In the latest issue of The Wright Toolbox:
- EEOC Releases Latest Data – read now
- Streamlined Three-Arbitrator Panel Option – read now
- OFCCP Renewed Focus on Affirmative Action/EEO Compliance – read now
EEOC Releases Latest Data
The EEOC fiscal year 2017 enforcement and litigation data was released and bears some examination. The data shows that retaliation was the most frequently filed charge with the EEOC, followed by race and disability discrimination. The agency also received 6,696 sexual harassment charges and obtained $46.3 million in monetary benefits for victims of sexual harassment. Specifically, the EEOC numbers show the following breakdown by bases alleged, in descending order:
- Retaliation: 41,097 (48.8 percent of all charges filed)
- Race: 28,528 (33.9 percent)
- Disability: 26,838 (31.9 percent)
- Sex: 25,605 (30.4 percent)
- Age: 18,376 (21.8 percent)
- National Origin: 8,299 (9.8 percent)
- Religion: 3,436 (4.1 percent)
- Color: 3,240 (3.8 percent)
- Equal Pay Act: 996 (1.2 percent)
- Genetic Information: 206 (.2 percent)
These percentages add up to more than 100 because some charges allege multiple bases. It is always helpful to look at the data to see what the latest issues are and then examine your business’ practices and preparedness to address such claims. Now is a good time to take stock and focus on employment policies and perhaps invest in some training so that your business doesn’t become one of the statistics.
Streamlined Three-Arbitrator Panel Option
Many commercial agreements have a clause that refers the resolution of disputes that might arise to arbitration as opposed to the courts. In some cases, the arbitration clause in the agreement may require a panel of three arbitrators as opposed to having the matter decided by a single arbitrator. This is frequently the case when the parties anticipate the possibility of disputes that involve complex issues, complicated facts, and large sums. Absent an agreement on the number of arbitrators, arbitration rules may provide a guide. For instance, under the Commercial Rules of the American Arbitration Association, claims or counterclaims seeking damages of at least $1,000,000 would be assigned to a panel of three unless the parties agree to one. Of course, if the parties all agree, they are free to choose a single arbitrator no matter what the size of the claims or what the arbitration clause says.
Three experienced minds may be better than one at sorting out the facts and law of a large and factually complex case, particularly at the evidentiary hearing. However, the cost and expenses can add up, particularly when all three participate in every ruling at every stage of the proceeding. In fact, studies have shown that a panel of three can cost as much as five times the cost of a single arbitrator.
Responding to cost concerns and in an effort to make the choice of arbitration more appealing, the American Arbitration Association recently adopted a procedure called the Streamlined Three-Arbitrator Panel Option. It allows the parties to use a single arbitrator for managing preliminary matters, discovery and motions, including dispositive motions. This new streamlined option actually has two variations. Under Option 1, the panel is selected under the normal rules. The selection is usually made from lists of qualified arbitrators in the AAA’s roster. A chairperson is selected by the panel or the AAA if necessary. In cases in which each party selects an arbitrator (party appointed arbitrators) and the first two select the third neutral, and the third arbitrator becomes the chairperson. The chairperson is given the power to handle all pre-evidentiary hearing matters, including dispositive motions. The parties may, however, chose to have dispositive motions decided by all three
During the preliminary scheduling conference, the panel and parties determine the process for keeping the so called “wing” arbitrators informed of the case and updated. The wing arbitrators are placed on hold. They would participate in the hearing and award, and in some cases would hear argument of dispositive motions. At any time prior to the evidentiary hearing, the parties have the right to release the wing arbitrators and have the evidentiary hearing proceed before the chairperson alone.
Under Option 2 of the new streamlined procedure, the parties select a single arbitrator at the outset. The single arbitrator handles the case alone – controlling all prehearing matters including exchange of information and motions. No later than sixty days prior to the scheduled evidentiary hearing, the parties select two additional arbitrators. The original arbitrator serves as chairperson of the newly comprised panel. The new arbitrators would be provided with a summary of the case. Generally, the process of educating the new arbitrators will be determined at the preliminary scheduling conference and incorporated in the scheduling order. For instance, the scheduling order might provide that the summary of the case be included in the prehearing briefs. Alternatively, the summary could be prepared by the chairperson. The full panel would hear the case and collaborate in the award. The parties could also agree to dispense with a panel, or if the two additional arbitrators have been selected, may dismiss them and proceed with the chairperson as a single arbitrator.
Either party can opt out of the streamlined procedure if they are not satisfied. The opt-out must be in writing. In that case, the wing arbitrators will be reactivated and be part of all future actions. If the parties are operating under Option 2, the chairperson will immediately cease handling the case until the two new arbitrators needed to fill out the panel are selected either through the AAA roster or by the parties in a party appointed case. If a dispositive motion has been argued before the single arbitrator prior to the opt-out, the single arbitrator will make the ruling prior to reactivation of the wing arbitrators or selection of the remaining two, as the case may be.
The potential benefits of this new streamlined option are primarily savings in arbitrators’ costs and avoiding difficulties in scheduling prehearing conferences if the entire panel must be involved in all facets of the case. There are also drawbacks. If the parties chose Option 2, a party fearing an unfavorable ruling might use the appointment of the two new arbitrators as an opportunity to stall. Under either option, the wings may not be fully informed or engaged or have a feel for the subtleties of the case and may come to the hearing with insufficient background. There is also a risk that the chairperson may lack experience, temperament, or knowledge required to be effective. This is more of a concern under Option 2. In considering the merits of adopting the Streamlined Three-Arbitrator Panel Option, counsel and the parties must consider all pros and cons, keeping in mind that most of the streamlining features are often used and available anyway and can be adopted at the scheduling conference without formal adoption of this new option.
OFCCP Renewed Focus on Affirmative Action/EEO Compliance
Under Executive Order (EO) 11246 (9/24/65), Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, federal contractors are prohibited from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, national origin, disability or status as a protected veteran. Such contractors are also required to take affirmative steps to ensure equal employment opportunity in their employment processes, such as outreach, recruitment, and training obligations. The Office of Federal Contract Compliance Programs (“OFCCP”) within the Department of Labor is charged with enforcing the Affirmative Action laws among the 120,000 contractor establishments and approximately 24,000 firms or parent companies over which the OFCCP has jurisdiction.
Under the applicable laws, federal contractors are required to develop an affirmative action plan (“Plan”) within 120 days of the commencement of a contract and to update the Plan annually. In 2016, the U.S. Government Accountability Office (GAO) in a report, Equal Employment Opportunity: Strengthening Oversight Could Improve Federal Contractor Nondiscrimination Compliance (GAO-16-750), expressed concern that OFCCP had no process for ensuring that federal contractors have timely developed a Plan or updated it annually. The report further found that almost 85 percent of federal contractors did not submit a timely written Plan.
On August 24, 2018, the OFCCP issued a Directive to implement a verification process with the objective of ensuring that all covered federal contractors are meeting the equal employment opportunity regulatory requirements by establishing a program for verification of compliance by all contractors. The verification would initially take the form of OFCCP review of a certification, followed by potential compliance checks, and could later take the form of annual submission of Plans to OFCCP for review. In addition, under this Directive OFCCP will be able to incorporate Plan certification information as a criterion for scheduling compliance audits. Thus, contractors that have not developed and maintained Plans will be more likely to get audited by the OFCCP.
In light of this new Directive, federal contractors must ensure that they are in compliance with the EEO and affirmative action laws and regulations and that associated Plans are timely submitted and updated annually. With the OFCCP renewed focus and attention and the revamping of the audit procedures, affected contractors should no longer risk non-compliance and exposure to penalties for failure to comply. Contact us if you need assistance with compliance.
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