Duane Morris EEOC Litigation Review – 2024

DISCLAIMER The material in this Review is of the nature of general commentary only. It is not meant as or offered as legal advice on any particular issue and should not be considered as such. The views expressed are solely those of the authors. In addition, the authors disclaim any and all liability to any person in respect of anything and of the consequences of anything done wholly or partly in reliance on the contents of this book. This disclaimer is from the Declaration of Principles jointly adopted by the Committee of the American Bar Association and a Committee of Publishers and Associations.

The EEOC Litigation Review – 2024

CITATION FORMATS All citations in The EEOC Litigation Review – 2024 are designed to facilitate research. If available, the preferred citation of the opinion included in the West bound volumes is used, such as EEOC v. Eberspaecher North America Inc., 67 F.4th 1124 (11th Cir. 2023). If the decision is not available in the preferred format, a Lexis cite from the electronic database is provided, such as EEOC v. UFP Ranson, LLC, 2023 U.S. Dist. LEXIS 170629 (N.D. W.Va. Aug. 17, 2023). If a ruling is not available in one of these sources, the full case name and docket information is included, such as EEOC v. BNSF Railway Co ., Case No. 21-CV-369 (D.

Neb. Apr. 28, 2022). eBook Highlights

The EEOC Litigation Review – 2024 is available for use on a smartphone, laptop, iPad, or any personal electronic reader by using any eBook reader application. eBook reading allows users to quickly scroll, highlight important information, link directly to different sections of the Review, and bookmark pages for quick access at a later time. The eBook is designed for easy navigation and quick access to informative data.

The EEOC Litigation Review – 2024

NOTE FROM THE EDITORS We are pleased to provide you with the latest edition of our annual analysis of trends and developments in EEOC litigation, The EEOC Litigation Review – 2024 . This useful reference aims to explain the most important EEOC policies and decisions in 2023 and provide an expert analysis of what we predict for 2024. The Review explains the impact of the EEOC’s six enforcement priorities as outlined in its Strategic Enforcement Plan on employers’ business planning and how the direction of the EEOC’s Plan’s should influence key employer decisions. The Review also contains a compilation of significant rulings decided in 2023 that impacted EEOC-initiated litigation and a list of the most significant settlements in EEOC cases in 2023. Thank you to our Duane Morris colleagues who contributed to the creation of this Review, providing research, analysis, and information on case rulings and agency developments. We hope the Review will provide clients with a definitive resource on EEOC-Initiated litigation. Sincerely,

Gerald L. Maatman, Jr.

Jennifer A. Riley

General Editor February 8, 2024

The EEOC Litigation Review – 2024

CONTRIBUTORS

Alex W. Karasik

Shireen Y. Wetmore

Brandon L. Spurlock

Partner

Special Counsel

Emilee N. Crowther

Gregory Tsonis

Nick Baltaxe

Associate

Nathan K. Norimoto

Christian Palacios

Brittany Wunderlich

Associate

The EEOC Litigation Review – 2024

Gregory Slotnick

Elisabeth Bassani

Nicolette J. Zulli

Associate

The EEOC Litigation Review – 2024

TABLE OF CONTENTS I. Overview Of EEOC-Initiated Litigation In 2023 ……………………………….....8 II. EEOC Litigation And Settlement Trends In 2023 …………………………..........8 III. Key Rulings In EEOC-Initiated Litigation ………………………………………...23 IV. Key EEOC Settlements In 2023 …………………………………………………….40 V. Appendix Of Cases ............................................................................................43

The EEOC Litigation Review – 2024

I. Overview Of EEOC-Initiated Litigation In 2023 Government enforcement litigation is similar in many respects to class action litigation. Lawsuits brought by the U.S. Equal Employment Opportunity Commission (EEOC) typically present significant monetary exposure and involve numerous claimants. Most often the lawsuits pose reputational risks to companies. While plaintiffs in private party class actions must meet the requirements of Rule 23 to secure class certification for their claims, EEOC-initiated litigation is different. For example, systemic “pattern or practice” lawsuits brought by the EEOC follow a framework established by the U.S. Supreme Court in International Brotherhood Of Teamsters v. United States, 431 U.S. 324 (1977), class certification is not required. Nonetheless, EEOC systemic lawsuits present analogous issues as compared to Rule 23 private party class actions. The EEOC is one of the most aggressive federal agencies in terms of prosecuting government enforcement litigation. This book focuses on EEOC litigation in 2023 and the types of legal issues spawned by that litigation. II. EEOC Litigation And Settlement Trends In FY 2023, the EEOC filed 144 lawsuits, including 25 systemic lawsuits. This represents a resurgence from what we observed in FY 2022, during which the EEOC filed 97 lawsuits, including 13 systemic suits. These enforcement numbers reflect a boost over filing numbers from FY 2021, as well, during which the EEOC filed 114 lawsuits including 13 systemic lawsuits. They likewise reflect an increase over FY 2020, during which the COVID-19 pandemic pushed case filings down to 33. In accordance with tradition, the EEOC filed more lawsuits in September 2023, the last month of its fiscal year, than in any other month from October 2022 forward.

This past year, the EEOC filed 67 lawsuits in September, up from 39 filed in September 2022. The graphic shows this filing trend:

The EEOC Litigation Review – 2024

As illustrated in the following chart, FY 2023 represents the highest number of filings since FY 2019, during which the EEOC filed 157 lawsuits.

These numbers remain off the high water marks we observed in prior years, including 217 lawsuits in FY 2018 and 201 lawsuits in FY 2017. Notably, FY 2023 also reflected a resurgence in the filings from historically active district offices. In FY 2023, Philadelphia District Office had by far the most lawsuit filings with 19, followed by Indianapolis and Chicago with 13 filings, and New York and Los Angeles each with 10 filings. Charlotte, Atlanta, Dallas, Phoenix, and Memphis had 9 each, Houston had 8, Miami, Birmingham, and St. Louis had 7 each, and San Francisco had 5 filings. The following shows the filing numbers in FY 2023 by district office:

The EEOC Litigation Review – 2024

In FY 2023, the Philadelphia District Office had by far the most lawsuit filings with 19, followed by Indianapolis and Chicago with 13 filings, and New York and Los Angeles each with 10 filings. Charlotte, Atlanta, Dallas, Phoenix, and Memphis had 9 each, Houston had 8, Miami, Birmingham, and St. Louis had 7 each, and San Francisco had 5 filings. The most noticeable trend of FY 2023 is the filing deluge in Philadelphia (19 lawsuits), compared to FY 2022 where the Philadelphia District Office filed 7 lawsuits. Similarly, Indianapolis ramped up its filings compared to the 7 filings from FY 2022. Like FY 2022, Chicago remained steady near the top of the list again with 13 filings. Los Angeles had a slight increase, based on the 8 filings it had in FY 2022. Going another direction, Miami filings slightly fell compared to its 8 filings in FY 2022. Finally, both New York and Charlotte increased their filings from FY 2022, with New York substantially increasing from 7, and Charlotte moderately increasing from 7 filings. The balance across various District Offices throughout the country confirms that the EEOC ’ s aggressiveness is in peak form, both at the national and regional level.

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As to systemic filings, the EEOC filed 25 systemic lawsuits in FY 2023, almost double the number it filed in each of the past three fiscal years and the largest number of systemic filings in the past five years. As to its current docket, in FY 2023, the EEOC reported that it had a total of 32 systemic cases on its docket at the end of fiscal year 2022, accounting for 18% of its active merits suits. During FY 2022, the EEOC reported 29 pending systemic cases, which accounted for 16% of the EEOC’s docket. The following chart highlights the year-to-year change:

While these numbers continue to climb, they do not yet reflect the activity that employers observed prior to FY 2018. By the end of FY 2018, the EEOC had 71 systemic cases on its active docket, two of which included over 1,000 victims, and systemic cases accounted for 23.5% of its active docket in that year. Comparing its monetary recovery to previous years, the EEOC reported that it recovered $513.7 million in all types of cases in FY 2022, an increase over its reported recovery in FY 2021, during which it recovered, $485 million.

The EEOC Litigation Review – 2024

Comparing the numbers to prior years, the EEOC recovered $535.5 million in all types of cases in FY 2020, $486 million in FY 2019, and $505 million in FY 2018. The below chart shows the year-over-year change in total recoveries.

In terms of the types of filings, FY 2023 remained generally consistent with prior years in that the EEOC filed the bulk of its lawsuits under Title VII, the Americans with Disabilities Act (“ADA”), and the Age Discrimination in Employment Act (“ADEA”). Title VII cases once again made up the majority of cases filed. The EEOC filed 97 cases under Title VII, making up 68% of all filings (down from 69% of filings in FY 2022 and above 61% of filings in FY 2021).

The EEOC Litigation Review – 2024

The EEOC filed more cases under the ADA this past year with 49 lawsuits, nearly twice the number of ADA lawsuits it filed in FY 2022, and, as a percentage of all filings, ADA lawsuits increased from 29.7% in FY 2022, to 34% of lawsuit filings in FY 2023. The EEOC filed 12 ADEA lawsuits in FY 2023, an increase from the 7 ADEA lawsuits it filed in 2022. The following graphs show the number of lawsuits filed according to the statute under which they were filed (Title VII, Americans with Disabilities Act, Pregnancy Discrimination Act, Equal Pay Act, and Age Discrimination in Employment Act) and, for Title VII cases, the theory of discrimination alleged.

The EEOC Litigation Review – 2024

We also analyzed the number of lawsuits filed by industry. As shown by the graph below, three industries were the primary targets of lawsuit filings in FY 2023: Restaurants with 28 filings, Retail with 24 filings, and Healthcare with 24 filings. Not far off those industries are Manufacturing with 15 filings; Construction with 7 filings; Automotive, Security, and Transportation with 6 filings each; and Technology with 5 filings. Hospitality and Healthcare employers should be keenly aware of the EEOC ’ s enforcement of alleged discriminatory practices in these sectors. That said, in reality, employers in nearly any industry are vulnerable to EEOC-initiated litigation, as detailed below. The next chart outlines all of the EEOC’s top industry focus areas for 2023:

The EEOC Litigation Review – 2024

Amplifying its renewed activism, the EEOC issued a press release at the end of the fiscal year touting its increased enforcement litigation activity. Such a media statement is unprecedented in that 2023 is the first year the EEOC issued a media statement touting its numbers, a signal that its renewed activity reflects a strategic priority. In July 2023, the Senate confirmed Kalpana Kotagal, President Biden’s nominee to fill the fifth Commissioner slot, for a term expiring in July 2027. Upon her confirmation, Democrats gained a 3 to 2 majority among Commissioners. Employers are apt to see increased litigation enforcement activity in 2024 as the EEOC continues to gain momentum with its full component of Biden appointees and can utilize its majority power to advance its agenda. Now that the EEOC has a majority of Democratic-appointed Commissioners firmly in place, along with a significantly increased proposed budget, we expect that Corporate America will see a continued expansion of enforcement activity in 2024. B. The EEOC’s Strategic Plan Every four years the EEOC prepares a Strategic Plan that guides how it will improve its internal operations to enforce federal anti-discrimination laws. The Commission ’ s Plan

The EEOC Litigation Review – 2024

for 2022-2026 sets forth specific goals along with performance metrics to measure how well those goals are being met. The key elements of the Plan and why they are important are critical data points for employers. This year on August 22, 2023, the EEOC announced the approval of its Strategic Plan for Fiscal Years 2022-2026. The 2022-2026 Strategic Plan specifies that when investigating private sector employers, the EEOC will focus its internal operations on four key areas. First, the EEOC will ensure that by FY 2025, up to 90% of EEOC conciliations and litigation resolutions will contain targeted, equitable relief. Furthermore, between FY 2022 and 2026, the Commission will endeavor to favorably resolve at least 90% of its enforcement lawsuits. On this point, the EEOC explains that because its systemic litigation program is resource intensive, this goal is important to enable the agency to use its resources in a wise and efficient manner. Employers who have faced systemic lawsuits are well aware of the amount of litigation resources they can consume, both for the companies involved and the Commission. In addition, the EEOC is poised to expand its capacity to prosecute systemic lawsuits. To that end, the EEOC will provide training to all field staff on identifying and investigating systemic discrimination, and at least 90% of its investigators and trial attorneys will participate in systemic litigation training each year. The purpose is to expand the EEOC ’ s capacity to conduct systemic investigations, so that it may engage in a coordinated, strategic, and effective approach to systemic discrimination enforcement litigation. This signals that the Commission will continue to emphasize and prioritize the use of pattern or practice lawsuits to enforce the statutes over which Congress gave it authority. Finally, the EEOC will endeavor to increase its monitoring of conciliation agreements, thereby leading to a more robust compliance program. The Commission ’ s focus here is to implement streamlined and standardized procedures, improved tracking and internal reporting mechanisms, and related training for EEOC field staff to ensure that conciliation agreements are enforced to the letter of the law. C. The Commission ’ s Strategic Enforcement Plan The Commission ’ s Strategic Plan is distinct from its Strategic Enforcement Plan (SEP). The SEP is a statement of the EEOC ’ s priorities while the Strategic Plan is an explanation of how those priorities will be effectuated. When the EEOC first unveiled its SEP in December 2012, it stated that the plan established substantive priorities and set forth strategies to integrate all components of the EEOC ’ s private, public, and federal sector enforcement to have a sustainable impact in advancing equal opportunity and freedom from discrimination in the workplace. On September 21, 2023, the EEOC announced its SEP covering Fiscal Years 2024- 2028 with similar priorities as years past but with the inclusion of a wholly new subset of goals on technology uses.

The EEOC Litigation Review – 2024

The EEOC also identified three guiding principles. First, the Commission states that to maximize the EEOC’s effectiveness, it will focus on those activities that have the greatest strategic impact, including systemic investigations, resolutions, and lawsuits. The EEOC thus “reaffirms its commitment to a nationwide, strategic, and coordinated systemic program as one of the EEOC’s top priorities.” Second, the EEOC states that it will take an integrated approach at the agency that promotes collaboration, coordination, and information sharing throughout the agency. It explains that “[e]ffective systemic enforcement requires communication and collaboration between the EEOC’s legal and enforcement units, between headquarters and the field, and across EEOC districts.” Third, the EEOC states that it will ensure that it achieves results “in accordance with the priorities set forth in the [Strategic Enforcement Plan].” This signals that the Commission will continue to emphasize and prioritize the use of systemic, pattern or practice lawsuits to accomplish its agenda. As in years past, the Strategic Enforcement Plan also sets out the EEOC’s six substantive priorities.

The EEOC Litigation Review – 2024

#1 - Eliminating Barriers In Recruitment and Hiring - The EEOC ’ s focus relative to this priority is to address discriminatory recruiting and hiring practices that target racial, ethic, and religious groups, older workers, women, and people with disabilities. This year ’ s update emphasized additional discrimination, bias, and hate directed against religious minorities (including antisemitism and Islamophobia), racial or ethnic groups, and LGBTQI+ individuals. According to the EEOC, addressing this priority typically involves strategic litigation with pattern or practice cases. #2 - Protecting Vulnerable Workers - The EEOC ’ s focus here is to combat policies and practices directed against “vulnerable workers,” such as immigrants and migrant workers, and those historically underserved by federal employment discrimination protections. #3 - Addressing Selected Emerging And Developing Issues – The priority focuses on pushing the legal envelope on the contours of employment discrimination laws and establishing new legal precedents. #4 - Ensuring Equal Pay Protections For All Workers - While the EEOC ’ s primary focus has been combating pay discrimination based on sex, the Commission also endeavors to address unequal pay based on gender and pay discrimination based on any protected status, including race, ethnicity, age, and disability. #5 - Preserving Access To The Legal System - The Commission ’ s focus with this priority is on practices that discourage or prohibit individuals from exercising their rights, including overly broad waivers, releases, and mandatory arbitration provisions, failure to maintain applicant and employee data, and retaliatory practices that dissuade employees from exercising their rights. More often than not, this priority manifests itself with lawsuits grounded on retaliation theories. #6 - Preventing And Remedying Systemic Harassment - This priority is directed the Commission’s continued focus on combatting systemic harassment in all forms and on all bases. The EEOC noted that individual claims could also be in this group if they relate to a widespread pattern or practice of harassment. Some – but certainly not all – of the EEOC ’ s lawsuits initiated over the past year fall into one or more of these six categories. Further, while the Commission ’ s six major enforcement priorities have remained consistent across its iterations of the SEP, the EEOC has changed how it interprets those priorities. In effect, this has lead the Commission to shift how it approaches litigation and the issues it chooses to litigate in the courts. The 2024-2028 SEP shift in focus to technology is impactful and demonstrates the possibility of targeting advanced technologies, such as artificial intelligence, in employment processes. Underlying many of these enforcement priorities is “systemic cases.” Systemic cases are those with a strategic impact, insofar as they affect how the law influences a particular community, entity, or industry.

The EEOC Litigation Review – 2024

As described in previous coverage on the 2017-2022 SEP, which recognized the importance of “systemic” cases to its overall mission, the EEOC is uniform in its devotion of resources and personnel to this type of litigation. D. Impact Of Artifical Intelligence In EEOC Litigation And Enforcement On May 18, 2023, the EEOC released a technical assistance document, “Assessing Adverse Impact in Software, Algorithms, and Artificial Intelligence Used in Employment Selection Procedures Under Title VII of the Civil Rights Act of 1964,” (hereinafter, the “Resource”) to provide employers guidance on preventing discrimination when utilizing artificial intelligence. For employers who are contemplating whether to use artificial intelligence in employment matters such as selecting new employees, monitoring performance, and determining pay or promotions, this report is a “must-read” in terms of implementing safeguards to comply with civil rights laws. As the EEOC is well-aware, employers now have a wide variety of algorithmic decision- making tools available to assist them in making employment decisions, including recruitment, hiring, retention, promotion, transfer, performance monitoring, demotion, dismissal, and referral. Employers increasingly utilize these tools in an attempt to save time and effort, increase objectivity, optimize employee performance, or decrease bias. The EEOC’s Resource seeks to inform employers how to monitor the newer algorithmic decision-making tools and ensure compliance with Title VII. To set the parameters for the Resource, the EEOC first defines a few key terms: • Software: Broadly, “software” refers to information technology programs or procedures that provide instructions to a computer on how to perform a given task or function. • Algorithm: Generally, an “algorithm” is a set of instructions that can be followed by a computer to accomplish some end. • Artificial Intelligence: In the employment context, using AI has typically meant that the developer relies partly on the computer’s own analysis of data to determine which criteria to use when making decisions. AI may include machine learning, computer vision, natural language processing and understanding, intelligent decision support systems, and autonomous systems. Taken together, employers sometimes utilize different types of software that incorporate algorithmic decision-making at a number of stages of the employment process. Some of the examples provided by the EEOC in terms of how employers can utilize artificial intelligence include: resume scanners that prioritize applications using certain keywords; employee monitoring software that rates employees on the basis of their keystrokes; “virtual assistants” or “chatbots” that ask job candidates about their qualifications and reject candidates who do not meet pre-defined requirements; video interviewing software that evaluates candidates based on their speech patterns and facial expressions; and testing software that provides “job fit” scores for applicants or employees regarding their personalities, aptitudes, cognitive skills, or perceived “cultural

The EEOC Litigation Review – 2024

fit,” which is typically based on their performance on a game or on a more traditional test. “Questions And Answers” About AI After summarizing the pertinent provisions of Title VII, the heart of the EEOC’s Resource is presented in a question and answer format. First, the EEOC defines a “selection procedure” to be any “measure, combination of measures, or procedure” if it is used as a basis for an employment decision. Employers can assess whether a selection procedure has an adverse impact on a particular protected group by checking whether use of the procedure causes a selection rate for individuals in the group that is “substantially” less than the selection rate for individuals in another group. If there is an adverse impact, then use of the tool will run afoul of Title VII unless the employer can demonstrate that, pursuant to Title VII, such use is “job related and consistent with business necessity.” The EEOC then posits the critical question of whether an employer is responsible under Title VII for its use of algorithmic decision-making tools even if the tools are designed or administered by another entity, such as a software vendor. This is an important issue since many companies seek the assistance of third-party technologies to facilitate some of their employment-decision processes. The EEOC indicates that “in many cases, yes,” employers are responsible for the actions of their agents, such as third-party vendors. Ultimately, if the employer is making the final employment decision, the buck would likely stop with the employer in terms of Title VII liability. The EEOC also defines the term, “selection rate,” which refers to the proportion of applicants or candidates who are hired, promoted, or otherwise selected. The selection rate for a group of applicants or candidates is calculated by dividing the number of persons hired, promoted, or otherwise selected from the group by the total number of candidates in that group. By virtue of including this definition in the Resource, a reading of the tea leaves suggests that the EEOC will be monitoring selection rates to determine whether there is an adverse impact in employment decisions that were catalyze from the use of artificial intelligence. In terms of what is an acceptable selection rate, the EEOC relies on the “four-fifths rule,” which is a general rule of thumb for determining whether the selection rate for one group is “substantially” different than the selection rate of another group. The rule states that one rate is substantially different than another if their ratio is less than four-fifths (or 80%). For example, if the selection rate for Black applicants was 30% and the selection rate for White applicants was 60%, the ratio of the two rates is thus 30/60 (or 50%). Because 30/60 (or 50%) is lower than 4/5 (or 80%), the four-fifths rule dictates that the selection rate for Black applicants is substantially different than the selection rate for White applicants, which may be evidence of discrimination against Black applicants. The EEOC does note that the, “four-fifths rule” is a general suggestion, and may not be appropriate in every circumstance. Some courts have also found this rule to be inapplicable. Nonetheless, employers would be prudent to ask whether artificial

The EEOC Litigation Review – 2024

intelligence vendors deployed the “four-fifths rule” in their algorithms. Statistics matter here. Finally, the EEOC posits the issue of what an employers should do when they discover that the use of an algorithmic decision-making tool would result in an adverse impact. The EEOC explains that one advantage of algorithmic decision-making tools is that the process of developing the tool may itself produce a variety of comparably effective alternative algorithms. Accordingly, employers’ failure to adopt a less discriminatory algorithm that may have been considered during the development process could give rise to liability. Employers should thus take heed to document the steps they take to utilize non-discriminatory algorithms. The use of artificial intelligence in employment decisions may be the new frontier for future EEOC investigations. While these technologies can have tremendous cost- benefits, the risk is undeniable. Inevitably, some employer using AI will be the subject of a test case in the future. Employers should monitor the results of their own use of artificial intelligence. This can be accomplished by conducting self-analyses on an ongoing basis, to determine whether employment practices are disproportionately having a negative impact on certain protected classes. As the EEOC notes, employers can proactively change the practices going forward. Given the agility of the artificial intelligence software, employers who do find the technologies’ “employment decisions” to be problematic can and should work with vendors to remedy such defects. The balance across various District Offices throughout the country confirms that the EEOC ’ s aggressiveness is in peak form, both at the national and regional level. E. Proposed Enforcement Guidance on Harassment in the Workplace On September 29, 2023, the EEOC issued a new Proposed Enforcement Guidance on Harassment in the Workplace (the “Guidance”). The Guidance provides insights into how employers can handle evolving workplace realities and developing trends with harassment claims. Notably, the Guidance addresses how digital technology and social media postings can contribute to a hostile work environment. It also addresses the U.S. Supreme Court’s 2020 landmark decision in Bostock, et al. v. Clayton County, 140 S. Ct. 1731 (2020), where Supreme Court held that discrimination based on sexual orientation or gender identity constitutes sex-based discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”). The Guidance is open to public comment through November 1, 2023; if issued in final form, it will mark the first update to the EEOC’s

official harassment guidance in nearly 25 years. Workplace Harassment In The Digital Landscape

The Guidance spotlights how social media postings and other online content can contribute to hostile work environments, even if it occurs outside of the workplace and is

The EEOC Litigation Review – 2024

not work-related. For instance, the Guidance cites the following examples of conduct occurring in an employee’s “virtual work environment” that employers can be liable for: “[a] sexist comments made during a video meeting, [b] racist imagery that is visible in an employee’s workspace while the employee participates in a video meeting, or [c] sexual comments made during a video meeting about a bed being near an employee in the video image.” In addition to discussing conduct occurring in a “virtual work environment,” the Guidance also clarifies that conduct occurring in non-work-related contexts can contribute to a hostile work environment if it impacts the workplace. This includes electronic communications through phones, computers, and social media. For example, the Guidance cautions that, if an employee’s private social media posting subjects a co- worker to racial epithets, and other co-workers discuss the posting at work, then that Another notable aspect of the Guidance is that it incorporates Bostock , which held that Title VII’s prohibition of sex-based discrimination encompasses discrimination based on sexual orientation and gender identity. While Bostock concerned an allegedly discriminatory employment discharge and did not involve harassment, the EEOC states in the Guidance that the Supreme Court’s reasoning “logically extends to claims of harassment.” The Guidance therefore dictates that “sex-based harassment includes harassment on the basis of sexual orientation and gender identity, including how that identity is expressed.” The Guidance lists several examples of conduct that can constitute this type of harassment, including: “[a] epithets regarding sexual orientation or gender identity; [b] physical assault; [c] harassment because an individual does not present in a manner that would stereotypically be associated with that person’s gender; [d] intentional and repeated use of a name or pronoun inconsistent with the individual’s gender identity (misgendering); or [e] the denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity.” The EEOC also includes a hypothetical fact pattern in the Guidance depicting harassment based on gender identity. In that hypothetical, supervisors and co-workers of a fast food employee who identifies as female commonly referred to the employee using her prior male name and pronouns, asked questions about her sexual orientation and anatomy, and asserted that she was not female. In addition, customers posting “can contribute to a racially hostile work environment.” Harassment Based On Sexual Orientation And Gender Identity “intentionally misgendered” the employee and “made threatening statements to her,” which the employer only responded to by reassigning the employee to a workstation where customers could not see her. These facts, according to the EEOC, established harassment based on gender identity and, therefore, sex-based discrimination under Title VII.

The EEOC Litigation Review – 2024

The Guidance provides employers with an opportunity to revise their policies and protocols to better reflect the current legal landscape and the evolution of digital technology. The Guidance also highlights the EEOC’s emphasis on enforcing Title VII’s prohibition of harassment based on sexual orientation and gender identity. Employers should review their policies and practices to ensure they adequately protect against, and provide avenues to report, potential harassment that takes place virtually. Likewise, employers may wish to consider incorporating examples of harassment given by the EEOC when implementing harassment prevention measures. F. Looking Ahead To Fiscal Year 2024 Moving into FY 2024, the EEOC ’ s budget includes a $26.069 million increase from 2023, and focuses on six key areas including advancing racial justice and combatting systemic discrimination on all protected bases; protecting pay equity; supporting diversity, equity, inclusion, and accessibility (DEIA); addressing the use of artificial intelligence in employment decisions; and preventing unlawful retaliation. The EEOC also announced goals for its own Diversity, Equity, Inclusion and Accessibility (DEIA) program where it seeks to achieve four goals, including workplace diversity, employee equity, inclusive practices, and accessibility. Additionally, the EEOC continues to polish its FY 2021 software initiatives addressing artificial intelligence, machine learning, and other emerging technologies in continued efforts to provide guidance. Finally, the joint anti-retaliation initiative among the EEOC, the U.S. Department of Labor, and the National Labor Relations Board will continue to address retaliation in American workplaces. III. Key Rulings In EEOC-Initiated Litigation A. EEOC Cases Under The ADA Enforcement of the Americans with Disabilities Act (ADA) remains a core priority of the Commission. In 2023, it pursued a myriad of ADA-related lawsuits. One of the most significant lawsuits brought by the commission is EEOC v. Army Sustainment, LLC , 2023 U.S. Dist. LEXIS 171406 (M.D. Ala. Sept. 26, 2023), an enforcement action against the defendant Army Sustainment LLC a/k/a Army Fleet Support (AFS), a helicopter maintenance contractor which, from 2003 to 2018, employed aircraft mechanicals, technicians, and other aviation specialists at Fort Novosel (previously known as Fort Rucker). AFS implemented a drug testing policy (the “Policy”) in 2012 requiring employees in “safety-sensitive positions” to submit to drug testing for opioids, amphetamines, and benzodiazepines. Id. at *2. Individuals who were legally prescribed these medications were cleared to work so long as they agreed not to take their medication within 6-to-8 hours before their shift. Id. at *4. In 2016, AFS eliminated the “6-to-8-hour rule,” and instead required employees to undergo a medical evaluation “to determine whether an employee ’ s prescription medication was appropriate for use during work hours.” Id. at *2. As part of the medical evaluation, the

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employee ’ s original prescribing doctor was asked “whether the employee was stable on their safety-sensitive medication or whether alternative medications were available that were as effective.” Id. If no alternative medications were available, and the employee was determined unable to safely work while taking the medication, the employee was deemed “disabled.” Id. In 2016, two AFS employees affected by the Policy filed discrimination charges with the EEOC. The EEOC found reasonable cause that AFS violated the ADA by “not allowing a class of individuals ‘ to continue to work or return to work while taking their disability-related medications. ’ ” Id. Further, the EEOC held that AFS’ Policy itself had “the effect of discrimination on the basis of disability” and violated the ADA. Id. at 3. The EEOC subsequently filed suit against AFS on behalf of 17 AFS employees who suffered from different disabilities, but were legally prescribed medications and required to undergo medical evaluations to return to work. Id. The EEOC brought four claims against AFS, including: (1) Discrimination on the Basis of Disability; (2) Failure to Accommodate; (3) Impermissible Qualification Standard; and (4) Interference. Id. AFS asserted that the EEOC ’ s claims for eight of the 17 claimants were time-barred, as their claims arose more than 180 days before the “representative charge” was filed with the EEOC. Id. The court found that § 706(e)(1) precluded the EEOC “from pursuing claims that arose outside the charging period, even when those untimely claims are related to otherwise timely claims.” Id. at *15. While the parties disagreed as to what date the “representative charge” was filed with the EEOC, the court held that any claims that arose prior to May 23, 2016 (180 days before one of the representative charges were filed), were time-barred. Id. at *20. As such, the court dismissed seven of the claimants from the EEOC ’ s lawsuit. Id. The court ’ s first step in analyzing the EEOC ’ s disability discrimination claim was determining whether the claimants with timely claims experienced adverse employment actions. The court rejected the EEOC ’ s argument that requiring the claimants to stop using their prescription medications was an adverse action, and held that merely being required to stop using certain prescription medications, without more, did not have a tangible adverse effect on employment of the claimants. Id. at *23. In making this determination, the court explained that “[w]hether the employer ’ s conduct constitutes an actionable adverse employment action under the ADA is determined by whether a reasonable person in the plaintiff ’ s position would view the employment action in question as adverse.” Id. The court noted that while AFS required the claimants to sign a document acknowledging that their medications were “inappropriate for use in a safety sensitive work environment” and could result in discipline for employees if caught taking the medications, the court held that “neither signing a form nor fear of termination are sufficient to constitute an adverse employment action.” Id. at *24. The court also considered whether AFS, as a means of providing a disability accommodation, could place employees on unpaid leave until they either received medical clearance to return to work or agreed to stop taking their medications. Id. at *25. The court rejected the notion that temporary leave is an accommodation rather than an adverse action. It reasoned that AFS “unilaterally forced the claimants on unpaid leave and did so without an accommodation request by the claimants or without any showing that the claimants could not actually perform their job duties either with or without their prescription medications.” Id. at *27. Thus, the court denied summary judgment as to the claims of four AFS employees who alleged they suffered an adverse employment action after

The EEOC Litigation Review – 2024

being placed on unpaid leave, and granted summary judgment in favor of AFS as to the remaining employees on this claim. Id. at *28. The court further held that AFS was entitled to summary judgment against all claimants based on their failure to establish a prima facie case for the EEOC ’ s failure-to-accommodate claim. Id. at *37. For example, the court found the EEOC did not show that two of the claimants made accommodation requests to AFS or how any such requests would accommodate the limitations presented by their disabilities. Id. at *36. The court ’ s penultimate holding concerned the EEOC ’ s claim that AFS ’ s drug policy constituted an impermissible qualification standard in violation of §§ 12112(b)(3) and 12112(b)(6) of the ADA by screening out qualified individuals with a disability. Id. at * 41-42. The court granted summary judgment as to all claimants on the screening-out claim based on the EEOC ’ s failure to support its claim with statistical evidence or by showing that any of the claimants were actually terminated and “screened out” from their jobs. Id. Finally, the court declined to consider or grant summary judgment on the EEOC ’ s interference claim because AFS failed to acknowledge it as a standalone cause of action and thus did not formally move for summary judgment on that claim. Id. at *44-45. Another key ADA ruling in 2023 is EEOC v. Allstate Beverage Co., LLC, 2023 U.S. Dist. LEXIS 4852 (M.D. Ala. Jan. 11, 2023). The EEOC filed an action on behalf of charging party Jimmy Freeman against his former employer, Allstate Beverage Co., LLC (Allstate). The EEOC alleged that Allstate violated the Americans with Disabilities Act (ADA) by failing to accommodate his disability and wrongfully terminating his employment based on his disability. After discovery, Allstate filed a motion for summary judgment, which the court granted for the ADA accommodation and termination claims because the EEOC failed to demonstrate that Freeman was actually disabled or had a record of impairment. The court denied Allstate ’ s motion for summary judgment on whether Allstate wrongfully terminated Freeman on the basis of regarding him as having a qualifying impairment. Allstate filed a motion for reconsideration of the court ’ s summary judgment ruling on the ADA regarded-as claim, arguing that the EEOC failed to properly plead the claim. The court agreed with Allstate ’ s argument. It opined that the EEOC ’ s complaint did not contain plausible allegations specifying which definition of disability (actual disability, record of impairment, or regarded as disability) applied to Freeman ’ s ADA discrimination claim. The court also noted that the EEOC ’ s pre-suit determination letter and Freeman ’ s EEOC charge did not put Allstate on notice of a regarded-as claim. Consequently, the court decided that the ADA regarded-as claim was not properly before it and vacated its previous denial of summary judgment on this claim. In EEOC v. Princess Martha, LLC , 2023 U.S. Dist. LEXIS 219651 (M.D. Fla. Dec. 11, 2023), the EEOC brought an action against the defendants alleging that they subjected the charging party , Sarah Branyan, to discrimination by failing to hire or accommodate her based on her disability (PTSD) in violation of the Americans with Disabilities Act (ADA). The EEOC specifically asserted that the defendants rescinded a job offer it extended to Branyan after she disclosed that she takes prescription medications to treat her PTSD. The defendants filed a motion to dismiss, arguing that the EEOC failed to exhaust its administrative remedies and that the complaint did not adequately allege a joint employment relationship. The defendants asserted that the EEOC only named

The EEOC Litigation Review – 2024

Princess Martha (the retirement community where Brayan applied for employment) in its charge of discrimination and did not name the TJM entities (the management companies). The court denied the motion. The court found that the EEOC provided sufficient notice to the defendant, and that the entities were given ample time to participate in the conciliation process prior the EEOC filing the lawsuit. The court thereby denied the motion for failure to exhaust administrative remedies. The defendants also contended that the EEOC failed to provide sufficient evidence for a single/integrated enterprise or joint employer relationship. The TJM entities claimed that the complaint lacked details on centralized control, common management, common ownership, and financial control. The EEOC asserted that the complaint adequately outlined a plausible basis for holding TJM liable under both theories. The court concluded that the EEOC’s complaint contained specific factual allegations that plausibly established that the TJM entities and the Princess Martha were highly integrated with respect to their ownership and operation. Id . at *23. The court stated that the TJM Properties and the Princess Martha shared a human resources director, who reviewed and revised employee handbooks and policies and conduct trainings on the policies for the Princess Martha and TJM's other regional facilities, Princess Martha employees received benefits through TJM Properties, and TJM Property Management’s agreement with the Princess Martha required it to review and assist the Princess Martha with employment and payroll policies, and manage its budget, information systems, supplies, and insurance. Id . at *23-24. TJM Property Management also issued job postings for the Princess Martha and operated some of its hiring procedures. Id . at *24. The court held that the EEOC’s allegations were more than sufficient to plausibly allege that both TJM entities' operations were interrelated with the Princess Martha. Additionally, the court ruled that at this stage of the litigation, the complaint only needed to establish a sufficient factual foundation to plausibly allege the joint employer liability claim. The court rejected the defendants’ argument that the EEOC’s allegations were conclusory, and concluded that the complaint was sufficiently detailed to survive a motion to dismiss. Accordingly, the court denied the defendants’ motion to dismiss on all grounds. In EEOC v. Telecare Mental Health Services of Washington, Inc. , the EEOC brought claims for ADA discrimination on behalf of a charging party who alleged he was denied employment due to his leg impairment. The following three decisions discuss impactful rulings in quick succession across this case. First, in EEOC v. Telecare Mental Health Services Of Washington, Inc., 2023 U.S. Dist. LEXIS 101869 (W.D. Wash. June 12, 2023), the EEOC filed an action on behalf of charging party Jason Hautala, alleging that the defendant violated the Americans with Disabilities Act (ADA) by denying Hautala employment due to his leg impairment. The defendant argued that EEOC failed to demonstrate material issues of fact on several elements of its claims such that summary judgment was appropriate. The court granted the motion, finding that the EEOC failed to meet its burden of demonstrating a prima facie case of disability discrimination under the ADA. Hautala applied for a registered nurse position at the defendant ’ s mental health facility, which provides care to adult residents with serious mental health disorders. Job duties for nurses include performing physical tasks such as administering medications, CPR, and restraining violent clients

The EEOC Litigation Review – 2024

when necessary. The defendant conditioned Hautala ’ s job offer on a physical examination to determine his fitness for the position. Hautala had a permanent leg impairment resulting from a motorcycle accident, and after the examination, the defendant rescinded the job offer. The defendant contended that while Hautala met the skill, experience, and education requirements for the RN position, it found that he lacked the necessary compassion for mentally ill patients such that it had to rescind the job offer. The defendant stated that Hautala made statements about how he enjoyed “crazy person takedowns” and “fighting off meth heads,” which it determined should disqualify him for the position and thus he was not a “qualified individual” under the ADA. Id. at *8. The EEOC did not dispute the comments Hautala made, but argued that the comments were discovered after the job offer, making them “after-acquired” evidence not related to the job offer being rescinded. Id. at *10. The court rejected this argument. It opined that after-acquired evidence can be used to show that an individual is not qualified under the ADA, which is distinct from using such evidence to retroactively justify discrimination. The EEOC also argued that allowing after-acquired evidence would cause undue prejudice since the defendant initially dismissed its after-acquired evidence affirmative defense. The court concluded that it was not being used as an affirmative defense, but rather to demonstrate that Hautala was not qualified from the outset. Accordingly, the court granted the defendant ’ s motion for summary judgment. Next, in EEOC v. Telecare Mental Health Services of Washington, Inc. , 2023 U.S. Dist. LEXIS 146513 (W.D. Wash. Aug. 21, 2023), the court gave the EEOC a second chance to present evidence rebutting Telecare ’ s argument, and requested supplemental briefing on Telecare ’ s argument that Hautala was not a “qualified individual” for the position. Despite the second opportunity to rebut Telecare ’ s position, the EEOC offered no contrary evidence and argued only that the comments, “as after-acquired evidence, could not be considered as a post hoc justification” for Telecare ’ s failure to hire Hautala. Id. at *6. Accordingly, the court granted Telecare ’ s motion for summary judgment and held that the EEOC failed to allege facts sufficient to support its prima facie case of discrimination under the ADA. In particular, the court found that the claimant was not a qualified individual for the nursing position he applied for given Telecare ’ s undisputed evidence that Hautala had made the “troubling” and “inappropriate” comments, that compassion for patients suffering from mental illness was a necessary qualification for the position, and that the comments “conclusively demonstrated a lack of such compassion.” Id. The EEOC subsequently filed a motion for reconsideration of the summary judgment ruling in Telecare ’ s favor. In doing so, the EEOC for the first time provided evidence that Telecare was aware of Hautala ’ s views towards the mentally ill, and argued that a material issue of fact required reinstating Hautala ’ s ADA claims. The EEOC contended that it was entitled to reconsideration because subjective criteria ( i.e. , whether the claimant possessed the requisite compassion for the job) could not be considered as part of its prima facie case. In rejecting this argument, the court found the McDonnel Douglas burden-shifting framework inapplicable because Telecare admitted it did not hire Hautala based upon his disability, nor was the subjective criteria at issue “hotly contested” like the criteria in the EEOC ’ s cited precedent. However, the court found the EEOC ’ s second argument for reconsideration more convincing. The EEOC argued that there was a disputed issue of fact as to whether Telecare knew of the claimant ’ s view on mentally ill patients during the application process, thereby

The EEOC Litigation Review – 2024

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