When the federal Equal Employment Opportunity Commission (EEOC) receives a complaint that an employer illegally discriminated against its workers, that employer may be in for a rough ride. The ensuing months can bring time-consuming official requests for information, intrusive investigations, large legal bills, negative publicity and, if the complaint is upheld, expensive damages.
The EEOC investigates complaints of discrimination based on race, color, national origin, religion, sex, age and disability. In general, only employers with 15 or more employees are subject to EEOC oversight. Any employee can file an EEOC complaint, not just those who have been victims of discrimination.
Regardless of whether an EEOC complaint has merit, the employer is going to have to invest time, effort and sometimes money to deal with it. When a worker files a complaint, the EEOC notifies the employer and asks it for a “statement of position,” in which it offers its side of the story. The EEOC follows up with a formal request for the employer to supply documents and other information relevant to the case, such as copies of company human resources policies and personnel files.
EEOC staff may also visit the workplace, something that the agency itself acknowledges can be disruptive to company operations. While on site, the staff may ask the employer to make employees available for interviews. The employer can say no, but the EEOC can still contact them away from work – without the employer’s knowledge or permission.
A Typical Investigation Proceedings
All of this activity so far is simply fact-finding; the EEOC will use the information it turns up to determine whether the complaint merits further action. If so, it moves on to a formal investigation, which will chew up more time and money. The investigators have the authority to subpoena company documents, prohibit the employer from destroying any documents of any kind without permission and compel employees to provide statements.
The EEOC says the typical investigation lasts six months. If the employer doesn’t have an attorney involved in the case by now, it needs one to advise management of its rights and responsibilities. Robin Shea, a partner at the national employment law firm Constangy Brooks & Smith, says employers operating without a lawyer can turn even a seemingly trivial complaint into a major investigation by unintentionally admitting that a violation occurred or providing too much information.
Mediation or Costly Litigation
An employer may be able to avoid a formal EEOC investigation by agreeing to try to resolve the matter through mediation or by settling the complaint. Doing so will probably bind the employer to changing its policies and procedures, and the employer may have to compensate employees who complained. But the employer doesn’t have to admit any guilt or liability, and any agreements can remain confidential.
If the employer declines to mediate, or if the EEOC concludes that the case is too serious for mediation, the EEOC may sue the employer. Even if the EEOC decides not to sue – or take any action – the employees who filed the complaint reserve the right to sue. Regardless of whether the EEOC or the worker does the suing, litigation means not only considerable legal expense for the employer, but also bad publicity.
Penalties and Indemnifications
Penalties for an EEOC complaint – whether resolved through mediation, settlement or litigation – start with providing relief for workers who suffered discrimination. That includes paying workers’ back wages, reinstating them or even promoting them, depending on the nature of the complaint. Employers can be ordered to pay complainants’ legal and court costs. Things get worse if the case goes to trial and the employer loses.
The court can award compensatory and punitive damages to the employees who filed the complaint. Such damages are capped at $50,000 per person when the defendant is an employer with 15 to 100 employees; $100,000 for employers with 101 to 200 employees; $200,000 for 201 to 300 employees; and $300,000 for more than 300 workers. However, in cases of age discrimination and of sex discrimination in pay, the damages are limited to an amount equal to the complaining employees’ lost wages.