Alexander to EEOC: Agency with Critical Task Has Gotten Far Afield of Mission

“EEOC is spending too much time initiating lawsuits from investigations which were begun without any individual filing a complaint, and with a clear intention by the agency to achieve a maximum amount of publicity.” –Lamar Alexander

WASHINGTON, D.C., May 19 – U.S. Senator Lamar Alexander (R-Tenn.) today told the chair and general counsel of the Equal Employment Opportunity Commission that he is concerned the agency is pursuing investigations with no complaints while the backlog of complaints grows, receiving embarrassing court rebukes, and seems to be inventing ways to avoid following the law.

“This is not the first time these issues have come up. I issued a report last fall detailing many of these problems, we held a bipartisan hearing earlier this year, the White House press secretary has expressed the administration’s concern with the EEOC’s maneuvers.”

Alexander added: “Here we are still about to discuss the fact that EEOC is still spending its time looking for investigations where there are no complaints, while a backlog of complaints grows. Still receiving embarrassing rebukes from the court. Still experimenting with ‘developing the law’ and guidance free from public comment.”

Alexander also expressed concerns with the agency’s recent proposed rule on employee wellness programs, saying the agency was ignoring the intentions of Congress and the president in writing into federal law a system for encouraging businesses to offer employee wellness programs.”

The chairman’s prepared remarks follow:

Exactly six months ago, I sat in the Ranking Member’s chair and I voted against the re-nomination of David Lopez to the position of EEOC general counsel.

I said then that I believed he had placed too much emphasis on litigating high-profile lawsuits at a time when there were more than 70,000 complaints of workplace discrimination that hadn’t been investigated.

Since then the lawsuits have continued, the agency has suffered embarrassing rebukes from the courts, and the backlog has grown.

We’re here today to find out why such an important agency with such a critical task has gotten so far afield of its mission.

I was in the crowd on the National Mall in August 1963 when Dr. Martin Luther King delivered his “I Have a Dream” speech and called for our nation to “make real the promises of democracy.”

The next year, the historic Civil Rights Act of 1964 established the EEOC to outlaw employment discrimination, and this year the agency celebrates its 50th anniversary.

I have 4 chief concerns with EEOC today:

o          One: The commission is pursuing investigations that may not involve a complaint, while the backlog of complaints has grown to over 75,000.

o          Two: The commission is losing lawsuits and receiving strong rebukes from courts, wasting taxpayer dollars and commission resources.

o          Three: Instead of following the law, EEOC is focused on “developing the law” and creating regulatory guidance without any notice and comment.

o          Four: I’d also like to express my concern that, after the agency initiated litigation against employee wellness programs – creating a conflict with the Affordable Care Act and ignoring the clear intentions of Congress and the president to encourage these programs – the agency’s proposed rule on the plans does not resolve all the issues it created.

Investigations without a complaint

EEOC is spending too much time initiating lawsuits from investigations which were begun without any individual filing a complaint, and with a clear intention by the agency to achieve a maximum amount of publicity.

For example:

EEOC continues to investigate at least three accounting firms—at none of which was there a complaint—rather, where partners have voluntarily adopted a mandatory retirement age.

EEOC is investigating the Texas Roadhouse restaurant chain for age discrimination as well—because their hosts, bartenders, and servers seem too young.

There were no apparently no complaints when they started, although their investigations may have stirred some up.

In fact, the agency is putting up Craigslist ads trying to churn up even more complaints.

At the same time, the number of backlogged complaints stands at 75,658—an increase of almost 5,000 since I raised this issue six months ago.

Court rebukes

The last time Mr. Lopez was before the Committee I read some embarrassing words from a unanimous three-judge panel on the 6th Circuit Court of Appeals.

o          In that case, EEOC alleged the use of credit background checks led to race discrimination, but lost the case.

o          The court wrote:  “EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

The commission continued to appeal another case that used the same faulty witness testimony, from the same faulty witness, and in February, they lost that case too.

This time, a unanimous three-judge panel on the 4th Circuit Court of Appeals found that there were “an alarming number of errors and analytical fallacies in [the expert witness’s] reports, making it impossible to rely on any of his conclusions.”

o          In a concurring opinion, one of the judges said, “the commission’s conduct in this case suggests that its exercise of vigilance has been lacking.  It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.”

Since 2011, EEOC has been ordered to pay attorney’s fees in 11 different cases.

The most recent example of a fee award is from yet another court, this time a federal district court in Washington state, which ruled just a couple of months ago that EEOC had demanded more than $25 million each from two defendants, but the court found it had no valid basis do to so.

o          The court said: “The EEOC failed to conduct an adequate investigation to ensure Title VII claims could be reasonably brought against [two of the defendants], pursued a frivolous theory of joint-employer liability, sought frivolous remedies, and disregarded the need to have a factual basis to assert a plausible basis for relief under Title VII.”

And still another court, this time our highest court, found against EEOC in a unanimous decision in April.  In this case, the EEOC argued that its attempts to resolve complaints before going to court – a process known as “conciliation” – should not be reviewed by the courts, and if the courts could review EEOC's process—then it should be a really minimal review. Or as the Supreme Court characterized the agency’s position, they were arguing for  “the most minimalist form of review imaginable.” The Supreme Court unanimously disagreed with both arguments.

Last fall, I released a report that detailed a litany of missteps and questionable tactics by the agency and it’s apparent those missteps are still happening.  And it’s all happened while more than 75,000 Americans wait for their complaints to be investigated.

Respect for rule of law

On top of all this, I am concerned that the commission and Mr. Lopez seem to be inventing ways to avoid following the law.

In public speeches, Mr. Lopez has admitted that his attorneys take an “entrepreneurial approach” to litigation and work to “develop the law.”

EEOC has pushed the bounds of the law by seeking out what the commission itself described in its fiscal year 2016 budget justification as “novel issues” in the cases it pursues.

Then there’s the matter of guidance, which is a growing problem at federal agencies. It’s supposed to be a non-binding way for agencies to provide advice to individuals and businesses on how the agencies interpret the law. 

But twice in the past two and a half years, EEOC has set national workplace discrimination policy through guidance. 

Then they filed lawsuits based on this guidance, which tells me the agency thinks its guidance is binding even if the law says it isn’t.

The public feels bound by this guidance, but EEOC does not let them have a say about it because it issues the guidance without letting the public comment on a draft.

This does not follow the administration’s own “best practices” when issuing significant guidance.  Also, three of the current EEOC commissioners have supported public comment on draft guidance.

Senator Lankford and I recently sent a letter to the EEOC, and other agencies, about their use of guidance and I look forward to EEOC’s response.

Employee wellness programs proposed rule 

In addition to all of this, there is the issue of the agency’s pursuit of employee wellness programs, which has been the subject of bipartisan hearings by this committee.

In the health care law, this committee, Congress, and the president specifically authorized employers to reward employees for making healthy lifestyle choices.

The Departments of Health and Human Services, Labor, and Treasury have issued regulations consistent with the law that employers could understand and comply with.

The law allows employers to discount employees’ premiums by up to 30 percent for doing things like maintaining a healthy weight or keeping their cholesterol levels in check.

The law also authorized the secretaries of Health and Human Services, Labor, and Treasury to increase this maximum discount to 50 percent through regulations.  And they went ahead and have done this—allowing employers to discount premiums by up to 50 percent for employees who quit smoking.

Yet, in 2014, EEOC decided to sue employers for following the law and offering these plans.

Even the White House expressed concern about the EEOC’s actions.

In December 2014, when asked about the lawsuits, White House Press Secretary Josh Earnest said the administration is concerned EEOC’s actions are, or could be, “inconsistent with what we know about wellness programs and the fact that we know that wellness programs are good for both employers and employees.”

Earlier this year this committee held a hearing about the importance of employer wellness programs and I introduced legislation to clear up the confusion EEOC created.

In April 2015, EEOC offered a proposed rule on employer wellness programs.  However, the proposed rule ignores the law and the administration’s regulations.  Here are a couple of ways it does that:

First, the proposed rule caps the premium discount reward an employer may give an employee at 30 percent—never mind that the law says the secretaries may increase this to 50 percent if they want, and which they have done with smoking cessation.

Second, the agency’s rule really complicates the reward system for employers and tries to get stingy with employees in a way that is at odds with the law.

The law says that the only employee rewards that should count toward these 30 percent and 50 percent maximum premium reductions are actual discounts on the employees’ premiums. If an employer also wants to offer paid time-off or give iPods to employees who achieve a certain health goal – the value of that prize has nothing to do with the rules on reward maximums.

But the EEOC rule says that these kinds of rewards should count against an employee. That their premium discounts should be slashed if they get another reward of value. That the iPod or the time off should count against their premium discount.

Put simply, the health care law does not provide EEOC the authority to make these changes.

Conclusion

This is not the first time these issues have come up. I issued the a report last fall detailing many of these problems, we held a bipartisan hearing earlier this year, the White House press secretary has expressed the administration’s concern with the EEOC’s maneuvers.

But the EEOC doesn’t seem to be listening.

Here we are still about to discuss the fact that EEOC is still spending its time looking for investigations where there are no complaints, while a backlog of complaints grows. Still receiving embarrassing rebukes from the court. Still experimenting with “developing the law” and guidance free from public comment. And still ignoring the intentions of Congress and the president in writing into federal law a system for encouraging businesses to offer employee wellness programs.

All these issues are of concern to me, and I look forward to hearing from EEOC’s general counsel and chair regarding how they are addressing them.

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For access to this release and Chairman Alexander’s other statements, click here.