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EEOC May Get Cozier with Conciliation Under Gustafson

I appreciate contributing to the below article posted to Bloomberg Law  written by Jacquie Lee and Jay-Anne B. Casuga.

Sharon Fast Gustafson, the general counsel nominee for the EEOC, hopes to focus more energy on mediation than litigation, which she described as “necessary” but also an “expensive, imperfect tool.”

“Resolution of disputes without litigation is an important part of the lawyer’s job, just as it is an important part of the EEOC’s function,” she said before the Senate Health, Education, Labor and Pensions Committee April 10. As general counsel of the Equal Employment Opportunity Commission, Gustafson would manage the agency’s litigation program.

Gustafson’s emphasis on conciliatory measures mirrors sentiments expressed by Janet Dhillon, the nominee to chair the EEOC. That could signal that the agency might become less aggressive in filing lawsuits against employers and more prone to mediation and conciliation. Dhillon, who also awaits Senate confirmation, said “litigation truly is a last resort” in testimony before the same committee Sept. 19.

A Bloomberg Law analysis of Gustafson’s track record appears to support her stance on avoiding potentially lengthy litigation. Since becoming a solo practitioner in 1995, Gustafson has negotiated settlements or voluntary joint dismissals in more than 80 percent of the employment discrimination cases in which she represented workers in federal court.

The high number of Gustafson’s settlements doesn’t surprise Jonathan Segal, a partner at Duane Morris LLP in Philadelphia. The vast majority of cases don’t make it to court, he said. Her settlement rate is what he’d expect from a litigator, he said. It shows she’s “pragmatic and she resolves cases where she can.”

Gustafson’s Litigation Stats

Gustafson has been viewed as a somewhat unusual choice by President Donald Trump to be the EEOC’s top litigator. Republican administrations typically choose agency general counsels with more management-side experience, while Democrats usually appoint attorneys with a background representing workers.

Gusfason represented workers in nearly all of the federal labor and employment cases—42 out of 43—in which she appeared as an attorney.

Of those cases, 19 involved workplace discrimination claims brought by employees against companies, including United Parcel Service, Marriott International, and the District of Columbia. She represented an employer in one federal discrimination case. The claims in those cases are based on many of the same laws that the EEOC enforces. Gustafson also has represented workers in federal wage and hour litigation under the Fair Labor Standards Act, as well as in employee benefits lawsuits under the Employee Retirement Income Security Act.

Gustafon’s clients agreed to dismiss their claims after reaching settlement in 16 of the 20 discrimination cases. One of the cases settled at the appeals court level following the employee’s jury trial win. Another case settled after the worker scored a victory before the U.S. Supreme Court.

Fewer Class Actions?

Employees nationwide filed more than 84,000 discrimination charges with the Equal Employment Opportunity Commission in the 2017 fiscal year. The agency filed 201 lawsuits, 30 of which were systemic cases. It has averaged a “favorable outcome” in more than 90 percent of its suits since fiscal year 2010, according to agency annual reports. The commission, however, doesn’t specify how many of those outcomes are court decisions or settlements.

The agency has made it a priority in the past few years to root out systemic discrimination, which involves a broad pattern of bias within a certain industry or company.

Gustafson emphasized the importance of individual discrimination lawsuits in her Senate HELP Committee hearing April 10.

“One of the best ways to attack discrimination and to get higher compliance is to keep going against those small individual claims and never let up,” Gustafson said. “I feel strongly that the EEOC should be doing both.”

Most of the agency’s lawsuits are on behalf of individuals. Of the 182 discrimination lawsuits the agency filed in fiscal year 2017, 124 were on behalf of individuals. The proportion of such lawsuits might rise under Gustafson’s leadership, given her statement and considering her federal track record shows no discrimination class actions, at least after 2005.

Consequently, some expect Gustafson might be inclined to address systemic discrimination through individual cases rather than class actions, Segal told Bloomberg Law.

A discrimination case against UPS, in which Gustafson represented a pregnant employee, is a good example, Segal said. That pregnancy accommodation case made its way to the Supreme Court, where a majority of justices in 2015 sided with the worker.

“It was an individual claim, but it had class implications,” Segal said. “It doesn’t mean she won’t look at systemic issues, she just may not bring them by class.”

That might be a winning strategy if the agency wants to combat sexual harassment in the courtroom, an issue the EEOC has been tackling for years but has put renewed emphasis on since the #MeToo movement began.

The nature of sexual harassment cases makes them difficult to litigate as a class because the circumstances can vary greatly between victims, Carolyn Wheeler, a former assistant general counsel for the agency, told Bloomberg Law.

“It’s not that it can’t be done, but you need to do a really exhaustive investigation before you file a case like that,” Wheeler said. That sucks up EEOC resources and time, both of which are already stretched thin at the agency.

Take the large number of women who sued Carrols Corp., a Burger King franchisee, because they allegedly faced sexual harassment and retaliation from managers, she said. The company eventually settled with the 89 women for $2.5 million, but a judge said the EEOC couldn’t pursue a class claim for that case because the agency failed to show a “pattern or practice” of sexual harassment.

“That’s how courts have looked at a lot of these cases,” Wheeler said. “Agree with that or not that’s the state of the law.”

Construing a Continuum of Harassing Behaviors

I am pleased to share my latest article posted to Bloomberg Law Insights.

We hear many people use the terms “sexual misconduct” or “sexual harassment” to describe a continuum of harassing behaviors. Further, more and more employers are adopting or reissuing “zero tolerance” policies for such collectively defined behaviors.

Of course, we must put an end to the litany of horrific behaviors to which women (and some men) have been subjected. There is no defense to the indefensible.

But we also need to be careful not to use a single label to describe a broad spectrum of unacceptable conduct. For example, we all know that a sexually suggestive comment on someone’s appearance is objectively unacceptable. However, if we put that comment in the same category as sexual assault, we risk minimizing the seriousness of the latter by lumping it with the former.
That is part of the danger in zero-tolerance messaging. At first blush, “zero tolerance” sounds good. However, it may be heard as suggesting that, regardless of the severity of the unacceptable conduct, the
wrongdoer will be terminated.

This is dangerous because it may discourage victims who just want the problematic behavior to stop from reporting it because they do not want the wrongdoer to be terminated. Yes, she (or he) will not be a
silence-breaker but instead will suffer in silence to avoid someone else’s suffering more.

Zero-tolerance messaging is dangerous for another reason. A leader who becomes aware of unacceptable conduct by a star performer may not report it for fear that the star will be terminated. The thinking is entirely unacceptable but it is also foreseeable.

So, instead of lumping all behaviors under one label, we need to look at a hierarchy of bad behaviors. Instead of applying corporate capital punishment in every case, we need to take proportionate corrective
action based on how bad the conduct is. At a very minimum, the corrective action must be reasonably calculated to deter further unacceptable conduct.

With this background, here is a hierarchy of behaviors that constitute misconduct or harassment for employers to consider when preparing policies, training programs, investigations, and corrective actions.

1. Lack of Respect/Civility
The law does not require that employers be respectful or civil. Yes, an executive can yell and intimidate its employees, so long as it does not target employees for such hostile conduct based on their gender,
race, religion or other “protected group” status.

While such unacceptable conduct does not violate the law, it violates human decency. Plus, it is bad for business. Employees who are bullied (as well as those who witness it) underperform, if they do not leave
for a better workplace.

Further, disrespectful or uncivil behavior creates fertile soil for harassing behavior that may break the law. One witness who testified before the EEOC Select Task Force on Harassment called incivility the
“gateway drug” to harassment.

For all of these reasons, employers are well advised to respond to disrespectful, uncivil and abusive behavior, even if not unlawful. While employees may call such behavior harassment, employers must be
careful to avoid the label. It may not be.

2. Gray Areas
Telling a colleague that her or his new suit is “sharp” at a social event is not harassing behavior. Conversely, telling that colleague she looks “hot” in that new suit is harassing behavior. Let’s leave what is clear and enter the land of gray.

What if a male colleague tells a female colleague she looks “attractive” in that suit. He may mean “nice,” but his use of “attractive” may be heard as “hot.” The same word may have very different meanings between the parties to the communication.

We all need to be more thoughtful about what we say and do. If a word can have a sexual or suggestive meaning, then find another word.

As employers, we need to keep in mind that not all cases are as black and white as those we have read or heard about during the last few months. In some of the complaints we receive, the conduct falls into gray areas. In such areas, at least for the first instance of such conduct, proportionate corrective action may consist of non-punitive coaching or counseling.

3. Sexually Harassing but Not “Bad Enough” to Be Illegal
Under federal law, for sexual harassment to be actionable, among other factors, it must be severe or pervasive. Some state or local jurisdictions, such as New York City, have established lower hurdles that
must be met for conduct to be actionable.

So, at least under federal law, the following behaviors, in and of themselves, probably do not constitute unlawful conduct:
• a sexist “joke”;
• an inappropriate comment of a sexual or suggestive nature; or
• a leer or a gawk

To prevent harm to employees and to avoid legal liability, employers should respond to sexually harassing behavior, even if the behavior in and of itself is not unlawful. In an employer’s preventive efforts, this message must resonate loud and clear. An employee does not have to violate the law to violate the employer’s policy.

However, in taking corrective action in these circumstances, employers should avoid the legal label. Use “sexually harassing behavior” rather than “sexual harassment.”

But, even here, distinctions must be made within the category of “sexually harassing behavior.” For example:
• If an executive makes a degrading comment about women, it is worse than if a lower-level employee
does the same. Power magnifies the wrong.
• If a lower-level employee makes a degrading comment about women, it is worse if he has done so before and been warned not to do it again.

The label we apply to this category of unacceptable conduct does not alone dictate the nature of appropriate corrective action. What is proportionate also may depend on myriad other factors.

4. Sexual Harassment
Some conduct, in and of itself, constitutes sexual harassment.

The clearest example is when a supervisor or other higher-ranking employee conditions the granting of any term, condition, or benefit of employment on a subordinate’s submission to sexual advances or
punishes the subordinate for not submitting to them. This is often what is referred to as “quid pro quo” harassment, that is, “this for that.”

Another example may be use of the “C” word. Some courts have found that saying the “N” word once may create a racially hostile work environment. A court very well could find that using the “C” word once
may create a sexually hostile work environment.

If conduct is or may be sexual harassment in and of itself, the proportionate corrective action is almost always termination. I say “almost always” rather than “always” because there could be an exception,
such as if the employee’s supervisor used the same hate word and the subordinate said he went “along to get along” with his supervisor. In these circumstances, the supervisor should be terminated. The case of the subordinate may be less clear.

While the severity of the conduct in these cases must inform the level of corrective action, employers still may wish to stay away from the legal label. Employers can do what is right for their employees without
necessarily making what may be argued to be an admission of liability.

5. Sexual Assault
In some high-profile cases, we are dealing with more than the civil wrong of sexual harassment. We are dealing with a criminal wrong: sexual assault.

If, after an appropriate investigation, an employer concludes that there has been a sexual assault, there is only one proportionate remedy: termination.

In this regard, it is important to emphasize that law enforcement may have elected not to pursue the matter does not mean the employer should ignore the matter. While the determination by law enforcement may be one factor an employer may consider, it rarely will be determinative.

Even where an employer concludes there was a sexual assault, such as grabbing a woman’s breasts or genitals, the employer still is better off avoiding legal labels and describing the behaviors.

While there is a continuum of bad behavior, each category does not exist in isolation. We need to recognize that each level of the hierarchy of bad behavior creates a cultural environment where the next level of bad behavior is more likely to occur. Just as lack of civility can be the “gateway” to sexual harassment, sexual harassment can be the gateway to sexual assault. We must have zero tolerance to bad behavior but with a proportionate response to how bad the behavior is so that the bad behavior is not repeated or becomes worse.

This article is not legal advice and does not apply to specific factual situations.