Our friend, Merrily S. Archer, Esq., has written an important piece on her website concerning a survey which she helped to conduct among lawyers and others who have appeared before the EEOC as part of its conciliation process (“ADR”). Her takeaway: with ADR being the EEOC’s “biggest cash cow,” to settle cases for as much as possible EEOC mediators capitalize on employer insecurity, fear of the costs of defense, and threat of EEOC enforcement actions. While she agrees that the costs of litigation are enormous (who doesn’t!), she debunks the threat of EEOC enforcement as being illusory.
Complete with helpful graphs, her report states that over 80% of those who responded “reported that an EEOC mediator referenced the cost of defense when encouraging employers to settle. The cost of defense undoubtedly now drives employers’ settlement deliberations more than any other factor. Discrimination is, after all, difficult to prove but easy to allege, and the allegation itself exposes employers to an average cost of $70K in non-recoverable defense fees.”
She notes that “According to the EEOC’s 2013 Performance and Accountability Report (PAR), the EEOC collected another historic amount of money from employers ($372.1 million) last year,” and that “its ADR program is the EEOC’s biggest cash cow, accounting for nearly half of its collections.”
As to employer insecurities, she says that “EEOC Mediators often ‘capitalize on employer insecurities about juries, such as ‘your summary judgment motion will fail’ … “juries dislike employers” … and “a jury won’t like/believe your witnesses or documents.” In fact, “most EEOC mediators are former investigators, not attorneys, and have extremely limited experience divining the preferences of future jurors. Besides, juries don’t hate employers; rather, they hate liars and lawyers, often failing to distinguish between the two.”
Finally, when it comes to EEOC enforcement activity, the EEOC’s own enforcement statistics show that, for example, in FY2013 “the EEOC issued Reasonable Cause determinations in only 3.6% of charges, down from 3.8% in FY2012. Likewise, the number of EEOC-initiated civil lawsuits has fallen dramatically in recent years, as the EEOC focuses more on larger, systemic investigations and prosecutions. Perhaps for this reason, the fact that over 60% of employers reported threats of an EEOC systemic investigation is particularly alarming.”
Her conclusion: “When money counts as the measure of its effectiveness, EEOC mediations are not neutral; on the contrary, EEOC mediators are allied with Charging Parties and their attorneys, whose sole objective is to maximize settlement payouts.”
Recommended reading for EEOC practitioners and employers!
In response Fox Rothschild’s republication of our EEOC Mediation Survey, a handful of practitioners weighed in: (a) one claimed that EEOC mediations are just like private ones; (b) a contract EEOC mediator insisted he would never make the misrepresentations specifically identified in our survey; and (c) another practitioner reported he has had only positive experiences with his local EEOC mediators, here.
The first point—i.e., EEOC mediation are just like private mediations—merits a more substantive response, below. As for the other two, the sheer volume of responses (780) and strength of the findings (e.g., over 70% of reporting threats of “reasonable cause” determinations and prosecutions) account for one-off, individual experiences. That is, we designed a quick survey to elicit the feedback of numerous practitioners, not just the vocal ones, and to draw statistically supportable conclusions, not just report our opinions and personal experiences. We’re delighted that some practitioners have reported good experiences, but the whole point of a survey is to develop an understanding broader than anecdotes.
Further, our survey did not intend to measure “satisfaction,” on the rationale that participants could simultaneously report satisfaction and evidence of mediator deception. For that reason, we asked only whether EEOC mediators made a specific representation, and then juxtaposed those findings against published EEOC information.
Three Ways EEOC Mediations Are (or Should Be) Different from Other EEO Mediations
Unlike Private Mediators (or Magistrate Judges), EEOC Mediators Represent a Federal Agency that Wields Broad Enforcement Authority and Prosecutorial Discretion
Our survey revealed that EEOC mediators regularly threaten employers with “reasonable cause” determinations (73.7%), prosecutions (70%), and even systemic investigations (61%). We then tested these representations against the EEOC’s own Priority Charge Handling Procedures (PCHP), and clarified that if any of these enforcement outcomes were LIKELY, the EEOC would not have routed the charge to the ADR program in the first place. We also compared these representations to the EEOC’s own enforcement data, noting a considerable gap between their reported frequency and REALITY.
Unlike a private mediator (or even a judge), the EEOC was entrusted with numerous enforcement powers—e.g., to investigate, to issue subpoenas, to render determinations, and to prosecute employers. Most of these activities occur below the surface, out of public view and under the heavy armor of “government deliberative process” privilege and statutory confidentiality, which the EEOC cites to resist judicial scrutiny of its administrative processes (e.g., mediation, investigation, conciliation). These processes, however, possess tremendous power, by themselves, to inflict terrible financial pain and inconvenience on employers, even before actual PROOF of an EEO violation in court. Thus, our finding that EEOC mediators regularly brandish these powers (disingenuously, in reality) to encourage employer settlement payouts raises legitimate questions about (a) the objectivity of the process; and (b) the responsible use of governmental power. The EEOC I served under Clinton would not have allowed Field personnel to get this close to the ethics fence.
Unlike Private Mediators (or even Magistrate Judges), EEOC Mediators Represent a Federal Agency that Measures Its “Efficacy” by Its Employer Collections
Different kinds of mediators come with different motivations. Private mediators whom I have worked with over a long litigation career get paid by the hour and so, they seem motivated to help the parties get a deal done no matter how long it takes. Magistrate judge mediators make their same government salary while they’re juggling five other matters in addition to your mediation, and so, they seem motivated to make your case (and you) go away as quickly as possible. Our study ultimately asked this question: if (a) the EEOC equates efficacy with employer settlement payouts; and (b) the ADR program historically generates more settlement payouts than any other EEOC program, what would EEOC mediators say to make employers pay?
Our study suggests that EEOC mediators may be neutral toward the parties and the dispute, but certainly not toward OUTCOME, unlike any other mediation context. On the contrary, if success is ultimately measured in dollars, EEOC mediators are inherently allied with Charging Party’s counsel, whose primary motivation is to maximize monetary payouts. Perhaps for that reason, employers and practitioners who show up to EEOC mediations empty-handed or with small purses often encounter the barb that they are not negotiating in “good faith.” In fact, EEOC mediations differ substantially than other kinds of mediation because at the outset, the mediator shares the underlying motivations of one of the parties.
Unlike Private Mediators (or even Magistrate Judges), MOST EEOC Mediators are Not Lawyers
Our study showed that EEOC mediators often forecast gloomy litigation outcomes and juror preferences. Unlike private mediators or magistrate judges, most EEOC mediators are not lawyers; rather, most of them are longtime EEOC investigators who got promoted into their positions when the ADR program launched in the late 1990’s. Thus, unlike the sage insights of battle-hardened judges and former litigators, most EEOC mediators mimic the “pro-wrestler speak” of trial lawyers.
Fancying itself an advocacy agency, the EEOC frequently forgets the important concomitant duties of balance and fairness that accompany prosecutorial discretion and governmental deliberative process privilege. To suggest, therefore, that EEOC mediations are just like any other mediation (a) misses the point of our survey; and (b) ignores the public duties (e.g., fairness, balance) that temper governmental power.
Ultimately, given the EEOC’s focus on employer settlement payouts as the measure of its efficacy, we question whether the EEOC’s programs, processes, burdens and initiatives have WORKED to actually deliver equal employment opportunity based on far more meaningful measurements of progress. We’re trying to further the march toward EEO by asking, What can we do differently (better) to improve access to top jobs, equalize the burdens of unemployment, become an international leader in the benefits of multiculturalism, level the playing field in the federal sector, etc.? At this historic milestone (i.e., Title VII’s 50th on 7/2/14), it is not enough to say “We have much work to do,” a clear EEOC talking point. Rather, responsible policy-making requires us to evaluate whether past interventions have proven effective and to develop positive approaches based on programs that have actually worked.
Please stay tuned for “Seven Sparks to Jumpstart the March Toward Equal Employment Opportunity”, which we plan to publish in the coming weeks.
Merrily S. Archer, Esq., M.S.W., May 26, 2014
Five Employer Takeaways from the EEOC Mediation Survey
What You Don’t Know Can Cost You
In late 2013, EEO Legal Solutions released the then-available results of its EEOC Mediation Survey, which Bloomberg BNA republished in January, 2014. Other media outlets also picked up our preliminary findings, and even tried to elicit a response from the EEOC. After four months, the EEOC finally responded to other media inquiries. It denied any knowledge of our findings, despite published documentary proof that EEOC Commissioner Chai Feldblum requested (and we provided) survey data charts in January, 2014. Since then, the response rate increased to 779, bringing the overall picture about common EEOC mediator tactics into sharper focus.
We had hoped, however, for 1,000 responses from an evenly distributed cross-section of the United States to look for regional variations, if any, from national averages. Nevertheless, because of widely varying response rates by state, we simply cannot differentiate between EEOC District Offices with any statistical firepower. With recent revelations about the poor quality of EEOC statistical analyses undergirding systemic investigations and prosecutions, prudence and fairness dictate more conservative treatment of data.
In our earlier publication about the EEOC mediation process, we detailed the impetus for this survey, central research questions, survey methodology, question design, and response-gathering process, here. In this Final Report, we get right to the point and post the pictures: what can employers learn from the mediation survey?
As reflected in Figure 1, over 80% reported that an EEOC mediator referenced the cost of defense when encouraging employers to settle. The cost of defense undoubtedly now drives employers’ settlement deliberations more than any other factor. Discrimination is, after all, difficult to prove but easy to allege, and the allegation itself exposes employers to an average cost of $70K in non-recoverable defense fees. Without EPL Insurance, most employers can no longer afford to fight to prove themselves RIGHT, an unwelcome byproduct of an EEO enforcement scheme that benefits lawyers at the expense of employers. Employers are stuck, and our survey shows that EEOC mediators know it.
According to the EEOC’s 2013 Performance and Accountability Report (PAR), the EEOC collected another historic amount of money from employers ($372.1 million) last year, a feat it touts under the heading “Enforcing the Law More Effectively.” The FY2013 PAR also makes clear that its ADR program is the EEOC’s biggest cash cow, accounting for nearly half of its collections. Nowhere, however, does the EEOC mention the cost-of-defense conversation its personnel initiate with employers as soon as the allegation is made, regardless of merit. Accordingly, the EEOC’s use of employer settlement money as ostensible evidence of “enforcing the law more effectively” seems like a poor proxy for progress toward equal opportunity.
EEOC Mediators often mimic the standard settlement tripe of NTLA/NELA attorneys to capitalize on employer insecurities about juries, such as “your summary judgment motion will fail” (Figure 2), “juries dislike employers” (Figure 3), and “a jury won’t like/believe your witnesses or documents” (Figure 4). In fact, most EEOC mediators are former investigators, not attorneys, and have extremely limited experience divining the preferences of future jurors. Besides, juries don’t hate employers; rather, they hate liars and lawyers, often failing to distinguish between the two.
EEOC Mediators Overstate the Risk of Reasonable Cause Determinations, Systemic Investigations, and Prosecutions
Given the suffocating cost of defense, the possibility of future EEOC enforcement activity would weigh heavily on any employer’s settlement deliberations. Survey results show that EEOC mediators regularly threaten EEOC cause determinations (Figure 5), EEOC prosecutions (Figure 6), and even systemic investigations (Figure 7), which go on years and cost employers millions, more here. When faced with these enforcement possibilities, most reasonable employers would pay more to settle, again, to avoid anticipated defense costs.
These mediator representations are, however, complete nonsense. First, as EEOC mediators know, if any of those enforcement actions were likely under the EEOC’s 1995 Priority Charge Handling Procedures (PCHP), the EEOC would not have routed the charge to the ADR Unit in the first place; only charges designated as “B” (lower priority) are eligible for ADR. In fact, at an EEOC hearing on March 20, 2013, EEOC Commissioner Victoria Lipnic suggested that the EEOC tell employers about the charge’s PCHP designation to take the “gamesmanship” out of EEOC enforcement. EEOC field personnel immediately opposed her idea, citing the timeworn government deliberative process privilege: if employers knew, they argued, that the EEOC classified the charge as a “B”, and that, by extension, the EEOC was unlikely to devote its limited resources to an actual “investigation,” employers would be less likely to settle.
Second, the EEOC’s own enforcement statistics completely belie EEOC mediator threats of enforcement activity. In FY2013, the EEOC issued Reasonable Cause determinations in only 3.6% of charges, down from 3.8% in FY2012. Likewise, the number of EEOC-initiated civil lawsuits has fallen dramatically in recent years, as the EEOC focuses more on larger, systemic investigations and prosecutions. Perhaps for this reason, the fact that over 60% of employers reported threats of an EEOC systemic investigation is particularly alarming.
HR is Under-utilized
Approximately one-third of survey participants had not participated in any EEOC mediation over the past two years, and nearly 50% were HR practitioners (Figure 8); by contrast, only 5% of attorneys in law firms and 7% of in-house reported not having any mediation over the past two years. Our survey suggests, therefore, that most employers still treat EEOC mediations like serious legal problems that require lawyer “superpowers” and the corresponding expense.
Not so fast: as “B” charges, EEOC mediations are comparatively low risk. Under PCHP, “B” charges are “handled,” not “investigated.” In fact, the presence of counsel for the Charging Party is the single biggest determinant of whether an EEOC charge will advance beyond the EEOC administrative process or will languish, and then fizzle, just like the overwhelming majority of “B” charges heaped on the EEOC’s “Inventory” each year. And to the EEOC, reducing its Inventory (by “handling” but not investigating “B” charges) shows that it is “serving the public more efficiently.” Ironically, NTLA/NELA attorneys and I find common ground re the utter uselessness of this administrative process.
In some cases, it makes sense to pit lawyer against lawyer in an EEOC mediation, particularly if the EEOC administrative process seems like just a speed-bump en route to real litigation. But for most EEOC mediations, employers can realize incredible cost savings by sending well-trained HR professionals instead. Under this “coaching” mediation model, attorneys remain instantly available to advise and intervene, if necessary, using the wide variety of media that modern technology makes possible (e.g., cell phone, text messaging, and email). Ultimately, this “coaching-from-the-sidelines” approach spares employers of the considerable unnecessary expense of non-productive attorney appearance time, particularly those long intervals when the mediator confers with the other party.
Further, today’s HR professionals often possess the interpersonal, emotional intelligence (EQ) skills that (a) attorneys often lack; and (b) work extremely well in informal mediation settings. EQ skills, which are not taught or honed in law schools or law firms, quell the rancor that fuels workplace disputes and prevents cost-effective resolutions. For an angry, allegedly aggrieved employee, the presence of defense counsel often signifies warfare, sets a counterproductive tone, and interferes with resolution. Smart attorneys—i.e., the skilled, not just the billed—know when to get out of the way.
Over this past year, in-house counsel and EPL adjusters have expressed a rational concern. Attorneys are necessary to advise employers during EEOC mediations, they argue, just in case the EEOC mediator starts talking smack about reasonable cause determinations, systemic investigations, prosecutions, adverse summary judgment rulings and opinionated juries. By calling attention to and then dispelling common mediator threats, however, this survey thereby seeks to diffuse them and help all practitioners make more informed mediation decisions. In an era of high EPL deductibles and frequent EEO disputes, HR can fulfill an important, and necessary, cost-saving role. To view our EEOC mediation training webinar, EEOC Mediations: Getting What You Want without a Big Legal Bill, click here.
When Money Matters, EEOC Mediations are NOT Neutral
Employer settlement payouts make a poor proxy for progress toward EEO, even though the EEOC counts their money as evidence of “enforcing the law more effectively.” Our study aimed to answer this central question: If the EEOC equates efficacy with employer settlement payouts, what impact, if any, would this metric-that-matters have on the behavior of personnel operating its biggest settlement machine, the ADR program?
The results speak volumes. Behind closed doors, EEOC mediators exaggerate the risk of poor litigation outcomes and EEOC enforcement activity to ratchet up employer cost-of-defense settlement offers, regardless of charge merit. Immediately upon the mere accusation of discrimination, employers walk into a cost-of-defense conversation where the questions of wrongdoing and EEO compliance are irrelevant. In the EEOC’s “fabulously successful” ADR program, money (and lots of it: $372.1m) changes hands between employers, EPL carriers, defense attorneys, and plaintiff’s employment lawyers, with some leftovers for allegedly aggrieved employees. But does this wealth redistribution really advance the march toward equal employment opportunity (i.e., “enforcing the law more effectively”)?
Unfortunately, no. When we measure what MATTERS, it becomes clear that under this adversarial litigation-based model of EEO enforcement, progress toward EEO has stalled for most of Title VII’s intended beneficiaries. In Measuring What Matters at Title VII’s 50th Anniversary,we analyzed the EEOC’s own EEO-1 data to evaluate the progress of women and minorities toward attaining top jobs, across industries; we looked at unemployment rates among gender and racial groups; we researched federal sector EEO employment trends; we pulled up Gallup polls and EEOC intake data to assess whether workers perceive workplace opportunity as more equitably distributed; and we compared the United States to other developed nations (e.g., Sweden, Israel, South Africa) re the representation of women in business and governmental leadership. These more meaningful measurements of our progress show that our methods for securing EEO—i.e., the STICKS of an adversarial EEOC and CRA 1991’s privatized litigation-based model—no longer WORK, by themselves or at an acceptable pace, to modify employers’ behavior and by extension, reform the workplace.
When money counts as the measure of its effectiveness, EEOC mediations are not neutral; on the contrary, EEOC mediators are allied with Charging Parties and their attorneys, whose sole objective is to maximize settlement payouts. The EEOC claims, nevertheless, that 98% of employers are satisfied with their ADR experience; until this survey, however, most employers likely did not suspect that EEOC mediators were misleading them.
The EEOC will continue sell its “fabulously successful” ADR program to employers. At the EEOC’s March, 2013 hearing, EEOC careerist Mary Jo O’Neill, Regional Attorney in the Phoenix District Office, called the ADR program “such a wonderful opportunity to settle” and urged employers to “take more advantage of [it] than they do.” At last year’s EEOC Excel Conference, EEOC Chair Jacqueline Berrien heavily peddled the ADR program, and not coincidentally, at this year’s Excel Conference in San Diego (for which the EEOC charges employers over $1,300), the EEOC has again devoted an entire “track” to the merits of mediation. As long as the EEOC counts employer money as EEO progress, employers and Title VII’s intended beneficiaries will remain STUCK in an ineffective wealth redistribution loop where nothing much changes except money changing hands.
We can do better. Stay tuned for Part II of our two-part series on Title VII’s 50th anniversary, “Seven Sparks to Jumpstart Progress toward Equal Employment Opportunity.” Part I, “Measuring What Matters on Title VII’s 50th Anniversary,” is available here.