Latest EEOC’s report highlights rise in systemic suit filings
The U.S. Equal Employment Opportunity Commission (EEOC) recently published its 2012 Performance and Accountability Report. The Report foreshadows the EEOC’s strategic objectives for 2013. The EEEOC’s proposed strategic plan has established three objectives: (1) combating employment discrimination through strategic law enforcement; (2) preventing employment discrimination through education and outreach; and (3) delivering excellent and consistent service through a skilled and diverse workforce and effective systems.
The Report recognizes the EEOC’s record recovery of $365.4 million through the administrative process in 2012, an increase of $700,000 from 2011.
One of the most striking numbers in the Report is the drop in the number of lawsuits filed in 2012. The EEOC only filed 122 lawsuits in 2012 as compared to 261 lawsuits in 2011. Although the EEOC has characterized its efforts as “enforcing the law more effectively” in furtherance of its strategic objectives, these numbers also illustrate a response to growing criticism by federal courts over the EEOC’s litigation tactics.
The decrease in overall lawsuits by the EEOC demonstrates the increasing focus on pursuing systemic discrimination lawsuits. Systemic cases are defined as a pattern, practice, policy, or class cases where the alleged discrimination has a broad impact on an industry, occupation, business, or geographic area.
According to the EEOC, by the end of 2012, systemic suits accounted for approximately 20% of all of its active suits. Under the new Strategic Plan, the EEOC anticipates that systemic filings will account for 22% to 24% of all pending lawsuits by FY 2016. Over the last year, 10 systemic discrimination lawsuits have been filed. The EEOC also resolved 240 systemic investigations, which resulted in monetary damages of $36.2 million for 3,813 individuals; 21 of these cases will result in multiple million dollar recoveries.
In light of the numbers released, employers still face pending charges or complaints and should be conscious of the EEOC’s focus on resolving its inventory of charges and litigation. When the EEOC files suit, it has signaled that it intends to do so more aggressively and more thoughtfully. The EEOC’s actions during 2012 clearly demonstrate it is focused on large systemic discrimination complaints that could result in large monetary recoveries. Employers should expect the EEOC to direct more time and money to pursue these large-scale cases and to be looking for more opportunities to file even more of these cases in the coming year.
The EEOC’s continued persistence in filing suits against employers will increase a company’s risk of having to defend itself against a suit brought by an employee and/or the EEOC. Companies should make sure that Employment Practices Liability is included in their Management Liability Insurance coverage. Insurers underwriting Employment Practices Liability will be under pressure to tighten terms and conditions on their policies to mitigate increased claims expected from the EEOC complaints and suits.
About the Author
Mark Stiles is an Assistant Vice President at William Gallagher Associates and a member of the ExecutiveRisk Practice. He works with private and nonprofit organizations to assist them and their executives with protection for their exposures to Directors’ & Officers’ Liability, Employment Practices Liability, Fiduciary Liability, Crime, Kidnap & Ransom and Extortion.