EEOC Issues Proposed Rule to No Longer Keep Employers in the Dark as to Cause Finding and Conciliation Demand

By Joseph A. Kroeger

Employers who have been frustrated over the years by the Equal Employment Opportunity Commission (EEOC)’s oft-employed tactic of keeping its factual evidence close to the vest, even after a cause finding as to a charge and/or during conciliation efforts, may be on the verge of receiving some welcome relief.

On Thursday, October 8, 2020, the EEOC issued a proposed rule that would provide employers, as part of the conciliation process, with: (1) “a summary of facts and non-privileged information that the Commission relied on in its reasonable cause finding”; (2) “a summary of the Commission’s legal basis for finding reasonable cause”; (3) “the basis for any relief sought, including the calculations underlying” the conciliation proposal and amount; and (4) “identification of a systemic, class, or pattern or practice designation.”

This new rule would be a game-changer for employers. Information asymmetry has been a hallmark of the EEOC’s administrative charge handling process. After an employee files an initial charge, the employer (unless it is offered and opts for voluntary mediation) files a position statement. That position statement is shared with the charging party, and the EEOC investigator typically goes through it in detail with the charging party. The employer receives no information from the EEOC beyond the typically vague and non-detailed initial charge.

After the EEOC completes its internal investigation of the charge, employers frequently receive a cause finding – often “out of the blue” – that includes a significant monetary demand on a take-it-or-leave-it basis. In most cases, this is the extent of the EEOC’s statutorily mandated “conciliation” process: accept the EEOC’s offer (which bakes in the assumption that it will prevail in all respects, if litigated) or it will file a federal lawsuit backed by nearly unlimited federal resources. This approach put employers in a difficult situation and often with precious little information to make an informed decision about whether to accept or reject the EEOC’s offer.

Employers understandably were frustrated by this often opaque process and the lack of information provided by the EEOC before being required to make such a crucial decision. The newly proposed rule holds the EEOC accountable to engage in the conciliation process in good faith and provides employers with much-needed information at an important juncture.

In issuing the proposed rule, the EEOC acknowledges that “cooperation and voluntary compliance” are the preferred methods for resolving charges with employers. The EEOC shared that, between fiscal years 2016 and 2019, EEOC conciliations were successful only 42.23 percent of the time, a far lower rate than private mediation. This proposed rule is intended to increase the likelihood of successful conciliation efforts, to the benefit of all.

The public will have 30 days to comment on the proposed rule once it is published in the Federal Register.

A copy of the proposed rule can be found here.