United States: As The Economy Struggles, EEOC Charges Increase

The cataclysmic effects of the longest and deepest recession since the 1929 depression will significantly change many aspects of our society for generations. The devastating impact of the recession on large segments of the workforce can be counted as one of the more significant effects. While it remains to be seen how the recession will change the psyche of this generation over the long term, one objective measure showing one aspect of the change is the large increase in EEOC charges as the economy nose dived.

While the correlation between the downward slope of the economy and the rise in the EEOC charges is significant and telling, the precise cause-and-effect relationship is less apparent. Start with the correlation: the downward spiral of the economy began in December of 2007. The recession continued to deepen during 2008 and then crashed after Lehman Brothers filed for bankruptcy on September 15, 2008. The economy continues to struggle even today.

As shown on the following chart published by the EEOC in its Performance and Accountability Report for FY 2011,¹ the number of EEOC charges jumped from 75,768 charges in FY 2006 to 99,947 charges in FY 2011.

While the precise causes of the correlation between volume of EEOC charges and the declining economy cannot be determined with any exactitude, we can assume a lot of the increase is due simply to the fact that during this period there was a meteoric increase in the number of employees who were experiencing negative employment actions such as terminations, layoffs, decreased wages because of lower pay rates or fewer hours, and decreased benefits. For example, because of layoffs and terminations, the unemployment rate rose 4.5%.

The severity of the adverse job actions was vividly characterized by the Department of Labor Statistics in its December, 2010 Summary: "The unemployment rate increased more sharply and the employment-population ratio decreased more precipitously during the 2007-09 recession than in any of the other post WWII recessions." The number of employees filing charges was undoubtedly exacerbated by the difficulty terminated employees were having finding new employment. The Bureau of Labor Statistics reports that the median number of weeks jobseekers had been unemployed increased from five weeks in 2007 to ten weeks in 2010.

Analyzing The Numbers

While all categories of EEOC charges increased during the period FY 2007 through FY 2011, higher increases were observed in five categories: race discrimination charges increased by 4,882 to a total of 35,395; sex discrimination charges increased by 3,708 to a total of 28,534; age discrimination charges increased by 4,362 to a total of 23,465; disability discrimination charges increased by 8,008 to a total of 25,742; and retaliation charges increased by a whopping 10,671 to a total of 37, 334.

It's likely that some of the increased number of disability discrimination charges were caused by the amendments to the Americans with Disabilities Act which became effective in January, 2009 and which greatly expanded the definition of disability. It's also likely that the increased number of retaliation charges was simply a product of the overall increase in the number of EEOC charges, thereby increasing the potential number of times employees felt they had suffered retaliation because they filed a charge.

Employers have increasingly experienced the fallout from this increase in EEOC charges – more investigators and investigations; more systematic enforcement proceedings involving larger groups of employees; and more litigation. Among other things, this increased level of activity is encouraged by the rapidly increasing budgets for the EEOC. In FY 2009 they received additional appropriations of $14.6 million. In FY 2010 the agency received additional appropriations of $23.4 million. This has permitted the EEOC to go on a hiring spree and to devote even more efforts to systematic investigations involving much larger numbers of employees.

In FY 2011, the EEOC was working on 580 systemic investigations involving more than 2,067 charges. As the EEOC noted in its FY 2011 Performance and Accountability Report "the agency places a high priority on issues that impact large numbers of job seekers, and employees. The Commission therefore devoted resources to investigating and litigating cases of systemic discrimination as a top agency priority...."

Our Advice

What should an employer do in these difficult times? It is even more important now to manage the human resources aspects of your business and to devote enough time and attention to the effort to ensure it's being done properly. This includes proper training of your supervisors, prior review and complete documentation of the circumstances involving adverse employment actions, and ensuring consistency of treatment among the employees and managers.

Footnotes

^{1.The EEOC's fiscal year begins on October 1 and ends on September 30.}

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