There are two recent developments at the EEOC that should be on the radar of all employers, HR professionals, and employment attorneys:

• The commission’s new pilot program on direct investigations of compensation practices, with the goal of rooting out gender-based pay bias even before any discrimination charge has been filed, and 
• The agency’s commitment to hone in on discrimination against lesbian, gay, bisexual, and transgender individuals in the wake of its Macy v Holder decision.

New front on war against pay bias. In an effort to combat gender-based pay discrimination, the commission has launched pilot programs at three of its district offices to figure out the best approach to using its authority to conduct direct investigations — investigations initiated without any prior charge of pay discrimination — to determine whether Equal Pay Act violations are occurring.

To understand more about this developing strategy, we reached out to EEOC Senior Attorney-Advisor Justine Lisser. She noted that the EEOC is part of the National Equal Pay Enforcement Task Force set up by President Barack Obama to address problems of gender-pay discrimination. The commission, as part of its role on the task force, has taken up a number of activities ranging from its commissioning of a study by the National Academy of Sciences on what types of compensation data are available and what the EEOC should try to compile, to training investigators, and its “Fair Pay Day” public events last year.

The commission is also “working with other government agencies with overlapping responsibilities such as the OFCCP, Wage and Hour Division and Women’s Bureau of the Department of Labor, to share best practices and information,” according to Lisser.

Back in February 2011, the Department of Justice, the EEOC and the OFCCP hosted a live webcast that “marked the first time in the history of the three agencies that their national and field staffs convened to discuss opportunities for increasing coordination, improving collaboration and sharing information in order to strengthen enforcement,” according to The Equal Pay Task Force Accomplishments report issued in April. Since then, these three agencies have taken several actions to improve coordination and enforcement. By the end of March 2012, the commission had provided compensation discrimination training to some 2,000 enforcement personnel from the EEOC, the OFCCP, the Wage and Hour Division, and state and local civil rights agencies, according to the report.

The EEOC also has another tool — a rather rusty one until now — to use in its attack on pay discrimination. Lisser pointed out that unlike Title VII, the EPA is enforced pursuant to the Fair Labor Standards Act. “This means that the EEOC does not need to wait for a charge of discrimination to be filed, and has the authority to conduct directed investigations of employers to assess whether Equal Pay Act violations are occurring,” she explained. The Wage and Hour Division routinely conducts directed investigations when looking into FLSA violations, and did so when it had authority to enforce the EPA — that authority was transferred from the Department of Labor to the EEOC in 1979, she said.

“Because discrimination in pay is difficult for individuals to assess since most employers do not make employees’ pay public, the EEOC’s authority to conduct directed investigations could be an important tool in combating pay discrimination,” Lisser observed. To this end, as part of the EEOC’s Task Force efforts, the commission is conducting pilot projects in three of its district offices — Chicago, New York, and Phoenix — to see what approaches work best, she said.

What’s the take-away? Pay discrimination is an issue that several federal agencies are targeting — not just individually, but with combined forces and efficiencies. And they’re not necessarily going to wait for a current or former employee to complain about discrimination in compensation — they’re poised to take action independent of employee complaints. This is one of those times when an ounce of prevention may be better than a pound of cure — employers should find out whether a gender-based pay disparity exists among their workforce.

LGBT discrimination. The EEOC has clearly articulated its conviction that Title VII protects transgender employees and applicants from discrimination in employment — in both the federal and private sectors. And the agency is also very interested in bringing cases on behalf of lesbian, gay, and bisexual individuals who have been discriminated against.

At a Brown Bag Session available on video, the EEOC presented “What Does the Macy Decision Mean for Title VII?” The video is well worth the viewing time for those who want to get a good handle on how the EEOC defines the scope of Title VII’s protections against sex discrimination and where the agency hopes to go in extending protections to the LGBT community.

In Macy v Holder, the commission addressed a purely jurisdictional question, finding that a transgender male-to-female federal applicant’s complaint of discrimination because she is transgender could be processed under EEOC procedures. In reaching this conclusion, the commission wrote that “intentional discrimination against a transgender individual because that person is transgender is, by definition, discrimination ‘based on …sex,’ and such discrimination therefore violates Title VII.”

The videotaped session features a discussion by EEOC Commissioner Chai Feldblum (who was integral to the Macy decision), Acting Assistant General Counsel Daniel Vail, and Office of Federal Operations Appellate Attorney Melissa Brand. Feldblum stressed that the decision is not new law and does not create a new protected category.

Feldblum characterized the law as “stunningly simple.” In Macy, the EEOC makes clear what courts have not always done as clearly, she said: a Title VII claim for discrimination because a person is transgender can be brought based on gender stereotyping or because “gender was on the brain” and clearly taken into account. When gender is taken into account, Title VII is violated, she stressed.

To illustrate that the Macy decision does not create a new class, Feldblum analogized to an employer who refuses to hire Christians who convert to Judaism, but will hire anyone of either faith. This is clearly religious discrimination and not a new protected class. The same is true of a man who transitions into a woman — no new protected class is created — it’s still gender discrimination.

Vail, who works with cases brought against private sector employers, noted that the landscape is getting better for transgender individuals. Four or five Circuit Courts of Appeals have explicitly recognized that transgender persons can bring a Title VII claim, albeit not in the same way as articulated by the EEOC in Macy, he said. However, the landscape is less hospitable for Lesbian, Gay, and Bisexual individuals, according to Vail.

Vail also noted that the EEOC has formed a LGBT work group to advise the General Counsel on how to make sure that LGBT are not being carved out and receiving less protection under statutes enforced by the EEOC. The work group is also looking at federal districts and circuits around the country to identify areas where they may be able to bring some cases applying Macy, or theories of sex-plus or associational discrimination.

“Stay tuned, the law is sort of dramatically shifting under our feet,” Vail said — its hard to argue against that observation.