EEOC's Aggressive Systemic Discrimination Initiative Strategic Responses to Expansive Requests for Information, Subpoenas and "Sue First, Ask Questions Later" Approach
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TUESDAY, OCTOBER 15, 2013
Presenting a live 90-minute webinar with interactive Q&A
Alison B. Marshall, Partner, Jones Day, Washington, D.C.
Maritoni D. Kane, Counsel, Mayer Brown, Chicago
Eric S. Dreiband, Partner, Jones Day, Washington, D.C.
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EEOC’s Focus on Systemic Discrimination – October 15, 2013
Alison B. Marshall Jones Day
202-879-7611 [email protected]
EEOC’s Renewed Focus on Systemic Investigations and Litigation
• EEOC adopted systemic initiative in 2006. • Reiterated focus on systemic litigation in strategic
plan approved on February 22, 2012. • Emphasis on “targeted enforcement.” • Strategic Enforcement Plan issued on December
17, 2012 identifies six nationwide priorities. • Continues delegation of litigation authority to the
EEOC General Counsel with some exceptions. • In targeted areas, expect a deeper dive during
investigation and likely more lawsuits.
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Strategic Enforcement Plan • Identifies the following as the Commission’s
nationwide priorities: • Eliminating systemic barriers in recruitment and hiring. • Protecting immigrant, migrant, and other vulnerable
workers. • Addressing emerging issues – current issues identified in
plan: ADA issues, pregnancy discrimination, and LGBT coverage.
• Enforcing equal pay laws. • Preserving access to the legal system – retaliation and
releases. • Combating harassment.
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FY 2012 Enforcement Activity • 99,412 charges filed in FY 2012 (ended 9/30/12). • Completed work on 240 systemic investigations.
• 46 settled or conciliated. • 94 reasonable cause determinations.
• EEOC filed 122 merits suits during FY 2012. • 10 were systemic cases.
• At the end of the year, EEOC had 309 active merits suits. • 62 or 20% were systemic.
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FY 2013 Enforcement Activity (ended 9/30/13)
• Filed approximately 130 merits suits. • Continued to file significant number of ADA and
retaliation claims. • Of 40 cases filed in September, 14 included ADA
claims and 13 retaliation claims. • Also notable increase in pregnancy discrimination
claims.
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FY 2013 Enforcement cont’d.
• Two illustrative recent EEOC complaints: • EEOC v. Catastrophe Management Solutions, Inc., Civil Action
No. 1:13-cv-00476-CB-M) – filed 9/30/13 in Mobile, Ala. alleging race discrimination against an African American applicant because she wore dreadlocks.
• EEOC v. All Star Seed d/b/a Eight Star Commodities, et al., Case No. CV 13-07196 – filed 9/30/13 in the Central District of California alleging discrimination based both on disability and genetic information where pre-employment physical elicited family medical history information.
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EEOC’s Continued Focus on Criminal Background Checks
• EEOC issued new guidance on April 25, 2012. • In guidance, EEOC focuses on national conviction statistics to
show disparate impact. • EEOC suggests that employer will have burden of refuting
a disparate impact determination by showing that its own applicant statistics show no adverse impact.
• Employer must then satisfy the affirmative defense of showing that the use of criminal background information is “job related for the position in question and consistent with business necessity.”
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Criminal Background Checks – New EEOC Guidance cont’d.
• EEOC identifies two circumstances when an employer will meet the defense: • The employer validates the criminal conduct screen for the position in
question per the Uniform Employee Selection Procedures. • The employer develops a targeted screen considering at least:
– The nature of the crime, – The time elapsed, – The nature of the job, – AND then provides an opportunity for an individualized assessment for
people excluded by the screen to determine whether the policy as applied is job-related and consistent with business necessity.
• Clear emphasis on individualized determinations. • Also, the guidance states that while federal laws and regulations that restrict or
prohibit employing individuals with certain criminal records provide a defense, state and local laws or regulations are preempted by Title VII if they “purport[] to require or permit the doing of any action which would be an unlawful employment practice” under Title VII.
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Criminal Background Checks cont’d. • On June 11, 2013, EEOC filed two suits that received
extensive media: • EEOC v. Dolgencorp LLC d/b/a Dollar Gen., N.D. Ill., No.
1:13-cv-04307. • EEOC v. BMW Mfg Co. LLC, D.S.C. No.7:13-cv-01583.
• But agency has had little success in existing cases. • EEOC v. Peoplemark, Inc., W.D. Mich., 2011 – Claims
dismissed because employer did not, contrary to EEOC allegation, have blanket prohibition on hiring convicted felons.
• EEOC v. Freeman, Case No., RWT 09 cv 2573 (D. Md. Aug. 9, 2013) – In harshly worded opinion, court rejected EEOC’s statistics and granted summary judgment against EEOC.
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Pay Equity
• Pay equity emphasized in strategic enforcement plan.
• EEOC offices have started conducting directed investigations under the Equal Pay Act. • EEOC can start investigation without a charge.
• EEOC official has stated that the EEOC, like the OFCCP, will be looking at all practices that affect compensation.
• EEOC still considering whether to collect pay data.
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EEOC’s Aggressive
Systemic Discrimination Initiative: Response Strategies
October 2013
Maritoni D. Kane Mayer Brown LLP Chicago, Illinois 312-701-7125
Responding to EEOC Charges and Information Requests
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Responding to EEOC Charges
Evaluating the charge Looking for red flags
Drafting a position statement
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Responding to EEOC Charges
Evaluating the charge • Jurisdictional requirements
• Threshold issues
• Claims made
• Potential exposure to liability
• Settlement
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Responding to EEOC Charges
Looking for red flags • Scope of the allegations
• Do the allegations suggest a group of employees are impacted?
• Subject matter of claims made • Do the claims involve one of the EEOC’s Strategic
Enforcement Plan’s six priorities?
• Are the practices implicated perennial targets of the EEOC?
• Multiple claims with similar allegations – Are there multiple charges/claims with similar allegations?
– EEOC v. Georgia Power, 1:13:cv-03225 (N.D. Ga.)
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Responding to EEOC Charges
Looking for red flags (continued) • Scope of requests/subpoena for information and documents
• Are the requests broad?
• Do the requests ask for information beyond the scope of the charge?
• Scope of on-site investigation – Has the EEOC asked to conduct interviews of employees not involved
in the allegations in the charge?
• Appetite for settlement – Did the EEOC offer mediation?
– Did the EEOC deny a request for early settlement discussions?
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Responding to EEOC Charges
Drafting a position statement
• Draft careful and thoughtful responses
• Don’t expose the employer to greater scrutiny
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Responding to EEOC Charges
Drafting a position statement (continued)
• Don’t volunteer • Information about other employees or locations not at
issue
• Statistical data
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Responding to EEOC Charges
Drafting a position statement (continued) • Be careful about relying on uniform policies and/or practices
- Eliminating barriers in Recruitment and Hiring
• Pepsi Beverages ($3.13M)
• J.B. Hunt Transport Inc. (5-year conciliation agreement & private settlement )
- Addressing Emerging and Developing Issues (ADA issues)
• EEOC v. Sears, Roebuck and Co., 04-c-7282 (N.D. Ill.) ($6.2M)
• EEOC v. Supervalu, Inc., 09-c-5637 (N.D. Ill.) ($3.2M)
• EEOC v. Denny’s, Inc., WDQ-06-02527 (D. Md.) ($1.3M)
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Responding to EEOC Charges
Drafting a position statement (continued) – Dig deeper
• Even if the employer has a uniform policy and/or practice, does it conduct further analysis on a case-by-case basis?
• Spell it out
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Responding to Broad Information Requests
What can the EEOC ask for?
“…evidence, including but not limited to, books, records, correspondence, or documents”
29 CFR § 1601.16
“…virtually any material that might cast light on the allegations against the employer”
EEOC v. Shell Oil Co., 466 U.S. 54, 68-69 (1984)
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Responding to Broad Information Requests
Communicating with the EEOC Conducting due diligence
Strategies for limiting responses
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Responding to Broad Information Requests
Communicating with the EEOC
• Play nice in the sandbox. If you take a cooperative/ collaborative approach…
– May be able to limit responses
• Be cautious about coming out swinging. If you are too aggressive/adversarial…
– May cause the EEOC to think the employer is trying to hide something
– May prompt the EEOC to issue a subpoena immediately
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Responding to Broad Information Requests
Conducting due diligence • Determine whether the employer has the information
requested and the format of the information (preserve ESI)
• Assess the burdens and costs associated with accessing, gathering and producing the information
• Determine whether alternate sources are available that contain the requested information
• Assess what information is helpful and what information is harmful to the employer
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Responding to Broad Information Requests
Strategies for limiting responses • Be prepared to explain the burdens and costs associated with
accessing, gathering and producing the requested information
• Phased/rolling production
• Narrowing production in a manner that makes sense, e.g., limiting production to a particular business unit or location
• Producing a representative sample
• Highlighting favorable information
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EEOC Subpoena Authority • Title VII confers on the EEOC the power to issue administrative
subpoenas in furtherance of its investigations. 42 U.S.C. § 2000e-9; 29 U.S.C. §161(1). • Same in ADA, ADEA, GINA, and EPA.
• Recently, EEOC has issued an increasing number of subpoenas, often seeking nationwide data. • In fiscal year 2012, EEOC filed 33 subpoena enforcement
actions. • Respondent who wants to oppose subpoena must file a
petition to revoke or modify the subpoena. • File with the District Director who issued the subpoena. • Must be filed within 5 days of receipt of subpoena.
• Failure to file petition may foreclose ability to oppose subpoena enforcement.
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Subpoena Litigation
• Transforms confidential investigation and enforcement proceedings into a public event.
• In recent years, courts have largely ratified EEOC’s broad authority to obtain information, including by subpoena.
• Some district courts have limited EEOC subpoenas but circuit courts have generally endorsed broad EEOC view of its subpoena power.
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Some District Courts Willing to Limit EEOC Subpoenas
• EEOC v. HomeNurse Inc., Case No. 1:13-cv-02927 (N.D. Ga. Sept. 30, 2013). • Individual retaliation charge. • EEOC sought data regarding class disability, age, GINA,
and race claims. • Magistrate quashed subpoena calling EEOC’s approach a
“misuse of its authority.”
• EEOC v. Nestle Prepared Foods, 2012 BL 128495 (E.D. Ky. 2012). • Individual GINA charge. • EEOC sought extensive information about all fitness-for-
duty exams • Court rejected.
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Appellate Courts Side With EEOC • EEOC v. United Parcel Service, Inc., 587 F.3d 136 (2d Cir.
2009). • Second Circuit reversed district court order denying
enforcement of EEOC subpoena. • EEOC need only show that:
– the investigation will be conducted pursuant to a legitimate purpose,
– the inquiry may be relevant to the purpose, – the information sought is not already within [the agency’s]
possession, and – the administrative steps required . . . have been followed
• EEOC v. Randstad, No. 11-1759 (4th Cir. 2012). • Fourth Circuit reversed district court order denying
enforcement of EEOC subpoena. • EEOC entitled to significant deference.
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Third Party Subpoenas
• EEOC v. Kronos, Inc., 694 F.3d 351(3d Cir. 2012). • Decision by Kroger not to hire applicant with
disabilities was based in part on personality assessment.
• Third-party administrative subpoena to vendor that develops assessment tests.
• EEOC subpoenaed nationwide data from Kronos. • Case has been up to Third Circuit twice. • Court has allowed, among other things, discovery
of assessments used by employers other than Kroger.
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EEOC’s Focus on Systemic Discrimination – October 15, 2013
Eric S. Dreiband Jones Day
202-879-3720 [email protected]
Judicial Review Of EEOC’s Presuit Conduct
• EEOC v. CRST Van Expedited, Inc., 679 F.3d 657 (8th Cir. 2012) • Sexual harassment class action .
• District court dismissed claims on behalf of 67 class
members because the EEOC failed to investigate or attempt to conciliate their claims before EEOC sued.
• 8th Circuit affirmed.
• District court sanctioned EEOC about $4.7 million on remand.
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EEOC v. Cintas Corp., 699 F.3d 884 (6th Cir. 2012), petition for cert. pending
• Failure to hire sex discrimination case
• District court
• Dismissed EEOC’s claims for 13 individuals because EEOC did not investigate or conciliate the claims before EEOC sued.
• Sixth Circuit reversed
• EEOC satisfied its presuit obligations. • It is inappropriate for a district court to inquire into the
sufficiency of the Commission’s investigation.
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EEOC v. Dillard’s Inc., Case No. 08-CV-1780-IEG (PCL)., 2011 BL 184685 (S.D. Cal. July 14, 2011)
• EEOC investigated discrimination in one store. • EEOC’s conciliation efforts focused on two
individuals who worked at that one store. • EEOC then filed a nationwide class action
against the retail chain. • The Court dismissed the nationwide suit and
allowed the EEOC to proceed only on claims as to the one store.
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EEOC v. The Original Honey Baked Ham Co. of Georgia, Inc.,
No. 1:11-cv-02560-MSK-MEH, 2013 BL 10024 (D. Colo. Jan. 15, 2013)
• Court limited EEOC’s case to one supervisor who allegedly sexually harassed women.
• “There was nothing in the EEOC’s investigation, determination letter, or the subsequent conciliation that identified unlawful conduct of any manager or supervisor other than [one supervisor].”
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EEOC v. American Samoa Government, Civ. No. 11–00525, 2012 WL 4758115 (D. Haw. Oct. 5, 2012)
• Age Discrimination in Employment Act • “[T]he scope of permissible claims in a civil action is
limited by what an EEOC investigation uncovers and what the EEOC conciliates.”
• EEOC’s investigation and other presuit activities focused only on one department of the American Samoa Government.
• EEOC’s attempt to sue the entire Government was improper; the court limited the case to the department that EEOC investigated before it filed suit.
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EEOC v. GEO Group, Inc., Civ. A. No. 10–1995–PHX–SRB, Docket No. 172 (D. Ariz. Apr. 17, 2012),
appeal pending
• EEOC could not seek relief for fifteen individuals first identified after EEOC filed its lawsuit.
• “[T]he fifteen individuals were not identified (and therefore their allegations could not have been investigated, included in the reasonable cause determinations, or subject to conciliation efforts) until September 2011, more than a year after conciliation efforts had failed,” and “almost a year after the EEOC filed its Complaint.”
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EEOC v. Swissport Fueling, Inc., No. CV-10-02101-PHX-GMS, 2013 BL 4628 (D. Ariz. Jan. 07, 2013)
• Dismissed claims for 21 claimants not identified before EEOC sued.
• EEOC spent “eight pages of its brief arguing that its pre-litigation actions are not subject to judicial review.”
• Those eight pages did not persuade the court: “[w]hether the EEOC fulfilled its statutory prerequisites to suit is a proper issue for the Court to decide.”
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EEOC v. Bloomberg, L.P., No. 1:07-cv-08383-LAP, 2013 BL 239093 (S.D.N.Y. Sept. 9, 2013)
• Summary judgment granted in Bloomberg’s favor on EEOC’s claims for 29 claimants and EEOC’s complaint dismissed with prejudice.
• “The Court is not aware of any binding legal authority, and the EEOC has provided none, that allows the EEOC to do what it is attempting to do here-namely level broad accusations of class-wide discrimination to present Bloomberg with a moving target of prospective plaintiffs and, after unsuccessfully pursuing pattern-or-practice claims, substitute its own investigation with the fruits of discovery to identify which members of the class, none of whom were discussed specifically during conciliation, might have legitimate individual claims under [Title VII].”
• “The EEOC's conduct here blatantly contravenes Title VII's emphasis on resolving disputes without resort to litigation and lands far and wide of any flexibility Title VII might provide with respect to pre-litigation conciliation requirements where both individual and class-wide claims are asserted and potential claimants are discovered throughout the course of discovery.”
• “Bloomberg is now a ‘prevailing party’ as to the EEOC and may file an application for attorneys' fees from the EEOC[.]”
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EEOC v. New Hanover Regional Medical Ctr., No. 7:09-CV-85-D, 2012 BL 86790 (E.D.N.C. Mar. 29, 2012).
• EEOC could seek relief for individuals first identified
after EEOC filed its lawsuit.
• EEOC “began investigating class claims during the pre-litigation phase” of the case.
• The court determined that the defendant was “aware” of the scope of EEOC’s investigation “before litigation began.”
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EEOC v. United Road Towing, Inc., No. 10 C 6259, 2012 BL 125811, 26 AD Cases 692 (N.D. Ill. May 11, 2012).
• EEOC alleged that United Road Towing violated the Americans with Disabilities Act when it discharged a class of disabled employees who exhausted a 12-week leave policy.
• EEOC’s presuit references to a “class” enabled EEOC to seek relief for 17 claimants first identified by EEOC after it filed suit.
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EEOC v. Mach Mining, LLC, Case No. 11-cv-879-JPG-PMF., 2013 BL 21378 (S.D. Ill. Jan. 28, 2013),
appeal pending. • Class failure-to-hire sex discrimination case.
• EEOC sought summary judgment on the defendant’s “failure to conciliate affirmative defense” because, according to EEOC, courts cannot review the conciliation process.
• The court denied EEOC’s motion and concluded that EEOC’s conciliation process is “subject to at least some level of judicial review.”
• The court rejected EEOC’s reliance on the Administrative Procedure Act because that Act limits claims to persons who suffer a “legal wrong because of an agency action.”
• EEOC is “not a person aggrieved by an agency action” and therefore has no claim under the Administrative Procedure Act.
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EEOC v. Bass Pro Outdoor World, LLC, Case No. 4:11-CV-3425, 2013 BL 269666 (S.D. Tex. Oct. 2, 2013)
• Denied EEOC’s summary judgment motion and determined that “the mere fact of conciliation is fair game for judicial review.”
• The EEOC did not “not cite[]any case in which a statutorily prescribed precondition to suit was found unreviewable.”
• The Administrative Procedure Act is “not relevant” because APA concepts of “final agency action” and “committed to agency discretion by law” are “only relevant to suits brought under the APA” and “not suits brought by the agency under another Act” – here, Title VII.
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EEOC v. United Parcel Serv., Inc., Case No. 09-cv-5291., 2013 BL 7679 (N.D. Ill. Jan. 11, 2013)
• Class Americans with Disabilities Act claim
• Challenge to the sufficiency of EEOC’s complaint
• EEOC need not include in its complaints “detailed factual allegations supporting the individual claims of every potential member of a class.”
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“Sue First, Ask Questions Later” Best Practices for Employers
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“Sue First, Ask Questions Later” Best Practices for Employers
• Challenge whether the EEOC met its statutory obligation to conciliate
• Seek to trim claims (EEOC v. Freeman)
– Assess whether to file a motion to dismiss claims arising from decisions made more than 300 days before the Charging Party filed his or her charge.
– Assess whether to file a motion for summary judgment to dismiss claims not included in the original charge to the date on which the EEOC officially notified the Respondent that its investigation was expanding.
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“Sue First, Ask Questions Later” Best Practices for Employers
• Move to compel the EEOC to make class members available for deposition, and move to dismiss those who do not present for deposition (EEOC v. CSRT Van Expedited, Inc.)
• Gather evidence on the EEOC’s practices (EEOC v. Kaplan Higher Educ. Corp., Freeman)
• Challenge the techniques or data used in the EEOC’s expert report (Freeman)
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“Sue First, Ask Questions Later” Best Practices for Employers
• Move for summary judgment on pattern and practice claims (EEOC v. Bloomberg, LP)
• Move for summary judgment on individual claims (CSRT)
– Bankruptcy issues
– Failure to timely report claims
– Company’s prompt and effective response
– No genuine issue of material facts as to essential elements of claims
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“Sue First, Ask Questions Later” Best Practices for Employers
• Be proactive – Assess current policies and practices before they become
the subject of an EEOC charge/lawsuit
– Articulate goals for policies/justify job relatedness/
business necessity of policies
– Develop policies that are consistent with and narrowly tailored to goals
– Be careful about bright-line rules
– Evaluate situations/decisions on a case-by-case basis
– Have upper management/HR/legal review decisions
– Train management and HR personnel
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Avoiding EEOC Systemic Discrimination Lawsuits
• Tailor practices and policies with an understanding about EEOC’s position
• Recognize EEOC’s very broad authority to compel the production of information and evidence during investigations
• Communicate with the EEOC’s investigator and other field staff
• Make a clear written record
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Avoiding EEOC Systemic Discrimination Lawsuits
• Avoid scorched earth practices
• Attempts at a political solution
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