EEOC Proposes Rule to Revise Voluntary Dispute Resolution Process

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The Equal Employment Opportunity Commission (EEOC) published a proposed rule on Oct. 9 that would update its conciliation program and encourage employers to voluntarily resolve employment discrimination charges.

The EEOC is responsible for enforcing federal employment laws that make it illegal for employers to discriminate against job applicants and employees based on certain characteristics, such as age, disability, national origin, race, religion and sex.

The EEOC can sue an employer on behalf of a worker for discrimination under Title VII of the Civil Rights Act of 1964 and certain other federal laws, but the agency must try to resolve the issue through "informal methods of conference, conciliation and persuasion."

Congress authorized the EEOC to file a lawsuit against an employer only when the agency is unable to secure an acceptable voluntary agreement. However, conciliation fails sometimes "as a result of mistrust between the parties," said EEOC Chair Janet Dhillon. Therefore, she said, the agency is proposing a regulation that will "create greater accountability and transparency in the conciliation process" and "bridge the communication gap that [she believes] has interfered with the success of [the agency's] conciliation program." The agency would accomplish this, in part, by providing more information to employers.  

"The changes are a critical read for all employers and practitioners alike, as the amendments aim to improve transparency and the effectiveness of the EEOC's previously opaque and undefined conciliation procedures," according to law firm Seyfarth Shaw.

What Is Conciliation?

The EEOC is statutorily required to try to resolve employment discrimination claims through informal means. When the agency finds that there is "reasonable cause" to believe that a worker was discriminated against, the EEOC will ask the worker and the employer to participate in discussions to attempt to voluntarily resolve the issue outside of court.

[Need help with legal questions? Check out the new SHRM LegalNetwork.]

During this conciliation process, an EEOC investigator will work with the employee (or job applicant) and the employer to determine an appropriate remedy. "We encourage you to take advantage of this final opportunity to resolve the charge prior to EEOC considering the matter for litigation," the agency says on its website.

The EEOC lists the following advantages of participating in the conciliation process:

  • Conciliation is a voluntary process.
  • Conciliation discussions are negotiations, and the parties may present counteroffers.
  • Conciliation offers the parties a final opportunity to resolve the charge informally after an investigation has been conducted but before the EEOC decides whether to file a lawsuit on behalf of the employee.
  • Conciliation agreements can eliminate the uncertainty, cost and animosity associated with litigation.

In a 2015 decision, Mach Mining, LLC v. EEOC, the U.S. Supreme Court provided clarity about the conciliation steps the EEOC is required to take. The EEOC must inform the employer about the specific discrimination allegations in a notice that describes what the employer has allegedly done to violate the law and which employees have been affected. "And the EEOC must try to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice," wrote Justice Elena Kagan. The court said a sworn affidavit from the EEOC stating that it has performed its obligations will likely show that the agency has met the conciliation requirement.

Proposed Updates

The EEOC has improved its success rate for resolving charges through voluntary procedures over the past eight years, but it is still only successful about half the time.  

The agency can only litigate a few hundred cases a year, explained Andrew Maunz, legal counsel for the EEOC. "That means failing to conciliate leaves thousands unable to receive any redress," he noted. 

Many employers opt not to participate in the conciliation process, which Maunz said indicated that employers may not find the process worthwhile.

The EEOC already initiated two six-month pilot programs in July—one for its mediation program and one for its conciliation process—to make mediation more widely available and to bring about more uniformity in conciliations.

Under the proposed rule, the EEOC would have to provide employers with the following information:

  • A summary of the facts and nonprivileged information that the agency relied on in finding reasonable cause for a worker's claim.
  • A summary of the EEOC's legal basis for finding reasonable cause.
  • The calculations and methods used to determine the relief the EEOC is seeking.
  • Whether the matter has been designated as a systemic, class or "pattern or practice" claim.

The EEOC also proposed allowing employers at least 14 calendar days to respond to the agency's initial conciliation proposal.

The goal is to encourage more cases to be resolved through conciliation and ensure the EEOC meets its obligations in the most effective manner, Maunz said.

EEOC Commissioner Charlotte Burrows noted that the conciliation process is important because it helps "resolve charges of discrimination on behalf of thousands of working men and women each year." However, she called the current proposal "deeply flawed."

"A quick settlement is not always a fair settlement," Burrows said. She also noted that the EEOC has limited resources. "By regulating burdensome new steps that the EEOC must take in every conciliation, the proposed guidelines invite litigation over whether the EEOC complied with these unnecessary rules," she said.

Opportunity to Comment

Employers, worker-advocacy groups and other interested members of the public will have until Nov. 9 to submit comments on the proposal. EEOC Commissioner Victoria Lipnic noted that the agency has "benefited greatly" from public comment in the past. "So I look forward to that being the case here as well."

The EEOC specifically said it would like input on whether the agency should specify that its disclosures must be done in writing or if it should also allow for oral disclosures.

If the proposed changes are ultimately adopted, Seyfarth Shaw said, "they would result in substantially more transparency in the conciliation process for employers and would create a more consistent process for employers negotiating conciliation terms with the commission."

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