Category: EEOC Litigation

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

Duane Morris Takeaways: In Mobley v. Workday, Inc., Case No. 23-CV-770 (N.D. Cal. April 9, 2024) (ECF No. 60), the Equal Employment Opportunity Commission (“EEOC”) filed a Motion for Leave to File an Amicus Brief in Support of Plaintiff and in Opposition to Defendant’s Motion to Dismiss. This development follows Workday’s first successful Motion to Dismiss, about which we previously blogged here, after which the Court allowed Plaintiff a chance to amend his complaint. 

For employers utilizing Artificial Intelligence in their hiring practices, this notable case is worth monitoring. The EEOC’s decision to insert itself in the dispute demonstrates the Commission’s commitment to continued enforcement of anti-discrimination laws bearing on artificial intelligence use in employment. 

Case Background

Plaintiff, an African American male over the age of forty alleged that he suffered from anxiety and depression and brought suit against Workday claiming that its applicant screening tools discriminated against applicants on the basis of race, age, and disability.  Plaintiff further alleged that he applied for 80 to 100 jobs, but despite holding a bachelor’s degree in finance and an associate’s degree in network systems administration, he did not get a single job offer.  Id., 1-2 (ECF No. 45).

Workday moved to dismiss the Complaint in part arguing that Plaintiff did not allege facts to state a plausible claim that Workday was liable as an “employment agency” under the anti-discrimination statutes at issue.

On January 19, 2024, the Court granted the defendant’s motion to dismiss, but with leave for Plaintiff to amend, on the ground that plaintiff failed to plead sufficient facts regarding Workday’s supposed liability as an employer or “employment agency.”  Shortly thereafter, Plaintiff filed his Amended Complaint.  Id. (N.D. Cal. Feb. 20, 2024) (ECF No. 47.)

On March 12, 2024, Workday filed its Motion to Dismiss Amended Complaint, asserting that Workday is not covered by the statutes at issue – Title VII, the Americans with Disabilities Act (“ADA”), and/or the Age Discrimination in Employment Act (“ADEA”) – because Workday merely screens job seekers rather than procuring them.  Id., (ECF No. 50.)  On April 2, 2024, Plaintiff filed his opposition (id., ECF No. 59) and, on April 12, 2024, Workday filed its reply.  Id., (ECF No. 61.)

The motion is fully briefed and set for hearing on May 7, 2024.

The EEOC’s Motion for Leave to File an Amicus Brief

On April 9, 2024, before Workday filed its Reply, the EEOC filed a Motion for Leave to File an Amicus Brief in Support of Plaintiff and in Opposition to Defendant’s Motion.  Id., (ECF Nos. 60 & 60-1.)  The EEOC noticed its Motion for hearing on May 7, 2024.  Id., (ECF No. 60.)

The EEOC describes Mobley as a case that “implicate[s] whether,” Title VII, the ADA, and the ADEA, “cover[s] entities that purportedly screen and refer applicants and make automated hiring decisions on behalf of employers using algorithmic tools.”  Id., at 1 (ECF No. 60-1.)  The Commission argues that Plaintiff’s Amended Complaint satisfies federal pleading standards “with respect to all three theories of coverage alleged.”  Id., at 4.

First, with respect to Workday as an employment agency, the EEOC notes that Title VII, the ADA, and the ADEA, all prohibit discrimination by employment agencies.  Under each statute, the term “employment agency” includes “any person regularly undertaking with or without compensation to procure employees for an employer.”  Id.  The EEOC maintains courts generally construe “employment agency” based on “‘those engaged to a significant degree’ in such procurement activities ‘as their profession or business,’” and the focus on the degree to which an entity engages in “activities of an employment agency.”  Id.

The EEOC argues, among these activities, screening and referral activities are classically associated with employment agencies.  Id., at 5.  The Commission asserts that “[Plaintiff] has plausibly alleged that Workday’s algorithmic tools perform precisely the same screening and referral functions as traditional employment agencies—albeit by more sophisticated means.”  Id., at 6.  In contrasting Workday’s position, the EEOC urged the Court to find Workday’s arguments that “screening employees is not equivalent to procuring employees,” and that Workday does not “actively recruit or solicit applications” as unpersuasive.  Id., at 7.

Second, the EEOC argues leading precedent weighs in favor of Plaintiff’s allegations that Workday is an indirect employer.  Taking Plaintiff’s allegations as true, the EEOC contends that “Workday exercised sufficient control over [Plaintiff’s] and others applicants’ access to employment opportunities to qualify as an indirect employer,” and “Workday purportedly acts as a gatekeeper between applicants and prospective employers.”  Id., at 11. 

The EEOC argues Workday’s position on sufficient control misses the point.  Workday’s assertion that it “does not exert ‘control over its customers,’ who ‘are not required to use Workday tools and are free to stop using them at any time,” is not the inquiry.  Id., at 12.  Rather, the relevant inquiry is “whether the defendant can control or interfere with the plaintiff’s access to that employer,” and the EEOC notes that the nature of that control or interference “will always be a product of each specific factual situation.”  Id.

Finally, the EEOC maintains that Plaintiff plausibly alleged Workday is an agent of employers. The EEOC also maintains that under the relevant statutes the term “employer” includes “any agent of” an employer and several circuits have reasoned that an employer’s agent may be held independently liable for discrimination under some circumstances.  Id. 

In analyzing Plaintiff’s allegations, the EEOC argues that Plaintiff satisfies this requirement, where Plaintiff “alleges facts suggesting that employers delegate control of significant aspects of the hiring process to Workday.”  Id., at 13.  Accordingly, the EEOC concludes that Plaintiff’s allegations are sufficient and demonstrate “Workday’s employer-clients rely on the results of its algorithmic screening tools to make at least some initial decisions to reject candidates.”  Id., at 14.

On April 15, 2024, the Court ordered any opposition or statement of non-opposition to the EEOC’s motion for leave shall be filed by April 23, 2024.  Id.  (ECF No. 62.)

Implications For Employers

With the EEOC’s filing and sudden involvement, Employers should put great weight on EEOC enforcement efforts in emerging technologies, such as AI.  The EEOC’s stance in Mobley shows that this case is one of first impression and may create precedent for pleading in AI-screening tool discrimination cases regarding the reach of “employment decisions,” by an entity – whether directly, indirectly, or by delegation through an agent.

The Mobley decision is still pending, but all Employers harnessing artificial intelligence for “employment decisions” must follow this case closely.  As algorithm-based applicant screening tools become more common place –the anticipated flood of employment discrimination lawsuits is apt to follow.

 

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

Duane Morris Takeaways: The EEOC’s fiscal year (“FY 2024”) spans from October 1, 2023 to September 30, 2024. Through the midway point of FY 2024, EEOC enforcement litigation filings have been noticeably down. In the first six months of FY 2023, there were 29 new lawsuits filed by the Commission, while only 14 lawsuits were filed through the midway point of FY 2024.

Traditionally, the second half of the EEOC’s fiscal year – and particularly in the final months of August and 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 fiscal year. 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 2024 is that the Atlanta and Philadelphia District Offices already filed three lawsuits each. Houston, Indianapolis, and New York each have two lawsuit filings, and Dallas and Chicago have one each. That means that many of the district offices have yet to file a lawsuit at all in FY 2024. But for employers in the Atlanta and Philadelphia metropolitan areas, these early tea leaves suggest that a higher likelihood of pending charges may turn into federal lawsuits by the end of Summer to next Fall.

Analysis Of The Types Of Lawsuits Filed In First Half Of FY 2024

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. However, in FY 2024, nearly every filing has contained Title VII claims, with 12 of the 14, or 87% alleging these violations. This is a major increase over past years — in FY 2023, Title VII claims in 59% of all filings, 69% in FY 2022, and 62%. ADA cases were alleged in three lawsuits filed, for 21% of the cases, a decrease from the EEOC’s FY 2023 filings of 31%, 18% in FY 2022, and 36% in FY 2021. There was also an ADEA claim in one of the lawsuits and Pregnancy Discrimination Act claim in another.

The graph set out 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.

The industries impacted by EEOC-initiated litigation have also remained consistent in FY 2024. The chart below details that hospitality, healthcare, and retail employers have maintained their lead as corporate defendants in the last 18 months of EEOC-initiated litigation.

Notable 2024 Lawsuit Filings

Gender Identity Discrimination

In EEOC v. Sis-Bro, Inc., Case No. 24-CV-968 (S.D. Ill. Mar. 28, 2024), the EEOC brought suit alleging that the farm violated federal law when it allowed an employee to be harassed because of her sex and gender identity after she began transitioning genders. The EEOC contended that the employee was subjected to frequent, derogatory comments about the employee’s gender identity; the co-owner refused to call the targeted employee by her name and referred to her by her former name; repeatedly told her she was “a guy”; and criticized her use of employer-provided health insurance and leave for gender affirming care, in violation of Title VII of the Civil Rights Act.

Disability Discrimination

In EEOC v. Atlantic Property Management, Case No. 24-CV-10370 (D. Mass. Oct. 4, 2023), the EEOC filed an action on behalf of a new hire who the company allegedly rescinded a job offer following the employee’s cancer diagnosis. The EEOC alleged that the individual was offered employment as an executive administrative assistant to the president and vice president of the two companies. Shortly after the offer of employment, the employee was diagnosed with breast cancer. Her doctor confirmed she was able to perform all aspects of her position, but she would need to receive treatment weekly resulting in a need for some limited time off from work. When she provided her doctor’s note to the companies, the president decided to withdraw her job offer without any discussion with the employee, which the EEOC alleged violated the ADA.

Race / National Origin Discrimination

In EEOC v. Bob’s Tire Company, Case No. 24-CV-10077 (D. Mass. Jan. 10, 2024), the EEOC filed an action alleging that the company violated Title VII of the Civil Rights Act by subjecting employees to egregious and constant harassment, including the owner telling Hispanic employees to “go back to [their] country”; calling Guatemalan employees “f—ing Guatemalans”; donning a U.S. Immigration and Customs Enforcement hat to intimidate Hispanic employees; and calling employees homophobic slurs. Additionally, the EEOC contended that employees were also harassed by a co-worker because of their sex, race, and national origin, and at least one employee complained to the owner, who retaliated against this complaining employee by mocking him for being in a romantic and/or sexual relationship with the harassing co-worker.

These filings illustrate that the EEOC will likely continue to prioritize sex, disability, and race discrimination claims in the second half of FY 2024.

March 2024 Release Of Enforcement Statistics

On March 12, 2024, the EEOC published its fiscal year 2023 Annual Performance Report (FY 2023 APR), highlighting the Commission’s recovery of $665 million in monetary relief for over 22,000 workers, a near 30% increase for workers over Fiscal Year 2022. 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.

As we blogged about here, the Commission reported having one of the most litigious years in recent memory in FY 2023, with 142 new lawsuits filed, marking a 50% increase from FY 2022. Among these new lawsuits, 86 were filed on behalf of individuals, 32 were non-systemic suits involving multiple victims, and 25 were systemic suits addressing discriminatory policies or affecting multiple victims. The EEOC also touted that it obtained $22.6 million for 968 individuals in litigation, while resolving 98 lawsuits and achieving favorable results in 91% of all federal district court resolutions.

These numbers show the EEOC is still aggressively litigating discrimination claims, and despite the slow start in FY 2024, we anticipate the EEOC will turn up the jets in the second half of the fiscal year.

Strategic Priorities

The Commission also reported significant progress in its “priority areas” for 2023, which included combatting systemic discrimination, preventing workplace harassment, advancing racial justice, remedying retaliation, advancing pay equity, promoting diversity, equity, inclusion and accessibility (“DEIA”) in the workplace, and, significantly, embracing the use of technology, including artificial intelligence, machine learning, and other automated systems in employment decisions.

In 2023, the EEOC resolved over 370 systemic investigations on the merits, resulting in over $29 million in monetary benefits for victims of discrimination. The Commission also reported that its litigation program achieved a 100% success rate in its systemic case resolutions, obtaining over $11 million for 806 systemic discrimination victims, as well as substantial equitable relief.  Further, the Commission made outreach and education programs a priority in 2023, and specifically sought to reach vulnerable workers and underserved communities, including immigrant and farmworker communities, hosting over 680 events for these groups and partnering with over 1,120 organizations, reaching over 107,000 attendees.

These statistics confirm the Commission’s prowess, dictating that employers should take heed in the coming months as the EEOC seeks to match these gaudy figures.

Other Notable Developments

Beyond touting its monetary successes, and litigation accomplishments, the FY 2023 APR also highlights the newly enacted Pregnant Workers Fairness Act (“PWFA”), which provides workers with limitations related to pregnancy, childbirth, or related medical conditions the ability to obtain reasonable accommodations, absent undue hardship to the employer.

The Commission began accepting PWFA charges on June 27, 2023 (the law’s effective date) and has conducted broad public outreach relating to employers’ compliance obligations under the new law.

Takeaways For Employers

By all accounts, FY 2023 was a record-breaking year for the EEOC. As demonstrated in the report, the Commission has pursued an increasingly aggressive and ambitious litigation strategy to achieve its regulatory goals.  The data confirms that the EEOC had a great deal of success in obtaining financially significant monetary awards.

Although the early numbers are lagging as compared with last year, we anticipate that the EEOC will continue to aggressively pursue its strategic priority areas in FY 2024.  There is no reason to believe that the annual “September surge” is not coming, in what could be another precedent-setting year.  We will continue to monitor EEOC litigation activity on a daily basis, and look forward to providing our blog readers with up-to-date analysis on the latest developments.

Finally, we are thrilled to announce that will be providing a webinar on May 13, 2024, to further analyze the above data.  Employers will gain insight on what they should be doing to ready themselves for the remainder of FY 2024.  Save the date and stay tuned!

By Ryan T. Garippo, Nicolette J. Zulli, and Gerald L. Maatman, Jr.

Duane Morris Takeaways:  On March 29, 2024, in EEOC v. Phoebe Putney Memorial Hospital, Inc., No. 1:17-CV-201 (M.D. Ga. Mar. 29, 2024), Judge Leslie Gardner of the U.S. District Court for the Middle District of Georgia held that even minimal evidence for the EEOC’s claims may be sufficient to find that its failed lawsuit is not frivolous. Consequently, employers may be forced to pay their own attorneys’ fees even where the claims against them are lost at trial by the Commission. The decision in EEOC v. Phoebe Putney Memorial Hospital, Inc., is well worth a read by corporate counsel facing government enforcement litigation.

Case Background

In 2015, Phoebe Putney Memorial Hospital, Inc. (“Phoebe”) hired Wendy Kelley (“Kelley”) as a medical records analyst for a shift that typically ran from Monday through Friday. Kelley, however, understood that she needed to work weekends from time to time.  Hence, when another employee went on maternity leave, Phoebe asked Kelley to cover some Saturday shifts. Instead, Kelley met with her doctor the next day to discuss an ongoing generalized anxiety disorder diagnosis.

Among other things, Kelley’s doctor recommended that she “take Saturdays and Sundays off work when she had to take an increased dose [of medication] at the end of a stressful workweek.”  Id. at 6. As a result, Kelley submitted a request under the Americans with Disabilities Act (“ADA”) and asked not to work weekends. Phoebe explained that it is “a hospital and [it is] open on the weekend” and it could not accommodate the request. Id. at 8. Phoebe did, however, offer Kelley two days off in a row to give her time to take her medication. At the time, it appeared that this solution would work for everyone. Kelley then submitted another request for time off — this time for two weeks straight — citing her generalized anxiety disorder. Phoebe denied that request and explained that it could not cover her shifts. Kelley then refused to come into work. Accordingly, Phoebe terminated Kelley’s employment.

The Equal Employment Opportunity Commission (“EEOC”), on behalf of Kelley, filed a lawsuit alleging a violation of the ADA. The EEOC asserted that Phoebe fired Kelley because of a perceived disability. Ultimately, Phoebe filed a motion for summary judgment, which was denied, and the EEOC went to trial on Kelley’s claims. The jury sided with Phoebe on the basis that “Kelley’s request for accommodation was not made in good faith,” among other findings.  Id. at 1.  This verdict prompted Phoebe to file a motion for attorneys’ fees and costs that argued the entire lawsuit was frivolous.

The Court’s Decision

Judge Gardner denied Phoebe’s request for its attorneys’ fees and costs.

The Court explained that attorneys’ fees in ADA cases can be awarded only if the claim itself is frivolous. Courts consider three factors to make such a determination, including “(1) whether the plaintiff established a prima facie case; (2) whether the defendant offered to settle; and (3) whether the trial court dismissed the case prior to trial or held a full-blown trial on the merits” along with other considerations in the Eleventh Circuit. Sullivan v. Sch. Bd. Of Pinellas Cnty., 773 F. 2d 1182, 1189 (11th Cir. 1985) (citations omitted). Additionally, even if a plaintiff’s evidence is “weak,” she may be able to defeat a request for attorneys’ fees if there is “any evidence to support [her] claims.” Id.

Based on these principles, the Court held that Kelley’s testimony, even if weak or unpersuasive, was sufficient to establish her prima facie case for the EEOC’s claim of an ADA violation. The Court relied on that testimony to deny summary judgment. The Court stated as long as Kelley had “any evidence” for her claim, the lawsuit was not frivolous. That testimony, along with some medical records, qualified as such evidence. Further, the Court explicitly noted that Phoebe “did not offer to settle” and, therefore, the Court could not determine that this factor cut in Phoebe’s favor. Id. at 8.

Implications Of The Decision

The EEOC is an aggressive litigant. This decision demonstrates that even when the Commission loses its claims, companies nevertheless may have to foot the bill for their attorneys’ fees. Establishing an entitlement to attorneys’ fees is an uphill climb.

By Haley Ferise, Kathryn Brown, and Gerald L. Maatman, Jr.

Duane Morris Takeaways: On March 26, 2024, in EEOC v. Ferrellgas LP, No. 23-1719 (6th Cir. Mar. 26, 2024), the Sixth Circuit affirmed the decision of the U.S. District Court for the Eastern District of Michigan to enforce an EEOC subpoena over an employer’s objections. Although the employer raised both procedural and substantive grounds to challenge the pre-lawsuit subpoena, but both the District Court and the Sixth Circuit rejected those arguments. The ruling ought to be a required read for corporate counsel facing EEOC subpoenas issued as part of pre-lawsuit administrative investigations.  

Case Background

April Wells, a Black woman, was a driver for a propane distribution company. She alleged in a discrimination charge filed with the Equal Employment Opportunity Commission that she was subjected to sex discrimination based on (i) her over qualification for the position for which she was hired as compared to that for which she applied, (ii) her compensation that was allegedly lower than that of her male counterparts, and (iii) her termination. She later amended the complaint to include race discrimination claims.

The EEOC began its investigation of Wells’ claims by sending the company two requests for information (RFIs). The employer refused to fully respond to the RFIs on grounds that the scope was overbroad. As is its usual approach, in October 2022, the EEOC issued a subpoena for information the company’s hiring practices. The company objected that the subpoena was unsigned, overly broad, unduly burdensome, and not relevant to the matters arising from the charge. A month later, the EEOC sent a second subpoena, in response to which the employer reiterated its objections.

In December 2022, the EEOC applied for an order to show cause as to why the subpoena should not be enforced, which was granted with a deadline of February 24, 2023. The company responded that (i) the EEOC improperly served the subpoena on the wrong corporate entity and therefore the company had not forfeited its right to challenge the subpoena, (ii) the EEOC could not show the relevance of its subpoena, and (iii) gathering and producing the information sought would be “unduly burdensome.” Id. at 4. The District Court rejected all of the company’s arguments, and it subsequently appealed.

The Sixth Circuit Decision

On appeal, the Sixth Circuit affirmed.

On appeal, the employer raised a new issue of improper service, claiming that the EEOC was required to mail the subpoena to the company itself or utilize another method enumerated in the National Labor Relations Act (NLRA), as the EEOC is authorized to do under Title VII. The Sixth Circuit found that, after directing the EEOC to communicate with its defense counsel, the company could not defeat service via its outside counsel that complied with its own request and that the company’s strict interpretation of the NLRA was erroneously narrow.

In response to the company’s argument that EEOC’s addressing its subpoena to the wrong corporate entity rendered the subpoena invalid, the Sixth Circuit ruled that such an error did not prevent the employer from raising its objections sooner and that the error was harmless, thereby not “preclud[ing] the district court from enforcing the subpoena.” Id.at 7.

At the same time, the Sixth Circuit rejected the EEOC’s argument that the employer had forfeited the right to object to the subpoena because of the company’s allegations the “the EEOC … failed to properly serve a facially valid subpoena.” Therefore, it addressed the company’s substantive objections. The Sixth Circuit reasoned that the District Court did not “abuse its discretion in rejecting” the employer’s arguments that the subpoena was “overbroad and unduly burdensome.” Id. at 11-12. The Sixth Circuit explained that Wells’ charge of discrimination did in fact concern hiring practices in light of her allegations related to discriminatory remarks in the interview process and that, even if the charge did not directly concern hiring practices, information about hiring processes “could cast light on whether [the employer] discriminated against other job applicants.” Id. at 12-13.

Finally, the Sixth Circuit agreed with the District Court that the company did not meet its burden in demonstrating that compliance with the subpoena presented an undue hardship.

Implications Of The Decision

Employers facing administrative subpoenas from the EEOC should be aware that clerical errors or even questionable service likely will not be sufficient to defeat the subpoenas. A better practice is to raise substantive objections to such subpoenas in a timely and formal manner.

By Gerald L. Maatman, Jr., Alex W. Karasik, and Christian J. Palacios

Duane Morris Takeaways:  In EEOC v. Keystone RV Company, Case No. 3:22-CV-831 (N.D. Ind. Mar. 27, 2024), Judge Damon R. Leichty of the U.S. District Court for the Northern District of Indiana held that an employer was liable under the Americans with Disabilities Act (“ADA”) for failing to accommodate a former employee after the company terminated the worker for attendance issues stemming from his novel medical condition. This rare summary judgement victory in favor of the Commission illustrates the importance of employers engaging in an interactive process with their employees to provide them with reasonable accommodations under federal anti-discrimination laws, and the legal liability associated with non-compliance. 

Background

The Charging party, Brandon Meeks, was diagnosed with cystinuria at the age of 19, a rare chronic illness that caused kidney stones to develop with irregular frequency. Roughly once every two years, he developed a large kidney stone that required surgical removal. In 2019 Meeks was hired as a painter at Keystone’s Wakarusa, Indiana plant, where he painted the base coat on RV wheels.  Keystone had an attendance policy whereby it would terminate an employee who accrued seven “attendance points” (absences) within a year, and allowed an employee to miss up to three consecutive days from one doctor’s note and accrue just one attendance point without applying for an ADA accommodation.  Id. at 2.  According to the record, Mr. Meeks was a “diligent and hard worker,” but he accrued several attendance points for absences related to his medical condition, including a visit to his urologist, and treatment for kidney stone pain. Id.

On November 13, 2019, Meeks collapsed in a restroom due to excruciating pain.  He was promptly rushed to the hospital and informed by a doctor that he had a “golf-ball-sized kidney stone” in his left kidney that would need to be surgically removed.  Id. at 3.  Meeks informed Keystone that he would require two weeks off of work to schedule and recover from surgery, which his employer agreed to given that Keystone’s Wakarusa plant closed down for several weeks from December to January and Meeks would only need a single day off of work. Prior to this request, Meeks had accrued 6 attendance points.  Id. at 4.  When Meeks returned to work on January 13, 2020, he informed Keystone he would need time off for another surgery scheduled on January 24, 2020. Meeks’ manager forecasted to him that he would be terminated if he missed work, and could reapply for employed 60 days later, per company policy.  Id.  According to the manager, Meeks did not provide a return to work date in connection with his second surgery request.  According to Meeks, he knew he could likely return to work on January 27, 2020, but he never communicated this timeline to Keystone because his employer “never asked.” Id. After Meeks underwent his second surgery, on January 24, 2020, his mother drove him to the plant to pick up his paycheck, upon which he was sent to the corporate office and informed he was terminated due to his attendance points.  Meeks subsequently filed a Charge with the EEOC. After its investigation, the EEOC brought suit on his behalf.  On March 27, 2024, Judge Leichty granted summary judgement in favor of the Commission.

The District Court’s Ruling

Judge Leichty began his 19-page ruling by observing that this case illustrated one reason “why the ADA existed.”  Id. at 1.  Judge Leichty observed that “[n]o one can reasonably dispute that Mr. Meeks was a qualified individual with a disability. Keystone knew of the disability. And Keystone failed to accommodate the disability reasonably. A reasonable jury could not find otherwise on this record.”  Id. at 7.

As the record reflected, the Court reasoned that Keystone clearly could have accommodated providing Meeks with two weeks leave, and yet it had not done so. The Court was unpersuaded by Keystone’s arguments that Meeks did not effectively communicate with his employer, and prior to his January surgery, he did not provide Keystone with an estimated return date.  Rather, the Court determined that Keystone had an affirmative obligation to initiate an interactive process with its employees, and had historical knowledge of Meeks’ disability; because of this, the fault was theirs alone.  Thus, “[a] reasonable jury could not lay the fault at Mr. Meeks’ feet,” and the Court granted summary judgement in the EEOC’s favor on ADA liability.  Id. at 10-11.

Judge Leichty scheduled a trial at a later date to assess the question of damages, as factual disputes remained regarding Meeks’ reasonable diligence at finding comparable employment.

Implications For Employers

As the ruling in EEOC v. Keystone RV Company illustrates, it is imperative that employers engage in an interactive process with employees with respect to disability accommodations, provided the employer has reason to know of the employee’s disability. Significantly, a formal ADA request is not necessary on the part of the employee for a court to find an employer at fault for a breakdown of the interactive process.  Because of this, employers should have robust policies in place to proactively provide their employees with reasonable accommodations for their disabilities. To do otherwise risks receiving a pre-liability judgement in favor of a federal, state, or municipal regulatory agency tasked with enforcing anti-discrimination legislation.

By Gerald L. Maatman, Jr., Nick Baltaxe, and Brittany Wunderlich

Duane Morris Takeaways: On March 11, 2024, in Equal Employment Opportunity Commission v. Il Fornaio (America) LLC, Case No. 2:22-CV-05992, Judge Sherilyn Peace Garnett of the U.S. District Court for the Central District of California granted in part, and denied in part, the Defendant’s motion to dismiss the EEOC’s complaint. Specifically, the Court held that EEOC failed allege specific facts to support that a group of aggrieved employees were subjected to hostile work environment, retaliation, and constructive discharge. This holding illustrates that defendants may be successful in challenging the basis for EEOC lawsuits when the complaint fails to include specific facts as to unidentified aggrieved employees.

The Complaint

On August 24, 2022, the EEOC filed a lawsuit against Defendant Il Fornaio (America) LLC (“Il Fornaio”), the owner and operator of Italian restaurants.  The EEOC alleged that the Charging Party and similarly aggrieved employees (“Aggrieved Employees”) were subjected to sexual harassment while employed by Il Fornaio by male supervisors.  Specifically, the EEOC claimed that those supervisors leered at and groped female employees, as well as showed pornography to them while at work. The Complaint further alleged that Il Fornaio failed to take adequate steps to address complaints of harassment and retaliated against the Charging Party and Aggrieved Employees by reducing their hours, forcing employees to “clean the bar” more frequently, rejecting requests for time off, and “threatening” employees.  Id. at 1-2.

Il Fornaio’s Motion to Dismiss

Il Fornaio moved to dismiss the EEOC’s complaint pursuant to Rule 12(b)(6) or, in the alternative, moved for a more definite statement under Rule 12(e). Specifically, Il Fornaio argued that the EEOC’s Complaint should be dismissed as to the unnamed and unidentified victims because the allegations lacked sufficient specificity to meet the federal pleading standard.

In support of its motion, Il Fornaio pointed to the fact that the EEOC had not provide information regarding the number of Aggrieved Employees, which of Il Fornaio’s 19 restaurants were involved, basic identifying information about any of the Aggrieved Employees, information regarding the alleged complaints, the identities of the co-workers and supervisors involved, and the timeframe in which the alleged harassment occurred. Accordingly, Il Fornaio argued that it was unable to respond to the Complaint because the EEOC’s allegations were too vague and ambiguous.

The Court’s Order

As to the EEOC’s first cause of action for hostile work environment under Title VII, the Court noted that that all that is required to survive a motion to dismiss is for the plaintiff to satisfy Rule 8 of the Federal Rules of Civil Procedure and allege sufficient facts to state the elements of a hostile work environment claim (i.e., plead that (i) she was subjected to verbal or physical contact of a sexual nature, (ii) the conduct was unwelcome, and (iii) the abusive conduct was sufficiently severe or pervasive so as to alter the conditions of her employment thus creating an abusive work environment). The Court found that the EEOC had adequately alleged a hostile work environment claim on behalf of the Charging Party. For example, the EEOC alleged that the Charging Party was subject to frequent unwelcome comments and conduct that was sexual in nature, not isolated incidents, and that Il Fornaio failed to correct the harassment which, in turn, altered the terms and conditions of the Charging Party’s employment.

However, the Court held that the EEOC’s complaint failed to put Il Fornaio on notice as to how the allegations applied to the Aggrieved Employees. The Court noted that the EEOC’s complaint did not identify which of the alleged behaviors applied to the Charging Party and which applied to the Aggrieved Employees. In addition, the EEOC’s complaint failed to provide several categories of details, such as which of Il Fornaio’s locations were implicated, what roles the Aggrieved Employees held, where and to what extent the male co-workers worked, the approximate timeframes for when the Aggrieved Employees worked for Il Fornaio, and the approximate dates of complaints about the offending conduct. Most strikingly, the EEOC’s Complaint failed to identify one other claimant, other than the Charging Party, even anonymously. The Court held that all of the omissions, taken together, rendered the complaint deficient. As such, the Court granted Il Fornaio’s motion to dismiss as to the EEOC’s claims as to the Aggrieved Employees’ hostile work environment, with leave to amend the deficiency.  However, in doing so, the Court also maintained that the lack of any one of the identifying factors was not dispositive and that requiring all of those details would result in a heightened pleading standard, which did not apply to these claims.

Next, the Court examined whether the EEOC’s complaint pled sufficient facts to state a claim for retaliation under § 704 of the Civil Rights Act of 1964. The Court concluded that the EEOC’s Complaint failed to state a claim for retaliation because the Complaint did not allege that the Charging Party and/or Aggrieved Employees engaged in a protected activity. Additionally, the Court held that because the EEOC failed to allege a protected activity, the Complaint also failed to draw a casual connected between the protected activity and the adverse employment action. For that reason, the Court granted Il Fornaio’s motion to dismiss the EEOC’s retaliation claim with leave to amend to cure the deficiencies.

Finally, the Court held that the EEOC’s constructive discharge was adequately plead as to the Charging Party.  Specifically, the Court noted that the EEOC alleged that the Charging Party resigned due to being subjected to sexual harassment, which was sufficient to put Il Fornaio on notice of the claim.  However, as with the other claims, the Court agreed with Il Fornaio that the allegations as to the Aggrieved Employees failed the Rule 8 standard.  With that reasoning, the Court dismissed Plaintiff’s constructive discharge claim as to the allegations regarding the Aggrieved Employees with leave to amend.

Implications For Employers

The holding in U.S. Equal Employment Opportunity Commission v. Il Fornaio (America) LLC confirms that the EEOC must include facts regarding the unidentified Aggrieved Employees in order to state a claim. However, the Court confirmed that there is no “heightened standard” in these cases and that the failure to include any specific fact will not be dispositive.  Nonetheless, employers can, and should, move to dismiss a complaint that is completely silent as to unidentified Aggrieved Employees.

By Gerald L. Maatman, Jr., Alex W. Karasik, and Christian J. Palacios

Duane Morris Takeaways:  On March 11, 2024, the EEOC published its Fiscal Year 2023 Annual Performance Report (FY 2023 APR), highlighting the Commission’s accomplishments for the previous year, including a record-breaking recovery of $665 million in monetary relief for over 22,000 workers, a near 30% increase for workers over Fiscal Year 2022.

Employers should take note of the Commission’s annual report, as it provides invaluable insight into the EEOC’s regulatory priorities, and highlights the significant degree of financial risk that companies face for failing to comply with federal anti-discrimination laws. It is a must read for corporate counsel, HR professional, and business leaders.

FY 2023 Statistical Highlights

The EEOC’s recovery of $665 million in monetary relief over the past fiscal year represents an increase of 29.5% compared to Fiscal Year 2022.  Specifically, the Commission secured approximately $440.5 million for 15,143 workers in the private sector and state and local governments and another $204 million for 5,943 federal employees and applicants.

Furthermore, the Commission reported having one of the most litigious years in recent memory, with 142 new lawsuits filed, marking a 50% increase from Fiscal Year 2022. Among these new lawsuits, 86 were filed on behalf of individuals, 32 were non-systemic suits involving multiple victims, and 25 were systemic suits addressing discriminatory policies or affecting multiple victims. These numbers show an agency flexing its litigation muscles.

The EEOC’s drastic increase in filings was accompanied by a corresponding increase in complaint activity, with 81,055 new discrimination charges received, 233,704 inquiries handled in field offices, and over 522,000 calls from the public, thereby demonstrating the efficacy of the Commission’s outreach and public education efforts.

Other performance highlights from the report included obtaining more than $22.6 million for 968 individuals in litigation, while resolving 98 lawsuits and achieving favorable results in 91% of all federal district court resolutions. The Commission further reduced its private and federal sector inventories by record levels.

Strategic Developments / Systemic Litigation

The Commission also reported significant progress in its “priority areas” for 2023, which included combatting systemic discrimination, preventing workplace harassment, advancing racial justice, remedying retaliation, advancing pay equity, promoting diversity, equity, inclusion and accessibility (“DEIA”) in the workplace, and, significantly, embracing the use of technology, including artificial intelligence, machine learning, and other automated systems in employment decisions.

In 2023, the EEOC resolved over 370 systemic investigations on the merits, resulting in over $29 million in monetary benefits for victims of discrimination. The Commission also reported that its litigation program achieved a 100% success rate in its systemic case resolutions, obtaining over $11 million for 806 systemic discrimination victims, as well as substantial equitable relief.  Further, the Commission made outreach and education programs a priority in 2023, and specifically sought to reach vulnerable workers and underserved communities, including immigrant and farmworker communities, hosting over 680 events for these groups and partnering with over 1,120 organizations, reaching over 107,000 attendees.

Other Notable Developments

Beyond touting its monetary successes, and litigation accomplishments, the FY 2023 APR also highlights the newly enacted Pregnant Workers Fairness Act (“PWFA”), which provides workers with limitations related to pregnancy, childbirth, or related medical conditions the ability to obtain reasonable accommodations, absent undue hardship to the employer.

The Commission began accepting PWFA charges on June 27, 2023 (the law’s effective date) and has conducted broad public outreach relating to employers’ compliance obligations under the new law.

Takeaways For Employers

The EEOC’s Report is akin to a litigation scorecard. By all accounts, 2023 was a record-breaking year for the EEOC. As demonstrated in the report, the Commission has pursued an increasingly aggressive and ambitious litigation strategy to achieve its regulatory goals, and had a great deal of success in obtaining financially significant monetary awards.  Employers should take note of these trends and be proactive in implementing risk-mitigation strategies and EEOC-compliant policies.

We anticipate that the EEOC will continue to aggressively pursue its strategic priority areas in 2024, which could shape out to be another precedent-setting year. We will continue to track EEOC litigation activity, and look forward to providing our blog readers with up-to-date analysis on the latest developments.

By Gerald L. Maatman, Jr., Jennifer A. Riley, and George J. Schaller

Duane Morris Takeaways: In Equal Employment Opportunity Commission v. Western Distributing Co., No. 1:16-CV-01727, 2024 U.S. Dist. LEXIS 17225 (D. Colo. Jan. 31, 2024), Judge William J. Martinez of the U.S. District Court for the District of Colorado denied Defendant’s motion to dismiss for lack of standing and granted in part and denied in part Defendant’s motion to reconsider.  Both post-trial motions involved disparate impact claims for qualified disabled employees concerning Defendant’s return-to-work policies.  For employers facing EEOC-initiated lawsuits under the Americans with Disabilities Act  of 1990 (the “ADA”) concerning employment policies, this decision is instructive in terms of the record evidence and filings courts will consider when deciding post-trial motions.

Case Background

On July 7, 2016, the EEOC filed suit on behalf of individuals with disabilities who worked for Defendant Western Distributing Co. (“Western”), a trucking company.  The EEOC alleged Western’s employment policies disparately impacted these individuals under the ADA.

Western’s policies required employees to return to work on a “full-duty” basis after medical leave; required certain drivers to static push and pull 130 pounds of weight; and required certain drivers to be able to static push and pull 130 pounds of weight at 58 inches above the ground.  Id. at 2.

In January 2023, a jury decided that Western’s “full-duty” policy had a disparate impact on disabled drivers.  The post-trial motions resulted from the jury’s decision and Western moved to dismiss for lack of standing (“Standing Motion”) and moved to reconsider the Court’s denial of its yet-to-be-filed Rule 50(b) motion (“Motion to Reconsider”).

Standing Motion

The Court denied Western’s Standing Motion.  In reviewing Western’s arguments, the Court determined Western put “great weight … on: (1) Senior U.S. District Judge Lewis T. Babcock’s Bifurcation Order; and (2) several statements by the EEOC’s counsel and the Court during the trial.” Id. at 2.

The Court found the obvious purpose of the bifurcation order was “(1) to give the parties a clear procedure for trying this action; and (2) to give the jury issues it can legally decide and reserve for the Court issues upon which it must rule.”  Id. at 3.  The Court reasoned that Judge Babcock’s bifurcation order “clearly contemplate[d] separate fact finding on ‘all individual claims and resultant damages’” and construing the order otherwise would be “unjust and border on absurd.”  Id. at 4.

As to the statements during trial, the Court concluded that “back pay is viewed as equitable relief . . . to be decided by the judge.” Id. at 3.  Therefore, the Court opined that it “will not ascribe to it the power to foreclose retrospective relief to which the EEOC and aggrieved individuals might be entitled.  Nor will the Court rule such relief is improper simply because the EEOC did not present any damages evidence to a jury that could not award equitable back pay.”  Id.  at 4.

Motion to Reconsider

The Court granted Western’s request to reconsider arguments raised in its initial Rule 50(a) motion.  The Court addressed Western’s arguments and denied each in full.

First, Western argued “the EEOC waived its Disparate Impact Claim to the extent it was based on the “full-duty policy” by failing to include this claim in its proposed “Challenge Standards” instruction.  Id. at 5.

The Court determined its order one month before trial on the EEOC’s motion for partial summary judgment included both the “full-duty and maximum leave policies ‘[as] two of the thirteen discriminatory standards, criteria, or methods of administration that form the basis of the Disparate Impact Claim.’”  Id. at 6.  The Court also reasoned that Western was aware of the need to defend against the full-duty policy given the “significant body of evidence Western in fact prepared and marshaled to do just that.”  Id.

Second, Western sought reconsideration concerning the adequacy of the evidence the EEOC presented at trial with respect to the existence of the full-duty policy and its disparate impact on qualified individuals with disabilities.  Id. at 7. The Court denied Western’s request to re-weigh the evidence as the jury during trial “was attentive, engaged, and clearly thoughtful in issuing a narrow verdict.”  Id. at 8.  As to the disparate impact portion, the Court highlighted that this portion was “a retread of one of Western’s rejected summary judgment arguments.”  Id.  at 7.  Therefore, the Court decided it would “not functionally reverse its own legal conclusions reached during the summary judgment phase.”  Id.  at 8.

For the same reasons, the Court denied Western’s third argument regarding statistical evidence of the 130-pound push/pull tests as a “re-tread” of an issue already decided  on summary judgment.  Id.  Finally, the Court denied Western’s argument because it “[was] merely a short summary of the arguments raised in the Standing Motion.”  Id.

Implications For Employers

Employers that are confronted with EEOC-initiated litigation involving employment policies should note that the Court relied heavily on the established record including prior issued orders, previous motions raising the same or similar arguments, and statements made by counsel at trial.

Further, from a practical standpoint, employers should carefully evaluate employment policies that may impact individuals with disabilities, as courts and juries are apt to scrutinize these materials.