With limited resources to fight all potential employment discrimination battles, the federal Equal Employment Opportunity Commission will shift its strategy from small individual cases to larger systemic issues–some across entire industries, an EEOC commissioner said here last week.

“Like all government agencies, EEOC has limited resources. We need to choose our targets carefully–especially in litigation,” said Commissioner Stuart Ishimaru, speaking in New York at the Employment Practices and Fiduciary Liability Symposium of the Professional Liability Underwriting Society.

“And I believe, from a law enforcement agency standpoint, we need to make sure that we get as broad and as big a bang for our buck as possible,” he added, expressing the belief that to change attitudes and deter bad employment practices, targets must be bigger than they've been in the past.

On April 4, the EEOC announced it had adopted the recommendations from an internal task force led by Commissioner Leslie Silverman that would make the fight against “systemic discrimination” an agencywide top priority.

In a press release announcing a strengthened “nationwide approach to investigating and litigating systemic cases,” the EEOC defined “systemic cases” as “pattern or practice, policy, and class cases where the alleged discrimination has broad impact on an industry, profession, company or geographic location.”

Explaining the announcement at the PLUS meeting last week, Mr. Ishimaru told insurers and brokers in attendance the EEOC is “going to be changing the way we do business.” He said that at a meeting in Washington a week earlier, during which the EEOC adopted recommendations from the task force's report (www.eeoc.gov/about eeoc/task_reports/systemic.html), the key question addressed was how the EEOC could “better work at…going after 'pattern-of-practice' cases–the bigger cases.”

An anxious defense lawyer in the audience asked what industries and big companies are on the EEOC's hit list.

“If our program was working as well as it should [in the past], I guess I could have answered that question,” Mr. Ishimaru said, noting that one component of the revitalized systemic enforcement program will involve having district offices pore over data to spot problems within industries in their regions–something they hadn't done in the past.

He said most employers are required to file an EEO-1 report with the EEOC that shows the race, gender and ethnic composition of their workforces, noting that the EEO-1 statistics could potentially be used to reveal problem employers and industries.

Paul Siegel, a partner with Jackson Lewis in Melville, N.Y., who also spoke at the PLUS session, suggested that a past initiative of the EEOC, known as “Youth At Work,” had the effect of targeting systemic problems within certain select industries.

While Mr. Ishimaru agreed that the initiative resulted in a “fair number of cases” in the fast food, retail and hospitality industries, the real thrust of “Youth At Work” was to educate young people about basic rights and responsibilities, he said.

During the session, the commissioner highlighted his own list of EEOC successes in dealing with systemic discrimination, including:

o A big case against Morgan Stanley over “glass-ceiling issues and problems that women in the highest levels were having in the banking industry.”

o A case against Abercombie & Fitch that “dealt with the chain's nationwide hiring practices that put people of color in the back room.”

o An older case against Mitsubishi in Illinois, “where there was rampant sexual harassment on the plant floor.”

Turning to the agency's shortcomings, Mr. Ishimaru said he had long been troubled by the fact that offices in some regions have “a dismal track record,” while others are very active in bringing cases.

“When I got to the commission [in 2003], for example, I thought we would have a fairly active program for bringing race cases in the South. With a large African-American population, you would just expect that,” said Mr. Ishimaru, who was a civil rights lawyer at the Department of Justice during the 1990s. He noted that you could count the number of race discrimination cases brought by EEOC's two major Southern offices “on one hand–actually on one finger.”

A fix, which is part of the new systemic enforcement initiative, will be to have better offices pair up with weaker ones, he said, explaining that the agency will “spread the expertise around” and operate more along the lines of a national law firm.

Mr. Ishimaru also said he hoped EEOC would score some major successes in the area of hiring discrimination cases–”a tough nut to crack” in the past–revealing a personal desire to have the commission explore the use of testers as decoys to uncover discriminatory practices.

“Matched testing” procedures are performed by having job applicants with similar r?sum?s but different races or ethnic backgrounds apply for the same jobs, he explained. “We are exploring ways [for] the agency [to] use testers directly or indirectly in enforcement,” he reported–suggesting, however, that politics might keep such efforts from getting off the ground.

“As one of two Democrats on the commission, I get one vote out of five, and Republicans control the body,” he noted. “But it's something that I have raised repeatedly and something that people ought to be thinking about,” he added, going on to suggest that insurers and brokers consider using “matched testing” procedures to uncover discriminatory hiring practices among clients and potential insureds.

Throwing out additional “proactive prevention tips” to brokers and insurers that would minimize the possibility of EEOC visits to their customers, he told them to use the type of data the EEOC collects in the EEO-1 forms to measure risks.

He also recommended that insurance professionals start looking at how clients deal with work-life balance issues for employees, suggesting flexible employers that create family friendly workplaces will be better able to retain good workers.

Questioned about the EEOC's jurisdiction over such issues, he said that because responsibility for children or aging parents is often placed on women, this can develop into a gender issue, or that complaints might arise when workers ask for flexibility to deal with such issues and flexibility is selectively applied.

Mr. Siegel noted that when supervisors grant favors to those workers they view as better workers, they open themselves up to Family Medical Leave Act complaints.

During the session, Mr. Siegel reviewed a number of trends he believes are significant for employment practices liability insurers. (See the accompanying “Troubling Trends” infographic.)

Compounding those headaches for employment practices liability insurers, he is troubled by the fact that an increasing number of plaintiffs' lawyers taking on employment cases are not typical employment lawyers, but instead may be personal injury lawyers getting too old to chase ambulances.

“The bottom line is you're finding more and more of these cases going deeper. They're getting crazier, they're getting litigated more…like some nasty divorce cases or med mal cases, because that's what these [lawyers] are used to,” he said.

Therefore, they're costlier to defend, he noted, adding that “nuttier” plaintiffs' lawyers for “nuttier plaintiffs” will get significantly more recoveries than “normal” lawyers because the “nuttier” ones “don't have a reasonable expectation for what the case is worth.”

At the EEOC, Mr. Ishimaru suggested that reasonability will prevail in the future.

As part of its reform efforts, EEOC has given its staff “clear direction that if an investigation is not going anywhere–if it does not show likelihood of success–then we will stop and should stop. We should not be grinding into the ground for the sake of going after someone.”

Describing some additional changes that will take place at the commission, he said EEOC has created an internal group of employees “to look at coordination of the whole–to make sure our resources aren't skewed in any one direction, such as just going after sexual harassment cases, or just going after race cases.”

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