Sometimes employment discrimination is blatant. Sometimes it is not. Sometimes it may be perceived, but it isn’t there. For some, employment discrimination may be an “I-know-it-when-I-see-it” kind of phenomenon. But, what happens when discrimination is occurring but a company doesn’t see it? And, what happens if, over time, employment discrimination becomes a part of the corporate culture?
For companies handling hundreds or even thousands of workforce accommodation requests on an annual basis, it can become a real challenge to rigorously assess and adequately address the needs of each individual case. However, it is worth the effort for companies to evaluate their hiring, training, retention and other human resource policies. Being hit with “Systemic Discrimination” charges can be expensive – as grocery store operator Supervalu discovered.
The EEOC’s Systemic Discrimination Agenda and Enforcement
The EEOC has made it no secret that it is concerned about workplace discrimination that has become “systemic”.[1] And, since, 2008, reported decisions involving allegations of systemic discrimination have been on the rise without a foreseeable horizon. Consequently, employers should consider evaluating hiring, training and lay-off policies to ensure that they do not become a target for an EEOC investigation of systemic discrimination.
The EEOC’s website defines Systemic Discrimination as follows:
Systemic discrimination involves a pattern or practice, policy, or class case where the alleged discrimination has a broad impact on an industry, profession, company or geographic area.
The EEOC encourages employers to prevent discrimination by taking a careful look at the practices they use to recruit, hire, promote, train and retain employees. The EEOC is expanding its efforts to partner with advocacy groups, state and federal agencies, employer groups, the plaintiffs’ bar and other organizations to identify and address discriminatory practices.
Examples of systemic practices include: discriminatory barriers in recruitment and hiring; discriminatorily restricted access to management trainee programs and to high level jobs; exclusion of qualified women from traditionally male dominated fields of work; disability discrimination such as unlawful pre-employment inquiries; age discrimination in reductions in force and retirement benefits; and compliance with customer preferences that result in discriminatory placement or assignments.
The EEOC has long recognized that a strong nationwide systemic program is critical to fulfilling its mission of eradicating discrimination in the workplace. For this reason, the systemic program is a top priority of the agency. The identification, investigation and litigation of systemic discrimination cases, along with efforts to educate employers and encourage prevention, are integral to the mission of the EEOC.[2]
When a person charges an employer with individual or systemic discrimination, the EEOC must investigate to determine whether there is reasonable cause to believe that the employer engaged in an unlawful employment practice.[3] The EEOC is permitted to issue subpoenas in connection with its investigation, 29 U.S.C. § 161, but the power is not unlimited.[4] [7] If the charge that the EEOC is investigating is valid and the subpoena seeks information relevant to the charge, the employer must comply with the subpoena.[5]
Once the EEOC presents a valid charge, it has the authority to access “any evidence of any person being investigated or proceeded against that relates to unlawful employment practices covered by [Title VII] and is relevant to the charge under investigation.”[6] The relevancy [11] requirement is “not especially constraining” and includes any evidence that “might cast light on the allegations.”[7]
A systemic discrimination case falls under section 707 of Title VII. A § 707 case cannot be initiated by an individual charge, and it cannot be filed as a civil suit by an individual.[8] A § 707 case is a “pattern or practice” case that challenges systemic, wide-spread discrimination by an employer.[9]
When alleging a system-wide pattern or practice claim, the EEOC must prove that discrimination is the employer’s “standard operating procedure[,] the regular rather than the unusual practice” and may rely at least in part on statistical evidence.[10] Although this may sound like a class action, it is not treated as one. Whether bringing a true pattern or practice claim under section 707 or a claim on behalf of a group of aggrieved individuals under section 706, the EEOC need not comply with Federal Rule of Civil Procedure 23 governing class actions.[11]
A Case Study and Warning
A dispute that may act as a warning, or harbinger of things to come for the corporate employer, is EEOC v. Supervalu, Jewel-Osco, and American Drug Stores, No. 09-cv-5637 (N.D. Ill.). In early 2011, the EEOC and Supervalu entered into a consent decree to resolve the EEOC’s claims that Jewel-Osco violated the Americans with Disabilities Act by maintaining a policy and practice of terminating employees with disabilities at the end of medical leaves of absence rather than bringing them back to work with reasonable accommodations. The $3.2 million consent decree created a fund for 110 individuals and required Supervalu to ensure that employees making accommodation decisions would be trained on ADA requirements and accommodations available to employees returning to the workplace.
At the time, the EEOC published on its website a comment from an EEOC attorney that “It is vital that employers understand that the primary goal of the ADA is to allow people with disabilities to be active and productive members of the work force,” “Sending them home, with reduced or no pay, and without the ability to advance, thwarts that purpose. I am concerned that some employers believe that keeping an employee who is able to work off the job and on a leave of absence is a reasonable accommodation relieving them of further obligations under the ADA. Such a belief could lead to costly mistakes.”[12]
Those costly mistakes reared their ugly head a year after entry of the consent decree. In a company with 1100 accommodation requests a year, complete compliance would arguably have been difficult. It quickly proved to be unattainable. And, in early 2012, the EEOC filed a motion for civil contempt against Supervalu for violations related to three individuals during the first reporting period and after engaging in dispute resolution for five months.[13]
Thereafter, the parties engaged in discovery related to the EEOC’s claims of violation and multiple evidentiary hearings. Then, in July 2014, the magistrate judge issues a 51-page report and recommendation.[14] The magistrate judge found that the three employees all asked to be returned to work after disability leave, they presented restrictions, but ultimately Jewel-Osco refused to allow them to return to work with or without reasonable accommodations. Moreover, the magistrate judge found that Jewel-Osco “disregarded its own interactive process guidelines, failed to even consider the myriad resources available (at no cost or at minimal cost) to assist it in identifying or fashioning reasonable accommodations for these employees, and failed to consider reassignment to alternative positions.”[15] Later, the magistrate judge stated “there is nothing in the record to suggest that the company meaningfully considered accommodations for these three employees.”[16]
As a result of its findings of violation of the Consent Decree, the magistrate judge recommended awarding the three individuals backpay, appointed a special master (to be paid for by Supervalu) to review accommodation decisions pursuant to the Consent Decree, extended the term of the Consent Decree another year, and awarded attorney fees and costs to the EEOC.[17]
Thus, in EEOC v. Supervalu, the systemic discrimination Consent Decree exposed Jewel-Osco to individual-by-individual examination of compliance with the Consent Decree. This exposure quickly revealed the importance of satisfying and meeting the terms of the Consent Decree in short order. And, this case counsels that when a company fails to do so, the ramifications can be costly in the form of sanctions, lost productivity, fees and other costs.
[1] See http://www.eeoc.gov/eeoc/plan/strategic_plan_12to16.cfm (last visited August 28, 2014).
[2] See http://www.eeoc.gov/eeoc/systemic/ (last visited August 27, 2014).
[4]EEOC v. Shell Oil Co., 466 U.S. 54, 65, 104 S. Ct. 1621, 80 L. Ed. 2d 41 (1984).
[5]Seeid. at 65, 68-73.
[7]Shell Oil, 466 U.S. at 68-69.
[8]The EEOC is not authorized to seek compensatory or punitive damages under § 707.
[9]EEOC v. Mitsubishi Motor Mfg. of Am., Inc., 990 F. Supp. 1059, 1084 (C.D. Ill. 1998).
[11]See Gen. Tel., 446 U.S. at 320, 327 & n.9; see also EEOC v. Goodyear Aerospace Corp., 813 F.2d 1539, 1543 (9th Cir. 1987). The word “class” has been used frequently and rather freely in the context of Title VII, but as the Mitsubishi Motor court recognized in dealing with a section 707 claim, “this is a pattern or practice action, not a class action. . . . [However,] use of the term ‘class’ for the group of individuals on whose behalf the EEOC is bringing this action is, for lack of a better term, an acceptable nomenclature for the group.” 990 F. Supp. at 1070 n.4, 1076 n.10.
[12] See http://www.eeoc.gov/eeoc/newsroom/release/1-5-11a.cfm (last visited August 27, 2014).
[13] See EEOC v. Supervalu, Jewel-Osco, and American Drug Stores, No. 09-cv-5637 Dkt. No. 229 (N.D. Ill.).
[14]See Id.
[15] Id.
[16] Id.
[17] Id.
