Statistical Analysis in Employment Law: EEOC

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March Installments of "The Proactive Employer" Podcast

We have more great installments of "The Proactive Employer" scheduled for the next few weeks. We have another live installment and a special one hour episode. We'll be talking about the use of statistics in reduction in force and other employment decisions, compensation self-auditing, OFCCP requirements and compliance, calculation of economic damages in wrongful termination, and the elements of a comprehensive employment litigation risk management plan.

Friday, 2/26: In this LIVE installment, our guest will be Jonathan Hyman, a Partner in the Labor and Employment Group of Kohrman Jackson and Krantz. We will be discussing the use of statistics in reduction in force matters, and how statistical analysis factors into employment law. Mr. Hyman is the author of the Ohio Employer's Law Blog.

Friday, 3/5: In this installment, I will be providing five standards for conducting an OFCCP-compliant compensation self-evaluation with respect to gender race, and ethnicity. We'll cover construction of similarly situated employee groupings (SSEGs), statistical analysis and multiple regression analysis, practical versus statistical significance, investigation and remediation of statistically significant disparities, and contemporaneous creation and retention of required data.

Friday, 3/12: We'll continue our discussion of compensation self-auditing. I'll be providing a recap of my webinar, "Understanding the Compensation Self-Audit". Topics include reasons to conduct a self audit, the self-audit framework, similarly situated employee groupings, edge factors, data measurability, availability and collection, multiple regression analysis, practical and statistical significance, and follow up investigations. The webinar will take place on Thursday, March 4 at 2PM Eastern. You can register for the webinar here.

Friday, 3/19: In this installment, I will be discussing proactive statistical analyses. These analyses span the entire employment life cycle, from initial hiring, initial assignment and initial pay, to compensation, promotions, and reductions in force. These proactive statistical analyses will not only help you assess your risk of employment-related litigation, they can lead to operational efficiencies, more streamlined processes, and can help you transform your organization into a best-practices firm that can attract and retain top talent.

Friday, 3/26: In this installment, I will be providing an overview of the calculation of damages in wrongful termination litigation. My presentation will focus on the key issues and concepts, and will be non-mathematical in nature. We'll talk about mitigation, duration of unemployment and job search, and estimation of earnings streams but-for the alleged wrongful termination and given the alleged wrongful termination.

March should be a very exciting month at The Proactive Employer. I hope you'll be able to join me for these upcoming installments. You can listen online or download these podcasts at The Proactive Employer, or you can subscribe (free of charge) via iTunes.

Recap of Wednesday's Webinar 'Using Social Media for Recruiting? Beware Disparate Impact"

Today's installment on The Proactive Employer podcast is a 15-minute recap of the webinar from 2/9/10. To go along with that podcast, I thought I'd make the handout from my webinar available to everyone. Enjoy!

Using Social Media For Recruiting Handout ( S Thomas)

View more documents from Equal Employment Advisory and Litigation Support Division of Minimax Consulting.

March Installments of "The Proactive Employer" Podcast

EEOC Charge Statistics: Fiscal Years 1997 through 2009

In a January 6, 2010 press release, the EEOC reports that job bias charges approached record-high levels during Fiscal Year 2009, with 93,277 workplace discrimination charges filed nationwide. Regarding this data, EEOC Acting Chairman Stuart J. Ishimaru stated:

The latest data tell us that, as the first decade of the 21st century comes to a close, the Commission's work is far from finished. Equal employment opportunity remains elusive for far too many workers and the Commission will continue to fight for their rights. Employers must step up their efforts to foster discrimination-free and inclusive workplaces, or risk enforcement and litigation by the EEOC.

In their press release, the EEOC attributes the "near-historic" level of charge filings to multiple factors, including greater accessibility of the EEOC to the public, economic conditions, increased diversity and demographic shifts in the labor force, employees' greater awareness of their rights under the law, and changes to the agency's intake practices that cut down on the steps needed for an individual to file a charge.

The chart below presents the number of charges filed per fiscal year by type of alleged discrimination. The underlying data can be found on the EEOC's website here. Note that a charge can be filed under multiple types of alleged discrimination, and the data is not mutually exclusive by type. In other words, if a charge was filed alleging race and gender discrimination, that charge would be included in both the race data and the gender data for that fiscal year.

While charges filed for all types of alleged discrimination increased from Fiscal Year 2007 to 2008, age and retaliation claims were the main drivers, increasing 28.7% and 22.6%, respectively.

Fiscal Year 2010 is likely to see a further increase in EEOC activity, attributable not only to the factors mentioned by the EEOC above, but also to the clearing of some of the backlog as a result of the additional $23 million of requested funds.

EEOC Litigation: Fiscal Years 1997 to 2008

By now, surely everyone has heard about the 35% increase in the EEOC's backlog from 2007 to 2008, as well as the 20% increase in claims filed during the same one-year period. You also know that the EEOC is slated to receive an additional $23 million in funding for Fiscal Year 2010.

In light of the discussions surrounding the EEOC, I thought it would be interesting to look back at ten years of EEOC litigation statistics. Litigation statistics for Fiscal Years 1997 through 2008 are available at the EEOC's website, and can be found here.

The following chart shows the number of merits suits filed during the 1997 to 2008 time period by statute:

The number of merits suits filed varied quite a bit from 1997 through 2002. From 2002 to 2006, there was a slow but steady increase. A strong downward trend is evident from 2006 to 2008. The majority of merits suits filed during this time period were Title VII claims. ADEA claims held fairly steady at 13% to 14% of total merits suits filed, as did suits filed under multiple statutes at 3% to 5%. ADA claims declined from 28% of the total in 1997 to 13% of the total in 2008, and Equal Pay claims peaked in 2001 and then sharply fell off.

These same patterns are observed in merits suits resolved:

The majority of merits suits resolved were Title VII suits. ADA merits suits resolved fell from a high of 23% in 1997 to 14% in 2008. Equal Pay Act merits suits resolved rose to a high of 4.7% in 2001, and then declined to less than 1% by 2008.

The picture is less consistent when one examines the monetary relief by statute per year:

The total monetary relief peaked in 2004, at $168.8 million. Monetary relief for Title VII claims comprised the majority of relief; this is not surprising, given that the majority of merits suits filed and resolved were Title VII claims. What is surprising, however, is the relief associated with ADEA claims. In 1999, relief associated with ADEA claims was 43.4% of all relief, while ADEA merits suits filed and merits suits resolved were 10.7% and 15.9% of the totals, respectively. Similarly, in 2003 relief associated with ADEA claims was 39.4% of all relief, while ADEA merits suits filed and merits suits resolved were 7.4% and 10.0% of the totals, respectively.

It is not clear from the EEOC's data set whether the monetary relief for a given fiscal year is associated with merits suits filed or resolved during that fiscal year, or from previous fiscal years. Assuming that the monetary relief for a given year is directly attributable to the merits suits filed in that year, we see the following average relief per merits suit filed:

Under this assumption, the average monetary relief per ADEA merits suit filed in 2003 was $2.1 million per suit filed (total monetary relief for ADEA merits suits filed of $57.8 million divided by 27 ADEA merits suits filed in 2003).

My guess is that the monetary relief for a given fiscal year is just that- the money recovered during the year from suits filed and resolved in previous years. Even if the monetary relief for a given year is associated with suits from previous years, monetary relief associated with ADEA claims is still disproportionately high relative to the number of merits suits filed.

EEOC Funding: A Ten Year History

As 2009 comes to a close, there is considerable discussion about the EEOC in the coming year. In addition to the Agency's proposed regulations for ways to improve the processing of discrimination complaints, the EEOC is set to receive a substantial amount of funding in 2010. An article appearing in the National Law Journal indicates that the EEOC is slated to receive an additional $23 million to help reduce the backlog of more than 70,000 charges. According to the article:

the EEOC's backlog increased 35% from 54,970 in 2007 to 73,951 in 2008;
the number of complaints increased nearly 20% from 79,896 in 2007 to 95,402 in 2008;
nearly two-thirds of all complaints filed alleged gender or racial discrimination.

The total amount requested for Fiscal Year 2010 is $367 million. The table below presents the enacted funding for the EEOC for the fiscal years 1997 to 2008; data was taken from the EEOC's website, and can be found here.

The total amount requested represents a 6.8% increase over the enacted funding for 2009 of $343 million. This is more than twice the average annual increase from 1997 to 2008. But the question still remains: will the funding be enough to clear the backlog? Only time will tell...