The EEOC Targets Construction Industry For Heightened Enforcement

Seyfarth Synopsis: On January 10, 2023, the Equal Employment Opportunity Commission (EEOC) released for public comment its draft 2023-2027 Strategic Enforcement Plan (“SEP”)—a document that will guide the Commission’s enforcement priorities for the next five years. The EEOC’s prior Strategic Plan described how it would pursue its enforcement goals. (See our earlier blog on the Strategic Plan here). The Strategic Enforcement Plan, on the other hand, describes what the EEOC’s enforcement priorities will be. Earlier actions by the EEOC suggested that it might be turning its attention to the construction industry. In the SEP, the EEOC makes its intentions explicit, putting the construction industry—and especially those receiving federal funding—squarely in its sights.

History of the SEP

The EEOC’s first SEP covered Fiscal Years 2013-2016 (the EEOC’s fiscal years begin on October 1) and identified six broad subject-matter priorities. The EEOC’s second SEP set the course for enforcement priorities for FY2017-2022. The latest proposed SEP, published in the Federal Register for comment for the first time, provides notable additional details that put the employer community on notice of the Commission’s intentions for FY2023-2027.[1]

EEOC Calls Out Construction for Closer Scrutiny

In May 2022, the EEOC held a hearing to examine the mistreatment of women and people of color in construction, which it titled “EEOC Shines Spotlight on Discrimination and Opportunities in Construction.” During the hearing, the Chair of the EEOC expressed her concern that “[the construction sector has always been an important component of the American economy, as a major employer of America’s workers, a pathway to prosperity and security, and a key indicator of the nation’s health. . . [But u]nfortunately, many women and people of color have either been shut out of construction jobs or face discrimination that limits their ability to thrive in these careers.”

The most recent proposed SEP prioritizes the elimination of barriers in recruitment and hiring in the construction industry. In its discussion, the EEOC included the following statement:

The lack of diversity in certain industries and workplaces (such as construction and high tech, among others), especially in growth industries and industries that benefit from substantial federal investment, are also areas of particular concern. Although this priority typically involves systemic cases, a claim by an individual or small group may qualify if it raises a policy, practice, or pattern of discrimination.

This is the first time that the EEOC has specifically called out the construction industry in any of its proposed SEPs. In the past, industries at the receiving end of such messages from the EEOC have seen a notable uptick in enforcement activity, including closer scrutiny when EEOC charges are filed, more systemic investigations, and additional litigation brought by the EEOC on behalf of protected groups.

How EEOC Aims to Eliminate Barriers In Recruitment and Hiring

The EEOC’s stated goal is to eliminate barriers in recruitment and hiring. To that end, the EEOC says that it will focus on recruitment and hiring practices and policies that discriminate against racial, ethnic, and religious groups, older workers, women, pregnant workers and those with pregnancy-related medical conditions, LGBTQI+ individuals, and people with disabilities.

The EEOC has already described some areas of particular interest for examination, including job advertisements that exclude or discourage certain demographic groups from applying. For example, the EEOC has frowned upon “word of mouth” advertising to bring in new candidates via referrals from existing workers. It has also investigated the use of Internet advertising that uses micro-marketing tools to zero in on candidates in a way that might not reach some protected groups.

Another area is channeling, steering or segregation of individuals into specific jobs responsibilities due to their membership in a protected group. Here, the EEOC will focus on jobs where some groups appear to be over- or underrepresented, then search for an explanation why.

The EEOC also is focused on who is receiving on-the-job training, pre-apprenticeship or apprenticeship programs, temp-to-hire positions, internships, or other job training or advancement opportunities. Relatedly, the EEOC is focused on whether employees performing temporary work are permitted to seek permanent positions as they are made available. In each of these instances, over- or underrepresentation of protected groups may prompt the EEOC to turn its investigative powers to try to identify the reasons why.

The EEOC has also stated its interest in applications processes or systems, and screening tools or requirements that make it more difficult for workers in protected groups to obtain positions. This includes in particular automated systems that target job ads or applicants or assist in hiring decisions.

Focus on Unequal Pay

Advancing equal pay has been an EEOC focus for many years; however, the SEP included a renewed focus on the issue, as well as more explicit plans to pursue violators. The agency intends to focus on “employer practices that may impede equal pay or contribute to pay disparities,” including pay secrecy policies, retaliation against employees who share that information with each other, or requiring applicants to specify a desired salary at the application stage. Notably, the EEOC is behind on this issue - as many states have already instituted much stricter policies aimed at these issues. However, the difference is the EEOC has the authority to direct investigations into this issue, level charges, and facilitate enforcement, whereas state policies often rely on workers to report their employers.

EEOC’s “Systemic” Approach to Priority Areas

The EEOC selects its litigation targets based not just on the significance of the issue and the potential outcome, but also the number of individuals or employers affected, and the likelihood that the suit will prevent or deter future violations. That same commitment remains in the proposed SEP.

As a practical matter, this means that construction industries with large projects, or high-profile companies within the industry are at greater risk because the EEOC perceives that their enforcement efforts will send a message to other businesses in the same field.

Recent Enforcement Efforts by the EEOC

The EEOC did not wait for its proposed SEP to be finalized before pursuing litigation against businesses in the construction industry. In September 2022, just days before its fiscal year ended, the EEOC filed three such suits.

First, the EEOC sued a Tampa site development and asphalt paving company, for race discrimination, harassment, and retaliation. The EEOC’s lawsuit alleges that management regularly used a racial epithet in front of Black employees, and when an employee complained, he was humiliated and assaulted by a white manager, then fired.

Next, the EEOC also sued a plumbing and HVAC contractor based in the Orlando area, for the same charges. The EEOC’s lawsuit alleges that company management routinely used derogatory slurs in reference to non-white employees, referred to them as “non-essential” and “useless,” and assigned them the least desirable work tasks. The suit also alleges that when non-white employees complained of the racial discrimination, they were terminated.

Lasty, the EEOC filed suit against a contractor in Orange County, California, alleging that it subjected a class of Latino employees to harassment based on their national origin and retaliation for raising complaints. In particular, the EEOC alleges that since 2019 Latino employees were subjected to derogatory remarks and offensive graffiti, mocked if they could not speak English, and told to go back where they came from. The EEOC alleges that the company did nothing even after it learned of the conduct, instead terminating the one employee who complained. The EEOC issued a press release to announce the suits, warning that “[t]hese lawsuits again bring to the forefront and underscore the EEOC’s commitment to addressing race discrimination in the construction industry.”

The EEOC’s press release again called out the industry: “National origin, race, and sex harassment remain a persistent problem in the construction industry,” said Anna Park, regional attorney of the EEOC’s Los Angeles District Office. “We understand that some may be fearful about coming forward; however, we strongly encourage you to do so. Change cannot happen without those brave enough to speak out, and change in this industry, with its persistent issues, is long overdue.”

The Cost of Resolution

Whereas the three foregoing cases commenced just recently, the resolution of a fourth matter in August 2022 highlights what is at stake in such litigation. Last year, the EEOC announced that it reached a settlement with a series of related entities, operating as joint employers of oil pipeline workers in southeastern New Mexico. In the suit, which had been pending for more than two years, the EEOC alleged that the companies subjected the men to harassment based on race (African American), national origin (Native American, Hispanic, and Mexican), and/or sex (male), then retaliated against them by firing them for complaining about the harassment or associating with coworkers who complained about the harassment.

Under the settlement, the companies must pay $1.75 million, as well as update their policies; train all employees on non-discrimination, with managers and HR required to take additional training; discipline particular employees (one of whom is to be terminated); and submit detailed compliance reports for the next three years.

Implications for Employers

The SEP is still a draft, and the EEOC is accepting comments through February 9, 2023. However, the proposed SEP is a foreshadowing of the EEOC’s intentions concerning the construction industry. The past year saw some high-profile enforcement activity, and the coming 5 years can be predicted to include far more.

With the EEOC soon to be comprised of Commissioners appointed by the Biden Administration, we anticipate a pronounced uptick in enforcement activity. Construction industry employers should expect that the Commission will continue to make good on its promise to litigate large-scale, high-impact, and high-profile investigations and cases that address the issues identified as its enforcement priorities and areas of focus. Contractors should ensure their manuals are up to date, hold safety-toolbox sessions to remind their employees of the significance of respect for their fellow employees, and hold additional management level training sessions to ensure all recent hires and long-term employees are aware of the up-to-date company policies.

[1] Seyfarth attorneys have written in depth about all three (FY2013-2016, FY2017-2022, proposed FY2023-2027.)