EEOC Focuses on Harassment in the Workplace in the Wake of #MeToo

By Cara Murray, Assistant Vice President, Alliant

In October 2017, allegations of rampant sexual abuses by Hollywood producer Harvey Weinstein finally broke through to major news sources after decades of rumors of his engaging in sexual harassment and assault. The high profile revelations to the general public gained traction in the public narrative, and the conversations started in the aftermath of Weinstein ballooned into the wider #MeToo movement – a hashtag showing the prevalence of sexual harassment and assault (experienced predominantly but not exclusively by women), especially in the workplace.

In addition to the general public, the US Equal Employment Opportunity Commission (EEOC) was paying careful attention to the #MeToo movement. The EEOC is the government entity responsible for enforcing federal laws against discrimination, including harassment, against job applicants or employees based on a protected class (race, color, national origin, religion, sex, sexual orientation, gender identity, pregnancy, age, disability or genetic information). Not surprisingly, this major public discourse on harassment was of interest to the EEOC, especially considering the EEOC had just launched their Respectful Workplaces training program, a program developed following the 2016 meeting of the EEOC’s Select Taskforce on the Study of Harassment in the Workforce.

On June 11th, 2018 the EEOC reconvened the Select Taskforce on the Study of Harassment in the Workforce in a meeting called “Transforming #MeToo into Harassment-Free Workplaces.” Commissioner Chai Feldblum, in her opening statements of the meeting, emphasized the national focus on sexual harassment and the opportunity the EEOC has to leverage that focus in furtherance of its mission.[i]  Commissioner Feldblum made a point of emphasizing that the EEOC is seeking sustainable change in the workforce in decreasing all kinds of harassment, including but not limited to sexual harassment. In fiscal year 2017, harassment charges made up about 30% of the charges under all statutes enforced by the EEOC.[ii]  Within that 30%, sexual harassment accounted for approximately 35% of charges, with racial harassment accounting for 27% of charges, and harassment on other grounds accounting for the remaining 38% of harassment charges.[iii]  It is yet to be seen whether the Harvey Weinstein revelations will have an impact on the number or proportion of sexual harassment charges filed. Acting Chair Victoria Lipnic’s opening statement notes that the revelations came out at a time that coincided with the EEOC’s fiscal year (which begins in October and ends in September), and that there are typically delays in charge filing, so the EEOC cannot yet say if they will end up seeing more sexual harassment charges as a result of the #MeToo movement.[iv]

With a prominent place in public narrative, and with EEOC scrutiny at a bolstered high, harassment is an issue that companies should be carefully monitoring for, and attempting to prevent, in their workplaces. As well as continued development, implementation, and review of company policies and procedures against harassment in the workplace, it may also be beneficial for companies to review their Employment Practices Liability coverage in light of this EEOC focus. In particular, it is important to make sure the definition of Employment Practices Violation (or Employment Practices Wrongful Act) explicitly references harassment, and that such reference to harassment is not limited to sexual harassment.

In the wake of #MeToo, workplace harassment is high in public consciousness. The EEOC sees this public and media focus as an opportunity to effectively fulfill its role of enforcing federal laws against discrimination, including harassment. Companies should be on alert for harassment in their workplaces, because the general public and the EEOC are certainly paying attention.

[i] Opening Statement of Commissioner Chai R. Feldblum (2018) https://www.eeoc.gov/eeoc/task_force/harassment/feldblum.cfm

[ii] Derived from data found in the EEOC’s enforcement and litigation statistics. All Statutes https://www.eeoc.gov/eeoc/statistics/enforcement/all.cfm and All Charges Alleging Harassment https://www.eeoc.gov/eeoc/statistics/enforcement/all_harassment.cfm

[iii] Opening Statement of Acting Chair Victoria A. Lipnic (2018) https://www.eeoc.gov/eeoc/task_force/harassment/lipnic.cfm

[iv] Id.

The suspension of EEO-1 pay data reporting requirements does not mean U.S. companies are off the hook for pay disparity

By: Kamy Vacca, Senior Vice President, Alliant

At the end of 2016 new guidelines were passed requiring U.S. based employers to review the pay of all employees and to report on wage disparities in their EEO-1 reports beginning in March 2018. Many employers viewed these new requirements as overly burdensome. Apparently the White House agreed, suspending implementation of the rules, much to the relief of most U.S. companies who felt this requirement would not adequately reflect the reasons for any pay gaps. Companies would have been required to report W-2 wage information for every employee along with specific salaries divided up into 12 pay bands. What this report did not require were specific qualifications such as education, experience, productivity, performance and other measures that are utilized to determine individual compensation. The new guidelines would have required employers to modify the wages of those within each pay-band that were underpaid, as salaries could not be reduced for those who received higher salaries.

The suspension does not mean that companies cannot still be found to be in violation of the Equal Pay Act or for multinational companies, violations of the laws of other countries, such as the UK and others.

Multinational companies based in the U.S. with subsidiaries in foreign jurisdictions must comply with the local laws. The Equality Act of 2010 in the UK requires reporting by the end of March or April of this year, depending on whether the company is public or private. Those reports are starting to be published and we have seen at least one lawsuit against Tesco, in excess of $5 Billion. Link below: https://www.leighday.co.uk/News/News-2018/February-2018/Leigh-Day-launch-%C2%A34bn-equal-pay-claim-against-TESC

Should the U.S. proceed with the new EEO-1 reporting requirements, companies could see lawsuits arising out of various violations of the Equal Pay Act, discrimination, and other alleged employer wrongdoing. Publicity over non-compliance, or over apparent inequality in pay, may also lead to reputational damage. The EEOC and state agencies may choose to use such disclosures as the basis for class action activity as well.
Many companies had already begun the evaluation process. At this point, companies may consider attempts at closing or reducing the gap before being required to disclose any equality, which would obviously help with results.

It may be time to take a look at your EPL Policy and review some of the policy provisions to ensure you are adequately covered. Below are some questions to consider:

Does your EPL Policy have express coverage for back pay? This could be an element to consider if disparate wages must be adjusted upward, particularly if a court may require the employer to make up for prior underpayment of wages.

Does your EPL Policy have true worldwide coverage or is the worldwide coverage limited by having a requirement that claims have to be brought in the U.S.? This is significant right now as the U.K.’s pay disclosure requirement is coming into effect.

There are numerous other insurance issues that may be implicated in regard to pay inequality. A review of all potentially applicable insurance policies is certainly warranted at this time, even if the current legislation has been put on hold.