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How an EEOC Complaint Can Hurt Your Business

Posted by Christine Batten, PHR on Mar 13, 2018 3:00:00 PM
Christine Batten, PHR

EEOC ComplaintThe Equal Employment Opportunity Commission (EEOC) is responsible for investigating complaints of discrimination based on race, color, national origin, religion, gender, age and disability. An EEOC complaint usually comes on the organization’s radar when an employee feels illegally discriminated against and files what's called a Charge of Discrimination.

How to File an EEOC Complaint

When investigating allegations of harassment, the EEOC looks at the whole record, the circumstances, such as the nature and severity of the allegations, and the context in which the alleged incidents occurred. Investigators make a determination of whether harassment is severe or pervasive enough to be unlawful on a case-by-case basis.

The employer is vicariously liable for a hostile work environment created by a supervisor. An employee is a “supervisor” if the employer has empowered that employee to take tangible employment actions against the victim, causing a significant change in employment status. Examples of this significant change include hiring, firing, failing to promote, reassignment with significantly different responsibilities or a decision causing a significant change in benefits. The employer can avoid liability for hostile work environment harassment only if it can prove that:

  • It reasonably tried to prevent and promptly correct the harassing behavior; and
  • The employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer.

Whether or not the grievance has merit, employers have to spend a great deal of time, and sometimes money, going through the process. Here are five ways an EEOC complaint of discrimination can hurt your business:

  1. Official requests for information
  2. Intrusive investigations
  3. Costly legal bills
  4. Negative publicity
  5. Expensive damages

EEOC Complaint Information Gathering

The investigation typically begins with a “statement of position” where the employer shares its side of the story. The EEOC will also request documents related to the case, which potentially include copies of company policies and personnel files. In some cases, EEOC employees will visit your workplace and ask you to make employees and/or supervisors available for interviews. Investigators use these processes to determine whether the EEOC complaint merits further action.

Formal Investigation

If investigators determine the need for a formal investigation, they may choose to subpoena company documents and compel employees to provide statements. These types of investigations can last several months to a year. Many employers choose to involve an attorney at this point, but others attempt to avoid a formal investigation by settling the EEOC complaint or agreeing to resolve it through mediation.

If the employer agrees to mediate, they won’t necessarily have to admit any guilt or liability but may have to change policies and procedures and/or compensate the employee who complained. If the employer doesn’t agree to mediate, the EEOC may decide to sue the employer or grant permission for the charging party to sue the employer in court. Litigation is not only expensive but can create negative publicity.

EEOC Complaints Can Get Expensive

It’s important for employers to be aware of just how costly EEOC complaints can be. In 1998, hundreds of women who worked on Mitsubishi’s assembly line in Illinois claimed their male co-workers fondled them, demanded sexual favors and retaliated against those who didn’t comply. More than 400 women received $34 million in monetary relief. This remains one of the most publicized sexual harassment cases in history.

Penalties for an EEOC complaint start with providing relief for workers who suffered discrimination. Those may include:

  • Job reinstatement
  • Back pay and benefits the victim should have earned
  • Compensatory damages
  • Punitive damages
  • Liquidated damages (in sex-based wage discrimination) equal to the amount of back pay awarded to the victim

Prevention is the best tool to eliminate harassment in the workplace and avoid an EEOC complaint. Employers are encouraged to prevent and correct unlawful harassment by clearly communicating to employees that they won’t tolerate unwelcome, harassing conduct. They can do this by establishing an effective complaint or grievance process, providing anti-harassment training to their managers and employees and taking immediate and appropriate action when an employee complains.

Do you have additional questions about how to protect yourself and your employees? Be sure to check out our webinar on sexual harassment and discrimination in the workplace.

Partnering with FrankCrum grants you access to a team of HR experts. If you have questions about any HR-related issues, call 1-866-697-6576.

One Sexual Harassment Lawsuit Can Cost You Millions

Topics: Human Resources

Christine Batten, PHR

Written by Christine Batten, PHR

Christine has over 20 years of HR related experience with a background in labor and employment law. She manages FrankAdvice, the premium HR service provided to business clients of FrankCrum. FrankAdvice offers senior-level HR advice on all aspects of the employer/employee relationship and includes a vast library of employment-related documents including various forms, policies and handbooks. Christine also manages the Employment Practices Liability Insurance (EPLI) claims process for both the FrankCrum corporate office and the client companies.

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6,696 Sexual Harassment Charges Were Filed with the EEOC in 2017