How the EEOC is Hindering State’s Ability to Identify Systemic Employment Discrimination

Late last month the state of California, the California Department of Fair Employment and Housing, the state of Minnesota, the Minnesota Department of Human Rights, the state of Maryland and the Maryland Commission on Civil Rights, together filed a lawsuit against the Equal Employment Opportunity Commission (EEOC) stemming from the EEOC’s decision to stop sharing important data with state and local “fairness in employment practices agencies” (FEPAs). The complaint filed in the Federal District Court for the Northern District of California alleges that the EEOC’s decision has negatively impacted state efforts to eradicate workplace discrimination and violates Title VII of the Civil Rights Act of 1964. It also alleges that the decision violates the federal Administrative Procedure Act, because the change was made without consultation or adequate notice to state FEPAs with whom the EEOC has longstanding worksharing agreements. The states and state agencies involved in the lawsuit are seeking an order setting aside the EEOC’s new policy and requiring the EEOC to reinstate FEPAs’ access to employment data.

What Is EEOC Data and Why Is It Important to The States?

Since 1966, spurred by the new legal requirements of Title VII of the Civil Rights Act of 1964 prohibiting employment discrimination based on race, color, religion, sex and national origin,the EEOC has required employers with 100 or more employees to report employment data broken down by job category, race, sex and ethnicity on forms called EEO-1s. The intent of the EEO-1 data is to help identify and eradicate workplace discrimination in accordance with Title VII. Specifically, Title VII requires employers to maintain records that can show whether unlawful employment practices have been committed, and to preserve and produce those records as mandated by the EEOC. In further support of that mandate, Title VII also requires that the EEOC maintain open communication and coordinate its efforts with FEPAs. In part, the EEOC must provide FEPAs employment information reported to it if the reporting employer is in the FEPA’s state. In return, FEPAs are bound by confidentiality provisions. Worksharing Agreements between the EEOC and FEPAs generally set forth terms governing the relationship between the two agencies and often require both agencies to make data available to the other if it will assist in carrying out their responsibilities under Title VII.

IMG_0999-300x169The mandate of Title VII and the contractual terms of Worksharing Agreements have resulted in a longstanding practice by the EEOC of sharing the employment data it collects with state FEPAs. Because state agencies generally do not maintain the same data and many victims of workplace harassment and discrimination do not file complaints with their state agencies, the EEO-1 data has been pivotal in providing FEPAs with the information they need to identify systemic workplace bias at the state level.

In 2016, the EEOC began taking steps to add W-2 compensation data and hours worked to the EEO-1. The addition of compensation data was meant to help identify and rectify pay disparity in furtherance of equal pay laws such as the Lilly Ledbetter Equal Pay Act of 2009.Over the past couple of years, however, the EEOC has made unfortunate changes to the types of EEO-1 data it collects as well as its data sharing practices.

The EEOC’s Efforts to Collect Equal Pay Data

When any federal agency, including the EEOC, wants to gather information from the public, including employers, it must first conduct an internal investigation measuring the need for the information against the burden on the public of producing it. This is a mandate of the Paperwork Reduction Act of 1995 (PRA). If the agency determines that its request for information is warranted under the PRA, then it must seek approval from the Office of Management and Budget (OMB), which also seeks to strike an appropriate balance between minimizing the burden on the public and obtaining useful information for the government. Under the federal Administrative Procedure Act, the agency must also publish notice of its proposed changes and often must accept public comment before changing policy.

Between February 1, 2016 and July 14, 2016, the EEOC conducted an internal investigation pursuant to the PRA, sought public comment and published announcements seeking approval from the OMB to begin collecting data on employees’ W-2 earnings and hours worked. This data would be in addition to the employment data already routinely collected on EEO-1 forms. The purpose of compensation data collection was to help identify pay disparity and enforce equal pay laws.

The OMB approved the proposal on September 29, 2016 and employers were to begin reporting pay data in September 2017. Just under a year later and right before pay data collection was set to begin, on August 29, 2017, the OMB decided to initiate a review and force the EEOC to stay its collection of pay data. The OMB claimed that the EEOC released different information after it received OMB approval, depriving the public of an opportunity to provide comment on the method of data submission to the EEOC and potentially creating a greater reporting burden on employers than was anticipated. The OMB also claimed that the collection of pay data would not be useful and the EEOC did not present a plan to adequately address Title VII’s confidentiality requirement in relation to this data. The EEOC complied with the OMB’s order and did not begin collecting pay data from employers.

Two months later, the National Women’s Law Center and the Labor Council for Latin American Advancement sued the OMB seeking declaratory relief lifting the stay and reinstating the EEOC’s pay reporting requirement. The plaintiffs argued that compensation data was necessary to ensure wage parity and to identify and eradicate systemic pay inequality in the workplace.

The stay remained in effect until March 4, 2019, whenthe U.S. District Court for the District of Columbia issued a ruling in National Women’s Law Center v. Office of Management and Budget (Civil Action No. 17-cv-2458), finding that the OMB failed to demonstrate any cause to stay the collection of pay data. Finding that the OMB’s stay of EEOC’s pay data collection violated the PRA and was arbitrary and capricious, the Court vacated the stay and the EEOC’s pay reporting requirements went into effect retroactively for 2017 and 2018.

The EEOC’s Decision to Limit State Access and Its About-Face on Equal Pay Data Collection

Right after the Court’s decision vacating the stay on the EEOC’s pay data collection, in April 2019, the EEOC disabled state and local FEPAs’ online access to EEO-1 data. In September 2019, the EEOC published a new notice, in which it requested OMB approval to abandon its plan to collect data related to pay equity, curiously concurring with the OMB’s previous assertions that the utility of compensation data is unproven and the reporting effort is too burdensome for employers. In January 2020, the Director of the EEOC issued an Order significantly limiting states’ access to employment data. The Order mandated the EEOC to only share employer information and data with states if the information requested related to a particular charge under investigation.

On March 23, 2020, the EEOC officially confirmed that it would no longer be collecting pay data from employers. It was in this March 23 notice that the EEOC first made a public statement regarding its policy of allowing state access to employment data. In that notice, the EEOC noted that its “current practice” was to share EEO-1 data with FEPAs only upon request and only when related to a particular charge of discrimination cited by the FEPA in its data request. In June 2020, the California Department of Fair Employment and Housing received an EEOC memorandum addressed to all FEPA Directors. The memorandum explained that the EEOC had undertaken an internal review of its data sharing policies that resulted in the states losing their previous level of access to employment data collected by the EEOC. California, along with Minnesota and Maryland, together with their state FEPAs, are now suing the EEOC to regain access to employment data. Regardless of the outcome of this litigation, the EEOC will not recommence the collection of pay equity data.

Does New Jersey Have an Interest in This Litigation?

Yes. New Jersey’s FEPA is the New Jersey Department on Law and Public Safety, Division on Civil Rights. This Division enforces the New Jersey Law Against Discrimination which prohibits discrimination in the workplace and is responsible for investigating and eradicating workplace discrimination in the state. It is also entitled to access information collected by the EEOC that will help carry out its duties. Without access to EEO-1 data save for instances of active investigations, it could become increasingly difficult for state government to keep track of changes in the demographic makeup of different occupations and examine gender and racial disparity across jobs. Without any compensation data going forward, even if the states regain access to other employment numbers, pay disparity and equal pay concerns have no way of taking center stage in the state’s fight toward workplace equality.

For a copy of the Complaint regarding state access to EEO-1 data, see California v. EEOC, U.S. District Court for the Northern District of California, No. 3:20-cv-07664.

For a copy of the EEOC’s March 23, 2020 notice cited in the Complaint, see the Federal Register Notice.

For a copy of the Court’s decision vacating the stay on pay data collection, see the March 4, 2019 ruling in National Women’s Law Center v. Office of Management and Budget (Civil Action No. 17-cv-2458) at 2017cv2458-45


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