EEOC Releases 2016 Enforcement Data: Charges Increase, Downward Trend in Litigation & Monetary Recovery, LGBT Charges Highlighted

Each year, the U.S. Equal Employment Opportunity Commission (EEOC) releases data detailing the charges of workplace discrimination it receives, the number of enforcement suits filed and resolved, and any areas of targeted investigations and compliance initiatives from the prior year.  On January 18, 2017, the EEOC released its Fiscal Year 2016 Enforcement and Litigation Data summarizing its findings.

Rising Number of Discrimination Charges – According to the EEOC, in 2016 it received 91,503 charges of discrimination, making 2016 the second consecutive year that the agency has seen an increase in the number of charges.  2016 also marks the third consecutive year in which retaliation was the most frequently filed charge.  Below is a chart summarizing the EEOC’s breakdown of the categories of charges filed in 2016 along with a comparison to those charges filed in New Jersey and New York:

  National New Jersey New York
Retaliation:  

42,018 (45.9%)

 

731 (1.7% of total Retaliation charges in US)  

1,604 (3.8% of total Retaliation charges in US)

 

Race:  

32,309 (35.3%)

 

624 (1.9% of total Race charges in US)  

1,084 (3.4% of total Race charges in US)

 

Disability:  

28,073 (30,7%)

 

583 (2.1% of total Disability charges in US)  

1,061 (3.8% of total Disability charges in US)

 

Sex:  

26,934 (29.4%)

 

500 (1.9% of total Sex charges in US)  

1,202 (29% of total Sex charges in US)

 

Age:  

20,857 (22.8%)

 

437 (2.1% of total Age charges in US)  

865 (4.1% of total Age charges in US)

 

National

Origin:

9,840 (10.8%)

 

254 (2.6% of total National Origin charges in US)  

601 (6.1% of total National Origin charges in US)

 

Religion:  

3,825 (4.2%)

 

104 (2.7% of total Religion charges in US)  

180 (4.7% of total Religion charges in US)

 

Color:  

3,102 (3.4%)

 

42 (1.4% of total Color charges in US)  

208 (6.7% of total Color charges in US)

 

Equal Pay:  

1,075 (1.2%)

 

Info not available Info not available
Genetic

Information:

 

238 (.3%) Info not available Info not available

Steady Increase in Charges Filed by LGBT Individuals – For the first time, the EEOC included details in its year end summary about sex discrimination charges filed specifically by members of the LGBT community.  In fiscal year 2016, it settled 1,650 of such charges, recovering $4.4 million.  This accounts for roughly 40% of the 4,000 sex discrimination charges filed by LGBT individuals since fiscal year 2013, which indicates a notable, steady rise in the number of charges filed by members of the LGBT community.  Also trending are the issues involving transgendered employees’ restroom rights.  In July 2015, the EEOC ruled that denying an employee equal access to a common restroom corresponding to the employee’s gender identity constitutes sex discrimination violated Title VII of the Civil Rights Act, as does conditioning an employee’s such right on proof that the employee underwent a medical procedure, and/or restricting a transgendered employee to a single-user restroom.

Overall Decrease in Monetary Awards – The EEOC recovered a total of over $482 million in fiscal year 2016, down from the $525 million in 2015, broken down as follows:

  • $347.9 million for private-sector, state, and local government employees through mediation, conciliation, and settlements;
  • $52.2 million through litigations; and
  • $82 million for federal employees.

Downward Trend in Litigation – Over 76% of cases that were referred to mediation in 2016 were resolved successfully, though conciliation had a lower success rate of only 44%.  Litigation by the EEOC is experiencing a downward trend, with only 165 active cases on the EEOC’s docket at the end of 2016, as opposed to the 218 that existed at the end of 2015.  In addition, the EEOC filed only 86 lawsuits alleging discrimination in 2016, down from its 142 filed in 2015 and 133 in 2014.

New Online Charge Status System – The EEOC launched digital services allowing employers and charging parties to receive and file documents electronically, check the status of charges online, and communicate electronically with the EEOC.  These services are intended to streamline the charge process and reduce the number of paper submissions and phone inquiries, easing administrative burdens on the EEOC.  These changes may make it easier not only for the agency to handle more charges and resolve them more quickly, but for complainants to file them.

New ADA Regulations on Employer-Sponsored Wellness Plans – The EEOC issued regulations and interpretive guidance advising that employers may provide limited financial and other incentives in exchange for an employee answering disability-related questions or undergoing medical exams as part of a wellness program.

Employers should review the EEOC’s 2016 charge and enforcement data in order to remain vigilant when responding to complaints of harassment and/or discrimination in the workplace.  The EEOC’s statistics also reinforces the need for employers to train managers, supervisors, and employees on those policies.

For more information on the EEOC’s year-end summary, the EEOC’s strategy for future enforcement of federal employment discrimination statutes, or ways to ensure that your company is in compliance with the EEOC’s mandates, please contact John C. Petrella, Esq., Chair of the firm’s Employment Litigation Practice Group, at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq., Chair of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Please, Take Your Time: NJ Supreme Court Voids Contracts That Limit Workers’ Time to Sue

On June 15, 2016, the New Jersey Supreme Court issued its long-awaited decision in Sergio Rodriguez v. Raymours Furniture Company, Inc., in which it addressed whether the two-year statute of limitations under the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 to -49, may be altered pursuant to a private agreement.  The issue was a matter of first impression for New Jersey courts.  In a unanimous opinion authored by Justice Jaynee LaVecchia, the Court held that “a private agreement that frustrates the LAD’s public-purpose imperative by shortening the two-year limitations period for private LAD claims cannot be enforced.”

Plaintiff, Sergio Rodriguez, was hired by defendant, Raymours Furniture Company, Inc., the parent company of furniture retailer Raymour & Flanigan, in September 2007, and sustained an injury to his knee in April 2010.  After having undergone surgery for the injury, along with a brief recovery period, Rodriguez was cleared to resume his work duties in September 2010.  Just two short days after his return to Raymour & Flanigan, Rodriguez was terminated as part of a company-wide reduction in force. Rodriguez instead contended that he was targeted because of his injury and asserted that others with less seniority or distinguishing features were retained.

Rodriguez brought a lawsuit in the Superior Court against Raymours in July 2011, seven months after his termination, alleging wrongful termination based on an actual or perceived disability under the LAD, which carries a two-year statute of limitations. However, Raymour & Flanigan’s employment application, which Rodriguez signed, included a provision shortening the period for an employee to file a claim against the company to six months. The provision stated that “I agree that any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit,” adding, “I waive any statute of limitations to the contrary.”

The trial court granted summary judgment in favor of Raymours, upholding the validity of the contractual limitation as clear and unambiguous and neither unreasonable nor against public policy.  On appeal, the Appellate Division also sided with Raymours, holding that employers are generally able to shorten a statutory limitation through an employment contract so long as the provided language is clear and unambiguous.  While pointing out that the language of the provision was acceptable and not misleading, the Appellate Division noted that “[t]he disputed contract provision was not buried in a large volume of documents.  It was contained in a two-page application and set forth very conspicuously in bold oversized print and capital lettering, just above the applicant’s signature line. The terminology was clear and uncomplicated.”  Ultimately, the trial court and Appellate Division held that the provision met the aforementioned threshold and by signing the document, Rodriguez waived his rights to access the LAD after the six-month period expired.

On appeal to the Supreme Court, the plaintiff made two arguments, generally focusing on principles of contract unenforceability based on unconscionability.  Because this contract was one of adhesion, the plaintiff contended that it was both procedurally and substantively unconscionable and unenforceable due to the inherent imbalance of power in an employment application.  Furthermore, the plaintiff argued that permitting such a contractual shortening of the limitations period would frustrate the remedial scheme of the LAD.  The defendant-employer argued that it is well established under New Jersey law that parties may privately contract to shorten statutes of limitation and that the waiver at issue here was clear and unambiguous.

This case drew significant interest from the legal community.  The New Jersey State Bar Association, the New Jersey Association for Justice, the American Civil Liberties Union of New Jersey, and the National Employment Lawyers Association all submitted amicus curiae briefs generally supportive of the plaintiff’s position, focusing on the “singular public-interest importance of the LAD.”  The Academy of New Jersey Management Attorneys filed a brief in support of the defendant, arguing that shortening the limitations period under the LAD did not frustrate public policy and was within private parties’ ability to contract.

While recognizing the “strong belief” in the freedom to contract in New Jersey, the Court emphasized the public interest that the LAD serves to protect in trying to eliminate discrimination.  In making its determination, the Court relied heavily on its decision in Montells v. Haynes, 133 N.J. 282 (1993), where the two-year statute of limitations for claims under the LAD was first established.  In addition, the Court looked to the State Legislature’s more than two-decades-long acceptance of that limitations period, noting that the LAD has been amended in other respects during that time period.  The Court offered several reasons in support of its decision:

  • Shortening the time period for bringing an LAD action in the Superior Court would undermine the integrated nature of the statutory avenues of relief and election of remedies made available to claimants;
  • A limitations period of shorter than two-years would effectively eliminate claims because it takes time for an individual to bring the claim forward and the two-year period established in Montells was purposefully designed to impose uniformity and certainty;
  • A shortened limitations period might compel a person to file a premature LAD action where investigation might reveal a lack of a meritorious claim; and
  • Case law has incentivized employers to first receive workplace complaints, investigate them, and respond and any shortening of the period would “seriously affect an employer’s ability to protect itself.”

The Court emphasized that its decision was “rooted in the unique importance of our LAD and the necessity for its enforcement.”  The Court further noted that “[r]estricting the ability of citizens to bring LAD claims is antithetical to that societal aspiration and defeats the public policy goal” of the law.  While the Court’s decision was rooted in the public policy importance of the LAD, the Court also noted that it would have reached the same outcome based on the argument of unconscionability, though it did not go into a detailed analysis.  The Court said that if such an analysis were to be performed, it would have struck down the agreement because the provision was located in an employment application, the plaintiff could not bargain, and it was an adhesion contract containing “indicia of procedural unconscionability.”

What does this decision mean for employers in New Jersey?  The Court’s decision affirms its longstanding commitment to the public policy goals and remedial nature of the LAD.  Unless and until the State Legislature decides to alter the limitations periods for claims under the LAD, it remains a two-year period and that time frame may not be amended through a private agreement.

While it appears that employers can no longer alter the two-year statute of limitations for LAD claims by private agreement, employers need to take action to ensure that they are in the best positon possible when litigation does arise, which can be achieved by:

  • Thorough documentation of performance issues;
  • Regular Anti-Discrimination and Harassment Training;
  • Proper paperwork for all reductions-in-force; and
  • Ensuring that prompt and thorough investigations of employee complaints are conducted.

Finally, when terminating an employee, employers may want to consider severance payments in exchange for a release of all claims. Most importantly, employers should consult with counsel to evaluate their arbitration agreements, employment policies and procedures, and ensure conformity with the Court’s ruling.  For more information, please contact John C. Petrella, Esq., Director of the firm’s Employment Litigation Practice Group at jpetrella@nullgenovaburns.com, or Dina M. Mastellone, Esq, Director of the firm’s Human Resources Practices Group, at dmastellone@nullgenovaburns.com, or 973-533-0777.

Proposed NJ Equal Pay Bill Could Lead to More Wage Gap Disputes if Passed

On February 4, 2016, a bill that would close the wage gap amongst women and men advanced out of the New Jersey Senate Labor Committee.  On average in New Jersey, studies have shown that women make 80.4 cents for each dollar a man earns, making it slightly more than the national average of 79 cents.  Further, the wage gap is larger for African-American and Latina women, who make 58.1 cents and 42.7 cents, respectively, for every dollar men earn. If signed into law, the new Equal Pay Bill (Senate Bill 992) will amend the New Jersey Law Against Discrimination (LAD).

What Will the New Equal Pay Law Require?

The two year statute of limitations for pay discrimination claims would restart with each unlawful paycheck that is issued by the employer. The new law would allow employees to file claims after termination if the employee was unaware that the pay disparity existed during the course of his or her employment. The proposed bill will also expand back pay awards for successful plaintiffs for the entire period of time if the violations continued to occur within the statute of limitations. Employers will also be prohibited from requiring employees or prospective employees to consent to the shortening of the statute of limitations period or to waive any violations of the law.

The Equal Pay Bill will also require employers to prove that any disparity in pay was based on a factor other than sex, such as a seniority system, a merit system, training, education or experience (including position title), or the quantity or quality of production.  Employers would also have to prove that reasonable application of these factors accounts for the entire wage differential, that the factors are job-related and consistent with job necessity, and that there were no other alternative business practices that would serve the same purposes without causing a difference in pay between female and male employees. Employers will also be prohibited from retaliating against employees for disclosing information about job title, occupational category, and rate of compensation of any employees or former employees.

What Should Employers Do Now?

Given the increased fervor to close the pay gap for women and minorities, the advancement of the new Equal Pay Bill and U.S. Equal Employment Opportunity Commission’s new requirements with regard to EEO-1 pay data reporting beginning in 2017, the time is now for employers to begin to take preemptive action to correct any discriminatory pay practices that may exist.

  • Employers should review and update their policies to ensure that employees are not discriminated against or retaliated against for discussing or questioning compensation.
  • Employers must ensure that their wage rates in all of their operations and facilities are similar and should document that their pay-related decisions are based on a legitimate, business necessity.
  • Managers and supervisors should also be trained to comply with the employer’s nondiscriminatory pay practices.
  • Employers who are engaging in pay disparity can certainly expect an increase in pay discrimination cases both under the LAD as well as cases brought by the EEOC for illegal pay practices.

For more information regarding the potential impacts of this legislation and how to implement nondiscriminatory pay practices, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.

NJ Employers May Need to Revisit Arbitration Clauses Following Appellate Division Ruling

On January 7, 2016, the New Jersey Appellate Division found that an arbitration provision contained in an Employee Handbook was unenforceable. This decision is of critical importance to New Jersey employers when it comes to reviewing their own arbitration agreements and Employee Handbook disclaimers.

In Morgan v. Raymours Furniture Company, Inc. et al., plaintiff-employee alleged that in response to a complaint of age discrimination, he was given an ultimatum by the defendant-company, sign an arbitration agreement or be terminated. Plaintiff-employee refused to sign the arbitration agreement and was subsequently terminated. Plaintiff-employee sued alleging violation of the New Jersey Law Against Discrimination (“LAD”), wrongful termination, and other similar claims.  Despite plaintiff-employee’s refusal to sign the arbitration agreement, defendant-company moved to compel arbitration on the basis of Employee Arbitration Program contained in the company’s Employee Handbook.  The at-will disclaimer contained in the company’s Employee Handbook, however, stated in pertinent part: “Nothing in this Handbook or any other Company practice or communication . . . creates a promise of continued employment, [an] employment contract, term or obligation of any kind on the part of the Company.”  Relying on the disclaimer language, the trial court denied the defendant-company’s motion to compel arbitration.

On appeal, the Appellate Division affirmed finding that despite plaintiff-employee  acknowledging receipt of the Employee Handbook and the Employee Arbitration Program contained in the Handbook in August 2011, February 2012 and April 2013, the acknowledgements only signify that the employee received a copy of the Employee Handbook, not that he or she necessarily read and/or understood the contents. Relying on the New Jersey Supreme Court’s 1985 decision in Woolley v. Hoffman-LaRoche, Inc., the Appellate Division also reiterated that a disclaimer advising an employee that the Employee Handbook does not create a contract of employment will prohibit an employer from enforcing an arbitration provision contained in the same handbook. The Appellate Division found that it would be inequitable for an employer to claim certain policies contained in an Employee Handbook are binding contracts while others are not. The Appellate Division found that the purported waiver of plaintiff-employee’s right to sue, clearly conveyed that its “rules, regulations, procedures and benefits . . . are not promissory or contractual in nature and are subject to change by the company.”  Thus, the Appellate Division agreed with the trial court that the plaintiff-employee did not clearly and unambiguously waive his right to sue defendant-employer in court.

This decision makes clear that a court will not enforce an arbitration provision when the Employee Handbook includes an at-will disclaimer.  Given this decision, employers should carefully check their Employee Handbook to ensure that arbitration agreements are not contained therein. Employers who seek to arbitrate claims and disputes with their employees arising from employment must utilize a separate, stand-alone arbitration agreement which employee’s must separately sign and acknowledge receipt.

For more information regarding this decision and how your company can craft binding and effective arbitration agreements and Employee Handbook disclaimers, please contact Dina M. Mastellone, Esq., Director of the firm’s Human Resources Practice Group, at dmastellone@nullgenovaburns.com or 973-533-0777.