The U.S. Equal Employment Opportunity Commission (EEOC) has published a new proposed rule that would update the Commission’s conciliation process for Title VII and ADEA claims. The proposed rule adds structure to EEOC’s informal pre-suit negotiations by outlining four categories of information, which EEOC must provide in every case. The proposed rule follows a recent uptick in reliance on pre-suit negotiations to resolve cases and the Supreme Court’s ruling in Mach Mining, LLC v. E.E.O.C., 575 U.S. 480 (2015).
This brief analysis provides a look at Mach Mining and the existing EEOC conciliation process. Then it discusses the proposed rule itself, and the process it contemplates. And finally, to conclude, it considers the effect the proposed rule may have on employers and EEOC cases going forward.
Mach Mining and the Old Conciliation Process
By statute, when EEOC finds reasonable cause exists to pursue a claim against an employer for discrimination, the agency must first attempt to resolve the claim “by informal methods of conference, conciliation, and persuasion.” 42 U.S.C.A. § 2000e-5.
At the time Mach Mining, LLC was decided, EEOC’s informal conciliation process was exactly that—informal. Generally, the agency would send an employer a letter providing a brief outline of the claim and inviting the employer to negotiate some type of voluntary compliance. In response, employers typically engaged in internal investigations to discover the basis for the claim and replied accordingly. The predominant complaint from employers was that the informal process required very little of EEOC and left employers at a substantial disadvantage, given that the agency had facts relevant to the claim but no corresponding duty to disclose those facts.
In Mach Mining, the Supreme Court addressed the propriety of EEOC’s informal conciliation process and largely approved it. Although the Court did hold that EEOC "must inform the employer about the specific allegation” and could not simply disregard its duty to engage in conciliation, the Court continually stressed the agency’s discretion and flexibility during the conciliation process and referred to judicial review of that process as “barebones.”
Following Mach Mining, EEOC adopted a new focus on resolving cases at the pre-suit conciliation phase. In 2017, EEOC engaged in an agency-wide ‘‘Conciliation and Negotiation Training’’ with the express purpose of increasing conciliation rates. The measure was modestly successful, with conciliation rates increasing from 38% in 2014 to 41.23% between 2016-2019. However, conciliation remained a somewhat strained process, with as many as one-third of employers opting to not engage in pre-suit negotiations at all for the period of 2016-2019.
EEOC’s New Proposed Rules for Conciliation
In an attempt to address employer concerns with the conciliation process and increase pre-suit resolutions, EEOC published new proposed rules on October 9, 2020. These rules set out four categories of information that EEOC must provide employers as part of every pre-suit conciliation:
(1) A summary of the facts and non-privileged information that the Commission relied on in its reasonable cause finding, and in the event that it is anticipated that a claims process will be used subsequently to identify aggrieved individuals, the criteria that will be used to identify victims from the pool of potential class members;
(2) a summary of the Commission’s legal basis for finding reasonable cause, including an explanation as to how the law was applied to the facts, as well as non-privileged information it obtained during the course of its investigation that raised doubt that employment discrimination had occurred;
(3) the basis for any relief sought, including the calculations underlying the initial conciliation proposal; and
(4) identification of a systemic, class, or pattern or practice designation.
While setting out these four categories, EEOC was careful to acknowledge two things. First, EEOC noted that “[t]he purpose of these proposed changes is not to provide an additional avenue for litigation” for those who would challenge EEOC as failing to live up to these new obligations. And second, the agency was clear it intended to preserve the extensive discretion afforded to it in these pre-suit negotiations, stating “[t]he Commission still believes that it is important to maintain a flexible approach to conciliation, and that the Commission has broad latitude over what it offers and accepts in conciliation.”
Possible Effects of the New Proposed Rule
In its proposed form, the rule is being hailed as pro-business and a welcome clarification for employers who would like to handle discrimination claims outside of court. As written, the rule places businesses on a more level field with EEOC during negotiations and ensures that the employer will have all non-privileged information available to it, as it discusses voluntary compliance. EEOC anticipates this sharing of information will result in better employer engagement and increased conciliation rates. The agency is accepting comments until November 9, 2020.