by Andrew K. Jenkins
November 2014 Dicta
In case you missed it, on October 7th, the DAYL CLE Committee sponsored a presentation by Margaret Allen and Robert Velevis of Sidley Austin, LLP on current trends issues involving EEOC Enforcement. They covered (1) general EEOC enforcement initiatives, (2) drafting employment documents that will survive EEOC scrutiny, (3) use of class-action waivers and arbitration clauses, and (4) a look at EEOC issues before the Supreme Court in this term and beyond. Some take-aways are below:
- General EEOC Initiatives: Of the 131 lawsuits filed by the EEOC in 2013, 78 came under Title VII and 51 came under the ADA. Much of litigation centers around terms employers place in separation agreements prohibiting employees bringing claims to the EEOC, or assisting the EEOC (or any other party) in suits against the employer; requiring them to cooperate with the employer in suits and investigations; and waiver of claims the employee may have. Additionally, the EEOC is looking to big targets (with correspondingly big potential fines) more as the total number of suits falls.
- Drafting Tips: Specifically state that the release does not affect the employee’s rights to file charges with or cooperate with a government entity (not just the EEOC and NLRB, and not just employment laws). Also, include a statement of the protected rights in a separate paragraph of the separation agreement, and begin each paragraph containing restrictions on an employee’s rights (such as confidentiality and non-disparagement provisions) with language stating “Except as otherwise provided in paragraph [refer to paragraph protecting employee’s right to engage in protected activity],” to reinforce that nothing in any section of the agreement limits those rights. And last, don’t sue a former employee mere days after she files an EEOC charge.
- Class Action Waivers and Arbitration Agreements: The Supreme Court in AT&T v. Concepcion, 133 S. Ct. 1740 (2011) allowed waivers of class-action rights in arbitration. The Court held that: “Requiring the availability of classwide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” 133 S. Ct. at 1748. The court reiterated this stance in American Express v. Italian Colors Rest., 133 S. Ct. 2304 (2013) where it held “the FAA’s command to enforce arbitration agreements trumps any interest in ensuring the protection of low value claims.” Id. at 2312 n.5. Lower courts have followed and are not invalidating arbitration clauses for law-value claims. However, the NLRB continues to Battle Class Action Waivers. In D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 3, 2012), the National Labor Relations Board determined that participating in class or collective actions qualifies as protected concerted activity under the National Labor Relations Act (NLRA).
- Looking Ahead: American Express did not foreclose the possibility that an arbitration agreement imposing high administrative and filing fees could make access to an arbitral forum “impracticable,” thereby constituting “a prospective waiver of the party’s right to pursue a statutory remedy.” Amex, 133 S. Ct. at 2310. Also, there is a line of cases that circle around the issue of did the parties agree and with whom.