On September 19, 2017, the Senate Health, Education, Labor and Pensions (“HELP”) Committee held confirmation hearings for President Trump’s nominees to fill the two vacant Equal Employment Opportunity Commission (“EEOC” or “Commission”) positions – Janet Dhillon and Daniel Gade.  While a new administration almost always signals a policy shift, change typically occurs over a prolonged period of time.  However, given the immediate changes implemented under the Congressional Review Act, efforts to dismantle Obama-era regulations, and prompt action to curb the Affordable Care Act and immigration policy, industry can likely expect swift policy changes implemented throughout government agencies, including the EEOC.

The EEOC is set-up for perhaps the one of the largest policy shifts that business has seen in decades.  The foundation for such changes lies in the two current vacancies in the Commission.  President Trump’s nominations of Dhillon and Gade will change the makeup of the EEOC leadership to three Republican members and two Democratic members.  Additionally, the perspective that these two nominees will bring to the EEOC is likely to shift the agency’s priorities and help ease regulatory burdens on employers.

The Nominees

Janet Dhillon is the former General Counsel at Burlington Stores Inc. who has a long history of supporting Republican candidates for elected office, including John McCain and Ted Cruz.  Unlike the current Commissioners, Dhillon will bring a unique perspective that will be welcomed by employers.  Her experience as an in-house lawyer at a large company provides the backdrop for a more employer-friendly stance on workplace issues.

Gade is also an intriguing pick to fill the other vacant position at the EEOC.  Gade is a graduate of the United States Military Academy at West Point who served in Iraq.  He was decorated for valor with two purple hearts and most recently served as an assistant professor at West Point.  If confirmed, Gade will be the only non-lawyer on the Commission.  Gade has taken a hard-nosed stance on disability benefits for veterans, and what he believes is a perverse incentive for them to rejoin the workforce.  Although he would be the only Commissioner without any experience enforcing anti-discrimination laws, his views suggest that he would make a concerted effort to address disability claims, especially those concerning veterans.  In FY 2016 alone, disability discrimination charges accounted for approximately 31% of all charges received by the EEOC, which marks an 11% increase since 2001.

Mission to Decrease Burden on Employers

The nominations of Dhillon and Gade certainly reflect President Trump’s firm commitment to decreasing burdens on employers.  Since taking office, President Trump has been adamant on his mission to cut regulation on employers.  President Trump has already reversed one Obama-era EEOC initiative designed to further regulate the workplace.  Specifically, on August 29, 2017, the OMB’s Office of Information and Regulatory Affairs issued a memorandum to the EEOC informing the agency that the revised 2016 pay data requirements were being stayed immediately and directing the agency to submit a new information collection package for the EEO-1 form for OMB’s review.

As a consequence, according to Acting Chair Victoria Lipnic, the earlier approved EEO-1 form remains in effect, and employers with 100 or more employees and federal contractors will be required to submit only the data required before the September 2016 EEO-1 report changes.  The deadline to submit these EEO-1 forms remains March 17, 2018.

Increase in Mediation

Both Dhillon and Gade commented in their opening remarks that they are committed to addressing the substantial backlog of charges currently before the EEOC.  Gade highlighted that his first priority, if confirmed, would be to address the backlog of charges being investigated by the EEOC.  Dhillon commented that it is “a sad reality that too often, justice delayed is justice denied[,]” and that conciliation and education is “critically important to the EEOC’s mission.”

If both candidates are confirmed, the drive to address the existing backlog and pending matters quickly will likely signal an increased emphasis on mediation.  Parties may be under shortened deadlines to submit information, produce documents and supporting evidence, and there will likely be less cases pursued by the EEOC unless it has solid and substantial grounds to bring a case.

Despite the number of large cases brought by the EEOC during the Obama administration, mediation actually accounted for a majority and benefits accumulated for aggrieved parties over the past several years.  The FY 2018 EEOC budget justification echoes this trend – highlighting its increased efforts to focus on mediation, conciliation, and employer outreach, as opposed to litigation, which is listed as the final EEOC priority for FY 2018:

EEOC’s priorities for FY 2018 are to make critical investments needed to make the Commission an agency focused on addressing the needs and challenges of the workplace of the future. As jobs for Americans are increased under this Administration, we as an agency will seek to increase equality of employment opportunity in the workplace through enhanced outreach and education; voluntary compliance efforts; high quality investigations; early and voluntary resolution of matters (including mediation and quality conciliations); and strategic litigation to enforce the laws under our jurisdiction.

While the EEOC’s strategic objective to reduce the backlog may mean more involvement initially, the long-term effect of this policy shift will decrease burdens on employers and facilitate a less adversarial relationship with the EEOC.

Potential Shift in Title VII Policy on LGBT Discrimination

Another issue that employers are watching closely, due largely to the current uncertainty throughout the legal system, is LGBT protections under Title VII.  Under the Obama Administration, the EEOC took the position that sexual orientation and gender identity were a protected category under Title VII.

The new Administration has already made several moves within the first 8 months of taking office to reverse these protections.  Notably, within the first month of the new Administration, in February 2017, President Trump withdrew Obama-era protections for transgender students in public schools that called for them to be permitted to use bathrooms and facilities corresponding with their gender identity.  The backlash that arose from this policy change led the Department of Education to issue an internal memo directing attorneys to continue to examine discrimination claims brought by transgender students and not automatically reject them due to this change in policy.  More recently, on August 25, 2017 President Trump issued a memorandum to the Secretary of Defense and Secretary of Homeland Security banning transgender individuals from serving in the United States military.

The Administration’s shift in policy with respect to sexual orientation and transgender protections will similarly make its way to the forefront of issues needed to be addressed by the EEOC sooner rather than later.  With the anticipated shift in the makeup of the EEOC leadership, the EEOC is more likely to reverse the Obama-era stance on sexual orientation and transgender protections.  This would be a momentous change in the employment law context, as former Commissioner Jenny Yang labeled the Commission’s work on sexual orientation discrimination one of the greatest successes of her career at the EEOC.

During the confirmation hearings, neither Dhillon nor Gade would confirm that they would interpret Title VII as protecting LGBT workers.  When questioned during the hearing, Dhillon’s comments suggested that she may be ready to overturn findings of LGBT protections on the basis the that the U.S. government should speak with one voice on the issue.  When questioned by Sen. Patty Murray (D-Wash.), the top Democrat on the Senate HELP Committee, Dhillon expressed a lack of commitment to upholding the EEOC’s determination Title VII applies to LGBT workers, although the nominee said she’s “personally opposed” to anti-LGBT discrimination.  Gade was also tentative in his response on the issue, noting that he is “personally opposed to discrimination on the basis of . . . sexual orientation or gender identity” but that he is “committed to enforcing the law as its written and as the court interpreted it.”

Conclusion

The anticipated new viewpoints and a Republican-favored Commission will be welcomed by employers.  Ultimately, the commitment to decreasing the regulatory burden on employers and increasing educational outreach will provide more opportunities for employers to learn how to best manage their employees and operate their workplace, and it will also lend itself to a less adversarial relationship with the agency.

Although changes are expected in the near future, employers should nonetheless remain cautious about EEOC investigations and enforcement actions.  The new administration is not fully established throughout the agencies, and uncertainty regarding many issues, including Title VII interpretations and pay equity, are currently hot issues before the courts.  Therefore, employers should maintain and continue to enforce their employment policies, as they had under the Obama Administration, and ensure that they foster a welcoming environment for all of their employees.  Given the rapidly changing landscape in the EEOC and the areas of law it enforces, employers are encouraged to stay in communication with legal counsel prior to making any policy changes.