Legal compliance is vitally important to organizations today, and "getting it right" from an employment law perspective is a business imperative.
At the same time, managing workplace issues has never been more complex. The law of the workplace has become increasingly decentralized, with a mosaic of intersecting federal, state and local law requirements. In turn, this creates more compliance challenges relative to employee protections and employer obligations.
That challenge is increasingly more important and the stakes are unequivocally higher, in light of the new enforcement philosophy of the U.S. Equal Employment Opportunity Commission, the federal agency empowered to enforce anti-discrimination laws, which has become more of an activist in a Democratic administration.
The EEOC's strategic enforcement and litigation plan, announced in April 2006, centered on the government bringing more systemic discrimination cases, often with broad impact and affecting large numbers of workers.
Under the Obama administration, however, the EEOC is now armed with a bigger budget and increased staffing levels. This means that systemic discrimination issues are front and center for enforcement litigation.
In the view of the EEOC, systemic discrimination is illegal behavior impacting two or more employees.
As discriminators tend to treat members of a protected group in an adverse fashion--as opposed to treating just one person that way--the Commission believes that discrimination against one person often is a prelude to discrimination against others.
In other words, the EEOC views a single charge as "smoke" that may reveal a smoldering "fire" involving systematic treatment of multiple protected group employees in an illegal fashion.
However, this does not mean the EEOC is preserving its enforcement dollars to go after large employers only. Smaller and midsize employers are often investigated on the theory that their compliance programs are less sophisticated than industry leaders, or that a lack of a human resources department translates into more discrimination problems.
In practice, the EEOC also views smaller and midsize employers as "low-hanging fruit" for its litigation enforcement program, for such companies are at a disadvantage in defending litigation brought by the U.S. government.
The EEOC's recent enforcement activity manifests new areas of risk for employers.
The Commission is currently focused on wide-scale investigations of hiring discrimination allegations--and more particularly, the use of background screening procedures that adversely impact racial minorities.
As a result, the EEOC is using single-claimant "failure-to-hire" charges as the basis for investigating the entire history of an employer's hiring statistics for African-American applicants and the denial of employment opportunities due to arrest records and criminal convictions.
Costs of responding to nationwide data requests for hiring statistics are significant, and the EEOC has ongoing investigations into the hiring practices of thousands of companies.
The EEOC's prosecution of pattern-or-practice lawsuits is now an agency-wide priority. As a result, the EEOC is focusing more and more of its investigations and resources on systemic discrimination issues.
Many of the high-level investigations started in 2006 mushroomed into the institution of EEOC pattern-or-practice lawsuits in 2008 and 2009. Employers are likely to face even more such claims in 2010.
In terms of risk management, what can companies do?
Among many compliance strategies, the most vital is never underestimating the stakes at issue when a current or ex-employee files an administrative charge with the EEOC.
The charge presents a special risk--it should not be handled in an ill-prepared fashion or without sound legal counseling.
Careful consideration of the theory of the charge, the marshalling of proof that the company handled the personnel decisions appropriately, and aggressive but practical litigation stances vis-?-vis the EEOC determine success or failure.
Each charge poses the prospect of an expansion of exposure--a legal claim by one person transformed into an exposure stemming from a systemic allegation that the employer discriminates against many protected group employees.
In the end, employees need to recognize that the EEOC is a governmental enforcement agency. Its mission is to enforce the rights of employees to be free from discrimination.
The EEOC does not take its obligations lightly, and in this new age, nor should employers in discharging their legal compliance responsibilities in the workplace.
Gerald L. Maatman Jr. is a partner with Seyfarth Shaw LLP in Chicago.
