Key Takeaways From The EEOC’s Strategic Plan For Fiscal Years 2022-2026

By Gerald L. Maatman, Jr., Alex W. Karasik, and George J. Schaller

Duane Morris Takeaways: On August 22, 2023, the EEOC announced the approval its Strategic Plan (“SP”) for Fiscal Years 2022-2026.  The Strategic Plan can be accessed here.  The SP furthers the EEOC’s mission of preventing and remedying unlawful employment discrimination and advancing equal employment opportunity for all.  The SP focuses on: (1) Enforcement; (2) Education and Outreach; and (3) Organizational Excellence. The SP also provides performance measures for each strategic goal.  For corporate counsel involved in employment-related compliance and EEOC litigation, the new SP is required reading.

The EEOC’s Strategic Priorities

  1. Enforcement

The EEOC continues to promote equitable employment initiatives through its enforcement authority.  The SP highlights the EEOC’s primary mission of preventing unlawful employment discrimination through its administrative and litigation enforcement mechanisms, and adjudicatory and oversight processes.  The main strategic focus for employing these mechanisms is through fair and efficient enforcement based on the circumstances of each charge or complaint while maintaining a balance of meaningful relief for victims of discrimination.

As to enforcement, the SP provides a broad overview of the EEOC’s efforts to allocate its resources to ensure its efforts in stopping unlawful employment discrimination.  To that end, the EEOC indicates that it will continue its targeting of systemic discrimination through training staff on systemic cases and devoting additional resources to systemic litigation enforcement.  The SP included several performance measures for achieving enforcement goals, including measures on conciliation and litigation resolution, favorably resolving lawsuits, and increasing capacity for systemic investigations.

  1. Education and Outreach

The SP prioritizes education and outreach for deterring employment discrimination before it occurs.  The SP focuses on providing education and outreach programs, projects, and events as cost-effective tools for enforcement.  Primarily these programs are aimed at individuals who historically have been subjected to employment discrimination.  Part of the EEOC’s education and outreach involves expanding use of technology through social media, ensuring the EEOC website is more user-friendly and accessible, and leveraging technology to reach the agency’s audience.

These efforts to improve on education and outreach are aimed at promoting public awareness of employment discrimination laws while maintaining information and guidance for employers, federal agencies, unions, and staffing agencies.  The SP provides an in-depth list of measuring education and outreach by utilizing technology to expand the EEOC’s audience and ensuring accessible delivery of information through events, programs, and up-to-date website accessibility and functionality.

  1. Organizational Excellence

The SP makes clear that organizational excellence is the cornerstone of achieving the EEOC’s strategic goals.  The SP confirms that the EEOC aims to improve on its culture of accountability, inclusivity, and accessibility.  In addition, the EEOC seeks to continue protecting the public and advancing civil rights in the workplace by ensuring its resources are allocated properly to strengthen intake, outreach, education, enforcement, and service.

The EEOC’s organizational excellence strategic goal has two prongs, including improving the training of EEOC employees and enhancing the EEOC’s infrastructure.  For employees, the EEOC seeks to foster enhanced diversity, equity, inclusion, and accessibility in the workplace, maintain employee retention, and implement leadership and succession plans.  Relative to the agency’s infrastructure, the SP embraces the increased use of technology through analytics, and management of fiscal resources promote the agency’s mission of serving the public.

Implications For Employers

The EEOC’s SP is an important publication for employers since it previews immediate action areas.  The SP’s focus on systemic discrimination, conciliation, and litigation, and increasing the Commission’s capacity for litigating alleged systemic violations shows the EEOC is ramping up to improve handling all aspects of charges.  The EEOC’s increased focus on technology and employment discrimination awareness similarly shows accessibility will continue to be a pillar of the agency.  Accordingly, prudent employers should be mindful of these strategic priorities, and prepare themselves for continued EEOC enforcement.

Maryland Federal Court Issues Arrest Warrant In EEOC Sex Bias Suit

By Gerald L. Maatman, Jr., Alex W. Karasik, and George J. Schaller

Duane Morris Takeaways: In EEOC v. Above All Odds, LLC, No. 1:21-CV-02492 (D. Md. Aug. 15, 2023) (ECF No. 50), a federal district court in Maryland issued an arrest warrant for an ex-executive of a company involved in an EEOC lawsuit. The EEOC alleged that the ex-executive sexually harassed employees of a mental health clinic. The Court issued the  arrest warrant due to the ex-executive refusal to cooperate in the case and with discovery orders.

For employers facing EEOC-initiated lawsuits, the issuance of an arrest warrant is a novel development but informative in terms of the perils of continuously ignoring court orders. 

Case Background

The EEOC initiated this lawsuit on behalf of three former workers, Bricciana Strickland, Shana Hanson, and Saidah Feyijinmi, of Above All Odds, LLC (“Company”) and the Company’s co-founder, Raymond Dorsey, alleging a pattern of sexual harassment of female employees.  (Compl. at 1).

Strickland alleged Dorsey sent text messages asking for a date, and when she refused, Dorsey responded by stating he could fire her from her position.  Id. at 5-6. Hanson alleged Dorsey made repeated unwanted sexual advances including Dorsey asking if he could rub her back, sending an email with pornographic content, and throwing condoms on her desk.  Id. at 7. Feyijinmi alleged she saw Dorsey throw condoms on Hanson’s desk.  Id. at 8. Together, Hanson and Feyijinmi reported Dorsey’s sexual harassment to the Company’s senior management. Id. at 7.

Strickland continued to reject Dorsey’s advances and was demoted, and ultimately Dorsey ordered members of management staff to terminate her.  Id. at 6. Hanson was terminated in response to reporting Dorsey’s conduct.  Id. at 7. Feyjinmi was presented with a new contract of employment that lowered her salary and required her to work two positions, and after she requested time to review the contract before signing, the company terminated her before she had the opportunity to sign her contract.  Id. at 8-9.

The Arrest Warrant

Throughout the course of the lawsuit, Dorsey failed to respond to the EEOC’s complaint and ignored several show cause orders directing him to appear in court.  Subsequently, the court found Dorsey in contempt of court in June 2023.

Dorsey also ignored a subpoena to appear in the case brought by the EEOC.  Thereafter, the court authorized the arrest of Raymond Dorsey and issued an arrest warrant on August 15, 2023.

Implications For Employers

Employers that are confronted with EEOC-initiated litigation involving allegations of a pattern of sexual harassment should note that ignoring court filings, court proceedings, and orders issued by the court, may result in the court taking action.  In this instance, the court relied on the ex-executive’s lack of response to pleadings, court orders, and subpoenas leading to the court issuing an arrest warrant.  While the issuance of arrest warrants is rare in litigation, this development illustrates that court orders should not be taken lightly.


EEOC Settles Its First Discrimination Lawsuit Involving Artificial Intelligence Hiring Software

By Alex W. Karasik, Gerald L. Maatman, Jr. and George J. Schaller

Duane Morris Takeaways: InEqual Employment Opportunity Commission v. ITutorGroup, Inc., et al., No. 1:22-CV-2565 (E.D.N.Y. Aug. 9, 2023), the EEOC and a tutoring company filed a Joint Settlement Agreement and Consent Decree in the U.S. District Court for the Eastern District of New York, memorializing a $365,000 settlement for claims involving hiring software that automatically rejected applicants based on their age. This is first EEOC settlement involving artificial intelligence (“AI”) software bias. As we previously blogged about here, eradicating discrimination stemming from AI software is an EEOC priority that is here to stay. For employers who utilize AI software in their hiring processes, this settlement highlights the potential risk of legal and monetary exposure when AI software generates hiring decisions that disparately impact applicants from protected classes.

Case Background

Defendants iTutorGroup, Inc., Shanghai Ping’An Intelligent Education Technology Co., LTD, and Tutor Group Limited (collectively “Defendants”) hired tutors to provide English-language tutoring to adults and children in China.  Id. at *3.  Defendants received tutor applications through their website.  The sole qualification to be hired as a tutor for Defendants is a bachelor’s degree.  Additionally, as part of the application process, applicants provide their date of birth.

On May 5, 2022, the EEOC filed a lawsuit on behalf of Wendy Pincus, the Charging Party, who was over the age of 55 at the time she submitted her application.  The EEOC alleged that Charging Party provided her date of birth on her application and was immediately rejected.  Accordingly, the EEOC alleged that Defendants violated the Age Discrimination in Employment Act of 1967 (“ADEA”) for programming its hiring software to reject female applicants over 55 years old and male applicants over 60 years old.  Id. at *1. Specifically, the EEOC alleged that in early 2020, Defendants failed to hire Charging Party, Wendy Pincus, and more than 200 other qualified applicants age 55 and older from the United States because of their age.  Id.

The Consent Decree

On August 9, 2023, the parties filed a “Joint Notice Of Settlement Agreement And Requested Approval And Execution Of Consent Decree,” (the “Consent Decree.”).  Id.  The Consent Decree confirmed that the parties agreed to settle for $365,000, to be distributed to tutor applicants who were allegedly rejected by Defendants because of their age, during the time period of March 2020 through April 2020.  Id. at 15.  The settlement payments will be split evenly between compensatory damages and backpay.  Id. at 16.

In terms of non-monetary relief, the Consent Decree also requires Defendants to provide anti-discrimination policies and complaint procedures applicable to screening, hiring, and supervision of tutors and tutor applicants.  Id. at 9.  Further, the Consent Decree requires Defendants to provide training programs on an annual basis for all supervisors and managers involved in the hiring process.  Id. at 12-13.  The Consent Decree, which will remain in effect for five years, also contains reporting requirements and record-keeping requirements.  Most notably, the Consent Decree contains a monitoring requirement, which allows the EEOC to inspect the premises and records of the Defendants, and conduct interviews with the Defendant’s officers, agents, employees, and independent contractors to ensure compliance.

Implications For Employers

To best deter EEOC-initiated litigation involving AI in the hiring context, employers should review their AI software upon implementation to ensure applicants are not excluded based on any protected class.  Employers should also regularly audit the use of these programs to make sure the AI software is not resulting in adverse impact on applicants in protected-category groups.

This significant settlement should serve as a cautionary tale for businesses who use AI in hiring and are not actively monitoring its impact.  The EEOC’s commitment to its Artificial Intelligence and Algorithmic Fairness Initiative is in full force.  If businesses have not been paying attention, now is the time to start.

EEOC Issues New ADA Guidance On Visual Disabilities And Discussing AI Impact

By Alex W. Karasik, Gerald L. Maatman, Jr., and George J. Schaller

Duane Morris Takeaways:  On July 26, 2023, the EEOC issued a new Guidance entitled “Visual Disabilities in the Workplace and the Americans with Disabilities Act” (the “Guidance”).  This document is an excellent resource for employers, and provides insight into how to handle situations that may arise with job applicants and employees that have visual disabilities. Notably, for employers that use algorithms or artificial intelligence (“AI”) as a decision-making tool, the Guidance makes clear that employers have an obligation to make reasonable accommodations for applicants or employees with visual disabilities who request them in connection with these technologies.

The EEOC’s Guidance

The EEOC’s Guidance endeavors to address four subjects, including: (1) when an employer may ask an applicant or employee questions about a vision impairment and how an employer should treat voluntary disclosure; (2) what types of reasonable accommodations applicants or employees with visual disabilities may need; (3) how an employer should handle safety concerns about applicants and employees with visual disabilities; and (4) how an employer can ensure that no employee is harassed because of a visual disability.

The EEOC notes that if an applicant has an obvious impairment or voluntarily discloses the existence of a vision impairment, and based on this information, the employer reasonably believes that the applicant will require an accommodation to perform the job, the employer may ask whether the applicant will need an accommodation (and, if so, what type). Some potential accommodations may include: (i) assistive technology materials, such as screen readers and website accessibility modifications; (ii) personnel policy modifications, such as allowing the use of sunglasses, service animals, and customized work schedules; (iii) making adjustments to the work area, including brighter lighting; and (iv) allowing worksite visits by orientation, mobility, or assistive technology professionals.

For safety concerns, the Guidance clarifies that if the employer has concerns that the applicant’s vision impairment may create a safety risk in the workplace, the employer may conduct an individualized assessment to evaluate whether the individual’s impairment poses a “direct threat,” which is defined as, “a significant risk of substantial harm to the health or safety of the applicant or others that cannot be eliminated or reduced through reasonable accommodation.”  For harassment concerns, the EEOC notes that employers should make clear that they will not tolerate harassment based on disability or on any other protected basis, including visual impairment.  This can be done in a number of ways, such as through a written policy, employee handbooks, staff meetings, and periodic training.

Artificial Intelligence Implications

As we previously blogged about here, the EEOC has made it a priority to examine whether the use of artificial intelligence in making employment decisions can disparately impact various classes of individuals.  In the Q&A section, the Guidance tackles this issue by posing the following hypothetical question: “Does an employer have an obligation to make reasonable accommodations to applicants or employees with visual disabilities who request them in connection with the employer’s use of software that uses algorithms or artificial intelligence (AI) as decision-making tools?”According to the EEOC, the answer is “yes.”

The Guidance opines that AI tools may intentionally or unintentionally “screen out” individuals with disabilities in the application process and when employees are on the job, even though such individuals are able to do jobs with or without reasonable accommodations. As an example, an applicant or employee may have a visual disability that reduces the accuracy of an AI assessment used to evaluate the applicant or employee. In those situations, the EEOC notes that the employer has an obligation to provide a reasonable accommodation, such as an alternative testing format, that would provide a more accurate assessment of the applicant’s or employee’s ability to perform the relevant job duties, absent undue hardship.

Takeaways For Employers

The EEOC’s Guidance serves a reminder that the Commission will vigorously seek to protect the workplace rights of individuals with disabilities, including those with visual impairments. When employers are confronted with situations where an applicant or employee requests reasonable accommodations, the Guidance provides a valuable roadmap for how to handle such requests, and offers a myriad of potential solutions.

From an artificial intelligence perspective, the Guidance’s reference to the use of AI tools suggests that employers must be flexible in terms providing alternative solutions to visually impaired employees and applicants. In these situations, employers should be prepared to utilize alternative means of evaluation.

Georgia Federal Court Green Lights EEOC Lawsuit For Constructive Discharge Dismissal Based On Threat Of Future Sexual Harassment

By Gerald L. Maatman, Jr., Alex W. Karasik, and Shaina Wolfe

Duane Morris Takeaways: In EEOC v. American Security Associates, Inc., No. 1:21-CV-3870 (N.D. Ga. May 23, 2023), a federal district court in Georgia denied an employer’s motion to dismiss a constructive discharge claim, holding that comments made by the company’s owner regarding how Plaintiff can expect future sexual harassment were sufficient to establish a pervasive environment of intolerable working conditions. Employers who are defending against EEOC-initiated constructive discharge claims can learn valuable lessons from this ruling in terms of how courts may assess comments about harassment that is threatened in the future.

Case Background

The EEOC filed suit on behalf of a former female security officer (the “Claimant”) who worked for Defendant American Security Associates, Inc. (“ASA”). In April 2017, one of the Claimant’s male co-workers sexually harassed her by making lewd sexual statements and touching her in an unwelcome and inappropriate manner. After reporting this conduct to her supervisor and one of ASA’s owners, in June 2017, ASA reportedly reduced her hourly pay rate from $12 per hour to $10 per hour. ASA allegedly told the Claimant that she should expect harassment because of her appearance, and refused to remedy the situation. Id. at 1-2. The Claimant ultimately resigned, alleging that she was being required to accept future harassment as a condition of her employment.

After the Claimant filed an administrate charge, and the EEOC ultimately a filed lawsuit on her behalf, ASA moved to dismiss. On April 27, 2022, the Magistrate Judge issued a non-final Report and Recommendation (“R&R”), in which he recommended the District Judge grant in part and deny in part ASA’s motion to dismiss. In relevant part, the Magistrate Judge recommended that the EEOC amend the complaint to set forth the factual basis for the constructive discharge allegations.

On October 26, 2022, the Magistrate Judge issued an additional R&R recommending that the District Judge grant ASA’s motion to dismiss the constructive discharge claim because it failed as a matter of law. Id. at 5. The Magistrate Judge determined that the EEOC failed to allege that the Claimant was subjected to an ongoing, active pattern of sexual harassment, and therefore failed to meet a necessary element of that claim. Id. at 5-6. On November 9, 2022, the EEOC filed timely Rule 72 objections to the R&R.

The Court’s Decision

On Rule 72 review, the Court sustained the EEOC’s objections to the R&R and denied ASA’s motion to dismiss. First, the Court explained that to state a claim for constructive discharge, the Commission must allege facts to plausibly show that the conditions of employment were so unbearable that a reasonable person would be compelled to resign. Id. at 10. As to this point, the Court found that the Magistrate Judge improperly drew his conclusions from facts alleged in the original complaint, and not the amended complaint, which was the operative pleading.

The EEOC also contended that the R&R subjected the amended complaint to a heightened pleading standard because it failed to consider allegations in the light most favorable to the EEOC. Id. at 12. The Court held that that Magistrate Judge heavily relied on the unsupported assumption that the Claimant was not being actively subjected to any harassment at the time of her resignation. The Court also disagreed with the R&R’s holding that speculation about future harassment from co-workers was “insufficient” to amount to the “intolerable conditions” standard. Id. at 13. The Court opined that the Magistrate Judge again relied on facts not alleged in the amended complaint.

Finally, the Court held that statements made by ASA’s owner established a severe and pervasive environment of intolerable working conditions. Id. at 14-15. The Court determined that the Claimant’s frequent complaints to various supervisors did not deter the offensive behavior. After the Claimant complained to the owner, his responsive comments implied that the Claimant was almost certain to receive future sexual harassment, and potentially, physical attacks. The Court thus held that the Claimant’s psychological well-being is a term, condition or privilege of employment within the meaning of Title VII. Therefore, the Court sustained the EEOC’s objections to the R&R, and denied ASA’s motion to dismiss.

Implications For Employers

For employers that are confronted with EEOC-initiated litigation, this ruling is instructive from both procedural and substantive perspectives. Procedurally, this ruling makes clear that courts should consider the allegations from an operative complaint when evaluating a motion to dismiss. Substantively, employers should take note that the Court relied heavily on comments that the owner made about potential future harm, which ultimately was part of the Court’s basis for not dismissing the constructive discharge claim.

EEOC Issues New Resource On Artificial Intelligence Use In Employment Decisions

By Alex W. Karasik and Gerald L. Maatman, Jr.

Duane Morris Takeaways:  On May 18, 2023, the EEOC released a technical assistance document, “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964,” (hereinafter, the “Resource”) to provide employers guidance on preventing discrimination when utilizing artificial intelligence. For employers who are contemplating whether to use artificial intelligence in employment matters such as selecting new employees, monitoring performance, and determining pay or promotions, this report is a “must-read” in terms of implementing safeguards to comply with civil rights laws.


As the EEOC is well-aware, employers now have a wide variety of algorithmic decision-making tools available to assist them in making employment decisions, including recruitment, hiring, retention, promotion, transfer, performance monitoring, demotion, dismissal, and referral. Employers increasingly utilize these tools in an attempt to save time and effort, increase objectivity, optimize employee performance, or decrease bias. The EEOC’s Resource seeks to inform employers how to monitor the newer algorithmic decision-making tools and ensure compliance with Title VII.

To set the parameters for the Resource, the EEOC first defines a few key terms:

  • Software: Broadly, “software” refers to information technology programs or procedures that provide instructions to a computer on how to perform a given task or function.
  • Algorithm: Generally, an “algorithm” is a set of instructions that can be followed by a computer to accomplish some end.
  • Artificial Intelligence: In the employment context, using AI has typically meant that the developer relies partly on the computer’s own analysis of data to determine which criteria to use when making decisions. AI may include machine learning, computer vision, natural language processing and understanding, intelligent decision support systems, and autonomous systems.

Taken together, employers sometimes utilize different types of software that incorporate algorithmic decision-making at a number of stages of the employment process. Some of the examples provided by the EEOC in terms of how employers can utilize artificial intelligence include: resume scanners that prioritize applications using certain keywords; employee monitoring software that rates employees on the basis of their keystrokes; “virtual assistants” or “chatbots” that ask job candidates about their qualifications and reject candidates who do not meet pre-defined requirements; video interviewing software that evaluates candidates based on their speech patterns and facial expressions; and testing software that provides “job fit” scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived “cultural fit,” which is typically based on their performance on a game or on a more traditional test.

“Questions And Answers” About AI

After summarizing the pertinent provisions of Title VII, the heart of the EEOC’s Resource is presented in a question and answer format. First, the EEOC defines a “selection procedure” to be any “measure, combination of measures, or procedure” if it is used as a basis for an employment decision. Employers can assess whether a selection procedure has an adverse impact on a particular protected group by checking whether use of the procedure causes a selection rate for individuals in the group that is “substantially” less than the selection rate for individuals in another group. If there is an adverse impact, then use of the tool will run afoul of Title VII unless the employer can demonstrate that, pursuant to Title VII, such use is “job related and consistent with business necessity.”

The EEOC then posits the critical question of whether an employer is responsible under Title VII for its use of algorithmic decision-making tools even if the tools are designed or administered by another entity, such as a software vendor. This is an important issue since many companies seek the assistance of third-party technologies to facilitate some of their employment-decision processes. The EEOC indicates that “in many cases, yes,” employers are responsible for the actions of their agents, such as third-party vendors. Ultimately, if the employer is making the final employment decision, the buck would likely stop with the employer in terms of Title VII liability .

The EEOC also defines the term, “selection rate,” which refers to the proportion of applicants or candidates who are hired, promoted, or otherwise selected. The selection rate for a group of applicants or candidates is calculated by dividing the number of persons hired, promoted, or otherwise selected from the group by the total number of candidates in that group. By virtue of including this definition in the Resource, a reading of the tea leaves suggests that the EEOC will be monitoring selection rates to determine whether there is an adverse impact in employment decisions that were catalyze from the use of artificial intelligence.

In terms of what is an acceptable selection rate, the EEOC relies on the “four-fifths rule,” which is a general rule of thumb for determining whether the selection rate for one group is “substantially” different than the selection rate of another group. The rule states that one rate is substantially different than another if their ratio is less than four-fifths (or 80%). For example, if the selection rate for Black applicants was 30% and the selection rate for White applicants was 60%, the ratio of the two rates is thus 30/60 (or 50%). Because 30/60 (or 50%) is lower than 4/5 (or 80%), the four-fifths rule dictates that the selection rate for Black applicants is substantially different than the selection rate for White applicants, which may be evidence of discrimination against Black applicants.

The EEOC does note that the, “four-fifths rule” is a general suggestion, and may not be appropriate in every circumstance. Some courts have also found this rule to be inapplicable. Nonetheless, employers would be prudent to ask whether artificial intelligence vendors deployed the “four-fifths rule” in their algorithms. Statistics matter here.

Finally, the EEOC posits the issue of what an employers should do when they discover that the use of an algorithmic decision-making tool would result in an adverse impact. The EEOC explains that one advantage of algorithmic decision-making tools is that the process of developing the tool may itself produce a variety of comparably effective alternative algorithms. Accordingly, employers’ failure to adopt a less discriminatory algorithm that may have been considered during the development process could give rise to liability. Employers should thus take heed to document the steps they take to utilize non-discriminatory algorithms.

Implications For Employers

The use of artificial intelligence in employment decisions may be the new frontier for future EEOC investigations. While these technologies can have tremendous cost-benefits, the risk is undeniable. Inevitably, some employer using AI will be the subject of a test case in the future.

Employers should monitor the results of their own use of artificial intelligence. This can be accomplished by conducting self-analyses on an ongoing basis, to determine whether employment practices are disproportionately having a negative impact on certain protected classes.

As the EEOC notes, employers can proactively change the practices going forward. Given the agility of the artificial intelligence software, employers who do find the technologies’ “employment decisions” to be problematic can and should work with vendors to remedy such defects.

We encourage our loyal blog readers to stay tuned as we continue to report on this exciting and rapidly evolving area of law.

Indiana Joins The Bandwagon In Passing A Comprehensive Privacy Law

By Gerald L. Maatman, Jr., Jennifer A. Riley, Alex W. Karasik, and Shaina Wolfe

Duane Morris Takeaways: The United States currently has no comprehensive data privacy law. Rather, a patchwork quilt of various privacy laws cover different types of data, such as information in credit reports (the Fair Credit Reporting Act), student records (Family Educational Rights and Privacy Act), and consumer financial products (Gramm-Leach-Bliley Act).  In an attempt to fill the void of federal legislation, Indiana recently joined six other states – California, Colorado, Connecticut, Iowa, Utah, and Virginia – in enacting a comprehensive privacy statute, the Indiana Consumer Data Protection Act (“ICDPA”). At least nineteen states have introduced similar privacy bills this legislative session. Montana and Tennessee have comprehensive consumer privacy statutes pending signature by their governors. Businesses in Indiana should start immediately reviewing their policies and implementing processes for complying with ICDPA to avoid enforcement litigation by the Indiana Attorney General.

Indiana Legislation

On May 1, 2023, Indiana Governor Holcomb signed Senate Bill 5, known as the ICDPA. This new law will take effect on January 1, 2026.

The ICDPA applies to companies that conduct business in Indiana or produce products or services that are targeted to residents of Indiana and during a calendar year: (1) control or process the personal data of 100,000 consumers (who are Indiana residents) or (2) control or process personal data of at least 25,000 consumers (who are Indiana residents) and more than 50% of gross revenue from the sale of personal data. Significantly, the ICDPA does not apply to data processed or maintained in the course of applying to or being employed by a business. Moreover, the ICDPA does not apply to government entities, non-profit organizations or higher education institutions.

The ICDPA provides consumers with rights to their personal data, including:

– opt-out rights related to the sale of personal data, targeted marketing and profiling (automated decision making that could have significant legal effects, such as those related to employment and benefits);
– access rights, including a right to confirm whether a company is processing any data at all;
– deletion rights;
– correction rights, limited to data the consumer previously provided;
– appeal rights; and
– data portability rights (summary of the personal data sent to the consumer must be in a portable and readily usable format).

“Personal data” is broadly defined as information that is “linked or reasonably linkable to an identified or identifiable individual.” Personal data does not include de-identified data, publicly available information, or data related to a group or category of customers that is not linked or reasonably linked to an individual customer. The ICDPA also provides consumers the right to opt-out of the collection and processing of their sensitive personal data. “Sensitive personal data” includes: (1) personal data revealing racial or ethnic origin, religious beliefs, a mental or physical health diagnosis made by a healthcare provider, sexual orientation, or citizenship or immigration status; (2) genetic or biometric data that is processed for the purpose of uniquely identifying a specific individual; (3) personal data collected from a known child; and (4) precise geolocation data. Certain personal data that is covered by other statutes like the Fair Credit Reporting Act or Family Educational Rights and Privacy Act is exempt.

Once the ICDPA takes effect, companies must respond to a consumer personal data request within 45 days of receipt of the request. Companies may also seek a 45-day extension to respond. If a consumer appeals a company’s decision to deny the consumer’s request, the appeal response must be delivered within 60 days. If the appeal is denied, the company must provide the consumer with a method for contacting the state attorney general.

Importantly, the ICDPA does not provide individuals with a private right of action against businesses that violate the Indiana Law. Rather, the Indiana Attorney General will have exclusive enforcement authority. Prior to any enforcement action, the business will be allowed 30 days to cure the alleged violation. Only after the thirty days pass will the Indiana Attorney General be permitted to bring an enforcement action for the alleged violation. If the Indiana Attorney General decides to bring an enforcement action, the business may be fined up to $7,500 per violation.

Implications for Businesses

The ICDPA does not take effect until January 1, 2026. Covered businesses should start reviewing their policies and implementing processes for complying with the ICDPA to avoid enforcement by the Indiana Attorney General.

EEOC Mid-Year Lawsuit Filing Update For Fiscal Year 2023

By Alex W. Karasik, Gerald L. Maatman, Jr. and Jennifer A. Riley

Duane Morris Takeaways: The EEOC’s fiscal year 2023 (“FY 2023”) spans from October 1, 2022 to September 30, 2023. Through the midway point of FY 2023, EEOC enforcement litigation filings have been fairly status quo with a total of 29 new lawsuits filed in the first six months. Traditionally, the second half of the EEOC’s FY, and particularly in the final month of September, are when the majority of filings occur. Even so, an analysis of the types of lawsuits filed, and the locations where they are filed, is informative for employers in terms of what to expect during the fiscal year-end lawsuit filing rush in September.

Cases Filed By EEOC District Offices

In addition to tracking the total number of filings, we closely monitor which of the EEOC’s 15 district offices are most active in terms of filing new cases over the course of the FY. Some districts tend to be more aggressive than others, and some focus on different case filing priorities. The following chart shows the number of lawsuit filings by EEOC district office.

The most noticeable trend of the first six months of FY 2023 shows that the Charlotte District Office already filed five lawsuits. The Los Angeles and San Francisco District Offices each filed 13 lawsuits in FY 2022. In the first half of FY 2023, however, there was only one filed in Los Angeles, and three in San Francisco. The Birmingham and Dallas District Offices have yet to file a single lawsuit in FY 2023.

Analysis Of The Types Of Lawsuits Filed In First Half Of FY 2023

We also analyzed the types of lawsuits the EEOC filed throughout the first six months, in terms of the statutes and theories of discrimination alleged, in order to determine how the EEOC is shifting its strategic priorities. The chart below shows the EEOC filings by allegation type.

The percentage of each type of filing has remained fairly consistent over the past several years. Title VII cases again made up the majority of cases filed the first half of FY 2023, with 59% of all filings, (lower than the 69% in FY 2022, but similar to the 62% in FY 2021 and 60% in FY 2020). ADA cases also made up a significant percentage of the EEOC’s FY 2023 filings thus far, at 31%, an increase from the 18% in FY 2022, although down from the 36% in FY 2021. There were also four ADEA cases filed in the first half of the FY.

The graph below shows the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans With Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

Notable 2023 Lawsuit Filings

Gender Identity Discrimination

After the 2020 U.S. Supreme Court’s decision in Bostock v. Clayton County, 140 S. Ct. 1731 (2020), which held that federal law prohibits employment discrimination against LGBTQ workers on the basis of sexual orientation or transgender status, we expected to see more aggressive EEOC-initiated litigation in this area. Two lawsuits involve claims of discrimination on the basis of sexual orientation and transgender status. In the first, EEOC v. TC Wheeler, Case No. 23-CV-286 (W.D.N.Y. Mar. 30, 2023), the EEOC alleged that management and employees harassed a transgender male employee because of his gender identity, including telling the employee that he “wasn’t a real man,” and asking invasive questions about his transition. The EEOC further alleged that other employees also made anti-transgender comments and continually referred to the employee by using female pronouns.

In EEOC v. Sandia Transportation, Case No. 23-CV-274 (D.N.Mex. Mar. 31, 2023), the EEOC alleged that the defendant discriminated against lesbian female employees on the basis of their sexual orientation. The EEOC contended that the owner of the company stated that women did not belong in the workplace, that he “hated dealing with women,” and referred to them in a number of derogatory terms.

Both of these lawsuits suggest that the EEOC will be filing more lawsuits seeking to protect against harassment of employees based on their sexual orientation or because of their gender.

Vaccine-Related Litigation

Given the prevalence of vaccine-related debates that emerged during the COVID-19 pandemic, we anticipated there would be a surge of exemption cases coming through the EEOC’s charge intake system. In EEOC v. Children’s Hospital of Atlanta, Case No. 22-CV-4953 (N.D. Ga. Dec. 15, 2022), the EEOC alleged that the pediatric healthcare system violated federal law when it fired a maintenance assistant for requesting a religious exemption to its influenza vaccination policy. The EEOC contended that the defendant terminated the employee for failing to receive the vaccination, despite his request for a religious exemption to the defendant’s flu vaccination requirements based on sincerely held religious beliefs. The EEOC noted that the defendant previously granted the employee religious exemptions in 2017 and 2018, but denied the request in 2019 and subsequently terminated his employment. We anticipate a significant uptick in vaccine-related litigation as the smoke clears from the global pandemic.

Race Discrimination

Several events involving race discrimination over the last few years have made this issue a continued priority for the EEOC. So far, the Commission filed a few notable lawsuits involving race discrimination. In EEOC v. First Advantage Background Services Corp., Case No. 23-CV-958 (N.D. Ill. Feb. 16, 2023), the defendant allegedly used  background check information to make discriminatory hiring decisions on the basis of race. In EEOC v. Bilal & Aaya Subway, Inc., Case No. 23-CV-129 (E.D.N.C. March 16, 2023) the EEOC filed a lawsuit alleging that three Subway franchises subjected employees to racial discrimination when their owner regularly made racist statements about Black people and terminated workers because they were Black. The EEOC asserted that the harassment was severe and pervasive, that the owner criticized traditionally Black hairstyles, and fired an employee with dreadlocks.

These filings indicated that the EEOC will continue to litigation race discrimination claims on a priority basis throughout the remainder of the fiscal year.

March 2023 Release Of Enforcement Statistics

On March 13, 2023, the EEOC published its fiscal year 2022 Annual Performance Report (FY 2022 APR), highlighting the Commission’s recovery of $513.7 million in monetary relief for more than 38,000 victims of employment discrimination, including nearly $40 million as a direct result of litigation resolutions.

This annual publication from the EEOC is noteworthy for employers in terms of recognizing the EEOC’s reach, understanding financial exposure for workplace discrimination claims, and identifying areas where the EEOC may focus its litigation efforts in the coming year.

It is a must read for corporate counsel, HR professional, and business leaders.

Strategic Priorities

Addressing systemic discrimination has long been a top priority for the EEOC. In FY 2022, the EEOC resolved over 300 systemic investigations on the merits, obtaining more than $29.7 million in monetary benefits. The EEOC also resolved 10 systemic lawsuits, obtaining over $28 million in relief for nearly 1,300 individuals and significant equitable relief. To ensure the systemic lawsuit cupboard was not left bare, the EEOC filed 13 new systemic lawsuits.

Advancing racial justice was another strategic priority for the EEOC in FY 2022. The FY 2022 APR notes that the EEOC resolved 18 lawsuits alleging race or national origin discrimination, for approximately $4.6 million in relief benefiting 298 individuals.  In addition, nine of the new 13 systemic lawsuits include claims of race or national origin discrimination. The EEOC also conducted 468 race and color outreach events, which reached 52,675 attendees. This includes 143 racial justice events reaching 9,064 attendees.

Finally, in recent years the EEOC has indicated that the use of artificial intelligence (“AI”) and algorithmic fairness in employment decisions is a strategic priority. In addition to providing AI training to systemic enforcement teams in the EEOC’s field offices, the EEOC hosted 24 AI and algorithmic fairness outreach events for 1,192 attendees. The EEOC’s efforts culminated with one lawsuit filing in this area. Of note, the EEOC prepared two ADA-related guidance publications relative to the use of artificial intelligence.

We anticipate that the EEOC will continue to focus on these strategic priorities in the remaining months of FY 2023.

Other Notable Developments

Beyond touting its monetary successes, the FY 2022 APR also highlights the EEOC’s efforts in the community. The EEOC conducted 3,302 outreach and training events, providing more than 225,906 individuals nationwide with information about employment discrimination and their rights and responsibilities in the workplace. Among these outreach programs were 399 events for small businesses, which were attend by approximately 18,878 individuals. Finally, 369 outreach events concerned the intersection of COVID-19 and employment discrimination laws. These COVID-19 programs had 26,041 attendees.

The EEOC also expanded its digital footprint, as the EEOC’s website had 10.8 million users. This marks a 3% increase over fiscal year 2021. There were 16 million user sessions, a 4.4% increase over fiscal year 2021. The EEOC had over 29 million page views, a 4.4% increase over fiscal year 2021, and there was a 3% increase in mobile traffic on the website. This data suggests that potential charging parties and other various constituents are more actively engaging with the Commission through its online platforms.

Takeaways For Employers

The first six months of the EEOC’s FY 2023 started with changes in leadership and a focus on new strategic initiatives. With a vastly increased proposed budget, it is more crucial than ever for employers to take heed in regards to the EEOC’s strategic priorities and enforcement agendas.

Stay tuned to our blog for future updates regarding the EEOC’s litigation activities.

Illinois Trial Court Grants Class Certification In BIPA Class Action

By Alex W. Karasik, Gerald L. Maatman, Jr. and Jennifer A. Riley

TakeawaysIn Palacios v. H&M Hennes & Mauritz, LP, Case No. 18-CH-16030 (Cir. Ct. Cook County, Ill. Mar. 16, 2023), a state trial court in Illinois granted Plaintiff’s motion for class certification in an Illinois Biometric Information Privacy Act (the “BIPA”) class action. Given the limited jurisprudence in BIPA class action certification rulings, this decision is an important read for corporate counsel, as the ruling likely will be used as a roadmap by the plaintiffs’ bar to support their efforts to certify such classes.

Case Background

Plaintiff alleged that Defendant required him and other employees to scan their fingerprints into a biometric time clock system to record the time they worked, and unlawfully collected, possessed, and transferred their biometric information without consent and without a proper retention and destruction schedule.  Plaintiff sought to certify a class of all hourly employees who enrolled in or used Defendant’s timekeeping system while working for Defendant between August 9, 2014, and October 15, 2019.

In terms of the four factors to certify the class – numerosity, adequacy of representation, commonality, and appropriateness – Defendant did not challenge the numerosity factor. However, Defendant challenged the motion for class certification regarding the other three factors.

The Court’s Decision

The Court granted Plaintiff’s motion for class certification. First, the Court held that the named Plaintiff was an adequate class representative. Defendant argued that, based on Plaintiff’s deposition testimony, he was, “uninformed and disinterested in the facts, the litigation, and his role as class representative.” The Court rejected this argument, holding that, “while [Plaintiff] may not understand legal jargon . . . he understands the basic facts . . . understands he is making a legal claim for violation privacy rights on behalf of a class of other employees [and] has been in regular communication with his counsel and participated in discovery.” Accordingly, the Court found that Plaintiff would adequately represent the putative class.

Second, the Court held that the commonality factor was met. Defendant contended that Plaintiff was at odds with the rest of the class since he alleged that he suffered emotional distress damages. The Court rejected this argument, holding that Plaintiff testified that he was harmed through a breach of his biometric information privacy rights and was pursuing the same claims on behalf of class members. Accordingly, the Court held that common questions predominated over questions affecting individual class members.

Finally, the Court explained that, “a class action must be an appropriate method for the fair and efficient adjudication of the controversy.” Id. (citations and quotations omitted). The Court opined that many individuals incurred relatively small liquidated damages and their likely recovery was probably too small to justify a separate action. However, collectively, the Court could adjudicate the putative class’s claims, as it noted, “This is what class actions were designed to achieve.”  Id.  Accordingly, the Court held that a class action was the appropriate method for the fair and efficient adjudication of the controversy.

Implications For Employers

While employers are likely still recovering from the sting of adverse Illinois Supreme Court BIPA class action rulings from early 2023, this decision marks another victory for the plaintiff’s bar. Defendants in BIPA class actions who are facing motions for class certification would be wise to avoid duplicating the arguments made here. In light of the shrinking number of potential BIPA defenses and skyrocketing damages, employers must begin exploring alternative defense strategies to combat these bet-the-company cases.

Illinois Supreme Court Holds Federal Labor Law Preempts BIPA Claims Asserted By Unionized Employees

By Alex W. Karasik, Tyler Z. Zmick, and Elizabeth C. Mincer

Duane Morris Takeaways:  In the Illinois Supreme Court’s latest ruling in the biometric privacy space, it decided in Walton v. Roosevelt University, 2023 IL 128338 (Ill. Mar. 23, 2023), that claims brought under the Biometric Information Privacy Act (“BIPA”) by bargaining unit employees are preempted by Section 301 of the Labor Management Relations Act (“LMRA”) where an employer invokes a broad management rights provision in a CBA.  This ruling – which is consistent with federal court decisions addressing the issue – is a rare win for defendants facing BIPA class actions.  Employers with unionized workforces may now be able to assert an LMRA preemption defense in seeking dismissal of BIPA claims based on decisions issued by Illinois’s highest state court and the U.S. Court of Appeals for the Seventh Circuit.

Case Background

Plaintiff alleged that when he started working at Roosevelt University in 2018, Roosevelt required him to enroll a scan of his hand geometry onto a biometric timekeeping device as a means of clocking in and out of work.  Plaintiff sued Roosevelt the following year, alleging that the university violated Sections 15(a), 15(b), and 15(d) of the BIPA in connection with Roosevelt’s use of the timekeeping system by (i) failing to develop a written policy made available to the public establishing a retention policy and guidelines for destroying biometric data, (ii) collecting his biometric data without providing him with the requisite notice and obtaining his written consent, and (iii) disclosing his biometric data without consent.

In response to the complaint, Roosevelt moved to dismiss on the basis that Plaintiff’s claims were preempted by Section 301 of the Labor Management Relations Act (“LMRA”).  Specifically, Roosevelt argued that Plaintiff had been a union member while employed by Roosevelt, and the collective bargaining agreement (“CBA”) between Roosevelt and Plaintiff’s union contained a management rights clause broad enough to cover the manner by which union employees clocked in and out of work.  As support, Roosevelt cited the U.S. Court of Appeals for the Seventh Circuit’s decision in Miller v. Southwest Airlines Co., 926 F.3d 898 (7th Cir. 2019), which held that federal labor law preempts BIPA claims when the claims require interpretation or administration of a CBA.

The Cook County Circuit Court rejected Roosevelt’s LMRA preemption argument, finding Miller distinguishable and holding that BIPA claims are “not intertwined with or dependent substantially upon consideration” of terms of a CBA because a person’s rights under the BIPA “exist independently of both employment and any given CBA.”  Id. ¶ 6.  Because the issue presented a close call, however, the Circuit Court certified the following question for interlocutory appeal: “Does Section 301 of the [LMRA] preempt [BIPA] claims asserted by bargaining unit employees covered by a [CBA]?”

The Illinois Appellate Court answered the certified question “yes.”  In doing so, the court noted that the Seventh Circuit had recently come to the same conclusion in a case where “the relevant factual and legal circumstances . . . [were] indistinguishable.”  Id. ¶ 8 (citing Fernandez v. Kerry, Inc., 14 F.4th 644 (7th Cir. 2021)).  The appellate court determined that Fernandez reached the correct conclusion, as the BIPA “contemplates the role of a collective bargaining unit acting as an intermediary on issues concerning an employee’s biometric information.”  Id. ¶ 10 (noting that the BIPA prohibits private entities from collecting biometric information without obtaining consent from the subject or the subject’s legally authorized representative).

The Illinois Supreme Court’s Decision

The Illinois Supreme Court subsequently allowed Plaintiff’s petition for leave to appeal, after which it affirmed the appellate court’s decision.  The Supreme Court observed that the Seventh Circuit had twice held that federal law preempts BIPA claims asserted under similar circumstances, and it noted that when interpreting federal statutes, Illinois courts look to the decisions of the U.S. Supreme Court (“SCOTUS”) and federal circuit and district courts.  It further noted that the SCOTUS’s interpretation of federal law is binding, and that in the absence of SCOTUS precedent, the weight given to federal circuit and district court interpretations of federal law depends on factors such as uniformity of law and the soundness of the decisions.  See id. ¶¶ 23-24 (“[I]f lower federal courts are uniform in their interpretation of a federal statute, this court, in the interest of preserving unity, will give considerable weight to those courts’ interpretations of federal law and find them to be highly persuasive.”).

In comparing Plaintiff’s case to the Seventh Circuit decisions, the Supreme Court acknowledged that the relevant CBA provisions in Plaintiff’s case and in Fernandez both contained similarly broad management rights clauses.  See id. ¶ 31 (noting the CBA between Roosevelt and Plaintiff’s union stated that “[s]ubject to the provisions of this Agreement, the Employer shall have the exclusive right to direct the employees covered by this Agreement” and that “[a]mong the exclusive rights of management . . . are: the right to plan, direct, and control all operations performed in the building [and] to direct the working force”).

In sum, because the Supreme Court did not find Miller and Fernandez to be “without logic and reason,” id., it deferred to the uniform federal case law on the issue and held that when an employer invokes a CBA’s broad management rights clause in response to a BIPA claim brought by a bargaining unit employee, the plaintiff’s BIPA claims are preempted by the LMRA.

Implications For Employers

Like the Seventh Circuit’s decisions in Miller and Fernandez, Walton reflects a rare defendant-friendly development and provides a basis for certain employers to seek dismissal of BIPA claims on LMRA preemption grounds.  The defense applies only to a subset of employers, however, as it can be asserted only by (i) employers with unionized employees who (ii) have entered into a CBA with a union that contains a management rights clause broad enough to cover the manner by which employees clock in and out of work.  Furthermore, unionized employees are not prohibited from seeking redress for alleged BIPA violations – they are simply required to first pursue those claims through the grievance procedures in their CBAs rather than in state or federal court.

Moreover, the National Labor Relations Board (“NLRB”) – the agency that enforces the National Labor Relations Act (“NLRA”) – has indicated that it intends to reshape current law regarding employee privacy and management rights provisions. If such changes take effect, they could reshape how courts assess federal labor law preemption in future BIPA cases.

The Walton ruling highlights the importance of carefully negotiating and drafting CBA provisions, particularly with respect to management rights.  Employers in states with strict privacy laws (like the BIPA) should consider contract language that specifically provides management with the right to use and store certain biometric data and/or implement other new technologies.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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