Mediation and the Equal Employment Opportunity Commission

You’ve just received a letter from the U.S. Equal Employment Opportunity Commission (EEOC), telling you that a charge of job discrimination has been filed against you.  The EEOC is charged with enforcing all federal laws relating to job discrimination.  These include:

• Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits employment discrimination based on race, color, religion, sex, or national origin;
• the Equal Pay Act of 1963 (EPA), which protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination;
• the Age Discrimination in Employment Act of 1967 (ADEA), which protects individuals who are 40 years of age or older;
• Title I and Title V of the Americans with Disabilities Act of 1990 (ADA), which prohibit employment discrimination against qualified individuals with disabilities in the private sector, and in state and local governments;
• Sections 501 and 505 of the Rehabilitation Act of 1973, which prohibit discrimination against qualified individuals with disabilities who work in the federal government; and
• the Civil Rights Act of 1991, which, among other things, provides monetary damages in cases of intentional employment discrimination.

Included in this letter from the EEOC is a copy of the formal charge of discrimination filed by an employee, and an opportunity to refer the charge to the EEOC’s mediation department.  What should you do?  Should you agree to mediate?  Should you skip mediation and aggressively defend against the charge?  Before deciding, several issues should be considered.

Private lawsuits alleging discrimination in the workplace more than tripled in the 1990s, according to the Justice Department, and the trend has not slowed. Major factors in the upsurge were new civil rights laws -- including the Americans with Disabilities Act and the Civil Rights Act of 1991.  According to statistics maintained by the United States District Courts, for the 12-month period ending June 30, 2005, there were nearly 230,000 total civil cases filed across the country in district courts against private individuals and businesses.  This does not include state court cases.  Of those 230,000, over 50,000 were labor and civil rights suits.  Employment cases accounted for 65 percent of the increase in civil rights cases, typically alleging employer bias in hiring, firing, promotion or pay.

Before a federal lawsuit can be filed alleging a violation of Title VII, the law accounting for the vast majority of discrimination suits, a claimant must file a charge with the EEOC, and obtain a “right-to-sue” letter.  As a result of this requirement, according to EEOC statistics, from 1997 to 2006 the average number of charges filed annually was 79,500.  As a result of this increase in charges, the EEOC began a mediation program, which was fully implemented by the EEOC in the spring of 1999.

The Mediation Process

When a charge is initially filed, the employer is given several deadlines to respond to the EEOC.  The first is to inform the Commission whether they are willing to participate in mediation.  Because EEOC Mediation is voluntary, the employer or the charging party-employee can both refuse to go to mediation.

If both parties agree to mediation, then a mediation session is set up with the Commission’s mediation department.  The mediation is an informal dispute resolution format.  The EEOC’s program uses a combination of internal mediators employed by EEOC and external contract mediators.  All mediators are trained in both mediation and the laws enforced by EEOC.  The parties meet with the mediator, in an effort to reach a negotiated resolution of the dispute that gave rise to the charge.  According to the EEOC, the resolution rate is 69%, and over 90% of the participants viewed the process as favorable.

However, while the average number of charges filed from 1999 to 2003 was approximately 80,000 per year, only slightly more than 11,000 charges were submitted to mediation each year from 2000 to 2003.  Why are so few charges submitted to mediation?  Studies suggest that employer’s who feel the charge is completely without merit often decline mediation, viewing the agreement to mediate as an admission that they engaged in unlawful employment practices.  Others decline bacause they doubt that the EEOC can offer an effective mediator who will truly be “neutral” and not siding with the employee, whose charge they are processing.  Perhaps others simply prefer the opportunity to “prove” they are right, and that they didn’t do anything wrong.  While some of these concerns may be legitimate, employers should keep an open mind to the possibility of mediation.  Mediaiton can offer many benefits to the employer, if the case is suitable.

Mediation Benefits

First, by agreeing to mediation, the employer has the opportunity to resolve the charge in a very short time-frame as compared to investigation and ultimate litigation.  According to the EEOC, the average closure rate for charges referred to mediation between 1999 and 2003 was 86 days.  Alternatively, the investigation process can be drawn out over a year, and the litigation process can take an additional 18 months to two years.

Second, if the employer agrees to mediate, the employer can avoid the investigation response requirements of the EEOC.  If the employer declines mediation, then it must provide the EEOC with a Position Statement, which essentially is the employer’s explanation of why the charge should be found to be without merit.  In addition, the employer must respond to the Commission’s Request for Information, which is often very extensive and time consuming to comply with.  Each of these can be avoided, at least initially, by agreeing to mediate.

Third, depending on the charge, the employee is often looking for an opportunity to “vent” and share his/her story with an independent person and a member of the company who could “step in” to resolve what may simply be a personality conflict.  If nothing else, mediation provides an opportunity to learn what the claim is really about, and what evidence the claimant may have.

Finally, if successful, the mediation process is much less expensive and burdensome for the employer.  While the EEOC mediation process resulted in an average monetary recovery of $96,000,000 per year, this averages out to approximately $13,780 for each of the more than 35,000 claimants whose charges were resolved.    However, nearly 5,000 of these successful mediations resulted in no monetray benefit to the employee.  When compared to the average cost for the investigation and ultimate litigation of a claim of job discrimination, the savings can be significant.  This is especially true when the disruption to the employer’s business is taken into account.

What Should Employers Do?

In order to effectively deal with the impact of the discrimination laws on employers, several steps should be taken:

1. Consider mediation and other internal alternative dispute resolution mechanisms to avoid or minimize the high cost of job discrimination claims.
2. Employers should take steps to become familiar with the employment laws.  Failure to understand the law can result in unintentional violations.
3. Employers should train their managers and human resource professionals in proper documentation and enforcement of personnel actions.
4. Obtain sufficient Employers Liability Insurance.
5. Develop personnel policies that are neutral as to all employees.
6. Include in the company policy and procedur manual a complaint mechanism if an employee feels he or she has been discriminated against.  An appropriate complaint policy can serve as a defense to a claim of discrimination.
7. Provide clear explanations of all disciplinary actions taken.  Proper written documentation is critical both in a mediation, or in properly responding to or defending against a claim of discrimination.

Ultimately, familiarity with the laws, proper documentation, and a policy to prohibit and timely address discrimination concerns can minimize the risk of a catestrophic job discrimination lawsuit.