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What to do when the EEOC makes an offer it thinks you cannot refuse

February 25th, 2013  |  Lorene Park  |  12 Comments

After the EEOC has found reasonable cause to believe that an employee’s charge of discrimination is true, and before the agency files suit, the EEOC is required to attempt, in good faith, to resolve the dispute with the employer. According to the EEOC, there are many advantages to conciliation: the process is voluntary; it can remove the uncertainty, cost, and animosity of litigation; and such discussions are “negotiations” where “counter-offers may be presented.” But what happens when it doesn’t work that way? What if the agency presents an all-or-nothing settlement offer with little time to think it over?

Good faith required.

A federal district court in Pennsylvania recently wrestled with just that scenario (EEOC v Ruby Tuesday, Inc, WDPa 2013). A restaurant employee filed an EEOC charge alleging sex discrimination and retaliation. On August 25, 2009 the agency issued its finding of reasonable cause to believe the restaurant discriminated against the employee based on sex and engaged in a pattern and practice of age discrimination in six restaurants. The restaurant was given a proposed conciliation agreement and 13 days to respond. It asked for 30 days but the EEOC refused and, on September 9, demanded the restaurant’s “best offer” by September 18. The EEOC also for the first time demanded $6,458,375 to settle. On September 15, the restaurant counter-offered on the charging party’s claim and asked to engage in further conciliation discussions on the broader claims. The EEOC responded by issuing a notice of failure to conciliate. The agency filed suit on September 30.

After nearly three years of discovery, the employer filed a motion for summary judgment based on the EEOC’s failure to conciliate in good faith. The court was displeased with the EEOC’s failure to pass the “low bar” of good faith conciliation. To the court, “a demand for the payment of more than $6 million, coupled with nine (9) days to either say ‘yes’ or to make a ‘best and final’ response,” was “devoid of reasonableness.” Further, the EEOC provided no reason why it needed an answer in the form demanded (unqualified acceptance or best offer) or why the “line in the sand” approach could be deemed conciliation. Staying the proceedings, the court ordered the parties to engage in the conciliation that should have occurred much sooner.

Hold the EEOC to its mandate.

As illustrated in Ruby Tuesday, the “good faith” obligation presents a fairly low bar for the EEOC with respect to conciliation; however, the bar does exist. Employers presented with all-or-nothing offers or given an unreasonably short time to consider a conciliation agreement should object, and should do so sooner rather than later. Indeed, the failure to timely plead the defense of a lack of good faith conciliation can waive the defense (e.g., EEOC v Service Temps, Inc, 5thCir 2012). Employers should consider the following:

  • Factual basis: Ask for a minimal factual basis for an EEOC determination of reasonable cause and for any settlement amount demanded by the agency. Note, however, that with respect to class claims, courts do not typically expect the agency to specifically identify, investigate, and conciliate as to each individual claimant (EEOC v Evans Fruit Co, Inc, EDWash 2012).
  • Time: Ask for reasonable time to consider the facts and the offer.
  • Pleadings: If the agency files suit without good faith conciliation; plead the defense and file a motion to dismiss. Watch your deadlines (in the Ruby Tuesday case, the court also found that the EEOC failed to meet minimum pleading requirements but declined to grant the employer’s untimely motion to dismiss and merely ordered the EEOC to file a more definitive statement).
  • Confidentiality: Be aware that you can waive the confidentiality of communications exchanged during conciliation by making them public (e.g., by using them as an exhibit in court proceedings and citing terms). However, simply pleading the defense in an answer is generally not a waiver (EEOC v Mach Mining, LLC, SDIll 2012).

Whatever efforts employers make to hold the EEOC to its good faith obligations should be documented, including any requests to meet face-to-face. Employers should also keep in mind that they are unlikely to completely dispense with a discrimination suit due to the agency’s lack of good faith. Instead, courts typically stay the proceedings and order the parties to make further attempts at conciliation. Additional information with respect to resolving an EEOC charge is available on the agency’s website at: http://www.eeoc.gov/employers/resolving.cfm

Responses

  1. Lorene Schaefer, Esq. says:

    July 2nd, 2013 at 7:57 am

    Thanks for posting this excellent article. You might be interested to read my testimony to the EEOC from earlier this year in which I urged the EEOC to adopt an ADR pilot program as part of its conciliation process. The discussion that followed my suggestion at the public hearing on March 20, 2013 was quite fascinating and provides insight into how at least some at the agency view the conciliation process.

    Here are links to my written testimony, to the transcript from the public meeting and to an article from Corporate Counsel discussing this issue:

    http://www.eeoc.gov/eeoc/meetings/3-20-13/schaefer.cfm

    http://www.law.com/corporatecounsel/PubArticleCC.jsp?id=1202595401549&Can_Mediation_Improve_EEOC_Conciliation&slreturn=20130602085634

    http://www.eeoc.gov/eeoc/meetings/3-20-13/transcript.cfm

  2. Mari Myer says:

    July 5th, 2013 at 9:31 am

    Excellent summary. Too often the EEOC disregards or perhaps misunderstands this good faith conciliation obligation, taking an all or nothing approach without explaining its reasoning and (seemingly) without regard to the employer’s reasoning as to both the evidence and the claim value. A more “conciliatory” approach by the EEOC to conciliation might result in more pre-litigation resolutions – which should be the purpose of conciliation.

  3. David Tombre says:

    September 17th, 2015 at 9:58 pm

    I disagree.

    As you stated cases don’t get thrown out because of failed conciliation.

    9 times out of 10 the employer will realize wrong doing early in the investigation. Employers are given several opportunities to resolve issues. They can arbitrate, mediate and even are offered conciliation when reasonable caused exists for wrongdoing.

    This seems just like a stall tactic which would delay the inevitable, and cost the client more money in legal bills.

    What is accomplished by disputing conciliation? The charging party can reject any offers. If they really want to sue they will still sue. A decision in favor of the plaintiff will still be awarded damages. These damages won’t be lessened by proving the eeoc failed to conciliate.

    The moral of the story is this. If your client is guilty they would be well advised to settle. Anything less is bad advice. The burden of proof for the plaintiff is extremely low once a reasonable cause determination has been made.

  4. Grace west says:

    April 8th, 2016 at 6:12 pm

    My case has been in resolution for 2 months what can be the whole up after it took 2 years to get here

  5. amy branch says:

    November 16th, 2016 at 3:49 pm

    My case has been since 2012 it’s going on 2017. Too many ethics and no good faith being used. It’s dragging out intentionally I feel. Makes no since. They need a due process at settlement conference hearings or something to bring this slow process go much faster and smoother.

  6. Vicki says:

    December 16th, 2016 at 7:59 pm

    If agreement is not reached in conciliation and employer continues to deny allegations, despite the EEOC Determination Letter, charging party will have to pursue legal action himself if EEOC does not pursue case, thus incurring additional legal fees. It took 2-1/2 years to get Determination Letter and employer is still denying charges by fabricating statements. If charging party does not file suit in federal court, the employer is COMPLETELY FREE of ANY monetary or legal judgments. There are absolutely no ramifications for employer unless EEOC follows through on case. We have been told that the EEOC is not sufficiently staffed to take on all cases. We sought legal advice at the rate of $300 per hour for conciliation. Basically we were told that we should do all negotiations with EEOC and then attorney would consult on settlement for 1/3 of the settlement. He wanted a $5,000 retainer fee. This is an extremely difficult process.

  7. Vicki says:

    December 16th, 2016 at 8:08 pm

    Additionally, I feel the longer the time frame for settlement, memories fade, files disappear, witnesses leave the state, and statue of limitations runs out for pursuing other actions. We missed out on two other actions because EEOC took so long to respond on their investigation. Charge was made on September 19, 2014,they went on site in January 2015 but did not issue Determination letter until October 6, 2016. Charged party was given 14 days to respond. After 57 days we again called the EEOC to see what was happening. Just now we are starting the conciliation process.

  8. annie ross says:

    February 2nd, 2017 at 10:15 pm

    I filed my charge in 2014 in 2015 I was told my claim had merits the end of 2015 I got a letter saying the investigator was trying for a quick resolution and settlement that letter was dated Jan 10 2016 its a year I am confused about what does quickly mean

  9. Dee says:

    February 14th, 2017 at 9:20 am

    I contacted EEO 12/2012. No EEO counseling occured. I was contacted by an EEEO investigator at the end of 10/2013. I was issued a right to file 05/2014. This process was supposed to take 180 days! Then because the agencies attorney had no clue, she gave me a sworn statement that what they did was their regular proceedure, a procedure that violates Affirmative Action. I couldn’t believe they did that!!! Now, I am just waiting for the EEO Judge to get to my complaint. It is a long process but I have nothing to lose and everything to win. If I have to go in to Federal court I will.

  10. Salvatore bellantoni says:

    October 31st, 2017 at 8:32 pm

    I received a probable cause from the human rights commission recently. My assistant mgr. Threw my stool in the trash that I was using since 2013 which swas OK d through an interacted process. Then in Nov I 2017 I was approved for a disability again for bad ankles. Through the interactive process I was given a stool option. To this day I haven t received a stool from the same mgr again. It is almost a year and I am sitting on s low level swevil computer chair which is hard to get up from because of my sore ankles. Both interactive process is permanent. In may 2017 I took a computer swivil chair from flooring dept because I couldn’t stand on my feet any longer. Now I had to get ankles braces and have walk with a permanent
    Cane. I’m waiting for a settlement hearing. How much should I settle for?

  11. John. Anthony says:

    February 13th, 2018 at 8:07 pm

    Sirs:Need help. Please contact. Thanks.

  12. DEE says:

    March 1st, 2018 at 12:41 pm

    Well, I file in 2012 and still have not had a hearing. Had the prehearing conference in July 2017 and nothing was decided. In January Judge said she would issue an order by the end of February. Well, here it is March 1, over 5 years after my filing a formal complaint which took the Agency over 530 days to investigate. I was given no EEO counseling either. The agency, in a sworn statement, admitted to a policy which violates the law and was used to discriminate against me. The Agency did not perform effective service for the prehearing conference. They did not supply a witness list when asked during discovery. The agency gave 3 different reason for what they did. I feel I have given the Judge more than enough to find in my favor. She could just issue a default summary judgement on the 530 days it took the Agency to process the complaint. The agency has a history of ignoring the regulations on processing complaints and no one is holding them accountable!

    I think the system is rigged!

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