Legal Update
Sep 16, 2024
What Construction Firm Employers Should Do Right Now to Minimize Legal Risk of Discrimination and Harassment Lawsuits
Seyfarth Synopsis: In June 2024, Seyfarth published a blog article warning construction industry employers of recent anti-harassment guidelines issued by the EEOC. We predicted that the EEOC has “put the construction industry squarely in its sights.”[1] In this follow-up Alert, we discuss recent cases confirming the renewed regulatory focus on the construction sector, which demonstrate the need to put in place sound practices for non-discriminatory recruitment, hiring, and training of the work force in order to be prepared for this heightened risk of government scrutiny.
Recent EEOC Settlements
The U.S. Equal Employment Opportunity Commission (EEOC) has indicated, in no uncertain terms, that over the next five years it intends to prioritize the mitigation of systemic workplace problems and the historical underrepresentation of women and workers of color in the construction sector.[2] Two recent cases confirm that the EEOC is true to its word when it comes to tackling racial and gender disparities in the construction work force.
In August 2024, the EEOC secured two consent decrees with two separate construction firms in Florida, totaling nearly $3 million.
In EEOC v. J.A. Croson LLC, seventeen Black and Hispanic workers alleged they were subjected to racial slurs, derogatory language, and offensive imagery at work, and were given less desirable assignments by their foreman and other leaders in the company. Two Black employees also asserted retaliation claims alleging they had been fired for making work environment complaints. On August 26, a court in the Middle District of Florida approved a $1.6 million settlement, which also mandates three years of significant injunctive relief for the plumbing and HVAC contractor, including requirements to revise its EEO policies and procedures and provide to the EEOC for review; establish a harassment reporting hotline; create an internal complaint procedure subject to strict timelines, with the investigator reporting directly to the CEO and Director of Human Resources; hire a third-party to provide 1.5 hours annually of mandatory training to all employees (in-person for managers and supervisors, online or pre-recorded for non-supervisory employees); conduct work environment surveys and audits to gauge whether race and/or national origin play a role in assignments; take steps to prevent discrimination in the selection process for the company’s apprenticeship tuition reimbursement program; and submit reports to the EEOC twice per year for the duration of the decree.
The following day, August 27, another federal judge in Florida approved a $1.25 million settlement between a paving company and 12 Black former employees and a class of other Black employees. In the case of EEOC v. v. Asphalt Paving Systems Inc., the EEOC alleged that the defendant construction company failed to prevent white employees from regularly using racial slurs toward Black colleagues, wearing clothing bearing the Confederate flag, and flaunting white power tattoos. The complaint also alleged that Black employees experienced disparate treatment regarding taking breaks. For example, it claimed they were forced to work and eat at the same time, and forced to work in the rain during a downpour while white workers were free to take breaks at their discretion and were allowed to sit inside until the storm passed. The EEOC also alleged that white employees would often bring guns to work, in violation of company policy, which made Black workers feel intimidated. According to the complaint, in one instance, a white manager fired three Black employees while grabbing his gun from his waist. In addition to the monetary relief, the three-year consent decree also requires Asphalt Paving to: hire a third-party Compliance Monitor who is responsible for conducting any complaints of discrimination, among other duties; review and revise its employment policies to prohibit race discrimination and detail the process for handling bias complaints and submit to the EEOC for comment; hire a third-party to provide 1.5 hours of anti-discrimination training annually to its Florida employees (in-person for human resources and supervisors, online or pre-recorded for non-supervisory employees); establish an anonymous hotline for reporting bias; track and monitor all complaints; and submit reports to the EEOC twice per year for the duration of the decree.
Data on Racial and Gender Disparities in the Construction Industry
Data from the U.S. Bureau of Labor Statistics highlights ongoing race and gender disparities in the construction industry. In 2023, of the nearly 11.9 million people employed in the construction sector, approximately 88% were white and about 90% were men. In May 2023, EEOC Chair Charlotte A. Burrows issued a report entitled “Building for the Future: Advancing Equal Employment Opportunity in the Construction Industry,” finding that race and gender discrimination and harassment remain prevalent issues at construction worksites, which contributes to the underrepresentation of women and workers of color in construction.
Lessons for Construction Sector Employers
New Infrastructure Law Motivating EEOC to Intensify Monitoring of Construction Sector
Employers in the construction sector should anticipate increased scrutiny from the EEOC in the coming years, especially because of the Infrastructure Investment and Jobs Act, a $1.2 trillion initiative signed into law by President Joe Biden at the end of 2021. With substantial federal funding allocated for upgrading highways, roads, bridges, and other transit systems, the EEOC will be monitoring how this infrastructure money is spent and whether employers receiving these funds are operating in full compliance with discrimination laws.[3] According to its May 2023 report, the EEOC committed to collaborating with construction industry stakeholders including employers, unions, and workers to ensure fair hiring and employment practices and prevent discrimination and harassment. In addition, the EEOC will continue to utilize its administrative and litigation powers to resolve charges of discrimination, which includes investigating employee complaints and pursuing litigation to enforce the law.
Proactive Workforce Audits are Key to Mitigate Risk of Liability
To minimize legal risks and safeguard employees, employers in the construction industry are encouraged to proactively assess their workforce and worksites, including auditing for demographic disparities and taking documented steps to address such issues. For example, employers can conduct anonymous employee surveys or use other means to gather comprehensive data on the demographics of their workforce and develop detailed action plans to address any identified disparities. This might entail creating and implementing targeted recruitment strategies to attract a diverse pool of candidates, as well as providing bias training for hiring managers. Documenting all steps taken and regularly reviewing progress will support ongoing compliance with anti-discrimination laws and foster a more inclusive workplace.
Training, Training, Training
One of the most impactful things that construction employers can do is to provide robust training. Managers should be trained on avoiding workplace discrimination and harassment and when to escalate to human resources. HR professionals should be trained on best practices for handling and investigating harassment and discrimination complaints. And the broader workforce should be trained on the company’s anti-discrimination and anti-harassment policies. The best trainings are live and interactive, reviewing real-life scenarios. It is also effective to incorporate brief reminders of the employer’s non-discrimination policies into regular meetings as a way to reinforce the importance of the policy to all worksite employees.
Seyfarth at Work offers customized, interactive workplace training programs designed to ensure compliance with employment laws and mitigate legal risks. Our training services are tailored to meet specific industry needs and include practical skills development for HR professionals, managers, and employees.
Update your Policies and Ensure a Solid Reporting System
Construction employers should also ensure that they have clear, up-to date policies on discrimination and harassment. Workplace policies should define covered individuals, prohibited conduct, and reporting procedures. Policies must also commit to prompt, thorough investigations and confidentiality. Policies should be regularly updated, easy to understand, and posted in visible locations.
As for reporting, given the often complex overlap of multiple employers and entities involved in construction projects, onsite employers and leaders should collaborate to create a “no wrong door” environment for workers. That is, they should create multiple accessible channels, both formal and informal, for employees to report discrimination or harassment and policies to prevent any retaliation for such complaints. An effective harassment complaint system encourages early reporting, operates promptly and impartially, and imposes appropriate consequences for harassment or related misconduct.
To start, employers can consult the EEOC’s guide recently published in June, designed to assist construction industry leaders in reducing harassment. The guide offers recommendations on establishing clear policies, creating an accessible complaint system, and enhancing the effectiveness of anti-harassment training.
[1] Christopher Kelleher and Andrew Scroggins, EEOC Issues Anti-Harassment Guidance to Construction-Industry Employers, The Construction Seyt (June 24, 2024), available at: https://www.constructionseyt.com/2024/06/eeoc-issues-anti-harassment-guidance-to-construction-industry-employers/.
[2] Meghan A. Douris and Andrew Scroggins, The EEOC Targets Construction Industry For Heightened Enforcement, The Construction Seyt (Feb. 24, 2024), available at: https://www.seyfarth.com/news-insights/the-eeoc-targets-construction-industry-for-heightened-enforcement.html.
[3] EEOC regulations only apply to federal contractors and federally-assisted construction contractors and subcontractors who do over $10,000 in government business in one year. Exec. Order No. 11246, 30 Fed. Reg. 12319 (Sept. 24, 1965).