Seyfarth Synopsis: A seemingly innocuous case filed by the EEOC on behalf of a single charging party against a casino operator highlights some of the risks of betting at the conciliation table. Employers take note!

As its FY 2016 wound down, the EEOC filed suit against a casino operator – in the case of EEOC v. Greektown Casino, L.L.C., Case No. 2:16-CV-13540 (E.D. Mich.) – alleging that it failed to accommodate and then terminated a pit manager because of his alleged disability – stress anxiety disorder. Obviously, the casino not yet responded to the complaint, and it may well have excellent legal defenses. Yet, the Complaint shows the EEOC’s hand (or at least part of it) and provides an example of some of the important stakes in EEOC litigation.

Is The Commission Bluffing?

Employers sometimes assume that the EEOC is only in the business of suing large companies based upon allegations of class-wide mistreatment of large groups of employees. It is true that the EEOC makes headlines filing pattern or practice cases against big companies, but the EEOC routinely files complaints on behalf of individual charging parties against lesser known businesses and often smaller companies. In fact, the EEOC often does so strategically – because it has determined that the underlying legal issue is more important than whether there is a big-name company, thousands of employees, or big dollars involved. As noted here and here, the EEOC’s recent challenge to a wellness program, and its recent attempt to pursue a claim for transgender discrimination, for example, were pursued on behalf of individual charging parties. Obviously, though, the legal issues were deemed important and, frankly, the press coverage was just as wide as that of any of the EEOC’s behemoth cases.

Also, more than a few cases are filed by the EEOC because it simply determines justice must be done and that the charging party might not have the resources to pursue it. So, don’t assume during the conciliation process that the EEOC is just bluffing when it threatens to bring a case on behalf of one charging party. It happens.

Know When To Fold Them?

With each reasonable case determination, comes an invitation to the conciliation (gaming) table. The conciliation process can be long, episodic, and frustrating. Along the way, an employer must balance the various pros and cons associated with settling a case with the EEOC. Certainty of outcome is almost always a factor, as is money, but, for some employers, the question is whether the game is lost the instant a suit is filed by the EEOC. Consumer product and service companies, for example, are heavily invested in brand development and the relentless pursuit of brand loyalty. So, each employer must ask itself what it will wager on whether the failure to reach compromise will result in damage to its brand or company name if the government publicly accuses it of discriminatory treatment of employees (i.e., fellow consumers). The frustrating part is that the allegations may be wildly misleading and eventually proven wrong, but no matter how frivolous the assertions may be, the reputational damage can be done on filing day.

Know When (Not) To Run?

None of this is to suggest that employers should bend to the will of the EEOC in a meritless individual or class case just because the EEOC says it might file suit. The fact is that the EEOC is quite choosy and has limited resources. As we reported here, the EEOC filed only 136 cases in its fiscal year ending September 30, 2016. By contrast, as noted here and here, the EEOC routinely receives more than 80,000 charges of discrimination per year. In other words, the odds of the EEOC filing suit are actually quite low in any given case.

Plus, not all negative publicity hits are created equal. What is the issue? Is there an advantage to taking a stand? Do you have strong PR advisors? Can you turn it on the government – David v. Goliath style?

And, perhaps most importantly, settling is not always a good bet. EEOC conciliation agreements are confidential as a matter of law and EEOC policy – except where the employer agrees to some measure of publicity. Employers should bet that the EEOC will request an “agreed” press release if there is any level of significance to the case, and should demand to see details of that card before deciding to take it.

Readers can also find this post on our EEOC Countdown blog here.