EEOC to Ratchet Up Scrutiny of Gig Economy Employers

This week the Equal Employment Opportunity Commission approved an updated Strategic Enforcement Plan (SEP) for fiscal years 2017–2021, setting out its priorities and strategies for the near term. The SEP builds on a prior plan issued in December 2012, which guided EEOC activity for the past four years.

In the new SEP, the EEOC reaffirms its commitment to six overarching substantive priorities, while also focusing on several specific, burgeoning areas of law. Of particular interest, the EEOC intends to emphasize “issues related to complex employment relationships and structures in the 21st century workplace, focusing specifically on temporary workers, staffing agencies, independent contractor relationships, and the on-demand economy.” In other words, the EEOC intends to ratchet up scrutiny of employers with respect to fair employment practices in the “gig economy.”

In brief, the purpose of the SEP is to channel and coordinate EEOC efforts and resources so that the agency can “have strategic impact in advancing equal opportunity and freedom from discrimination in the workplace.” Similar to the 2012 iteration, the SEP identifies the following six substantive, national priorities:

  1. Eliminating barriers in recruiting and hiring;
  2. Protecting vulnerable workers, including immigrant and migrant workers, and underserved communities from discrimination;
  3. Addressing selected emerging and developing issues;
  4. Ensuring equal pay protections for all workers;
  5. Preserving access to the legal system;
  6. Preventing systemic harassment.

21st century workplace

While these six umbrella priorities remain essentially unchanged, the EEOC has announced increased emphasis on a handful of substantive areas. As mentioned above, the new priority with the broadest reach is likely the EEOC’s announced focus on “complex employment relationships and structures in the 21st century workplace.” With this change, the SEP acknowledges the continuing evolution of the workforce brought about by the gig economy, as more and more people work in alternative or contingent arrangements, including on-demand jobs. The EEOC plainly intends to take a much closer look at these types of relationships, including staffing agencies and independent contractors, than it has in the past.

Equal pay and “backlash discrimination”

The SEP also fires a warning shot on equal pay. While the EEOC will maintain its focus on gender-based pay discrimination, it plans to address disparities that persist on other grounds, including race, ethnicity, and disability. Equal pay has been a central theme this election season, and the EEOC intends to expand the reach of this existing national priority to all workers.

In the SEP, the EEOC identified two additional “emerging and developing issues” to be prioritized. In light of recent events, the EEOC intends to focus on “backlash discrimination against those who are Muslim or Sikh, or persons of Arab, Middle Eastern, or South Asian descent.” This enhanced focus also extends to workers who may be “perceived to be members of these groups, as tragic events in the United States and abroad have increased the likelihood of discrimination against these communities.”

As another developing issue, the EEOC is narrowing its focus for claims under Americans with Disabilities Act to “qualification standards and inflexible leave policies that discriminate.” The emerging priorities described in the SEP join several issues retained from the 2012 plan, including accommodations for pregnancy-related limitations and protections for LGBT employees.

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Retaliation and enforcement

The SEP provides further insight into other coming enforcement aims. Concerning the EEOC’s goal of preserving employee access to the legal system, the agency previously targeted “retaliatory actions, overly broad waivers, settlement provisions that prohibit filing charges… and failure to retain records required by EEOC regulations.” In the new SEP, the EEOC is removing “retaliatory actions” from the list of conduct that it deems a potential barrier to the legal system. The EEOC explains that it is deleting “retaliatory actions” because the term was undefined, resulting in inconsistent agency action. Nonetheless, the EEOC will continue to focus on questionable waivers, releases, and arbitration agreements, as well as recordkeeping and “significant retaliatory practices that effectively dissuade others in the workplace from exercising their rights.”

An example of such retaliatory activity would be “firing a senior director who reports a pattern of discrimination at the workplace,” as this action would send “a strong message to others not to complain about or to report discrimination.”

Finally, the EEOC is revising the priority concerning vulnerable workers to permit district offices, and the federal sector program, to identify particular groups or underserved communities. These offices can recommend communities for “focused attention, based on how the EEOC can most effectively utilize government resources to address the local issues of concern for these groups.” By way of example, the EEOC notes that discrimination against Native Americans could be an appropriate focus for certain offices in implementing this priority.

In sum, the SEP offers a preview into the EEOC’s expected enforcement priorities as the agency refines its focus and adapts to developing issues. Employers can reasonably anticipate that EEOC activity in these particular areas will accelerate over the next few years. Accordingly, employers should take note of the priorities identified in the SEP and closely evaluate issues that may affect them.

This was originally published on Littler Mendelson’s website© 2016 Littler Mendelson. All Rights Reserved. Littler®, Employment & Labor Law Solutions Worldwide® and ASAP® are registered trademarks of Littler Mendelson, P.C.

Barry A. Hartstein is a shareholder and Co-Chair of the EEO & Diversity Practice Group of Littler Mendelson. He has earned a national reputation for a career that includes more than 30 years of counseling and representing employers in a broad range of labor and employment matters. He is a frequent writer, commentator and lecturer on workplace issues. He also has extensive experience as a litigator and has defended employers nationwide in individual and class action claims and wage and hour collective actions. He has particular expertise dealing with the Equal Employment Opportunity Commission (EEOC) on both a local and national level.

Barry serves in numerous leadership roles for Cornell University's ILR School. Founded as the School of Industrial and Labor Relations, the ILR School today is the world's leading college focused on work, employment and labor issues. In addition to his position on the Dean's Advisory Council and as a board member of the Scheinman Institute, which is the first institute exclusively focused on the study and practice of workplace dispute resolution, he recently completed his term as president of ILR's Alumni Association.

Barry has served for many years in a national leadership role for the American Bar Association in its section devoted to labor and employment law focusing on EEO issues, including serving as a management co-chair of the Equal Employment Opportunity Committee.

Prior to joining Littler, Barry was the managing partner of the Chicago office of a major AM Law 100 Firm, where he also served as the Chicago practice leader for the firm's labor and employment practice.

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