Recoveries

The EEOC recovered $665 million for employees, representing a 29.5% increase over Fiscal Year 2022. This figure includes the recovery of $440.5 million for private sector and state and local government workers and $202 million for federal employees. Recovery refers to amounts collected through litigation, mediation, conciliation, and settlement.

Litigation

The EEOC reported filing 143 new lawsuits in 2023, which constitutes an increase of more than 50% from the previous year. Specifically, the lawsuits included 86 suits on behalf of individuals, 32 non-systemic suits with multiple victims, and 25 systemic suits involving multiple victims or discriminatory policies. Through litigation, the EEOC obtained more than $22.6 million for 968 individuals while resolving 98 lawsuits and achieving favorable results in 91% of all federal district court resolutions. The breakdown of the recovery by claims is: $16.5 million for Title VII claims, $3.8 million for ADA claims, $1 million for multi-statute claims, $800,000 for ADEA claims, and $500,000 for Equal Pay Act claims.

Increased Demand

The statistics demonstrate an increase in demand for EEOC services. The EEOC received 81,055 new discrimination charges, 233,704 inquiries in field offices, more than 522,000 calls from the public through the agency contact center, and over 86,000 emails, representing respective increases of 10.3%, 6.9%, 10%, and 25% over Fiscal Year 2022. This increase signals a heightened awareness of the EEOC and corresponding likelihood of bringing a claim.

Priority Areas

The EEOC identified the following as priority areas - addressing systemic, preventing workplace harassment, advancing racial justice, preventing and remedying retaliation, advancing pay equity, advancing diversity, equity, inclusion, and accessibility (“DEIA”) in the workplace, and addressing the use of technology, including artificial intelligence, machine learning, and other automated systems in employment decisions. These priorities reflect many of the hot button topics in employment law.

PWFA

The PWFA addresses workers who face discrimination based on pregnancy, childbirth, or related medical conditions and was signed into law on December 29, 2022. As we previously reported, it requires covered employers to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions. The PWFA became effective June 27, 2023, and the EEOC began accepting charges arising from the PWFA on that date. As this change occurred towards the end of Fiscal Year 2023, it will be interesting to see the evolution of PWFA claims into the remainder of 2024.

Conclusion

Given the increases in charges, litigation, and demand for EEOC services, employers should continue to keep their guard up, particularly due to the increases in monetary recovery. With the upcoming presidential election, employers face the potential for the continuation of the EEOC’s aggressive agenda or a potential shift in a different direction. Below are some best practices for employers for the remainder of 2024:

• Continue to provide regular training and make sure internal complaint and investigation procedures and policies are properly followed.
• Review and update pregnancy accommodation policies to make sure they comply with the PWFA.
• Identify any potential risk areas and work with counsel to develop mitigation strategies.

The proposed guidance lays out in detail the legal standards applicable to harassment claims under the federal law and provides a variety of illustrative examples coupled with references to recent case law.

One of the most notable aspects of this guidance is the incorporation of the Supreme Court’s decision in Bostock v. Clayton County. In Bostock the Supreme Court ruled that Title VII’s protections extended to claims for discrimination on the basis of sexual orientation and gender identity. Although that case dealt with a discriminatory termination, and not harassment, in the proposed guidance, the EEOC has noted: “[t]he Supreme Court’s reasoning in the [Bostock] decision logically extends to claims of harassment.”

The proposed guidance unequivocally states that Title VII extends to claims for harassment on the basis of sexual orientation or gender identity, “including how that identity is expressed.” Beyond these overt protections for LGBTQ+ employees, the proposed guidance also expressly acknowledges pregnancy, childbirth, and “related medical conditions,” encompasses harassment claims based on a woman’s reproductive decisions, including those related to contraception and abortion.

The EEOC’s proposed guidance lays out a playbook for how employers can show that they have exercised “reasonable care” both to prevent and correct harassment by describing in detail features of effective anti-harassment policies, processes, and training.

But the guidance is not final just yet. It is anticipated that the guidance will be published in the Federal Register on Monday, October 2, and once published the draft guidance will be open for public comment for 30 days.

Although the guidance itself will not be legally binding, employers would be wise to review this lengthy document and understand myriad ways that employees can pursue harassment claims against employers. If anything, it is a reminder that the best defense to these kind of claims is working to foster a respectful workplace and maintaining effective policies to mitigate issues that may arise. If you have any questions concerning compliance of your business’s current harassment policies or procedures, please contact a member of Kelley Drye’s Labor and Employment team.

The Seventh Circuit has already held that Title VII does prohibit sexual orientation discrimination. There is also a pending en banc appeal of this issue in the Eleventh Circuit.

We will be monitoring this and other Second Circuit cases closely and will let you know as things develop.

Employers should take note of the following new EEOC developments:

Employers: Be Careful What You File with the EEOC

EEOC now will give the Charging Party the Employer Position Statement

The EEOC made an official announcement of a change in their charge-handling procedures, making ‘official’ a practice which we had seen the agency follow in the past, but which was apparently confined to certain offices or investigators. Now, after the employer position statement is submitted, the EEOC will provide a copy of same – along with exhibits and data – to the charging party and allow the charging party the opposing to ‘comment’ on it.

This would seem only fair, as why should the employee making the charge not get a chance to rebut what the employer has said about them, or in defense of the charge?

But is it? I would say this process is fair, if everyone is given the same opportunity.

The employer is not. When a charge is submitted, the charging party may submit ‘evidence’, documents or statements to support the charge. The employer or Respondent is not always given that evidence. We have at times had to ‘argue’ with the EEOC to obtain documents which are identified in the charge as ‘exhibits’.

Also, when the charging party submits their rebuttal to the position statement, is the employer shown that and given an opportunity to respond? NO. That rebuttal, according to the process unveiled by the EEOC, will now go unanswered as the employer will not be given a copy.

Adding to the unfairness of the process, the employer will not see the rebuttal until the investigation is over, and the EEOC has made its determination. Thus, the determination could be based on false, erroneous or even fabricated information from the charging party in that rebuttal – and no one will know that until it is too late.

• My (humble) suggestion to the EEOC – just level the playing field. If you are going to allow the charging party to see the Respondent’s position statement, then also allow the employer to also see what they have submitted in response.
• My suggestion to employers – be careful. Now that you know a charging party may be given your position statement and exhibits, be cautious about what goes in there. Just be careful, as you certainly will have no control over what happens to that information once the charging party (and their attorney) gets hold of it.
  • Avoid including names of other employees who may be ‘comparators’, unless absolutely necessary to the defense.
  • Avoid including any information which may be confidential to your business: customer names, business plans, marketing strategies, or information about the financial health of the business.
  • Avoid attaching affidavits or sworn statements to the position statement, as these may become ‘public’ and could end up in the hands of plaintiff’s counsel.
  • Avoid attaching exhibits which may reveal confidential information about your business or other employees. This would include things like addresses, phone numbers and other personal information of other employees or witnesses, which you will want to redact from anything turned over to the EEOC.
  • MAKE SURE THE POSITION STATEMENT IS FACTUALLY ACCURATE. This is not the time to ‘embellish’ the facts or to try to gloss over bad information. If you have good facts, present them in an accurate and objective manner. If there are ‘bad’ facts, present them too and explain to the agency why they should not affect the outcome of the investigation. It is always better to get out in front of bad facts and present them in the best light possible, rather than wait for the plaintiff to present them as he/she wants them to be portrayed.

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In a decision which may send red flags to employment agencies and staffing firms, the 7^th Circuit just upheld enforcement of a very broad EEOC subpoena issued to a staffing firm that was accused of discrimination. See, EEOC v. Aerotek. The decision also contains language about EEOC subpoena power in general which does not bode well for all employers.

Aerotek had been accused of age discrimination. According to the decision, in reviewing files the EEOC found multiple instances of allegedly discriminatory requests to the agency from clients, asking specifically for applicants only of a certain age (usually younger).

The EEOC issued a subpoena asking for names of all clients over 62 offices, and of all employees placed with those clients. The agency naturally objected, noting that this subpoena went far beyond the scope of the charge, would encompass over 22,000 clients, and also could damage its relationship with its clients. The district court ordered the subpoena enforced, and the 7^th Circuit agreed.

In affirming that the subpoena was enforceable, the court noted that the EEOC did not need to find a specific violation of the law in order to demand information via a subpoena. Indeed, it held that the EEOC could “investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” It even had the power to “investigate on suspicion that the ADEA is being violated, without the necessity of bringing a charge.” The EEOC could thus seek “access to virtually any material that might cast light on the allegations against the employer.”

This is not helpful language for any employer that is looking to fight an EEOC subpoena, but is certainly something that employers should be mindful of before undertaking such a fight.

What is the takeaway?

• All employers should be aware that, when dealing with the EEOC in an investigation, the powers of the agency are extremely broad. When possible, it is better to agree on the scope of information to be produced to the agency rather than take your chances and litigate the issue in court.
• Staffing agencies in particular should be mindful of their obligation not to discriminate. If a client makes a request for a “young” applicant, or a “pretty girl” or a “strong man”, etc., etc. – the agency should have a stated response that “we cannot honor that type of request”. That response should be put in writing and/or sent via email, if possible, so that there is a record that it was rejected. Of course, the ultimate proof will be who the agency refers for jobs, and it should also keep records showing that it makes a real effort to make sure that it refers applicants who are diverse, when those applicants meet the criteria for the position.

By filing these two new lawsuits in federal court, the EEOC intends to “solidify its commitment to ensuring that individuals are not discriminated against in workplaces because of their sexual orientation.” Some federal courts have already recognized that sexual orientation discrimination is covered under Title VII, and the EEOC believed “it is critical that all courts do so.” We expect this issue to continue to gain traction in the courts going forward and it is vital that employers stay up to date on these fast paced changes in federal law. The EEOC has published guidance for employers on this area, which you can find here.

As we previously noted, putting aside Title VII, many states and localities have explicit prohibitions on sexual orientation discrimination and employers should seriously consider adopting their own policies. Employers are also well advised to train their employees on sexual orientation and gender identity non-discrimination policies. If you have questions about the EEOC’s recent lawsuits or need assistance drafting company policies or training employees, contact an employment attorney.

In addition to the payment of monetary damages to the plaintiff, the employer was required to issue her a letter of apology and is now under a 3 year consent decree with the EEOC. The consent decree requires the employer to revise its EEO policies to cover transgender status, and to give employees additional training on sex -stereotyping and gender identity discrimination.

The EEOC's press release makes the Agency's position clear: "This settlement underscores EEOC's commitment to securing the rights of transgender individuals under Title VII in the federal courts." The EEOC goes on to note that this is the agency's second settlement of such a lawsuit, with a Florida eye clinic paying $150,000 to settle a similar claim by an employee who was transitioning from male to female

What does this mean for all employers? Clearly, EEOC settlements and consent decrees are no fun and are best avoided. So, what should you do? It is simple – BE SMART! Discrimination against LGBT and transgender employees may or may not be explicitly a violation of the law in your city or state, but the federal government clearly considers such discrimination to be a violation of Title VII. Apart from amending your policies, the most important thing that you can and must do as an employer is EDUCATE your management, so they understand that an employee who 'present' as one gender when hired, can lawfully present as another gender at some point later in the employment relationship. Such an employee must be accommodated, and cannot be the subject of jokes, teasing or harassment. From my experience counselling numerous clients through these situations, I know this is often easier said than done, as management may also encounter other employees who do not understand, are wary of this situation, or simply do not want to accept it. You need to be respectful of all of your staff, but you simply cannot tolerate discrimination against transgendered employees, just as you would not tolerate race discrimination.

These situations need to be monitored and handled carefully, so that you do not find yourself in the crosshairs of the EEOC or a plaintiff's attorney.

We are clearly in uncharted waters in this era of transgender rights, but it is the law, so all employers must take the right steps to be in compliance.

First, the EEOC argues that Title VII prohibits employers from discriminating against individuals in employment matters because of an individual’s sex. Although Congress may not have considered sex discrimination to include sexual orientation, statutory analysis does not end with the consideration of Congress’s initial intentions. Ultimately, it’s the law that governs not the legislator’s intent when passing the law.

Second, sexual orientation discrimination necessarily involves sex stereotyping, as it results in the adverse treatment of individuals because their orientation does not conform to heterosexually defined gender norms, the stereotype of opposite sex attraction. Intentional discrimination on the basis of the gender of an individual’s preferred partner-whether that individual is lesbian, gay, bisexual, or straight-necessarily implicates stereotypes relating to “proper” sex-specific roles in romantic and/or sexual relationships. Even if the employee exhibits no other gender nonconformity, when his or her sexual orientation gives risk to discrimination, the discrimination violates Title VII. Because such discrimination is at heart based on gender stereotypes, it violates Title VII’s prohibition against discrimination against employees because of sex.

The EEOC then advances the argument that sexual orientation discrimination violates Title VII’s prohibition against sex discrimination because it treats individuals differently based on the sex of those with whom they associated. It is a well settled principle of law that where a plaintiff claims discrimination based upon an interracial marriage or association, he alleges he has been discriminated against because of his race. Thus, if a plaintiff is in a relationship with someone of the same sex, and an adverse employment consequence results from that relationship, discrimination has occurred because of the plaintiff’s sex.

Finally, the EEOC argues that sexual orientation discrimination is inherently sex based discrimination because sexual orientation cannot be understood without referring to an individual’s sex.

Takeaways:

• The EEOC acknowledges that “its understanding of Title VII’s application to claims of sexual orientation discrimination –like society’s understanding of homosexuality more generally – has evolved over time.” As demonstrated by the cases cited by the EEOC, its position has been recognized by numerous courts in finding that Title VII’s protections cover sexual orientation discrimination.
• Nineteen states, the District of Columbia, and Puerto Rick have statutes that protect against both sexual orientation and gender identity. Several state statutes already explicitly include the protection. This trend continues to advance. Employers should consider adopting their own policies prohibiting discrimination based upon sexual orientation.
• Train employees that company policies prohibit all forms of discrimination, including those based on sexual orientation or gender identity.
• If you need assistance drafting company policies or training employees, contact an employment attorney.

Living With HIV Infection: Your Legal Rights in the Workplace Under the ADA explains that applicants and employees are protected from employment discrimination and harassment based on HIV infection, and that individuals with HIV infection have a right to reasonable accommodations at work. The guidance provides tremendous value to human resource professionals and other management decision-makers who may be faced with accommodation requests as it clearly explains how the EEOC believes the process of requesting a reasonable accommodation should go. The document assures employees that in most situations the employee can keep her condition private. It also provides several examples of reasonable accommodations (e.g. altered break and work schedule, changes in supervisory methods, unpaid time off, permission to work from home, etc.). It advises employees “[b]ecause an employer does not have to excuse poor job performance, even if it was caused by a medical condition . . . it may be better to ask for an accommodation before any problems occur or become worse.” Businesses should heed the EEOC’s underlined warning that employers must base employment decisions (hiring, termination, reasonable accommodation) on objective evidence, not medical myths or stereotypes.

Helping Patients With HIV Infection Who Need Accommodations at Work explains to doctors that patients with HIV infection may be able to get reasonable accommodations that help them to stay productive and employed, and provides them with instructions on how to support requests for accommodations with medical documentation. It also answers questions about the types of accommodations that may be available. It further advises doctors that if their patient does not want to disclose their specific diagnosis, the doctor can describe the condition as an “immune disorder.”

Takeaway:

• Review the EEOC’ s new guidance here
• The EEOC is paying greater attention to protecting employees with HIV. In 2014, the EEOC resolved almost 200 charges of discrimination based on HIV status, obtaining over $825,000.00 for job applicants and employees with HIV who were unlawfully denied employment and reasonable accommodations.
• Do not rely on medical myths or stereotypes about HIV when making hiring decisions or engaging in the reasonable accommodation process.
• If you have specific questions about accommodating employees who are HIV positive, contact a labor and employment attorney.

With the right to same-sex marriage established, the workplace is likely the next civil rights frontier. While Title VII does not expressly prohibit discrimination against LGBT individuals, the EEOC has won favorable Title VII decisions based on “sexual stereotyping” allegations. The DOJ and the OFCCP are also backing such theories, while Congress considers federal legislation protecting the LGBT population.

The seminar will focus on key issues employers face when balancing obligations to their business and employees such as:

• Receive an update on both state and federal litigation relating to LGBT workplace discrimination.

• Review the states and localities which have passed legislation, and the status of pending legislation.

• Get tips on how to revise employer discrimination and harassment policies to reflect the evolving landscape, such as the latest guidance on the “exterior issue.”

• Review the EEOC latest activity and guidance.

• Learn how sexual stereotyping has been used as a theory in cases involving both transgender and gay employees.

• Find out how the right to same-sex marriage will impact the employee benefits arena.

• Discuss real-life cases, and how HR can devise practical solutions to resolve conflicts between and among employees with divergent or more “conservative” viewpoints.

Both predictions now ring true.

In a decision issued last week, Judge Weinstein of the US District Court for the Eastern District of New York affirmed a jury verdict against UPS, based on claims of harassment and discrimination of a lesbian employee by a male manager. Roberts v. United Parcel Service, 13 – cv-6161.

The judge started the decision by stating “[a]s the nation’s understanding and acceptance of sexual orientation evolve, so does the law’s definition of appropriate behavior in the workplace ... The jury found improper under the law repeated ‘advice’ from plaintiff’s supervisor that her sexual orientation as a lesbian was evil and needed to be changed in accordance with religious dictates. Appeals to the bible, or theology generally, cannot justify management’s condoning the harassing of a lesbian in the workplace. Defendant’s central administration failed to protect plaintiff from such abuse.”

According to the decision, the plaintiff, Tameeka Roberts, a lesbian who was married and had 3 children, was assigned to work under “Bob W,” a manager. Over the course of several years, Bob repeatedly told Ms. Roberts that she was “evil” and the bible prohibited her lifestyle. He also made comments to the effect that her behavior was “not natural” and she was “going to hell.” She complained to her union, to HR and other UPS managers. After several complaints, senior management and HR did investigate, but concluded that Bob’s behavior was not a violation of the UPS harassment policy. At trial, several UPS executives testified that they did reach that conclusion. Thus, Bob was never formally disciplined. Ms. Roberts claimed that Bob then retaliated by changing her time card and hitting her with packages. She eventually quit the job and claimed constructive discharge.

The District Court, in affirming the jury’s verdict, went to great lengths to set forth the history of LGBT legal protections, and explore the debate in the law as to whether Title VII prohibited discrimination based on sexual orientation. The Judge noted that the EEOC had just recently concluded that this was a prohibited form of discrimination under federal law, and that a number of states had enacted laws which prohibited such discrimination.

He then went on to note that New York State and City law specifically prohibit this discrimination and that Ms. Roberts’ allegations of “discriminatory comments about plaintiff’s sexual orientation made over a number of years, show adverse differential treatment. So too do the significant failures of supervisors to protect plaintiff against discrimination.” Based on the record, he affirmed the verdict of compensatory and punitive damages for the plaintiff.

What lessons can employers take from this case?

• You cannot turn a blind eye (or ear) to claims that a supervisor is making negative comments about gay, lesbian or transgender employees. This is especially true if you are in a state like New York, where such conduct is explicitly prohibited.

• You must make sure that all of your Human Resource staff understand the importance of your harassment and discrimination policies, and that they should be a resource that employees can turn to for help if they do perceive that behavior occurring in the workplace. We often find that if a company can address a complaint internally, it is far better than fighting it out with a former employee in court.

• As society changes the workplace must evolve also. Don’t let your workplace be caught behind the times. The time you spend now educating your employees and ensuring that LGBT harassment does not occur will pay for itself if you avoid even one lawsuit.

• The “Equality Act” - Yesterday, the House and Senate introduced federal legislation to extend job protections to gay, lesbian and transgender workers. As of now, only 19 states have laws prohibiting such discrimination, so this would be a significant change in the law in those states which are not among that group. Interestingly, the new bill specifies that the Religious Freedom Restoration Act cannot be used to “permit” discrimination against LGBT workers. This likely is the result of recent attempts by certain businesses to use religious freedom as an excuse to deny service to gay and lesbian customers. Many large companies as well as legislators from both parties have endorsed this legislation, so the political wind certainly seems to favor its passage.

• On Friday July 17, the EEOC issued a decision confirming its position that discrimination based on sexual orientation is prohibited under Title VII. In this most recent case, an air traffic controller complained that he was not promoted to a managerial position due to his sexual orientation. The agency had previously dismissed his complaint as time–barred, but reversed that decision in this most recent ruling. In so doing, it confirmed its view that sexual orientation discrimination is “associational discrimination on the basis of sex.” The ACLU, in the wake of this ruling, issued a statement praising the decision, but further stated that this underscores the need for comprehensive federal legislation protecting gay and transgender employees from job discrimination.

It is not clear whether the courts will agree with the EEOC, but this is certainly a signal of a growing trend in favor of broader employment rights for LGBT workers. In fact, given the current political climate, the passage of federal legislation seems likely, as even the more conservative members of the federal legislature seem to sense that the tide has turned overwhelmingly in favor the expanding the protections afforded to the LGBT population.

• Also last week, a federal judge in Oklahoma found that a transgender professor at Oklahoma State University could pursue a Title VII claim against the university based upon the theory that she was discriminated against based on her “presented gender.” The Department of Justice (DOJ) sued the university in March, claiming that the professor was denied tenure because she did not conform to gender stereotypes and then was the victim of retaliation after she complained. The professor, Dr. Rachel Tudor, then filed an intervener complaint to join the DOJ lawsuit. The District Court most recently denied a motion to dismiss Tudor’s complaint, finding that she had sufficiently pled a claim under Title VII and that the actions Defendants took against her were “based upon their dislike of her presented gender.” Dr. Tudor identified as a man when she was hired in 2004, but began presenting as a woman in 2007. She was denied tenure in 2009. Among her allegations she claimed that she was “forced” to use the single–sex disabled restroom, and warned not to wear short skirts. She also alleged that one VP told her that being transgender was a “grave offense to his religious sensibilities.” The court found that the allegations that Tudor was harassed “because she was a female, yet Defendants regarded her as male,” were also sufficient to support a discrimination and harassment claim under Title VII.

• And finally, last week a class action was filed against Wal-Mart by a proposed class of LGBT employees – alleging that the company had discriminated against them in its benefits packages. The class is represented by the Gay & Lesbian Advocates & Defenders and the Washington Lawyers Committee For Civil Rights. The plaintiff, a Wal-Mart employee, claims that her same sex spouse was diagnosed with cancer in 2012. Since she was not covered by Wal-Mart’s benefit plan, the couple incurred over $150,000 in uncovered medical expenses. At the time, they were legally married in Massachusetts. Interestingly, Wal-Mart changed its policy to cover same sex spouses in 2014. The plaintiff’s theory is that Wal-Mart violated title VII by failing to cover same-sex spouses prior to that date, using the rationale adopted by the Supreme Court in the King case – that same sex marriage is a right.

The Court was unmoved by this argument, and held that Abercrombie’s lack of “specific knowledge” of Ms. Elauf’s need for a religious accommodation was not a defense to the claim. To the contrary, the Court held that a plaintiff need only show that her need for an accommodation was a “motivating factor” in the employer’s decision in order to prevail. Justice Scalia explained:

An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions. For example, suppose that an employer thinks (but does not know for certain) that a job applicant may be an Orthodox Jew who observes the Sabbath, and thus may be unable to work on Saturday. If the applicant actually requires an accommodation of a religious practice, and the employer’s desire to avoid the prospective accommodation is a motivating factor in his decision, the employer violates Title VII.

The Court concluded by noting that the company could not hide behind its “neutral” policy: “Title VII does not demand mere neutrality with regard to religious practices …Rather, it gives them favored treatment, affirmatively obligating employers not to ‘fail or refuse to hire or discharge any individual because of … such individual’s religious observance and practice..” SO, an employer can have a dress code, but that ‘neutral’ dress code “must give way to the need for an accommodation.”

I have two observations about this decision, which conflict with some commentaries I have read from other management-side lawyers:

• First, is this decision a significant change in the law or a sharp turn to the plaintiff’s side for SCOTUS? I say NO, as it has always been the law that an employer cannot consider religion or religious accommodations when it makes hiring decisions
• Second, was this the correct result, in light of the specific facts? Yes. In fact, when considering these facts, one could see why the Court reached the result it did.

Facts

Plaintiff Elauf had applied for a sales job at an Abercrombie & Fitch store in 2008. During the interview, she wore the scarf, but said nothing about it and did not say she wore it for religious reasons.

The assistant manager who interviewed her rated her qualified for the job. However, after mentioning the headscarf while attempting to clear the hire with a manager, the interviewer and manager discussed and decided that the scarf was inconsistent with the brand’s “look policy” – as Abercrombie’s salespeople are treated as “models” for their merchandise. Abercrombie eventually declined to hire Ms. Elauf. The assistant manager testified that she told the manager she thought the applicant was Muslim. The manager denied this, but the discussion of religion was likely a “bad fact” which hurt Abercrombie’s position before the High Court.

Elauf filed a charge with the EEOC, which investigated and subsequently brought a case against the retailer on her behalf, claiming that Abercrombie had refused to hire her due to her religion, in violation of Title VII. While there is some evidence that the manager and the interviewer discussed why Ms. Elauf wore a hijab, both parties agree that Ms. Elauf never explicitly said it was for religious expression, or formally requested an accommodation for her religious belief.

The district court in Oklahoma found for Ms. Elauf. However, the Tenth Circuit overturned and granted summary judgment for Abercrombie

The Issues before SCOTUS

The EEOC, representing Ms. Elauf, argued that an employer should not be permitted to refuse to hire someone based on its “understanding” of her religious practices – as this is a blatant violation of Title VII. They asked the court to reject a “rigid” notice requirement, so that an applicant would not be expected to ask for an accommodation. In response to criticism of the fact that this would require an employer to inquire about religion – which is prohibited by law – the EEOC claimed that the employer could advise the applicant of work rules and ask if they could comply. If the applicant could not, he or she could then raise the issue of the accommodation.

The EEOC also argued that affirming the Tenth Circuit’s decision could allow employers to get around the anti-discrimination laws simply by rejecting any applicant they suspect may need an accommodation, as long as they aren't “certain” about an applicant's religious practices.

Company counsel continued to maintain that the court was asking employers to guess what an applicant might need based on appearance, which was effectively asking employers to stereotype.

The Rationale and Impact of the Decision

The core principle underlying the decision was that it did not matter when Elauf had requested the accommodation or not, but what mattered was whether the Company was “motivated,” even in part, by a desire to avoid giving this accommodation when it decided not to hire her. As explained above, Justice Scalia made it very clear that “(A)n employer who acts with the motive of avoiding accommodation may violate Title VII even if he has no more than an unsubstantiated suspicion that accommodation would be needed.”

To go back to my observations:

First, this decision does not radically change the law and should not cause an employer - which has the right policies and training in place - to lose much sleep. A couple of points to keep in mind:

• Title VII (and virtually all state laws) already prohibited discrimination based on religion and religious observances and required reasonable accommodation of those observances. This has not changed.
• Title VII also requires that employers consider modifications to policies, in order to accommodate employee’s sincerely held religious beliefs and practices. This has not changed.
• Title VII has always allowed an employer to decline to provide an accommodation, if the employer can show that the accommodation would cause it an undue hardship. This has not changed.
• An employer should not make a hiring decision based on a suspicion that an applicant may need some religious accommodation (which seems to be what happened here). This is not a change in the law.

This same rationale would apply to other religious applicants, or applicants whose appearance leads to the conclusion that they are religious. Title VII (and common sense) would tell you that you cannot decline to hire a Jewish applicant wearing a yarmulke, if you “think” he might wear the yarmulke every day; or if you think he may then want every Saturday off, regardless of whether the applicant stated that was his intent. This would be religious discrimination.

It is said that bad facts often make bad law, and the facts in the Abercrombie case were not favorable to the company. However, the decision is not a “bad” decision; it merely clarifies, in stronger terms, what was already the law.

Going Forward:

The key is training

• Managers and interviewers SHOULD NOT be raising or discussing religion during job interviews (as I have seen suggested by others). If your company or a job has specific dress or attendance requirements, discuss these clearly with all applicants and ask if they need some accommodation. Again, I do not believe you should ask about religion, but you should be clear about the job requirements and let the applicant tell you if there is a religious issue.
• However, employers should take heed and reiterate to all managers that they simply cannot reject a request by an applicant or employee for a job accommodation based on religion, without giving her request serious consideration.
• Managers who have not discussed an accommodation with an applicant should not reject the applicant because they “think” or ‘suspect’ that he may need an accommodation. Every applicant should be judged on their credentials and the accommodation conversation should be an open one, which happens during the interview.

In its complaint, the EEOC accuses Detroit-based R.G. & G.R Harris Funeral Homes, Inc., of having discriminated against a transgender funeral director and embalmer because she is transgender, was transitioning from male to female, and/or because she did not conform to the employer’s gender-based expectations, preferences, or stereotypes.

The name plaintiff in the suit, Stephens, had been employed by Harris since October 2007 and had adequately performed the duties of her position during her employment. In 2013, Stephens gave Harris a letter explaining that she was undergoing a gender transition from male to female and would soon begin presenting to work in proper business attire consistent with her gender identity as a woman. She was fired two weeks later, her employer telling her that what she was “proposing to do” was unacceptable. In its complaint, the EEOC also takes issue with Harris’ provision of a clothing allowance for male employees but not female employees.

The funeral home moved to dismiss the complaint, arguing, among other things, (1) that “gender identity disorder” is not protected by Title VII, (2) the unsuccessful legislative efforts of the Employment Non-Discrimination Act (“EDNA”), infra, necessarily acknowledges these characteristics are not protected by Title VII, and (3) the EEOC’s contention that a transgender claimant is being punished for not conforming to his sex defeats its own premise, as presumably the transgender individual is being punished “precisely because he is conforming to his true sex.”

On April 21, 2015, U.S. District Court Judge Sean F. Cox denied Harris’ motion to dismiss for failure to state a claim, thereby allowing the case to proceed to discovery. The Court noted that “had the EEOC alleged that the Funeral Home fired Stephens based solely on Stephens’ status as a transgendered person” it would have been inclined to grant the motion to dismiss the complaint. The EEOC, however, also asserted that the Harris fired Stephens because she did not conform to the funeral home’s sex or gender-based preferences, expectation, or stereotypes. The Court, therefore, found that the EEOC had sufficiently pled a sex-stereotyping gender-discrimination claim under Title VII. Indeed, the Court also acknowledged that “even though transgendered/transsexual status is currently not a protected class under Title VII, Title VII nevertheless ‘protects transsexuals from discrimination for failing to act in accordance and/or identify with their perceived sex or gender.’”

While the Court did note that “there is no Sixth Circuit or Supreme Court authority to support the EEOC’s position that transgendered status is a protected class under Title VII,” Judge Cox’s decision certainly strengthens the EEOC’s position that Title VII might nevertheless protect the rights of transgendered workers discriminated against on the basis of their sex and or gender.

The EEOC has also filed an amici brief in a number of transgender discrimination cases across the country. Kelley Drye will continue to follow this case and update you on any developments in the ever changing landscape of LGBT discrimination.

Until recently, federal courts routinely ruled that they had no authority to review the EEOC’s conciliation efforts. In a recent unanimous decision, Mach Mining, LLC v. EEOC, No. 13-1019 (April 29, 2015), the Supreme Court vacated a Seventh Circuit ruling that courts could not review the EEOC’s Title VII-mandated efforts to conciliate with companies accused of discrimination before filing a suit in federal court. The Supreme Court disagreed with the Seventh Circuit and held that “a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit, [b]ut . . . the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.”

The Court’s ruling sought to strike a balance between the discretion Title VII gives the EEOC and the need to ensure the EEOC follows the law. Now, the EEOC must inform an employer of the specific allegation against them, and try to engage that employer in some type of written or oral discussion to give them a chance to remedy the allegedly discriminatory practice.

Employers should view the Court’s decision as good news. First, even though the Court only endorsed “narrow” and “bare-bones” review, the Supreme Court’s ruling makes it clear that the EEOC is not above judicial review. Second, the Court left the door open for challenges to the sufficiency of the EEOC’s conciliation efforts. Thus, lawyers representing employers can continue to bring the failure to conciliate defense. If the employer wins that fight, the court can order the EEOC to undertake the mandated efforts to attempt to secure voluntary compliance. While employers may prefer a dismissal to a stay, in some cases, a delay in litigation can be advantageous.

Moving forward, employers should be aware of the EEOC’s obligations to conciliate in cases where the EEOC finds reasonable cause to proceed. Employers should also demand that the EEOC provide information about the claims because this information will allow employers to better assess entering into an early settlement versus moving forward with litigation. Finally, the employer’s counsel should document any conciliation efforts (or lack thereof) so that, if necessary, the employer can produce evidence that the EEOC failed to provide the requisite information about the charge and/or failed to attempt to engage in a conciliation discussion.

Courts have grappled with how liberally to apply what has been known as the “opposition” clause, and just last week the Sixth Circuit further expanded the concept .

In EEOC v. New Breed Logistics, the Sixth Circuit affirmed a jury’s award of almost $1.5 million against an employer for violations of Title VII that included a finding that the employer retaliated against a former employees who had not made any complaint at all, but alleged she simply made verbal “demands” to a supervisor to cease his (allegedly) offensive conduct. The Sixth Circuit had previously found that Title VII “protects not only the filing of formal discrimination charges with the EEOC, but also complaints to management and less formal protests of discriminatory employment practices.” However, it had never gone so far as to say that a verbal request to stop "harassment" was now protected activity.

The trial court had instructed the jury that protected conduct “can be as simple as telling a supervisor to stop” on the basis of two District Court decisions finding the same. The employer objected to that instruction, and appealed the verdict.

Relying on the expansive language of the opposition clause in Title VII, and Supreme Court precedent broadly interpreting that term, the Court found that “[i]f an employee demands that his/her supervisor stop engaging in this unlawful practice—i.e., resists or confronts the supervisor’s unlawful harassment—the opposition clause’s broad language confers protection to this conduct.” In finding that this applied to the complaints at issue, the Court stated that “the language in the opposition clause does not specify to whom protected activity must be directed,” and that it would be inequitable to require complaints to be made to a “particular official designated by the employer.”

In so finding, the Court rejected Fifth Circuit precedent which held that such a situation would lead to every harassment claim “morphing” into a retaliation claim. This case, and another recent Second Circuit decision concerning oral complaints under the FLSA, demonstrate the importance of a robust policy of complaint documentation to avoid the murky position an employer may find itself in when it must defend against claims of retaliation based upon oral complaints.

What does this mean for employers – undoubtedly more confusion. Now, a company cannot defend a retaliation claim by asserting that no complaint was made, or that an employee did not go to Human Resources and avail herself of the grievance process. A retaliation claim can potentially arise from anywhere, anytime an employee tells a manager to stop doing something she finds offensive. The possibility for employee abuse of this new broad definition of "opposition" is endless. Employers, especially those in the Sixth Circuit, should take note.

The underlying case arose from a racial discrimination charge brought by a black applicant to the Dallas-based convention management company, whose application was denied after a background check into her credit history. She alleged that the company’s background check process disproportionately affected minority applicants. The EEOC brought suit on behalf of a “credit class” and a “criminal class” of unsuccessful applicants.

The closely watched case was dismissed by the lower court after it discovered that the EEOC’s purported expert analysis to support the claims was littered with a “mind-boggling number of errors” that rendered it “utterly unreliable.”

On appeal, the Fourth Circuit rejected the EEOC’s attempt to correct these errors, finding that the expert only introduced new, unexplainable mistakes. It authored a scathing opinion (with equally harsh opinions in concurrence) lambasting the EEOC’s continued use of an expert whose work has been questioned in no less than five prior cases. Employers should be vigilant and scrutinize all expert reports or analysis with the EEOC, as this presents a strong defense against pattern or practice cases brought by the agency.

In Greengrass v. International Monetary System Ltd., No. 13-2901 (7^th Cir. Jan. 12, 2015), the Seventh Circuit Court of Appeals reversed a summary judgment decision of the District Court and determined that an adverse employment action included listing an employee’s name in publically available filings with the Securities and Exchange Commission (“SEC’).

In September 2007, Greengrass made a written complaint to IMS alleging harassment by a manager, and subsequently quit her job in November 2007. In January 2008 Greengrass filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) against IMS alleging sex discrimination, national origin discrimination, and retaliation. In July 2008 IMS received correspondence from the EEOC seeking information regarding other sexual harassment claims leveled against the company and, in January 2009, IMS received notices that the EEOC wanted to conduct interviews regarding Greengrass’s charge of discrimination. In September 2009 the EEOC found reasonable cause to believe that Greengrass and other females as a class were subject to harassment because of their sex and national origin, and Greengrass and females, as a class, were constructively discharged because of their sex, national origin, and in retaliation for engaging in protected activity. In December 2009 the parties resolved Greengrass’s original EEOC charge of discrimination through conciliation, which did not include IMS’s rehiring of Greengrass.

As a publically traded company, IMS is subject to the Securities and Exchange Commission (“SEC’) periodic reporting requirements. Specifically, IMS is required to describe any material legal proceedings, including principal parties, facts giving rise to the proceeding, and the relief sought. See 17 C.F.R. § 299.103. IMS did not refer to Greengrass’s charge of discrimination in its 2008 SEC disclosures. However, for the next SEC filing in April 2009, and less than three months after IMS received notices that the EEOC wanted to conduct interviews (in January 2009), IMS chose to include Greengrass’s EEOC charge of discrimination and to specifically identify her, stating: “On January 20, 2008, Celia Greengrass filed a sexual harassment complaint with the [EEOC]. The claim is still under investigation by the EEOC and IMS believes the claims to be meritless and will vigorously defend itself.” These SEC disclosures were repeated in a subsequent amendment to the annual report and in a quarterly disclosure in May 2009.

After leaving IMS, Greengrass had difficulties finding and maintaining regular employment, and she attributed this to IMS’s SEC filings that specifically identified her. Greengrass claimed that a Google search of her name displayed results of IMS’s SEC filings that included her name, and further claimed that a recruiter informed her that she was “unemployable” due to this information. Thus, in September 2010, Greengrass filed a second EEOC charge of discrimination alleging IMS retaliated against her by identifying her in its SEC filings because of her previous charge of discrimination, and after receiving the EEOC right-to-sue letter, subsequently filed a lawsuit against IMS alleging retaliation under Title VII of the Civil Rights Act, as amended.

The Seventh Circuit found that listing Greengrass’s name in publically available SEC filings and referring to her complaint as “meritless,” constituted a materially adverse employment action. According to the Court, Greengrass assembled a convincing array of circumstantial evidence. Specifically, the court stated that a reasonable jury could find that IMS decided to retaliate against Greengrass not when she filed her EEOC charge, but rather when IMS saw that the EEOC was taking the charge seriously in January 2009, and that the IMS retaliation occurred in its next scheduled SEC filing in April 2009 (evidence of suspicious timing). Greengrass also provided circumstantial evidence of animus and IMS pretext sufficient to demonstrate a causal link that IMS would not have taken the adverse action but for Greengrass’s protected activity.

Publically traded companies should heed this opinion when reporting any material employment-related legal proceeding under the SEC requirements. A company should maintain a policy of being consistent in its application of disclosing material legal proceedings under the SEC reporting obligations, and look to its past reports of material legal proceedings for guidance. Furthermore, a disclosure could lead to negative consequences if it appears to be solely aimed at dissuading employees from making or supporting claims of discrimination. It is important to note that once an EEOC charge of discrimination is filed, the claimant’s name and basic information about the allegations of discrimination will be disclosed to the employer, and during the course of the investigation information about the charging party and the respondent will be kept confidential by the EEOC and will not be disclosed to the public by the EEOC. If a claim or charge of employment discrimination is not made public, then perhaps it would be wise that publically traded companies not identify the name of the employee/claimant until such time a publically available lawsuit is filed in federal (or state) court.

During oral argument, the court seemed to wrestle with the fact of whether the applicant should have disclosed that the scarf was part of her religious observance, and appeared to be siding with the plaintiff in that regard. They asked the employer’s lawyer questions about how the company would treat a nun in a habit or an applicant wearing a Sikh turban.

Frankly, those are not fair comparisons, and I am not sure why the high court did not see that. A nun in a habit is plainly wearing religious garb, just as is a Sikh in a turban or a Jew wearing a yarmulke. A head scarf, on the other hand, may be subject to interpretation. Arguably, an employer may not need to ask whether an applicant wearing a yarmulke needs to wear the object as part of his religious observance, because that is obvious. However, if that applicant needs to work Saturdays, and does not disclose that religious observance will require some accommodation of that schedule – then what is the employer to do? There, the religious issue is “hidden,” unless the applicant discloses it.

If the interviewer starts asking questions about religion, he could be accused of religious bias. However, if the applicant does not have to disclose the needed religious accommodation, the company could find itself hiring a person who cannot work the needed schedule.

The same issue occurs if a woman is wearing a scarf or a piece of jewelry or clothing which is not obviously religious. If the employer starts asking questions about the object, and then does not hire the applicant – those questions will likely be cited as evidence that the interviewer was biased against the applicant based upon his/her religion.

If the court rules in favor of this applicant, it will leave employers in a difficult spot. The employer cannot ask questions about religion, yet seemingly will be forced to.

We will all be waiting anxiously to see how SCOTUS balances these concerns.

In Mr. Cook’s case, Kmart’s insistence on a urine test ran afoul of the ADA, which requires employers to provide reasonable accommodations, including during the application and hiring process, unless the employer can show it would be an undue hardship. In settling the matter, Kmart agreed to pay Mr. Cook $102,000 and agreed to revise its drug-free workplace policy and pre-employment testing policy to include a description of its obligation to provide a reasonable accommodation to employees or applicants in the testing processes. See E.E.O.C. v. Kmart Corp., No. GJH-13-CV-2576, 2014 WL 5320957, (D. Md.).

Similarly, in October 2014, Walmart settled a lawsuit and agreed to pay $72,500 to a job applicant who was denied a position because her end-stage renal disease did not allow her to take a drug urinalysis test. See E.E.O.C v. Wal-Mart Stores East, LP, 14-cv-00862, 2014 WL 6608585 (D. Md.).

The takeaway from these cases is that employers must be aware of their obligation to provide reasonable accommodations for pre-employment drug testing. Employers should remember hair, blood, or other non-urine forms of testing provide substantially similar results as urine drug testing. Instead of resisting these accommodations, employers should readily provide them as these recent EEOC lawsuits suggest.

The man, Christopher Alston, interviewed for the delivery driver position with Mims Distributing Co. back in May. Alston, who hadn’t cut his hair since 2009, explained that he couldn’t cut his hair for religious reasons – but Mims made clear he wouldn’t get the job otherwise.

The EEOC filed suit this past September. Mims denied it had discriminated against Alston but ultimately opted to pay $50,000, change its company policy, and subject itself to an EEOC investigation to avoid further litigation.

Employers should be wary of the EEOC’s increased scrutiny of religious accommodations in the workplace. Just last week, the EEOC filed another religious bias suit against a North Carolina-based catering and event planning company for unlawfully firing a different Rastafarian delivery driver for insisting on covering his head to prevent his spiritual energy from escaping.