Charges of discrimination filed with the Equal Employment Opportunity Commission (“EEOC”) (and similar charges with state and local human relations agencies) are a critical first step in an employee’s discrimination claim. For employers, the importance of responding strategically to such charges cannot be understated. This article will cover what to expect, and will provide a few key strategic pointers for employers confronted with these types of claims.
THE BEGINNING OF THE PROCESS
When an employee files a charge, the EEOC first evaluates the charge to determine whether it is a charge that it wants to litigate itself. The EEOC litigates approximately one tenth of one percent of all charges that are filed. Because the EEOC has limited resources and because private attorneys handle the majority of claims, the EEOC only takes cases that it believes it can use as a vehicle to impact the priorities set forth in its strategic enforcement plan—in other words, cases that the EEOC believes to have a particular social import.
If the EEOC elects not to pursue the charge, it will often be referred to the EEOC’s mediation unit. If both parties consent to mediation, a mediation will be scheduled where a neutral mediator will attempt to facilitate a settlement. Settlements at this stage tend to be far lower than settlements reached after a lawsuit is filed, and EEOC mediation is therefore often an opportunity to resolve a case for a low price and before investing substantial time and resources in a defense. Depending on the circumstances, EEOC mediation can be a worthwhile use of the employer’s time and resources.
THE INVESTIGATION AND POSITION STATEMENT
If either party does not consent to mediation, or if a mediation occurs and is not successful, the charge will be forwarded to the EEOC’s investigative unit and assigned to an investigator. Because of the EEOC’s backlog, it may take several months for the case to be assigned to an investigator. The investigator has a great degree of discretion to decide how to investigate the charge and the amount of time and resources to allocate. Their goal is to make a determination as to whether there is probable cause of discrimination, which in practice is a very high standard. In most cases, investigators find no probable cause. Typically, the investigative unit starts the investigation by requesting a written position statement from the employer that explains why the employer contends that there was no discrimination, harassment, or retaliation. The employee may then be asked to submit a written rebuttal to the position statement.
Keep in mind that the position statement will be seen by the employee and his or her attorney and may be used in court should the case proceed to litigation. Position statements must be carefully written and persuasive, and should be carefully reviewed to ensure that they do not contain any admissions or other statements that could be used by the employee later as evidence of pretext. They are your first opportunity to articulate why the employee doesn’t have a case.
Usually, the investigation ends at this point, but the investigator may request further information or interview witnesses. Keep in mind that EEOC investigators are federal investigators who carry badges, and they can interview your employees without your knowledge or consent. However, your employees are not required to talk to them. Your employees also have legal protection against retaliation for their cooperation with the investigation, and you should be careful to avoid any appearance that you are attempting to influence their cooperation with the investigation in any manner.
The investigator may also attempt to facilitate a settlement, particularly where the employee has a marginal claim that can be settled for nuisance value. Again, this may be an opportunity to settle a case for less than what it would be settled for after a lawsuit is filed. If the case does not settle, the EEOC will most likely issue a “right to sue letter,” which states that the investigation closed without a finding and that the employee has ninety days to bring suit. The employee may also request a right to sue letter after the case has been pending with the EEOC for 180 days (60 days for age discrimination claims). After a right-to-sue letter has been issued, the employer or counsel should monitor court dockets to see whether a claim is filed within the 90 day time period.
STRATEGIES AND RECOMMENDATIONS
Employers are not required to retain outside counsel in order to communicate with the EEOC and to submit a position statement, and many employers forego retaining counsel upon receipt of a charge. However, because an EEOC charge is often the first step in a dispute that can continue into state or federal court, employers should strongly consider retaining counsel with experience handling employment disputes, particularly if they do not have the assistance of in-house attorneys with this experience. Outside counsel can provide valuable advice about whether the dispute should be settled early, or help strategically determine the best arguments to put forth in a position statement. This is particularly important in cases involving higher-earning employees, or fact-sensitive issues such as disability accommodations.
Upon receipt of a charge, employers should also check their insurance policies to determine whether the defense of the charge may be covered by Employment Practices Liability Insurance (or “EPLI”). If there is potential coverage, you may be required to provide your insurance carrier with notice of the charge within a certain amount of time in order to obtain the carrier’s assistance with the defense.
Finally, while the majority of EEOC charges are filed by terminated employees, they are occasionally filed by employees who are still working for the company. Keep in mind that if you terminate the employee, harass them, or take even minor adverse actions against them, they will likely have a strong retaliation claim even if their underlying claim for which they brought the EEOC charge was marginal. An EEOC charge filed by a current employee creates a very volatile situation, and employers should exercise caution when considering any employment actions or changes regarding the complaining employee. For this same reason, employers should avoid disclosing the pending EEOC charge to a current employee’s direct supervisor. This is another scenario where the advice of experienced counsel can be invaluable.