Our friend, Merrily S. Archer, Esq., has written an important piece on her website concerning a survey which she helped to conduct among lawyers and others who have appeared before the EEOC as part of its conciliation process (“ADR”).   Her takeaway:  with ADR being the EEOC’s “biggest cash cow,” to settle cases for as much as possible EEOC mediators capitalize on employer insecurity, fear of the costs of defense, and threat of EEOC enforcement actions.   While she agrees that the costs of litigation are enormous (who doesn’t!), she debunks the threat of EEOC enforcement as being illusory.

Complete with helpful graphs, her report states that over 80% of those who responded “reported that an EEOC mediator referenced the cost of defense when encouraging employers to settle.  The cost of defense undoubtedly now drives employers’ settlement deliberations more than any other factor.  Discrimination is, after all, difficult to prove but easy to allege, and the allegation itself exposes employers to an average cost of $70K in non-recoverable defense fees.”

She notes that “According to the EEOC’s 2013 Performance and Accountability Report (PAR), the EEOC collected another historic amount of money from employers ($372.1 million) last year,” and that “its ADR program is the EEOC’s biggest cash cow, accounting for nearly half of its collections.”

9278555_sAs to employer insecurities, she says that “EEOC Mediators often ‘capitalize on employer insecurities about juries, such as ‘your summary judgment motion will fail’ … “juries dislike employers” … and “a jury won’t like/believe your witnesses or documents.”    In fact, “most EEOC mediators are former investigators, not attorneys, and have extremely limited experience divining the preferences of future jurors. Besides, juries don’t hate employers; rather, they hate liars and lawyers, often failing to distinguish between the two.”

Finally, when it comes to EEOC enforcement activity, the EEOC’s own enforcement statistics show that, for example, in FY2013 “the EEOC issued Reasonable Cause determinations in only 3.6% of charges, down from 3.8% in FY2012.   Likewise, the number of EEOC-initiated civil lawsuits has fallen dramatically in recent years, as the EEOC focuses more on larger, systemic investigations and prosecutions. Perhaps for this reason, the fact that over 60% of employers reported threats of an EEOC systemic investigation is particularly alarming.”

Her conclusion:  “When money counts as the measure of its effectiveness, EEOC mediations are not neutral; on the contrary, EEOC mediators are allied with Charging Parties and their attorneys, whose sole objective is to maximize settlement payouts.”

Recommended reading for EEOC practitioners and employers!

 BTW – last chance to register for the HR.com free live one hour webinar in which I will be the speaker tomorrow —  May 15th at 1:30 pm (EST).   My topic is — Employment Discrimination!

Anyone can join HR.com (its a free membership) and then register to attend my free webcast.  Here is the link to my webcast: http://www.hr.com/en/webcasts_events/webcasts/upcoming_webcasts/race-gender-disabilities-what-you-need-to-know-to-_htvoqypo.html