As Bloomberg Law recently reported, at least “[t]en shareholder proposals to disclose EEO-1 data revealing a company’s workforce race, ethnicity, and binary gender makeup—or to produce diversity, equity and inclusion (DE&I) reports similar to that data—have gone to a shareholder vote as of June 1, according to data from Insightia, a proxy analytics company.” For many years, companies with more than 100 employees have had to annually report data about their employees’ race, gender, ethnicity and job type to the Equal Employment Opportunity Commission (EEOC). This data is confidential unless companies choose to voluntarily disclose it. The EEO-1 instructions contain various categories of employee data from which employers can choose to describe the makeup of their workforce.
While some companies have agreed in the past to disclose their EEO-1 data in some form, this data can paint an incomplete picture of a company’s diversity and inclusion initiatives and can be misconstrued by the public and investors. However, it is clear that this data is important and its detailed disclosure may soon be required for publicly traded companies.
The purpose of this article is to outline some of the EEO-1 categories that companies should give extra thought and consideration prior to making public.
Race and Ethnicity
In terms of the race and ethnicity component, the EEO-1 report lists the following categories: (1) Hispanic or Latino, (2) White, (3) Black or African American, (4) Native Hawaiian or Pacific Islander, (5) Asian, (6) Native American or Alaska Native, and (7) Two or More Races.
However, these categories may exclude certain races and ethnicities. For instance, EEOC defines a white individual as a “person having origins in any of the original peoples of Europe, the Middle East, or North Africa.” Yet this definition does not account for the various ethnic groups currently living in Europe. Additionally, it fails to separate people from the Middle East and people from North Africa as distinct ethnic and racial populations, and it further mislabels these individuals as white. Similarly, there is no separate category for people of Caribbean origin, which can include several distinct ethnicities. And none of the EEOC categories accounts for aboriginal groups or tribal populations. Thus, a company reporting its ethnic and racial data solely according to the EEO-1 guidelines could end up underreporting a much more diverse employee force.
Gender and Sexual Orientation
Gender and sexual orientation present additional incomplete data points in the current EEO-1 guidelines. Although EEOC’s Instruction Booklet does not define gender, it does use the term “sex identification,” which traditionally limits the options to binary categories of male or female. However, gender today encompasses a wider spectrum. Similarly, EEOC does not require information about employees’ sexual orientation. Yet many employers promote and embrace employees who voluntarily disclose their preferred gender or sexual orientation, and in turn, consider these employees diverse individuals. Indeed, both gender identity and sexual orientation are protected categories under Title VII.
Other Traditionally Underrepresented Individuals
On a larger scale, there is no category in the EEO-1 report for other potentially diverse or underrepresented populations. For example, the Global Reporting Initiative (GRI) Standards include a definition of “vulnerable” groups in their proposed disclosures, which consist of “children and youth, the elderly, people with disabilities, excombatants, the internally displaced, refugees or returning refugees, HIV/AIDS-affected households, indigenous peoples, and ethnic minorities.” Indeed, some companies consider veterans as diverse individuals and have implemented hiring, retention and promotion initiatives for veterans.
In sum, although there is growing interest for employers of more than 100 employees to make public their EEO-1 data, this data may in some respects be considered limited and perhaps fails to account for a company’s overall diversity and inclusion statistics. Until EEOC updates the information it requires in companies’ EEO-1 reports, companies may be better served focusing on how to report their DEI information in a manner that is both comprehensive and useful to shareholders.