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By Jared Shelly

When it comes to workplace discrimination, 2011 proved to be a landmark year. Workers that felt discriminated against inundated the Equal Employment Opportunity Commission with claims -- 99,947 to be exact, the highest number of charges in the EEOC's 46-year history and a 31 percent increase over 2006.

It was the largest disability discrimination settlement in EEOC history.

And discrimination claims are not likely to drop anytime soon, said Barry Hartstein, labor and employment attorney at the law firm Littler.

"It wouldn't surprise me if we hit 100,000 [discrimination claims soon]," said Hartstein.

The most obvious reason for the uptick is the economic downturn. Lots of people have been fired in recent years and with the job market tight, they've chosen to retaliate against employers with lawsuits.

"The more layoffs and firings that occur, the greater the potential pool of workers who may claim -- rightfully or wrongfully -- that they have been discriminated against," said Zac Overbay, senior vice president and partner with consultancy Woodruff & Sawyer Co.

"Some would say hard times make employees more apt to file claims against their employers, than would otherwise be the case, given a more robust economy and higher rate of employment. I think the upward trend is simply due to a larger pool of unemployed workers."

But employers may also be to blame. Before the recession, some companies may have gone years without having to layoff or terminate employees and, in turn, they may have been out of practice with current legal standards. That could mean they're conducting layoffs without checking with legal counsel, human resources or risk management about the legal and proper ways to do so, leaving them susceptible to discrimination claims.

Meanwhile, the EEOC is stepping up action on systemic claims which involve at least 20 or more complainants (similar to a class-action lawsuit). The EEOC worked on 235 systemic investigations in 2011, 96 of which resulted in "reasonable cause" determinations that the policies or practices of companies were discriminatory in nature. In fact, in its recently released strategic plan for 2012-2016, the EEOC noted that it will be more strict in seeking out patterns of discrimination that have "a broad impact on an industry, occupation, business or geographic area."

So far, the agency has had its biggest impact targeting leave-of-absence and attendance policies. In 2009, Sears settled a case for approximately $6.2 million after the EEOC challenged the retailer's policy of terminating an employee who had been out of work for more than a year. The commission claimed it was unfair to those on workers' comp leave.

Then in June 2011, came the stunner that Verizon had paid the record $ 20 million settlement.

"That really has changed the landscape significantly for employers," said Frank Alvarez, a partner with law firm Jackson Lewis. "It's been a wake-up call for many companies."

But the EEOC hasn't had a great track record in settling other types of cases. In fact, the agency was ordered to pay Cintas Corp. $2.6 million in legal costs after the company won a systemic-discrimination case in 2011. U.S. District Judge Sean Cox even accused the EEOC of engaging in a "reckless sue first, ask questions later" policy, failing to properly investigate the allegations against Cintas or to interview individual complainants until well after it had filed a complaint against the company.

The agency also lost face in EEOC v. Bloomberg, when a district court in New York found that the media giant should not face trial on the alleged pattern or practice of discrimination against pregnant or recently pregnant employees. The court claimed in the 2011 ruling that the EEOC did not have statistical evidence and the anecdotal evidence was not enough to "demonstrate a pattern or practice."

Cases like those put attorneys in a thoughtful mindset when researching potential cases to bring against employers.

"I think most attorneys are much more apt to delineate the basis for their claims (discrimination, retaliation, etc.) to the employer and give them the opportunity to respond long before filing suit," said Woodruff & Sawyer Co's Overbay.

"Employee attorneys who frame their arguments and solicit the employer's response first, are following a safer, more measured approach to assessing the strength of their client's claim."

Disability discrimination claims have been a large part of the upsurge in EEOC claims, reaching 25,742 in 2011, up from 17,734 in 2007. That's an increase of more than 45 percent.

Discrimination claims were traditionally shot down because of mitigating factors under the Americans with Disabilities Act, enacted in 1990. If a person had diabetes, for example, their medication was seen as a mitigating factor. If they had vision problems, their glasses were seen as a mitigating factor. The Americans with Disabilities Amendment Act of 2008 made it much easier for people to prove they have disabilities by reversing Supreme Court cases that narrowed the potency of the original act. That's opened the door for a lot more wins for disability discrimination claims.

"The ADA has been born again with the ADAAA," said Frank Alvarez, a partner with law firm Jackson Lewis. Before the ADAAA, "the employer won the charge in nearly 90 percent of cases, prevailing mostly due to finding that the person did not have a disability," he said. "Now, there should rarely be a dispute about coverage, just a debate about whether the person was a qualified person with a disability."

"The bottom line is, there's more teeth in the law," said Milt Wright, founder of disability management firm Milt Wright & Associates Inc.

When consulting with companies, Wright's advice for employers is to "get their houses in order" regarding how they hire people, train their employees and handle discrimination claims of all types. He also urges them to judge people as individuals even if they've got the same disability. Take returning soldiers with post-traumatic stress disorder, for example. If one of them acts out, there's no need to say 'I never want to work with another PTSD victim again.'

"Look at them as an individual not a disability. Every person is different," said Wright.

Alvarez said that "most people think you avoid discrimination by treating them the same way, but if you're too consistent you fail because you didn't provide reasonable accommodations. You need to be consistent and flexible at the same time, and that's a challenge for managers. The only way around it is through effective training."

Alvarez also advises employers to review their leave and attendance polices right away.

"You cannot have inflexible rules concerning absences," he said, noting that companies need to offer light duty. Change work schedules. Change work stations. Provide equipment or devices if needed.

But employers are desperately seeking advice on handling all types of discrimination.

"Every day the phone is ringing" said Gerald L. Maatman Jr. a partner at Seyfarth Shaw. "An EEOC charge is more meaningful than it was five years ago. It's a serious matter these days."

The best way for employers to insure they won't be the subject of an EEOC lawsuit -- or to prove they're not a discriminating employer after a suit has been filed -- is by having workplace due process when complaints are filed. Showing that the company takes complaints seriously and handles them with state-of-the-art complaint processes, complaint hotlines and sophisticated protocols for human resource department will go a long way in providing a defense.

"A healthy company will have a larger number of internal complaints but a small number of external complaints, because grievances were listened to and handled properly," said Maatman.

Short of having a terrific severance policy to stem former employee dissention, Overbay said good practice is all about consistency in dealing with employee complaints.

"Employers need to have policies and procedures that are...consistently adhered to from employee to employee, division to division," he said. "Every situation cannot be treated the same, but the key is having fair employment practices and policies that do not vary widely without explanation."

Another way for employers to protect themselves is through useful communication with insurance companies.

"The ability to recover [from a claim] is negatively impacted by a failure to give timely notice and a failure to cooperate," said Ken Ross, executive vice president of FINEX, Willis' accountants practice. If insureds are not following those rules they could be denied coverage, he said.

But sometimes, losing an EEOC claim case really is the company's fault.

Said Ross, some employers have a "total lack of awareness."

JARED SHELLY is senior editor/web editor of Risk & Insurance®

May 1, 2012

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