How the New EEOC Rules Put Employers at a Disadvantage

An employer may at one point have to defend itself from allegations of discrimination or retaliation by a current or former employee (the claimant). Recently, the Equal Employment Opportunity Commission (EEOC), the federal agency that processes employment-related discrimination and retaliation complaints, modified its charge processing procedures in a manner that puts employers at a disadvantage. Claimants will now be able to receive a copy of the employer’s response to the allegations, commonly known as the position statement, during the investigation of the charge of discrimination. This new policy takes effect for any position statement submitted to the EEOC after January 1, 2016.

Approximately 25% of all charges of discrimination made by California employees are processed by the EEOC.[1] Often, when employers receive a charge of discrimination, the description of the allegations is minimal, and sometimes incoherent. The employer, though, is expected to respond to the claimant’s allegations and submit any relevant documents within 30 days. Previously, an EEOC investigator would more often than not summarize the employer’s arguments and evidence to the employee (or his/her attorney) in order to solicit a counter response. Full disclosure of the position statement and attachments were made on a case by case basis and at the discretion of the EEOC investigator. Under the new rules, employees will automatically receive notice that they “may request a copy of the Respondent’s position statement … and non-confidential attachments.”

Unfortunately, the claimant’s “response will not be provided to [the employer] during the investigation.” All the employer receives is the charge of discrimination and in some cases, a request for more documents and information. Click here to see the EEOC’s Q&A for Employees.

With these new changes, it may be prudent for employers to retain legal counsel’s assistance from the beginning to manage the potential exposure to a discrimination-related lawsuit and to prevent exposure of confidential or proprietary information.

Pretext Issues May Rise Under the New EEOC Rules

The position statement may provide the closure necessary for some employees to move on. However, now that claimants will be able to obtain a copy of the position statement, the claimant will have an opportunity to poke holes in the employer’s reason for taking the action the employee alleges is discriminatory or retaliatory. Under the EEOC’s new rules, the claimant will have 20 days to respond to the employer’s position statement. Since the employer will not have the benefit of receiving a copy of the employee’s statement, any subsequent response by the employer may serve as evidence of pretext during the investigation or subsequent lawsuit.

Pretext is legal jargon that means the proffered reason for an action is false and the reason was offered to cover up true motives or intentions. For example, an employer may claim that it did not promote the female claimant because she was not qualified for the position in question. However, the claimant provides evidence that her employer consistently promotes less-qualified males and therefore, her gender was the real reason the employer did not promote her.

Pretext may also exist where the reason, although factually correct, is not the true reason for the employment action. For example, an employer may be more critical of a claimant’s work performance and terminates the claimant after it receives the charge of discrimination. The claimant may show that his employer subjected him to a higher than normal standard and other employees were not disciplined for the same issue. So while it is true that the employee had performance issues, the real reason for the close scrutiny was because he filed a charge of discrimination.

Now that claimants have access to the employer’s position statement, employers will need to prepare a position statement that is very concise, focusing only on including the facts needed to allow the EEOC to dismiss the complaint. Legal counsel experienced in employment law may conduct a more thorough investigation of the claims, prepare a well-drafted statement of  position that demonstrates the non-discriminatory reasons why an employee suffered an adverse employment action, and include only those attachments that are truly necessary to support the employer’s position. The employer can also consult with legal counsel before taking any potentially adverse action against the claimant, if currently employed, or other currently employed individuals in similar circumstances as the claimant to minimize its exposure.

Additional Considerations in Identifying Information as “Confidential”

Unless designated as confidential, the EEOC will disclose the position statement and any attachments to the charging party without any limit on how the employee or her attorney uses or discloses the company’s information. Under the new rules, the EEOC requires employers to not only segregate and clearly mark certain information as “confidential” but also requires employers to provide a reason for the “confidential” designation. The EEOC has stated that it will not accept an employer’s blanket or unsupported assertions of confidentiality. After its review of the information, the EEOC has the discretion to redact the information designated by the employer as confidential before releasing the position statement to the charging party or his/her attorney.

The following is the type of information the EEOC considers confidential:

  • Sensitive medical information (except for the Charging Party’s medical information).
  • Social Security Numbers.
  • Confidential commercial or confidential financial information.
  • Trade secrets information.
  • Non-relevant personally identifiable information of witnesses, comparators or third parties, for example, social security numbers, dates of birth in non-age cases, home addresses, personal phone numbers, personal email addresses, etc.
  • Any reference to charges filed against the Respondent by other charging parties.

Remember that employers usually have 30 days to respond, and a short response time opens the door for an employer’s confidential and proprietary information to be disclosed, whether inadvertently or otherwise, to claimants.

What is an Employer to Do?

Employers should familiarize themselves with the EEOC’s new disclosure rules. When preparing a position statement, employers should closely consider the information they want to include as it will eventually be shared with the claimant or his/her attorney. Submit any confidential information separately as a separate “confidential” exhibit to the position statement or in a separate letter setting forth the reasons why the information is confidential. However, since the audience includes both the EEOC investigator and the employee (or his/her attorney), it is also recommended that you engage legal counsel to respond to the EEOC.

[1] The other entity that process charges of discrimination is the Department of Fair Employment and Housing (DFEH).