By David D. Schein, President & General Counsel, Claremont Management Group, Inc.
Recently, some legal newspapers have publicized an EEOC pattern called the “Red
Zone.” This is not a reference to plays within the 10 yard line in football.
This is a situation where the EEOC files a majority of its lawsuits against
employers during the last 60 days of the Federal fiscal year. At the end of the
prior fiscal year, the EEOC filed
175 of 261 suits during this period. In fact, on the last day of the fiscal
year, 18 suits were filed, including one against Safeway. While large companies
can help the EEOC pump up its public image, the EEOC faces much stronger
opposition in those cases. (http://www.lawweekonline.com/2012/08/legal-lasso-employers-are-bracing-for-suits-by-eeoc/ for more details.)
For small employers, the news can be especially bad. Many small
businesses do not carry EPLI, “Employment Practices Liability Insurance.”
Regular liability insurance does not protect an employer from an employee or
EEOC suit for discrimination. So, even a case filed by the EEOC on behalf of a single
claimant could be a major financial hurdle for a struggling small business. The
author’s experience has been that the EEOC will sue small employers even though
there is little to be gained. EEOC officials know settlement can be obtained on
terms far more favorable than the claimant, even in a best case scenario, might
deserve because the employer does not have the resources to fight the case. In
a recent private settlement, such a case settled for the high five figures
along with onerous future conditions on the employer in essentially a “no
liability” case.
Obviously, the EEOC has no conscience about bullying small employers. The
best approach is avoiding a showdown with the EEOC. Adopting a strong
anti-discrimination policy that is publicized to all employees is the first
step. Good management training in enforcing the policy and detecting
discrimination problems in the workplace is the next step. Then, consistent
enforcement of the policy, including thorough investigation of complaints and
protection against retaliation for claimants and witnesses. Last, there needs
to be appropriate penalties for violations of the policy and documentation of
the investigation and discipline.
When the EEOC comes knocking, that is the time to get an employment attorney
involved. Too many small employers wait until they have lost the EEOC case and
are facing “conciliation,” before they consult counsel.
