Stay up to date on everything mediation!

Subscribe to our free newsletter,
"This Week in Mediation"

Sign Up Now

Already subscribed No subscription today
Mediate.com

Worsening Economy Brings Increased Discrimination Charges: How Early Mediation Can Assist

by Claudia M. Viera
January 2010 Claudia M. Viera
The years 2008 and 2009 brought grim economic times resulting in increased charges of discrimination and harassment by beleaguered employees. In former days, employees who felt harassed or unfairly terminated sometimes moved on to other companies rather than filing a formal complaint. Because fewer job opportunities are now available, disgruntled or laid-off employees appear more likely to file complaints of discrimination. The following figures illustrate this trend.

2008 EEOC and California DFEH Complaint Statistics

The Equal Employment Opportunity Commission (“EEOC”) is the federal agency which enforces anti-discrimination legislation and is an employee’s first stop on the way to filing a law suit. Discrimination charges with the EEOC jumped an unprecedented 15.2% in the last fiscal year (2008). (1) The 95,402 charges of discrimination represent the highest number of charges ever filed in the EEOC’s 44-year history (Fig. 1).

Similarly, at the state level, California’s Department of Fair Employment and Housing (“DFEH”), responsible for enforcing state employment discrimination law, reported a 13 percent increase in claims in 2008. (2) Its 18,785 charges were the highest number filed since 2002. (3)

Fig. 1 - Total Number of Charges Filed Per Year

At the EEOC, filings in every major charge category increased in 2008 (Fig. 2). Over one-third of the claims involved race discrimination (36%) and nearly a third involved sex discrimination (30%). However, the largest increase in 2008 occurred in the number of age claims filed – 24,582 age discrimination charges or 25.8 percent. Retaliation claims represented the second-largest increase from last year, alleged in over one-third of the charges (34%). (4)

In California, however, the largest number of claims involved mental or physical disability, accounting for 36.4 percent of the total. (5) Retaliation represented the second highest number of claims (30%). Race and age claims represented 22.4 % and 19.5 % respectively, while sexual harassment claims made up 20.5% of the total.

Fig. 2 - Percentage of Total Charges Filed in 2008

At the DFEH, 50% of claims were filed after a termination occurred. Another 26% were filed because of perceived harassment. (6) Far less often, claims were filed because of failure to hire, working conditions or other employment actions.

Through its mediation and litigation efforts, the EEOC recovered $376 million in monetary relief for thousands of employees, a nine percent greater recovery than in 2007. Similarly, the DFEH recovered nearly $7.9 million in 2008, a one percent increase from 2007. Employers already reeling from the economic downturn may feel overwhelmed by these numbers and the potential monetary consequences of these outcomes. However, data indicate that early mediated settlements are reasonable and well within most employers’ budgets, as described below.

How Early Mediation Can Help: EEOC and DFEH Offer Free Services

Both the EEOC and California’s DFEH provide early mediation services to complainants and employers; however, the EEOC’s program is currently far more robust. (7)Certain parties are offered EEOC mediation within a few months of the charge being filed. If both the employee and employer accept the offer, the mediation occurs within 90 days. It is free of charge to both parties.

In 2008, the EEOC mediated 12,254 employment discrimination charges nationally (about 13% of the total charges filed). Of those mediated, 72.1% of the charges were resolved successfully. Mediation settlements awarded over $124 million dollars in monetary benefits to the affected employees, giving an average settlement value of approximately $10,000 dollars per claim. (8) Given the ever-increasing costs of litigation, $10,000 is usually within the realm of what employers consider to be de minimus, and many claims settle for less. At the DFEH, early settlements (through mediation or administrative settlement) averaged $9,600 dollars in 2008.

These figures do not account for the non-monetary benefits that often settle these cases. Mediated agreements commonly include: neutral or positive letters of recommendation, altering final paperwork to reflect resignation rather than termination, removal of documents from personnel files, payment of health insurance or benefits for a specified period, management or employee training commitments (particularly harassment prevention training, which many California employers are already required to provide every two years), internal distribution of anti-discrimination policies, assistance with job retraining, an apology or genuine expression of regret, and other creative solutions.

Other Advantages of Early Mediation

For employers, the benefits of early mediation are many. First, there is an increased savings in employee time and resources, since supervisors and Human Resource personnel can focus on their work, rather than on preparing documentation or responding to EEOC/DFEH requests for information. Quick resolutions help companies re-focus on the economic bottom-line, rather than being distracted by threats of litigation.

In addition, because mediation is typically protected by confidentiality laws, employers have less fear of the claims being made public through news articles or other media. In addition, if the termination was not conducted well, the employer has the chance to reframe what occurred or apologize for a supervisor’s behavior without fear of increasing liability, as confidentiality laws typically protect statements by either side from being used against the other in later litigation.

Next, mediated resolutions bring closure - emotional and actual - which typically relieves the stress of those accused of the misconduct. Resolving issues quickly ultimately helps employee morale return to normal. Also, typical California agreements include clauses stating that the employer does not admit liability and that the employee waives all other claims which is considered advantageous to the employer.

Finally, early resolution is highly beneficial in reducing costs associated with these claims, as the resolution often occurs before either side has hired an attorney or expended many resources (which, for employers defending litigated cases, can run from $30,000 to $150,000) depending on the case. Given the advantages described above, it is surprising that a mere 27% of employers (9)offered mediation by the EEOC accepted in 2008. (10) Complainant employees accepted mediation 84% of the time.

Clearly, employees desire a mediated process in which they can explain their perspective and receive information. For many employees, this is the first time they are given answers to their questions about their termination/lay off or receive a fuller understanding of the employer’s or manager’s circumstances. For some, it is an opportunity to speak with someone high up in the company about the disrespectful treatment they received and their hope that the behavior will not be repeated. They thereby reclaim some of the dignity or respect they feel they had lost originally. Sometimes, this is all that is needed to resolve the dispute, and even when it is not, a respectful conversation can alter the dynamics of the conflict moving forward.

Conclusion

As the economic downturn continued through 2009, and jobs continue to be scarce in 2010, terminated or laid off employees are left with no immediate future opportunity. With no clear path forward, employees often remain caught in the past, mulling over perceived injustices and filing employment discrimination claims in increased numbers. Given the 2008 figures, employers and employees should consider taking advantage of early mediation which provides the opportunity for both sides to move forward with expeditious settlements and more satisfactory results.

End Notes

1. EEOC Reports Job Bias Charges Hit Record High Of Over 95,000 In Fiscal Year 2008, EEOC Press Release, March 11, 2009, www.eeoc.gov/press/3-11-09.html. “The surge in charge filings may be due to multiple factors, including economic conditions, increased diversity and demographic shifts in the labor force, employees’ greater awareness of the law, EEOC’s focus on systemic litigation, and changes to EEOC’s intake practices.”

2. Blasi, Gary and Doherty, Joseph, FEHA by the Numbers: Preview of a Forthcoming Study, California Labor & Employment Law Review, vol. 23, no.5 (2009), UCLA Rand Center for Law and Public Policy Research Project.

3. Data is not yet available for 2009 for either agency.

4. Because individuals often claim multiple types of discrimination (e.g. race discrimination and retaliation), the percentages of each charge above exceed 100%. See www.eeoc.gov/stats/charges.html

5. In contrast, disability charges at the EEOC represented only 20% of the filings.

6. Similar EEOC data from 2005 indicate that 52% of claims were filed after a termination, 21% because of terms and conditions and 17% because of perceived harassment.

7. On average, approximately 150 cases are referred to the DFEH’s mediation program each year. Of those cases that are mediated, roughly 74% settle. “Despite the high rate of successful mediations, DFEH’s Volunteer Mediation Program remains underutilized. Counsel representing parties to DFEH complaints may request referral to the department’s Volunteer Mediation Program and are encouraged to do so,” stated Annmarie Billotti, Associate Chief Deputy Director, Special Projects Counsel for the Department of Fair Employment and Housing.

8. Of course, the outcome for any individual case will vary.

9. At the DFEH, on average, 21% of employers accept mediation.

10. The most common rationale for refusing mediation is generally that the employer does not believe the complaint has merit. In some cases, this is true. There may also be other good reasons not to mediate, such as the lack of complete discovery in these early cases.


Attachments



viera2010a.jpg Fig 1  (viera2010a.jpg)
viera2010b.jpg Fig 2  (viera2010b.jpg)

Biography


Claudia Viera is an experienced mediator and former Littler Mendelson employment attorney. In addition to mediating disputes, Ms. Viera has developed and presented trainings to thousands of employees and managers nationwide on employment law and ADR topics. Her areas of specialty include harassment and discrimination prevention, lawful investigations, hiring lawfully and mediation/alternative dispute resolution. Please contact mediationhelp@earthlink.net or 510.393.7117 for more information on mediation services or to schedule a training.

Email Author
Website: www.claudiaviera.com

Additional articles by Claudia M. Viera

Comments