armor of “government deliberative process” privilege and statutory confidentiality, which the EEOC cites to resist judicial scrutiny of its administrative processes (e.g., mediation, investigation, conciliation).  These processes, however, possess tremendous power, by themselves, to inflict terrible financial pain and inconvenience on employers, even before actual PROOF of an EEO violation in court. Thus, our finding that EEOC mediators regularly brandish these powers (disingenuously, in reality) to encourage employer settlement payouts raises legitimate questions about (a) the objectivity of the process; and (b) the responsible use of governmental power.   The EEOC I served under Clinton would not have allowed Field personnel to get this close to the ethics fence.

Unlike Private Mediators (or even Magistrate Judges), EEOC Mediators Represent a Federal Agency that Measures Its “Efficacy” by Its Employer Collections

Different kinds of mediators come with different motivations.  Private mediators whom I have worked with over a long litigation career get paid by the hour and so, they seem motivated to help the parties get a deal done no matter how long it takes.  Magistrate judge mediators make their same government salary while they’re juggling five other matters in addition to your mediation, and so, they seem motivated to make your case (and you) go away as quickly as possible.  Our study ultimately asked this question: if (a) the EEOC equates efficacy with employer settlement payouts; and (b) the ADR program historically generates more settlement payouts than any other EEOC program, what would EEOC mediators say to make employers pay?

Our study suggests that EEOC mediators may be neutral toward the parties and the dispute, but certainly not toward OUTCOME, unlike any other mediation context.  On the contrary, if success is ultimately measured in dollars, EEOC mediators are inherently allied with Charging Party’s counsel, whose primary motivation is to maximize monetary payouts.   Perhaps for that reason, employers and practitioners who show up to EEOC mediations empty-handed or with small purses often encounter the barb that they are not negotiating in “good faith.”  In fact, EEOC mediations differ substantially than other kinds of mediation because at the outset, the mediator shares the underlying motivations of one of the parties.

Unlike Private Mediators (or even Magistrate Judges), MOST EEOC Mediators are Not Lawyers

Our study showed that EEOC mediators often forecast gloomy litigation outcomes and juror preferences.  Unlike private mediators or magistrate judges, most EEOC mediators are not lawyers; rather, most of them are longtime EEOC investigators who got promoted into their positions when the ADR program launched in the late 1990’s.  Thus, unlike the sage insights of battle-hardened judges and former litigators, most EEOC mediators mimic the “pro-wrestler speak” of trial lawyers.

Fancying itself an advocacy agency, the EEOC frequently forgets the important concomitant duties of balance and fairness that accompany prosecutorial discretion and governmental deliberative process privilege.  To suggest, therefore, that EEOC mediations are just like any other mediation (a) misses the point of our survey; and (b) ignores the public duties (e.g., fairness, balance) that temper governmental power.

Ultimately, given the EEOC’s focus on employer settlement payouts as the measure of its efficacy, we question whether the EEOC’s programs, processes, burdens and initiatives have WORKED to actually deliver equal employment opportunity based on far more meaningful measurements of progress.   We’re trying to further the march toward EEO by asking, What can we do differently (better) to improve access to top jobs, equalize the burdens of unemployment, become an international leader in the benefits of multiculturalism, level the playing field in the federal sector, etc.?  At this historic milestone (i.e., Title VII’s 50th on 7/2/14), it is not enough to say “We have much work to do,” a clear EEOC talking point.  Rather, responsible policy-making requires us to evaluate whether past interventions have proven effective and to develop positive approaches based on programs that have actually worked.

Please stay tuned for “Seven Sparks to Jumpstart the March Toward Equal Employment Opportunity”, which we plan to publish in the coming weeks.

Merrily S. Archer, Esq., M.S.W., May 26, 2014

Five Employer Takeaways from the EEOC Mediation Survey

What You Don’t Know Can Cost You

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In late 2013, EEO Legal Solutions released the then-available results of its EEOC Mediation Survey, which Bloomberg BNA republished in January, 2014.  Other media outlets also picked up our preliminary findings, and even tried to elicit a response from the EEOC.   After four months, the EEOC finally responded to other media inquiries.   It denied any knowledge of our findings, despite published documentary proof that EEOC Commissioner Chai Feldblum requested (and we provided) survey data charts in January, 2014.   Since then, the response rate increased to 779, bringing the overall picture about common EEOC mediator tactics into sharper focus.

We had hoped, however, for 1,000 responses from an evenly distributed cross-section of the United States to look for regional variations, if any, from national averages.  Nevertheless, because of widely varying response rates by state, we simply cannot differentiate between EEOC District Offices with any statistical firepower.   With recent revelations about the poor quality of EEOC statistical analyses undergirding systemic investigations and prosecutions, prudence and fairness dictate more conservative treatment of data.

In our earlier publication about the EEOC mediation process, we detailed the impetus for this survey, central research questions, survey methodology, question design, and response-gathering process, here.     In this Final Report, we get right to the point and post the pictures: what can employers learn from the mediation survey?

EEOC Mediators Exploit Employers’ Cost-of-Defense Conundrum

As reflected in Figure 1, over 80% reported that an EEOC mediator referenced the cost of defense when encouraging employers to settle.  The cost of defense undoubtedly now drives employers’ settlement deliberations more than any other factor.  Discrimination is, after all, difficult to prove but easy to allege, and the allegation itself exposes employers to an average cost of $70K in non-recoverable defense fees.  Without EPL Insurance, most employers can no longer afford to fight to prove themselves RIGHT, an unwelcome byproduct of an EEO enforcement scheme that benefits lawyers at the expense of employers. Employers are stuck, and our survey shows that EEOC mediators know it.

According to the EEOC’s 2013 Performance and Accountability Report (PAR), the EEOC collected another historic amount of money from employers ($372.1 million) last year, a feat it touts under the heading “Enforcing the Law More Effectively.”  The FY2013 PAR also makes clear that its ADR program is the EEOC’s biggest cash cow, accounting for nearly half of its collections.  Nowhere, however, does the EEOC mention the cost-of-defense conversation its personnel initiate with employers as soon as the allegation is made, regardless of merit.  Accordingly, the EEOC’s use of employer settlement money as ostensible evidence of “enforcing the law more effectively” seems like a poor proxy for progress toward equal opportunity.

Figure 1

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 EEOC Mediators Forecast Gloomy Litigation Outcomes

EEOC Mediators often mimic the standard settlement tripe of NTLA/NELA attorneys to capitalize on employer insecurities about juries, such as “your summary judgment motion will fail” (Figure 2), “juries dislike employers” (Figure 3), and “a jury won’t like/believe your witnesses or documents” (Figure 4).   In fact, most EEOC mediators are former investigators, not attorneys, and have extremely limited experience divining the preferences of future jurors.  Besides, juries don’t hate employers; rather, they hate liars and lawyers, often failing to distinguish between the two.

Figure 2

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Figure 3

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Figure 4

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EEOC Mediators Overstate the Risk of Reasonable Cause Determinations, Systemic Investigations, and Prosecutions

Given the suffocating cost of defense, the possibility of future EEOC enforcement activity would weigh heavily on any employer’s settlement deliberations.   Survey results show that EEOC mediators regularly threaten EEOC cause determinations (Figure 5), EEOC prosecutions (Figure 6), and even systemic investigations (Figure 7), which go on years and cost employers millions, more here.   When faced with these enforcement possibilities, most reasonable employers would pay more to settle, again, to avoid anticipated defense costs.

These mediator representations are, however, complete nonsense.  First, as EEOC mediators know, if any of those enforcement actions were likely under the EEOC’s 1995 Priority Charge Handling Procedures (PCHP), the EEOC would not have routed the charge to the ADR Unit in the first place; only charges designated as “B” (lower priority) are eligible for ADR.  In fact, at an EEOC hearing on March 20, 2013, EEOC Commissioner Victoria Lipnic suggested that the EEOC tell employers about the charge’s PCHP designation to take the “gamesmanship” out of EEOC enforcement.  EEOC field personnel immediately opposed her idea, citing the timeworn government deliberative process privilege:  if employers knew, they argued, that the EEOC classified the charge as a “B”, and that, by extension, the EEOC was unlikely to devote its limited resources to an actual “investigation,” employers would be less likely to settle. 

Second, the EEOC’s own enforcement statistics completely belie EEOC mediator threats of enforcement activity.  In FY2013, the EEOC issued Reasonable Cause determinations in only 3.6% of charges, down from 3.8% in FY2012.  Likewise, the number of EEOC-initiated civil lawsuits has fallen dramatically in recent years, as the EEOC focuses more on larger, systemic investigations and prosecutions.  Perhaps for this reason, the fact that over 60% of employers reported threats of an EEOC systemic investigation is particularly alarming.

Figure 5

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Figure 6

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Figure 7

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HR is Under-utilized

Approximately one-third of survey participants had not participated in any EEOC mediation over the past two years, and nearly 50% were HR practitioners (Figure 8); by contrast, only 5% of attorneys in law firms and 7% of in-house reported not having any mediation over the past two years.  Our survey suggests, therefore, that most employers still treat EEOC mediations like serious legal problems that require lawyer “superpowers” and the corresponding expense.

Not so fast: as “B” charges, EEOC mediations are comparatively low risk.  Under PCHP, “B” charges are “handled,” not “investigated.”  In fact, the presence of counsel for the Charging Party is the single biggest determinant of whether an EEOC charge will advance beyond the EEOC administrative process or will languish, and then fizzle, just like the overwhelming majority of “B” charges heaped on the EEOC’s “Inventory” each year.   And to the EEOC, reducing its Inventory (by “handling” but not investigating “B” charges) shows that it is “serving the public more efficiently.”  Ironically, NTLA/NELA attorneys and I find common ground re the utter uselessness of this administrative process.

In some cases, it makes sense to pit lawyer against lawyer in an EEOC mediation, particularly if the EEOC administrative process seems like just a speed-bump en route to real litigation.  But for most EEOC mediations, employers can realize incredible cost savings by sending well-trained HR professionals instead.   Under this “coaching” mediation model, attorneys remain instantly available to advise and intervene, if necessary, using the wide variety of media that modern technology makes possible (e.g., cell phone, text messaging, and email).   Ultimately, this “coaching-from-the-sidelines” approach spares employers of the considerable unnecessary expense of non-productive attorney appearance time, particularly those long intervals when the mediator confers with the other party.

Further, today’s HR professionals often possess the interpersonal, emotional intelligence (EQ) skills that (a) attorneys often lack; and (b) work extremely well in informal mediation settings.  EQ skills, which are not taught or honed in law schools or law firms, quell the rancor that fuels workplace disputes and prevents cost-effective resolutions. For an angry, allegedly aggrieved employee, the presence of defense counsel often signifies warfare, sets a counterproductive tone, and interferes with resolution.  Smart attorneys—i.e., the skilled, not just the billed—know when to get out of the way.

Over this past year, in-house counsel and EPL adjusters have expressed a rational concern.  Attorneys are necessary to advise employers during EEOC mediations, they argue, just in case the EEOC mediator starts talking smack about reasonable cause determinations, systemic investigations, prosecutions, adverse summary judgment rulings and opinionated juries.   By calling attention to and then dispelling common mediator threats, however, this survey thereby seeks to diffuse them and help all practitioners make more informed mediation decisions.   In an era of high EPL deductibles and frequent EEO disputes, HR can fulfill an important, and necessary, cost-saving role.  To view our EEOC mediation training webinar, EEOC Mediations: Getting What You Want without a Big Legal Bill, click here.

Figure 8

HR and Mediations

When Money Matters, EEOC Mediations are NOT Neutral

Employer settlement payouts make a poor proxy for progress toward EEO, even though the EEOC counts their money as evidence of “enforcing the law more effectively.”  Our study aimed to answer this central question: If the EEOC equates efficacy with employer settlement payouts, what impact, if any, would this metric-that-matters have on the behavior of personnel operating its biggest settlement machine, the ADR program?

The results speak volumes.  Behind closed doors, EEOC mediators exaggerate the risk of poor litigation outcomes and EEOC enforcement activity to ratchet up employer cost-of-defense settlement offers, regardless of charge merit.  Immediately upon the mere accusation of discrimination, employers walk into a cost-of-defense conversation where the questions of wrongdoing and EEO compliance are irrelevant. In the EEOC’s “fabulously successful” ADR program, money (and lots of it: $372.1m) changes hands between employers, EPL carriers, defense attorneys, and plaintiff’s employment lawyers, with some leftovers for allegedly aggrieved employees. But does this wealth redistribution really advance the march toward equal employment opportunity (i.e., “enforcing the law more effectively”)?

Unfortunately, no.  When we measure what MATTERS, it becomes clear that under this adversarial litigation-based model of EEO enforcement, progress toward EEO has stalled for most of Title VII’s intended beneficiaries.   In Measuring What Matters at Title VII’s 50th Anniversary, we analyzed the EEOC’s own EEO-1 data to evaluate the progress of women and minorities toward attaining top jobs, across industries; we looked at unemployment rates among gender and racial groups; we researched federal sector EEO employment trends; we pulled up Gallup polls and EEOC intake data to assess whether workers perceive workplace opportunity as more equitably distributed; and we compared the United States to other developed nations (e.g., Sweden, Israel, South Africa) re the representation of women in business and governmental leadership.  These more meaningful measurements of our progress show that our methods for securing EEO—i.e., the STICKS of an adversarial EEOC and CRA 1991’s privatized litigation-based model—no longer WORK, by themselves or at an acceptable pace, to modify employers’ behavior and by extension, reform the workplace.

When money counts as the measure of its effectiveness, EEOC mediations are not neutral; on the contrary, EEOC mediators are allied with Charging Parties and their attorneys, whose sole objective is to maximize settlement payouts.  The EEOC claims, nevertheless, that 98% of employers are satisfied with their ADR experience; until this survey, however, most employers likely did not suspect that EEOC mediators were misleading them.

The EEOC will continue sell its “fabulously successful” ADR program to employers.  At the EEOC’s March, 2013 hearing, EEOC careerist Mary Jo O’Neill, Regional Attorney in the Phoenix District Office, called the ADR program “such a wonderful opportunity to settle” and urged employers to “take more advantage of [it] than they do.”  At last year’s EEOC Excel Conference, EEOC Chair Jacqueline Berrien heavily peddled the ADR program, and not coincidentally, at this year’s Excel Conference in San Diego (for which the EEOC charges employers over $1,300), the EEOC has again devoted an entire “track” to the merits of mediation.  As long as the EEOC counts employer money as EEO progress, employers and Title VII’s intended beneficiaries will remain STUCK in an ineffective wealth redistribution loop where nothing much changes except money changing hands.

We can do better.  Stay tuned for Part II of our two-part series on Title VII’s 50th anniversary, “Seven Sparks to Jumpstart Progress toward Equal Employment Opportunity.”  Part I, “Measuring What Matters on Title VII’s 50th Anniversary,” is available here.

Merrily S. Archer, Esq., M.S.W., May 13, 2014

Our FOIA Fight for EEO-1 Data (and Why Winning Matters)

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On March 7, 2014, the U.S. Equal Employment Opportunity Commission (EEOC) ultimately agreed to publish two more years (1996 and 1997) of aggregate EEO-1 data in electronic, researchable format by May 1, 2014 and “to begin the process of converting the aggregate EEO-1 data into electronic format for the years from 1966 to 1996 as resources allow.”  Read the EEOC’s recent Appellate Determination here.  The battle to get the EEOC to release this public data, however, is a story worth telling.  And, without public scrutiny, will the EEOC follow through on its data-publication promises?

For over four decades, the EEOC has required employers with 100 or more employees to submit an annual EEO-1 survey of the gender and racial/ethnic composition of their workforces, which provides (in the EEOC’s words) a “rich database for various uses.”  To that end, the EEOC has already made available on its website aggregate EEO-1 data for the years 1998-2012, here.   Recently, EEO Legal teamed up with Dan Kuang, Ph.D. of Biddle Consulting Group to analyze this public, granular database, to measure the pace of progress of women and minorities toward achieving top jobs across industries—i.e., Official/Manager positions in EEO-1 speak.  Our initial analysis yielded startling results: in our march to the top, women’s progress has flat-lined; Asian-Americans are gaining on Whites; and African-Americans have lost ground.

Intellectual (and morbid) curiosity took hold, making us wonder about larger trends over time.  For this one measurement of progress (i.e., attainment of top positions across industries), we wondered whether we could correlate any statistically significant changes with any major regulatory and/or legal enforcement shifts over Title VII’s 50-year history.   We quickly realized, however, that we needed a much larger swatch of data to draw any statistically meaningful conclusions . . .

. . . and hence, our odyssey to obtain this publicly available data from the EEOC under the Freedom of Information Act (FOIA) began.

Overcoming “No Mode”

In late November, after researching online the EEOC’s FOIA process, I called Stephanie Garner, Assistant Legal Counsel at the EEOC overseeing FOIA programs, using the phone number provided; much to my pleasant surprise, Ms. Garner answered the phone.  While describing the nature of our data request, Ms. Garner interrupted, Let me stop you right there.  That data is confidential, she claimed.  Our initially pleasant discussion then turned tense, as I read from passages of the EEOC’s website describing aggregate EEO-1 data as “publicly available.” Later that day, we tendered our initial FOIA request for raw, aggregate EEO-1 data from 1966 (or as early as practicable) to 1998, specifically rebutting the reasons Ms. Garner initially gave for perfunctorily denying it over the phone.  Ms. Garner, we correctly sensed, had switched into “No Mode,” an officious reluctance to serve the public that I observed firsthand among numerous career EEOC personnel during my brief EEOC service (1997-2000).  Sure enough, that SAME day, Ms. Garner’s administrative assistant summarily denied it because our FOIA request listed only an electronic, not physical, address to which to produce the requested electronic data.   No Mode.

Several weeks (and the FOIA deadline) passed.  During this time period, we proposed several FREE options for the electronic transfer of the requested data, without response.  Eventually, after the EEOC’s delinquency hit the three-week mark, I contacted Ms. Garner again by telephone.  Ms. Garner answered, and expressed surprise that I’d not heard from her subordinate, Tracy Smalls, about our FOIA request.  Ms. Garner stated that Ms. Smalls had recommended denying it because the EEOC had made the same information publicly available in its 2011 Report, Indicators over Time.  Another spirited discussion ensued about the difference between DATA and the INTERPRETATION OF DATA, and the many data-gaps in the 2011 Indicators over Time report.  Out of sheer frustration, I probably even blurted out that our FOIA request derived, in part, from the manipulative manner in which Indicators over Time reported EEO-1 data.  At this historic milestone (Title VII’s 50th anniversary on July 2, 2014), I pleaded, EEO researchers and advocates must have access to this data—data exclusively in the EEOC’s possession—to measure our progress and tinker with initiatives that may better advance the march toward EEO.  Apparently unpersuaded, the EEOC issued a written Determination denying our FOIA request based on the Indicators over Time report shortly thereafter.  No Mode again.

FOIA requires requesting parties to first file an administrative appeal before initiating any litigation in U.S. District Court.  To that end, we immediately launched an administrative appeal of this Determination, making clear that we wanted the data, not the fight.  Still, over the next several weeks, the EEOC’s FOIA bureaucracy sent several conflicting letters by email and snail mail that created confusion about whether our FOIA request was in appellate status or was still awaiting a Determination.   During this January, 2014 period, EEOC Commissioner Chai Feldblum also got involved, curiously noting that as a Commissioner, there was probably not a lot she could do, but that she is following our battle.

Then, on January 22, 2014, Ms. Garner issued another Determination with a new way to deny our request.  No Mode again, but with a twist.   According to this Determination, the EEOC has no legal obligation under the Electronic Freedom of Information Amendments Act of 1996 to provide electronic data prior to 1996.   True enough.  For the years 1996 and 1997, however, Ms. Garner determined that EEO Legal Solutions had requested this data for a “commercial purpose” and accordingly, must pay approximately $12K to $15K for EEOC personnel to “digitize” EEO-1 data into electronic, researchable format.

EEO Legal Solutions filed yet another administrative appeal.  The EEOC’s demand for upwards of $15K so that EEOC personnel can make public data electronically available, we argued, amounts to per se evidence that the EEOC has NOT complied with the 1996 electronic amendments to FOIA.  We also pointed out that the conduct of the EEOC’s FOIA personnel violated the letter and spirit of President Obama’s 2009 mandate to federal agencies to err in favor of disclosure, as well as the “Presumption of Openness” expressed in Attorney General Eric Holder’s March, 2009 directives to federal agencies.  We challenged the EEOC to justify its finding that we requested this EEO-1 data for commercial purposes, and referenced other non-attorney academic researchers who have, anecdotally, also tried in vain to wrest this important public information from the EEOC.  And, well, because not all the solutions at EEO Legal Solutions are legal, we threatened to launch a broad-based “Demand the Data” campaign on social media.

And, for all intents and purposes, it worked.  In its recent Appellate Determination, the EEOC agreed to PUBLISH on its website electronic EEO-1 data for the years 1996 and 1997 by May 1, 2014 without charge and “as resources allow,” to begin the process of converting pre-1996 data into electronic, researchable format.  According to the Appellate Determination, the EEOC now “recognize[s] the public interest in having the pre-1996 data available in electronic format.”  For civil rights, affirmative action, and equal employment opportunity geeks (like me), gaining access to more EEO-1 data opens up a world of research possibilities—e.g., to continue measuring how far we’ve come in the march toward EEO, to examine what enforcement initiatives WORK to equalize opportunity at all organizational levels, and to make workplace policy recommendations based on real DATA.

Holding the EEOC to its Publication Promises

Throughout this FOIA odyssey, we reinforced that we wanted the DATA, not the fight, and we got the data.  The FIGHT, however, would have enabled us to obtain a court order that imposes actual timetables on the EEOC for the publication of this EEO-1 data.  By conceding our appeal, the EEOC has made it impracticable, unwise, and largely unnecessary for us to file a FOIA lawsuit in U.S. District Court, the next step in the FOIA enforcement process.  A federal judge would rightfully put teethmarks in my backside for seeking judicial intervention when the EEOC has now agreed to produce more electronic data than the 1996 FOIA amendments technically require.  Unfortunately, without the threat of a lawsuit, we may actually lack LEGAL “teeth” to enforce the EEOC’s data-publication promises.

But, not all “teeth” are LEGAL either.  Through this blog, your interest, and our Twitter updates at #EEOData, we aim to hold the EEOC accountable for delivering on its commitments to publish all EEO-1 data on its website.  Without sharing news about our FOIA fight and micro-victory, no one would have even known about the EEOC’s decision to make more raw, EEO-1 data available for research, and the six months of wrangling it took to get there.  In fact, getting the EEOC to produce this publicly available EEO-1 database—i.e., a database in which the EEOC recognizes a “public interest”—theoretically cost about $20K in attorneys’ fees, grappling with one meritless Determination after another.

Please stay tuned for updates.  We will continue to monitor the EEOC’s website to determine whether the EEOC has kept its promises.  We are also counting on YOU to increase awareness of this powerful database, the struggle to get it, and its many potential, important uses.

 Merrily S. Archer, Esq., M.S.W.,  April 9, 2014

Jumpstarting the Stalled March toward Equal Employment Opportunity

Part I: Measuring What Matters at Title VII’s 50th Anniversary

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Title VII of the Civil Rights Act of 1964 (“Title VII”) will turn 50 on July 2, 2014.  Over the past year, we have already observed the 50th anniversary of Dr. Martin Luther King’s March on Washington for Jobs and Freedom, as well as the assassination of John F. Kennedy, significant historic events that prompted Title VII’s passage.  In his famous “I Have a Dream” speech in August, 1963, Dr. King entrusted our generation with the important task of keeping the march toward equal employment opportunity  moving forward and developing new, innovative ways to deliver on Title VII’s promises.

We’re failing, not only these civil rights trailblazers, but also the kids marching behind us.

Employer Money:  A Poor Proxy for Progress

In passing Title VII, Congress created the U.S. Equal Employment Opportunity Commission (EEOC) to eliminate workplace discrimination “through informal efforts of conference, conciliation and persuasion.”  Nearly 25 years after its passage, trial/employment lawyers urged Congress to amend Title VII to allow for jury trials, compensatory/punitive damages, and automatic attorneys’ fees awards.  They insisted that if Congress made it worth it (financially) to prosecute discrimination matters in court, they– as mini-deputized Attorneys General–would help an underfunded EEOC end discrimination and by logical extension, foster equal employment opportunity for Title VII’s beneficiaries. To learn more about CRA 1991’s brief legislative history, click here.

Since adopting CRA 1991’s “gladiator” enforcement model of Title VII, a tremendous amount of money has changed hands between employers, Employment Practice Liability (EPL) insurance carriers, trial lawyers, defense attorneys, and employees who raise allegations of workplace discrimination, harassment or retaliation (collectively, “discrimination”).  In fact, for at least the past two fiscal years, the EEOC has measured its efficacy by the amount of money it has collected from employers to resolve discrimination allegations: in both FY2012 and in FY2013, the EEOC has characterized its historic collections from employers–$365.4m and $372.1m, respectively—as evidence of “enforcing the law more effectively.”

But does the amount of money collected from employers really measure our progress toward eradicating discrimination and promoting EEO?

Of course not, and the EEOC knows better.  First, a recent survey of employers regarding common statements that EEOC mediators make in its “fabulously successful” ADR Program shows that mediators emphasize cost-of-defense, not charge merits, when encouraging employers to pay more money to resolve discrimination charges. EEOC mediators even threaten [disingenuously] EEOC enforcement action (e.g., cause determinations, systemic investigations, and prosecutions) to ratchet up employer monetary payouts.  Accordingly, the EEOC is well aware that cost-of-defense considerations, more than charge merit, now drive employers’ settlement deliberations.  In fact, the EEOC exploits that state of affairs so that it can later equate its efficacy with the amount of money it has “secured” on behalf of “victims.”

Second, because of the proliferation of EPL insurance following CRA 1991, employers and EPL carriers now treat ostensibly intentional discrimination claims like any other unavoidable, insured business risk.  Based on business (i.e., cost-of-defense) considerations alone, EPL carriers routinely pony up $25K to $50K in settlement proceeds, just to dodge suffocating defense costs.  Without EPL insurance, most employers can no longer afford to fight even when they’re right given the non-recoverable nature of defense fees.  By design, EPL insurance took the sting out of the stick of CRA 1991’s enhanced remedies and amplified risks.  Now, money changes hands in an automatic cycle of employers, EPL carriers, defense attorneys, trial lawyers, and then lastly discrimination claimants. The amount of money changing hands, however, makes a poor proxy for progress toward equal employment opportunity.

More Meaningful Measurements

Ultimately, a candid assessment of how far we have come at this historic, 50-year milestone begins with measuring what matters.  In evaluating the efficacy of any intervention to address a measurable social problem like inequitable employment opportunity, we start by visualizing success, as Dr. King did in his landmark “I Have a Dream” speech in August, 1963.  Once fulfilled, what does the dream of equal employment opportunity look like? Title VII’s architects and proponents certainly never dreamed that employer monetary payouts would one day measure our progress.  Instead, they likely dreamed about (a) the advancement of minorities/women toward top jobs; (b) comparable unemployment rates among racial groups; (c) improved perceptions of racial equality/opportunity in the workplace; and (d) maybe even EEO leadership among other industrialized nations, to name only a few desired outcomes.  We welcome your additions to this list; please join the conversation.

Looking for progress through this analytic lens, the march toward equal employment opportunity has decelerated for most of Title VII’s intended beneficiaries; African-Americans have actually lost ground in recent years.

Private Sector Progress of Women/Minorities toward Attaining Official/Manager Jobs

EEO Legal Solutions recently teamed up with Dan Kuang, PhD of Biddle Consulting Group, LLC in Folsom, California to analyze publicly available EEO-1 data from 1998-2012.  The EEOC requires all employers with 100 or more employees to provide an annual “EEO-1” report regarding the gender, racial, and ethnic composition of their workforces, resulting in a large database of granular employment data across industries.  Our analysis measured the pace and trajectory of women, Latinos, Asians, and African-Americans toward achieving top jobs across industries—i.e., Official/Manager positions in EEO-1 speak.  How far have women/minorities come in reaching the top?

Here’s what we discovered:

Despite earlier gains, women have not made significant strides toward greater representation in the Official/Manager ranks over the past decade; since 1998, the percentage of women holding these top jobs has hovered around 8%, graphically depicting a long flat line. Our findings comport with those reported by Catalyst.org: women make up nearly half of the workforce, but less than 10% actually reach the top. Women of color have fared particularly poorly in achieving management jobs.

Our findings regarding “Minorities”, however, reveal just why we cannot logically or legitimately lump everyone together in a single “Minority” group.  Although the pace appears [too] slow, Latinos have made progress toward achieving Official/Manager positions, a slight upward trajectory that we find encouraging.   Equally encouraging, Asian Americans, a classification that includes people of Asian and Middle Eastern descent, have significantly narrowed the gap with Whites in attaining Official/Manager positions, showing a steep increase since 2002.  African-Americans have lost ground since 2008, however, and have fallen behind Latinos, in their march toward inclusion at the top.  Given the historic election of President Barack Obama, and the appointment of Jacqueline Berrien, a former NAACP attorney, as Chair of the EEOC, this finding startled us, and deserves further analysis.

Improved Opportunity for African-Americans in the Federal Workforce

In a 2013 report, the EEOC has openly acknowledged that despite its greater control over federal sector discrimination issues, African-Americans still face significant obstacles in obtaining employment and advancing within the federal personnel system.

Comparable Rates of Unemployment Among Racial Groups

According to a U.S. Department of Labor, Bureau of Labor Statistics employment report issued on March 7, 2014, unemployment remains highest among African-Americans, with a sharp spike in 2010.  Latinos follow in a distant second, but Whites now outrank Asian Americans in terms of overall unemployment rates.  The burdens of unemployment, and of economic downturn, are not evenly shared, still hitting African-Americans the hardest.

Improved Perceptions of Workplace Fairness

The election of President Obama initially infused everyone with the hope that racial barriers (and maybe even gender, sexual orientation, and disability barriers) were starting to crumble.  According to a recent Gallup poll, however, a majority of African-Americans still feel disadvantaged compared to Whites in obtaining employment.  Notably, African-Americans’ confidence in equal employment opportunity has waned since 1995, shortly after the implementation on CRA 1991.  Further, the EEOC continues to take in nearly 100,000 new charges of discrimination every year, which suggests that increasing numbers of employees perceive their workplaces as discriminatory.

International EEO Leadership among Modern Societies and Economies

The U.S. is ranked at 69th in the world in terms of women’s representation in national legislatures or parliaments (tied with Turkmenistan) out 188 direct election countries (as of October 31, 2011), down from 57th in November 2004.  The U.S. lags behind Israel, Canada, and even South Africa in the number of female CEO’s, and behind many European nations in the number of women holding seats on boards of directors.  In fact, the U.S. has fewer female Board chairs  than Turkey, South Africa, and the Philippines.

Title VII’s golden anniversary provides a golden opportunity to assess whether our methods have worked to promote equal employment opportunity.  Given foreseeable market responses to CRA 1991, particularly the proliferation of EPL insurance among employers, this privatized litigation enforcement model no longer works, by itself or at an acceptable pace, to fulfill Title VII’s promises.  At one historical point in the march, the notion that the EEOC and “gladiator” trial/employment lawyers could reform the American workplace initially resonated with me and made me believe in a victim/villain paradigm of employment disputes that, I quickly discovered while working at the EEOC, bears little resemblance to reality.  With 20 years of data to draw on, however, we must now accept that with CRA 1991, Congress entrusted the march toward equal employment opportunity to trial lawyers, and trial lawyers have done exactly what trial lawyers do–namely, find a way to profit from the problem without actually solving it.

Please stay tuned for Part II where we will address specific non-litigation based policy recommendations to jumpstart our march toward equal employment opportunity.

Merrily S. Archer, Esq., M.S.W.

March 12, 2014

Has Private Litigation Advanced the March Toward Equal Employment Opportunity (EEO)

Politics Masquerading as Workplace Policy

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Every election year, members of my political party clamor to rebrand themselves as “Pro Business Democrats.”  Only Cheri Jahn (D-Arvada), however, can legitimately lay claim to this important middle ground, where sound public policy trumps partisan politics.  Bucking party lockstep, Cheri Jahn voted against 2013’s HB-1136, which takes effect on January 1, 2015 and dramatically changes the litigation landscape for Colorado’s employers.

Self-defeating Policy: Duping Stakeholders or Just Dumb?

On February 17, 2014, Colorado Senate Democrats issued a press release announcing the defeat of an obviously half-assed Republican effort to repeal HB-1136 that, with the notable exception of Cheri Jahn, passed along party lines last year.  According to Senate President Morgan Carroll, one of HB-1136’s primary sponsors, “Colorado was the 43rd state to enact a law to protect all workers.  Americans have been fighting for this since the 1960s . . .”   Rachel Martinez of the pro-employee lobby “9 to 5” also claimed that without HB-1136, victims of atrocious, overt sexual harassment perpetrated by small employers “had no access to recourse” and that with HB-1136, women like her will now have “access to justice.”

Not exactly.  Actually, federal laws (e.g., Title VII, ADA, ADEA, EPA) and their Colorado counterparts in the Colorado Anti-Discrimination Act (“CADA”) have long outlawed workplace harassment, retaliation and discrimination based on race, gender, religion, national origin, age, and disability.   Whereas Title VII covers employers with 15+ employees, the CADA protects employees of employers with less than 15 employees.  Though virtually identical, Title VII has historically offered distinct advantages to employee-side lawyers—namely, the compensatory and punitive damages and automatic attorneys’ fee awards available under the Civil Rights Act of 1991 (“CRA 1991”).  Because of the comparatively paltry economic damages available under CADA, alleged victims like Rachel Martinez had a tough time finding employee-side lawyers (“PELA/CTLA attorneys”) to vindicate their workplace rights.  Simply put, for these so-called civil rights gladiators, the low monetary recoveries available under the CADA hardly made their standard contingent fee arrangements profitable.

In her public comments last year, Ms. Carroll insisted that Colorado law must replicate the federal scheme (i.e., CRA 1991) for employers with 15+ employees, and must “close the gap” to provide greater remedies to “victims” of employers with 14 and fewer employees.  Echoing the same arguments advanced by national PELA/CTLA organizations for CRA 1991 over twenty years ago, see infra, Ms. Carroll claimed that if CADA’s remedial scheme made it worth it for PELA/CTLA attorneys to champion discrimination/harassment cases involving small employers, victims like Rachel Martinez could more easily find an attorney to prosecute her claims.  Notably, Ms. Carroll and Representative Joe Salazar, HB-1136’s primary proponents in the Senate and House, respectively, are both PELA/CTLA attorneys who exclusively represent employees in workplace disputes.

In signing HB-1136 into law, however, Governor Hickenlooper expressly commented that the caps on compensatory and punitive damages negotiated into this bill (e.g., $10K for 1-4 employees; $25K for 5-14 employees) will protect small businesses:  most PELA/CTLA lawyers take discrimination/harassment cases on a contingent fee, he correctly observed, such that the very low damage caps will make smaller employer discrimination/harassment matters unattractive to PELA/CTLA attorneys. Thus, in ostensibly trying to encourage PELA/CTLA attorneys to prosecute EEO cases for victims of small employers, HB-1136’s scheme actually makes it less likely that PELA/CTLA attorneys will pursue them.  After all, given the low damages caps, PELA/NELA attorneys like Morgan Carroll and Joe Salazar would have no more financial or moral incentive to help victims like Rachel Martinez than before HB-1136’s passage.

We were duped . . . or these Democrats stink at crafting legislation to effectuate their ostensible public policy purposes.  In fact, the results of HB-1136 speak volumes about the underlying intent.  HB-1136 was never about helping small employer victims like Rachel Martinez.  On the contrary, HB-1136 was always about switching EEO enforcement forums from federal court, where knowledgeable federal judges routinely dismiss non-meritorious discrimination/harassment matters before trial, to Colorado state court, where overwhelmed judges unfamiliar with 50 years of federal employment law allow even the dumbest discrimination matters to reach, or careen darn close to, juries.  Perhaps for that reason, HB-1136’s proponents actually proposed the low caps applicable to small employers, but refused to negotiate (or lower) the damages caps applicable to Colorado employers with 15+ employees, which mirrors existing federal law (i.e., CRA 1991).   In fact, HB-1136’s final draft contains a provision instructing Colorado state judges to rely on over 50 years of federal EEO law very well known to Colorado’s federal bench.

As passed, HB-1136 gives PELA/CTLA attorneys the best of both worlds: the ability to file discrimination/harassment lawsuits in historically employee-friendly jurisdictions like Denver, Boulder, and Adams counties, while fully benefiting from the same damages and LAW available in the federal EEO enforcement system.

The Great Divide between Rhetoric and Reality

Difficult to Prove . . . EASY to Allege

At the House Judiciary Hearing for HB-1136 on February 14, 2013, attorneys representing PELA and CTLA testified about how difficult discrimination cases are to prove. Morgan Carroll even postulated that Colorado employers will not likely encounter frivolous discrimination litigation arising out of everyday personnel decisions because actual discrimination is the “rare exception;” Governor Hickenlooper actually characterized the difficulty proving intentional discrimination or harassment as a “safeguard” for employers! Indeed, the federal U.S. Equal Employment Opportunity Commission (EEOC) issues “reasonable cause” determinations to believe discrimination/harassment has occurred in less than 4% of all charges, a percentage that has steadily decreased over the past five years. Likewise, the EEOC issues “no reasonable cause” determinations in nearly 2/3 (66%) of all charges filed, as does CCRD in all but approximately 5% of charges.

Although discrimination is difficult to prove, it is extremely EASY to allege.  And under HB-1136, employers start losing money as soon as the allegation is made.  HB-1136 mimics CRA 1991’s attorneys’ fees provisions, which require employers to pay the attorneys’ fees of a prevailing employee as a matter of course.  Accordingly, under this scheme, PELA/CTLA attorneys can recover BOTH (a) 33%-40% of the judgment as a contingent fee; AND (b) hourly attorneys’ fees based on an exaggerated rate and an inflated hourly time estimate, a real windfall.  Employers, by contrast, can recover their substantial defense investment only upon a showing that the lawsuit was patently frivolous or prosecuted in bad faith, a finding Colorado judges virtually never make (even when they should).   In the federal EEO enforcement system upon which HB-1136 is modeled, $700K in attorneys’ fees to the plaintiff’s lawyer, based on a $27K judgment, have become commonplace.  Meanwhile, the employer must not bear this incredible expense, but also the weight of its own non-recoverable defense fees, which typically exceed $100K for litigation.  Check out these Biglaw cost-of-defense estimates here.

Employers’ Cost of Defense Conundrum: A Cost-Prohibitive Fight to Prove Themselves Right

Cost-of-defense now drives employers’ settlement deliberations more than any other factor.  In the federal enforcement system that HB-1136 replicates, employers instantly walk into a cost-of-defense conversation as soon as the charge of discrimination is made, regardless of wrong-doing.  EEO Legal Solutions’ recent survey of employers’ experience in the EEOC mediation process demonstrates that these federal mediators regularly use cost-of-defense in “encouraging” employers to settle.  More troubling, our survey also shows that EEOC mediators regularly threaten EEOC enforcement activity, including prosecution, to ratchet up employers’ cost-of-defense monetary offers.  Thus, not only is it common knowledge within Colorado’s employment bar that employers, more often than not, settle out of cost-of-defense concerns, our study shows that this kind of “shakedown” has become an institutionalized tool to exact employer payouts.   Adding insult to injury, for the past several years, the EEOC has characterized its historic collections from employers, $372.1m in FY2013, as “enforcing the law more effectively.”

Déjà Vu All Over Again

The arguments advanced by PELA/CTLA, bar associations, and employee advocacy groups in favor of HB-1136 in 2013 bore a striking, and disturbing, resemblance to those articulated over 25 years ago in passing CRA 1991. Nearing the 25-year mark since passage of Title VII, these groups urged Congress to modify Title VII’s remedial scheme to allow for jury trials, compensatory and punitive damages, and recovery of attorneys’ fees.  They claimed that if Congress sweetened the pot to make it more profitable to prosecute employers for EEO violations, they, as “gladiators” and “mini Attorneys’ General”, would advance the cause for equal employment opportunity and help an underfunded EEOC deliver on Title VII’s promises.  By ratcheting up the damages against employers, victims of discrimination, they maintained, would have meaningful remedies to punish employers for bad behavior and to serve as an example to others of the importance of EEO compliance.  For more reading about the CRA 1991’s legislative history, click here.

Since CRA 1991: Measuring What Matters

As noted above, the EEOC boldly characterizes its historic collections from employers as evidence of “enforcing the [EEO] laws more effectively.”  Nevertheless, despite 20+ years of measurable data since CRA 1991 (HB-1136’s federal counterpart), neither HB-1136’s proponents nor opponents questioned whether this privatized civil litigation enforcement scheme even WORKED to promote greater workplace equal employment opportunity.  If we look at more meaningful evaluative metrics of our progress, the march toward equal employment opportunity has stalled.

As mere examples, the EEOC’s own EEO-1 data from 1998 to 2012 shows that women and Latinos have not made significant strides toward greater representation in Official/Manager jobs across industries; despite earlier gains, their progress has flat-lined in recent years.  Unfortunately, African-Americans have lost ground toward achieving these tops jobs since 2008, a downward trajectory that should cause obvious concern among policymakers; women of color have fared particularly poorly in achieving management jobs.  Further, the EEOC has openly acknowledged that despite its greater control over federal sector discrimination issues, its processes and procedures have yielded little progress for the federal African-American workforce.  A recent Gallup poll revealed that African-Americans feel as disadvantaged in obtaining desired employment as they did in 1963.  According to research by Catalyst.org, pay inequality based on gender, race, and ethnicity continues to plague our workplaces.  The U.S. lags behind numerous other modern economies (e.g., Norway, the UK, and even South Africa) in including women on Boards of Directors.

CRA 1991’s privatized civil litigation enforcement model has not proven effective at delivering greater equal employment opportunity for Title VII’s stakeholders, although a substantial amount of money has changed hands between employers, insurance carriers, and lawyers. Money changing hands, however, is no substitute for real EEO change.

The Market’s Foreseeable Response to CRA 1991: EPLI and the California Problem

After CRA 1991, the market responded in foreseeable ways—namely, the proliferation of Employment Practices Liability Insurance coverage (EPLI) for employers and of HR consulting practices like that of Senator Linda Newell, another leading HB-1136 proponent.  By design, EPLI takes the sting out of the stick of CRA 1991’s enhanced remedies, thereby allowing employers to treat discrimination matters like any other insured business risk (e.g., slip-n-fall, workers’ comp claim, car crash).  Employers now regard discrimination/harassment claims as an unavoidable cost of doing business, a sentiment that makes real workplace rehabilitation impossible.

In response to HB-1136, Colorado employers will also seek necessary protection by purchasing EPLI.  In the California EEO enforcement model that Colorado now copies, however, EPLI insurance has become increasingly un-affordable for small to mid-sized employers.  Colorado employers should expect the same, particularly steep increases in their EPLI premiums once HB-1136 takes effect on January 1, 2015.

It’s About the Money, Money, Money . . .

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If HB-1136’s proponents cared as much about civil rights and equal employment opportunity as they do the money that this enforcement model makes for them, they would surely share our concerns about its efficacy as we near Title VII’s 50th anniversary in July, 2014.   Given the intensely ad hominem and overly simplistic tenor of last year’s passage of HB-1136, however, optimism seems ill-advised. In the “victim/villain” dichotomy perpetuated by PELA/CTLA lawyers for the benefit of PELA/CTLA lawyers, rhetoric about victims, fighting for civil rights, a passion for justice, and doing “God’s work” often just masks ego and greed in the most Machiavellian manner.

HB-1136’s primary cheerleader, Senate President Morgan Carroll, is an attorney with Denver personal injury giant, Bachus & Schanker. Following HB-1136’s passage in May, 2013, Bachus & Schanker announced the expansion of its employee-rights practice by merging with longtime PELA/CTLA attorney Elwyn Schaefer. According to Darin Schanker, Bachus & Schanker founding partner, expanding their personal injury practice into employment law is simply “logical,” and with the addition of Mr. Schaefer, his firm looks forward “to benefiting from the high energy and outstanding results his firm is known for” (i.e., money, again).

The House’s primary sponsor in the House, PELA/CTLA attorney Joe Salazar, also stands to make more money prosecuting employers.  Likewise, Senator Linda Newell, who owns an HR consulting firm, should also profit from HB-1136 by cautioning/counseling Colorado’s employers about the increased EEO litigation risks that, ironically, she herself created!  Come to think of it, HB-1136 could allow me, a longtime and visible EEO litigator, to churn cost-of-defense payouts like a personal injury settlement mill too! Whether legislation benefits me, however, does not measure its value as public policy, an ethic I’d always assumed my fellow Democrats shared.

Elevating Lawyers over Employers

With an overbroad brush, HB-1136’s proponents claimed that “Colorado was the 43rd state to enact a law to protect all workers.  Americans have been fighting for this since the 1960s . . .”, as though Coloradans were backwards, racist hater hillbillies.   This misleading statement, however, smacks of the false “victim/villain” paradigm created by PELA/CTLA attorneys for the benefit of PELA/CTLA attorneys—i.e., if you oppose this legislation for sound business and public policy reasons, you must be a backwards, racist hater hillbilly.

This false dichotomy, however, prevented really SMART people among Democratic legislators (maybe even Governor Hickenlooper himself) from addressing the real downstream problems that HB-1136 poses.  In fact, HB-1136 renders Colorado one of the most employer-punitive states in the Rocky Mountain region.  According to legal research prepared by Biglaw employment boutique Littler Mendelson, the majority of states (29) do not permit recovery of punitive damages, as does HB-1136.  Even our neighboring states (e.g., New Mexico, Kansas, Wyoming, Utah), with which Colorado competes to attract business, do not allow punitive damages against employers.  Likewise, HB-1136 places Colorado in the minority of states that allow employees to recover compensatory and punitive damages, AND unlimited attorneys’ fees.

In enacting HB-1136, Colorado’s Democrats have steered us towards the California EEO enforcement model, which has hardly proven successful for anyone except lawyers.  Because damages available under California law are more generous than Title VII and CRA 1991, PELA/CTLA attorneys now bypass the federal EEO enforcement system entirely, opting to pursue their claims in state agencies and state courts—namely, the intended effect of HB-1136.  No doubt, this shift from federal to state EEO enforcement has foisted additional administrative and judicial burdens on a state teetering on the verge of bankruptcy for years.  The litigation climate in Southern California, for example, has become so bad that EPLI carriers are now pulling out of the market or are forced to charge exorbitant premiums that many small to mid-sized employers cannot afford.  Learn more here.  These conditions may help explain why large California businesses with lots of personnel needs migrate to the Rocky Mountain region in the first place.

Fostering Equal Employment Opportunity through Colorado Innovation and Collaboration

Coloradans are innovators.  Instead of enacting an EEO enforcement model that has proven ineffective, that burdens employers, that reduces our regional competitiveness, that treats employers as villains, and that legislates the exception, let Colorado become a beacon of innovation toward achieving meaningful EEO progress in our workplaces.  This July, 2014 marks the 50th anniversary of Title VII of the Civil Rights Act of 1964, an ideal moment to measure how far we have come toward inclusive, fair workplaces.  HB-1136’s model simply has not worked to transform our workplaces, which compels our generation to experiment with new ways to deliver on Title VII’s promises.  By partnering with business and investing in inclusiveness initiatives throughout our state, Colorado has an opportunity to become a positive, national example in the continuing march toward equal employment opportunity over the next 50 years.  The path forward requires more collaboration, less litigation.

Merrily Archer, Esq., M.S.W. (once politically Blue, but now a pleasant shade of Purple)

Why Hire PEOPLE? Rethinking Workplace Policy in the Age of Technology

shutterstock_101985643On Friday, January 31, 2014, President Obama called on CEO’s of the nation’s largest employers (McDonald’s, Morgan Stanley, and Wal-Mart) to hire long-term unemployed  and “credit challenged” people.  Given the employment litigation climate, however, why SHOULD they?

Drones, Krones and Apps

The “Octocopters” that Amazon CEO Jeff Bezos unveiled on CBS’ 60 Minutes in December of 2013, dazzled the daylights out of me too.  According to Bezos, these drones (called Amazon “Prime Air”) will fly packages from warehouse to doorstep within 30 minutes.  “Prime Air vehicles will be as normal as seeing mail trucks on the road today,” Amazon said in a statement, and could be available four to five years, pending further safety testing and FAA approvals.  In response, the Senate scheduled a hearing in 2014 to address the “economic benefits and threats to airspace.” 

Economic benefits for whom, I wondered?  Unlike mail trucks, unmanned drones are, well, UNMANNED, another human job lost to technology.  In fact, it looks like Amazon, the world’s largest online retailer, has figured out other clever ways to take PEOPLE out of the operational equation.  In Amazon’s massive distribution centers around the country, finding people among the busy bustling KRONES (i.e., high tech robots developed by Kiva Robotics Systems) is pretty tough.  Kiva robots do most of the heavy lifting and thinking, eliminating the risks of hiring PEOPLE: workplace injuries, lawsuits, human error, unreliability and unpredictability, to name a few.  By eliminating these risks, however, Amazon has simultaneously eliminated livelihoods of PEOPLE (i.e., warehouse workers and delivery drivers).   To say the least, therefore, the economic benefits of Amazon’s drones and Krones are not evenly distributed.

Just as righteous indignation started to surge, I realized that I, as a small business owner, have done exactly the same thing—i.e., used technology to avoid hiring PEOPLE.  At Biglaw, I had a secretary to handle dictation and court filings, a paralegal to manage documents, a receptionist to answer phones, in addition to an entourage of billing clerks, marketing coordinators, and miscellaneous “office support” (e.g., coffee and copy makers).  In setting up EEO Legal Solutions in May, 2012, I deliberately invested in technology (and in myself to master it) to slash the unnecessary “people overhead” that contributes to unreasonable rates.  Now, Dragon software handles my dictation (more accurately, actually); Adobe Acrobat makes document management and production a snap; Citrix’s online products, tablets, and smartphones foster fast communication and access; and other entrepreneurs in billing, IT, and marketing fill in any gaps . . . at a fraction of the cost and risk.  Worse, I openly criticize Biglaw for increasing rates when the actual cost of practicing law has decreased, again, due to technology. 

In an era when “there’s an App for that,” why hire PEOPLE?  That same question apparently occurred to Professors Erik Brynjolfsson and Andrew McAfee of the prestigious MIT Sloan School of Management years ago in their article How Technology is Destroying Jobs.  According to these researchers, advances in computer technology (e.g., robotics, automated translation) account for the sluggish employment growth over the past 10 to 15 years.  More troubling, these MIT academics forecast dismal job prospects as employers increasingly adopt new technologies “not only in manufacturing, clerical, and retail work but [also] in professions such as law, financial services, education, and medicine.”  In fact, Professors Brynjolfsson and McAfee argue that technology is replacing jobs faster than it is creating them, which explains why the past 10 years have seen economic growth, with no parallel increase in job creation. 

The Problem with People

No problem ever got less complicated by adding more people ranks high on my list of “inalienable truths” to emerge from years as an EEOC attorney, defense litigator, social worker, and more recently, a small business owner.  Although academics disagree about the core cause of technological job displacement, few of them have addressed the downstream legal risks that employers face when hiring PEOPLE for any job. 

For employers, hiring people means complying with a morass of federal and state laws governing every aspect of the employment relationship.  For employers, hiring people means submitting to the enforcement authority of overlapping federal and state administrative agencies.  For employers, hiring people means risking later litigation arising out of basic personnel decisions (e.g., firing, hiring, operating while accommodating) under numerous regulatory schemes.   And, these schemes now come fully loaded with a private civil litigation remedy, enabling plaintiffs’ lawyers to exact cost-of-defense settlements for alleged violations.  More here.   For employers, these realities make the choice between technology and people pretty easy:

after all, technology may fail me, but it will never sue me. 

Pushing Employers Away from People: Bad Enforcement Policy

Our current, public policy approaches to enforcing workplace rights—e.g., privatized civil litigation–drive employers away from using PEOPLE for the job.  Now, before proceeding further, I do NOT advocate workplace deregulation.  History provides numerous examples of the horrors of child labor, unsafe working conditions, picket line violence, blatant discrimination, unlivable wages, inhumane working hours, and other forms of human exploitation.  Each regulatory effort evolved to right a specific workplace wrong and to raise the “federal floor” of economic decency and fairness, ensuring relatively uniform conditions, standards, and rights. 

Yet, our mechanisms for enforcing these uniform conditions, standards and rights (i.e., a privatized litigation scheme that rewards lawyers at the expense of employers) pushes employers away from hiring PEOPLE at all, particularly in the equal employment opportunity (EEO) arena.  These days, employers find themselves stuck between the increasing likelihood of EEO disputes and the increasing, if not suffocating, cost of defending against them.  More here.  Worse, the U.S. Equal Employment Opportunity Commission (EEOC) admittedly has used its regulatory enforcement power to carve out new protected classes, to expand its authority, and to substitute its judgment for employers’ regarding workplace operations and minimally effective job performance, which exposes employers to even more private litigation. 

Paradoxically, in an EEOC prosecution I defended a few years ago under the Americans with Disabilities Act (ADA), EEOC v. Picture People, the EEOC literally took misanthropic positions that cut against using PEOPLE to interact with other PEOPLE in a retail or restaurant setting . . . all in the name of vindicating one person’s ADA rights.   In fact, the EEOC attempted to order a national retailer to jettison its “strong verbal [oral] communication skills” requirement to accommodate a profoundly deaf person without any oral communication skills at all (e.g., lip reading, minimal speech).  In substituting its judgment for this retail employers’, the EEOC insisted that this highly interactive customer service and sales position could be adequately performed via text message, gesturing, writing notes, and pointing to available product; its own expert, however, conceded that these methods are “not as effective” as speech in a sales/customer service position.  Thus, instead of verbal exchanges characteristic of most retail and restaurant positions, the EEOC advocated using technology (e.g., text messages, computers/tablets) so that customers can place their own orders, confirm their own contact information, look at written material in lieu of a sales dialog, and interact with staff.   If the EEOC is right, why hire PEOPLE, even for the most people-centric positions? 

People matter, and deserve workplaces that are safe and fair.  In our efforts to protect people, our enforcement system dissuades employers from hiring them at all.   Because technology enables employers to avoid hiring PEOPLE to accomplish unskilled, repetitive and/or administrative tasks, we must re-think how we approach workplace policy, focusing on collaborating with employers, not making it easier to sue them.  Punitive approaches like the privatized civil litigation enforcement model of CRA 1991 have not proven effective at ensuring equal employment opportunity, although a substantial amount of money has changed hands since its enactment.   Given the overwhelming burdens of this enforcement scheme, technology will continue to provide a cheaper, more reliable, and less litigious alternative to hiring humans, thereby equalizing only a lack of employment opportunity for EVERYONE. 

 Merrily Archer, Esq., M.S.W., February 4, 2014

               

 

More Brainstorming, Less Blamestorming

Does EEOC General Counsel David Lopez Really Belong “Under the Bus”?

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On January 27, 2014, EEOC Commissioner Constance Barker delivered the keynote at ACI’s Employment Practices Liability Insurance seminar before an audience teeming with defense lawyers and EPL carriers.  According to the Seyfarth Shaw’s description of her speech, Commissioner Barker acknowledged that the Obama Administration has used its executive, regulatory powers to make new law, given that the gridlock in Congress makes worker-friendly legislation difficult to pass.  She forecasted that because of “too much delegation of litigation decision-making” in the hands of EEOC General Counsel David Lopez, employers can expect more aggressive, extensive litigation in 2014.  She suggested that EEOC Commissioners should enjoy a greater role in deciding which cases the EEOC pursues in litigation, as though the GC (and the EEOC Legal Units) bear the fault and shame exclusively for the EEOC’s recent litigation debacles.  She then suggested that the EEOC’s Strategic Enforcement Program (SEP) will govern the regulatory efforts of EEOC personnel in the Field.  And finally, she predicted that litigation (and specifically, systemic litigation) will take precedence over discrimination prevention efforts.

Commissioner Barker’s comments reveal one of the EEOC’s historic institutional dysfunctions—i.e., the tension between EEOC Commissioners and the GC, all of whom are presidentially appointed upon Senate confirmation.  As a former EEOC Trial Attorney (1997-2000), I interpret her comments as an effort to deflect blame away from herself, Enforcement, and other Commissioners for the EEOC’s recent litigation failures in ADA and systemic matters.  But, these EEOC litigation failures simply reflect the iceberg’s tip of its bureaucratic defects—e.g., a legalish “enforcement” agenda, a warped measurement of efficacy, and an exploitative mediation and conciliation process that the Commissioners theoretically control on the Enforcement side of the EEOC house.  Remember that a long tortured Enforcement investigation necessarily preceded these litigation failures, which likely cost the employer MORE than the USDC litigation itself.

In last two Performance and Accountability Reports (PAR), the EEOC has equated its historic collections from employers as “enforcing the law more effectively.”  Employer MONEY has become the new “metric that matters” at the EEOC, and now drives the behavior of its personnel in the ADR (mediation) and Enforcement (investigation/conciliation) units.  Even though the Commissioners publicly peddle the SEP, its PAR’s still define success by how much money the EEOC has exacted from employers on behalf of “victims”, regardless of charge merit.  As our EEOC Mediation Study revealed, because money means “success”, EEOC personnel routinely exploit employers’ cost-of-defense conundrum, even threatening the use of EEOC enforcement powers to increase settlement payouts to employees and their attorneys.  Money changing hands, however, is no substitute for real EEO change.  

Particularly in this regard, the EEOC’s Enforcement and ADR Units inflict far more financial pain on employers than the Legal Unit in USDC litigation.  In FY2013, for example, the EEOC again collected a record amount of money, $371.1 million, from employers, broken down in Figure 1, below.  Collections resulting from verdicts and settlements in litigation made up only a very small part of the EEOC’s overall take in FY2013; by contrast, over 80% of dollars collected from employers came from Enforcement (i.e., typically during “conciliation,” after a finding of Reasonable Cause) and/or Mediation.

Figure 1

EEOC Money FY2013

More concerning, the EEOC’s administrative processes (e.g., Enforcement and ADR) occur under the carefully guarded cloak of confidentiality and “government deliberative process privilege,” which permits the EEOC strenuously to resist any judicial inquiry into its conduct.  Under the Freedom of Information Act (FOIA), the EEOC mechanically refuses to release charge information even to Respondent-Employers, unless and until a lawsuit already makes the allegations a matter of public record; even then, EEOC FOIA personnel redact any information that could invite scrutiny or criticism as “government deliberative process,” such as the basis for the Determination, the quality of the investigation, and the sufficiency of its conciliation efforts.  In peeking behind this EEOC’s iron curtain of confidentiality and “deliberative process,” however, our EEOC Mediation Study showed that EEOC personnel in the field seemed far more motivated by the “money metric” than some SEP cooked up by EEOC Commissioners in an ivory tower called “Headquarters.”  In reality, EEOC-initiated litigation marks the first opportunity to shine a spotlight on an otherwise confidential regulatory process, such that the EEOC’s litigation failures in systemic and ADA matters are just the first visible symptoms of more pervasive problems.   

Deflecting Instead of Doing

EEOC Barker then seemingly complains that because the EEOC’s prosecutorial discretion rests with the GC and not the Commissioners, litigation will continue to take precedence over EEOC prevention and compliance efforts.  This statement struck a dissonant (okay, disingenuous) chord: if the EEOC Commissioners sincerely bemoaned the likely increase in litigation, one would hope that they would take reasonable steps to mitigate its impact by investing MORE in EEOC compliance and prevention efforts.  After all, the Enforcement (i.e., Commissioners) side of the EEOC controls prevention programs and outreach. 

In various public outlets, we have suggested some cheap AND easy compliance programs that the EEOC COULD launch if it truly valued problem prevention–e.g., webinars, a YouTube training library, affordable Excel programming, publication of wins and losses so that employers have an ACCURATE view of the enforcement landscape.  These programs would fall squarely within the budgetary and organizational province of EEOC Commissioners, not its GC.  Given that the EEOC Commissioners have emphasized employer money as the measure of its success, however, it seems reasonable to question their commitment helping employers prevent EEO violations. Prevent works, but apparently, it does not PAY.  Likewise, ensuring that the EEOC maintains the credibility of its allegedly impartial ADR program also lies at the feet of EEOC Commissioners, not its GC.  And, defining meaningful measurements of success toward EEO (i.e., not employer payouts) is an inherently policy-related EEOC Commissioner function.  In this historic year, therefore, we would urge the EEOC’s Commissioners to stop deflecting blame for EEOC litigation failures, to recommit to improving EEOC’s problems directly within their control, and to start investing in collaborative efforts with employers to fulfill Title VII’s objectives.  After all, CRA 1991’s litigation-based enforcement approach has not worked well to secure equal employment opportunity anyway. 

Justice for Employers in Colorado?

Profiting from Politics

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“Our passion is justice” is the catchphrase of TV-hawking personal injury firm Bachus & Schanker.  Last month, Bachus & Schanker announced its expansion into another burgeoning “passion” apart from car crashes and slip-n-falls: employment law.  According to Darin Schanker, Bachus & Schanker founding partner, expanding their personal injury practice into employment law is simply “logical,” and with the addition of longtime Denver plaintiff’s employment lawyer Elwyn Schaefer, his firm looks forward “to benefiting from the high energy and outstanding results his firm is known for” (i.e., money).  More here, http://goo.gl/dOj1YC.

While Bachus & Schanker looks forward to profiting from its new employment law practice, Colorado employers should start asking serious questions . . . quickly, particularly BEFORE the Colorado General Assembly opens its new legislative session on January 8, 2014.

On October 8, 2013, Senate Democrats elected Bachus & Schanker attorney Morgan Carroll as their President, a key leadership and public policy position in Colorado’s legislature.   According to Bachus & Schanker’s website, Ms. Carroll represents employees in employment litigation.  She is a member of the Colorado Trial Attorneys Association (CTLA) and the Plaintiff Employment Lawyers’ Association (PELA), and is committed to “leveling the playing field for ordinary people to exercise their rights.”  http://www.coloradolaw.net/html/carroll.html.

Last year as a Senate Democrat, Ms. Carroll co-sponsored HB-1136, which significantly ratchets up the damages employees can recover by accusing their employers of discrimination, harassment and retaliation (collectively, “discrimination”).  More here, http://goo.gl/2D61yr.  Under HB-1136, which takes effect on January 1, 2015, employees alleging discrimination under Colorado law can recover more money from employers as compensatory (i.e., emotional pain, embarrassment) and punitive damages. Since 1991, these same remedies (e.g., compensatory, punitive damages) have been available under federal law against employers with 15 or more employees, covering the vast majority of the American workforce.   Nevertheless, in passing Title VII nearly 50 years ago, and enhancing its remedial scheme with the Civil Rights Act of 1991 (CRA 1991), Congress sought to insulate small employers from the staggering expense of civil litigation and exempted them as a matter of public policy.

In her public comments, Ms. Carroll insisted that Colorado law must replicate the federal scheme for employers with 15+ employees, and must “close the gap” to provide greater remedies to “victims” of employers with 14 and fewer employees (i.e., small employers). More here, http://goo.gl/sZW5Yi.   Yet ironically, in signing HB-1136 into law, Governor Hickenlooper expressly noted that the low caps on compensatory/punitive damages for small employers (e.g., $10K for 1-4 employees, $25K for 5-15 employees) will make discrimination matters involving them unattractive to personal injury attorneys using contingent fees, thereby raising legitimate questions about whether HB-1136 was about helping “victims” of small employers in the first place.   In fact, the results of HB-1136 reveal its underlying goals: to switch the litigation forum from federal courts, where judges routinely dismiss meritless employment claims on summary judgment, to Colorado state courts, where beleaguered judges grappling with huge dockets and unfamiliar subject matter (e.g., EEO law) allow most matters to careen toward jury trials until the bitter end.

Nevertheless, according to Ms. Carroll, HB-1136 will not hurt Colorado’s employers because proof of discrimination often requires a “smoking gun” that very few plaintiffs have. Indeed, the EEOC and the Colorado Civil Rights Division (CCRD) find discrimination in less than 5% of allegations.  Ms. Carroll and other HB-1136 proponents even argued only “bad actor” employers that commit or tolerate discrimination have something to lose under HB-1136; “innocent” employers can avail themselves of a good faith defense to avoid punitive damages.  Ms. Carroll publicly acknowledged that actual discrimination is rare, and exceedingly difficult to prove.

Exploiting Employers’ Cost-of-Defense Conundrum

Although discrimination is exceedingly DIFFICULT to PROVE, it is extremely EASY to ALLEGE.   And under HB-1136, employers start losing money and accumulating risk as soon as the allegation is made.  HB-1136 mimics CRA 1991’s attorneys’ fees provisions, which require employers to pay the attorneys’ fees of a prevailing employee as a matter of course.  Accordingly, under this scheme, plaintiffs’ attorneys such as Bachus & Schanker can recover BOTH (a) 33%-40% of the judgment as a contingent fee; AND (b) hourly attorneys’ fees based on an exaggerated rate and an inflated hourly time estimate, a real windfall.  Employers, by contrast, can recover their substantial defense investment only upon a showing that the lawsuit was patently frivolous or prosecuted in bad faith, a finding Colorado judges virtually never make (even when they should).   In the federal EEO enforcement system upon which HB-1136 is modeled, $700K in attorneys’ fees to the plaintiff’s lawyer, based on a $27K judgment, have become commonplace. More here, http://goo.gl/3EoA1m.   Meanwhile, the employer must not only bear this incredible expense, but also the weight of its own non-recoverable defense fees, which typically exceed $100K for litigation.

As a litigator for “victims,” Ms. Carroll surely understands employers’ cost-of-defense conundrum.  In fact, anticipated cost-of-defense drives employers’ settlement deliberations more than any other factor, particularly charge merit.  For example, in EEO Legal Solutions’ recent survey of the EEOC’s mediation process, over 600 HR professionals, employment lawyers and small business owners reported that EEOC mediators HAMMER cost-of-defense (82.21%), and then exaggerate the risk of EEOC enforcement activity such as reasonable cause determinations (72.84%), systemic investigations (61.30%), and even EEOC prosecutions (68.99%), which would naturally prompt employers to pay MORE. Astonishingly, the EEOC later characterized its historic collections from employers in FY2013 ($372.1m) as evidence of “enforcing the law more effectively.” Check out our study for a little insight into what EEOC mediators are saying to employers behind closed doors, http://goo.gl/sR792n.

Thus, in the federal system that HB-1136 seeks to replicate, employers immediately walk into a cost-of-defense conversation, even when they have done nothing wrong whatsoever.  Given the highly inferential, “squishy” nature of discrimination disputes, the question is really never whether the employer did anything provably wrong, but rather, how much the employer is willing to pay to avoid the suffocating cost of proving itself right.  This reality enables plaintiff’s counsel to demand settlements of $50K to $75K, again, even when the employer’s legal liability is far from established.  This reality also enables plaintiffs’ firms like Bachus & Schanker to churn quick cost-of-defense settlements from employers and EPL carriers, without having to prove much of anything .   Employers are STUCK, as is our progress toward full equal employment opportunity under enforcement models like CRA 1991 and HB-1136.  More about that later; stay tuned.

Also in her public comments, Ms. Carroll claimed that in the 42 other states with an HB-1136 counterpart, employers have not gone out of business or suffered an uptick in discrimination litigation (um, not exactly; stay tuned).  Nevertheless, her firm, Bachus & Schanker just expanded its employment law practice by adding a well-known plaintiff’s warhorse and his associate, and looks forward to benefitting from his “outstanding results”?  In fact, during HB-1136’s deliberations, several legislators publicly commented on the apparent conflict of interest inherent in Ms. Carroll’s sponsorship of and avid advocacy for HB-1136, considering that HB-1136 would directly help her (as a plaintiff’s attorney) personally to recover more money from employers in discrimination disputes. http://goo.gl/ap37Md.  Perhaps for that reason, Bachus & Schanker’s crowing about its recent expansion into employment law seems incredibly brazen.

Now that Ms. Carroll has ascended to a leadership position in Colorado’s General Assembly, will she continue to advance a one-sided, if not personal agenda, or can employers expect justice in her public policy positions?  Time will fully tell, but employers need to start paying careful attention now or get ready to pay the consequences, as with HB-1136.

Merrily Archer, Esq., M.S.W., December 30, 2013

Addendum: some readers may commit what social-psychologists call “fundamental attribution error” by attributing these perspectives solely to political party status, pecuniary interest, or some latent racism/sexism/ageism/etc.  Actually, HB-1136 stands to benefit attorneys on both sides of the employment bar, like any other increased risk or regulation.  More fundamentally, I’ve been a registered Democrat for nearly 30 years, but now count myself among the growing legion of politically purple people who value intelligent public policy over party obedience.  I earned my M.S.W. from Washington University in St. Louis on the Roger Baldwin Fellowship, while also earning my law degree.  I’ve looked at issues of workplace discrimination and inclusiveness as an EEOC Trial Attorney, Biglaw defense attorney for 12 years, social worker, and more recently, as a small business owner and researcher.  I believe religiously in the value and necessity of equal employment opportunity, but have concluded, based on these various perspectives and research, that private litigation schemes like CRA 1991 and HB-1136 have done little to further it.   Now, with that out of the way, let’s have a meaningful policy debate without all the victim/villain rhetoric.

 

Seeking LGBTQ HR Practitioner to Co-present EEO Legal Solutions’ June, 2014 Webinar

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As many of you already know, EEO Legal Solutions offers one free, often-but-not-always HRCI-accredited monthly webinar to help prevent everyday workplace “people problems” from becoming legal ones.   In recognition of LGBTQ Awareness Month in June, our webinar on June 18, 2014 will focus on workplace LGBTQ issues, including discrimination/harassment prevention, FMLA compliance, and benefit administration.  This webinar is also timely for another reason:  next year, on January 1, 2015, Colorado’s HB-1136 will take effect, exposing Colorado employers to the same remedies, risks and costs of equal employment opportunity (EEO) claims of LGBTQ employees as any other protected group (e.g., race, gender, religion).   We want to help employers get ready and get it right, before violations occur.

 We also hope that this webinar will break down communication barriers, sensitize employers to common concerns, and foster greater understanding of how employers can support LGBTQ employees.  To accomplish that goal, we would like to partner with a LGBTQ HR practitioner who would be willing to share anecdotes, insights and tips to strengthen HR’s awareness of LGBTQ issues.  The time investment would be minimal, but the value to both the HR and LGBTQ communities could be great.  If you’re interested in participating, please reach out to Merrily Archer, EEO Legal Solutions at archerm@eeolegalsolutions.com.