Update of Commission's Conciliation Procedures, 64079-64084 [2020-21550]

Agencies

• Equal Employment Opportunity Commission

[Federal Register Volume 85, Number 197 (Friday, October 9, 2020)]
[Proposed Rules]
[Pages 64079-64084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21550]


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EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

29 CFR Parts 1601 and 1626

RIN 3046-AB19


Update of Commission's Conciliation Procedures

AGENCY: Equal Employment Opportunity Commission

ACTION: Proposed rule.

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SUMMARY: The Equal Employment Opportunity Commission (EEOC or 
Commission) proposes amending its procedural rules governing the 
conciliation process. The Commission believes that providing greater 
clarity to the conciliation process will enhance the effectiveness of 
the process and ensure that the Commission meets its statutory 
obligations.

DATES: Comments are due on or before November 9, 2020.

ADDRESSES: You may submit comments by the following methods:
    You may submit comments, identified by RIN Number 3046-AB19, by any 
of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Fax: (202) 663-4114. (There is no toll free fax number). 
Only comments of six or fewer pages will be accepted via fax 
transmittal, in order to assure access to the equipment. Receipt of FAX 
transmittals will not be acknowledged, except that the sender may 
request confirmation of receipt by calling the Executive Secretariat 
staff at (202) 663-4070 (voice) or (202) 663-4074 (TTY). (These are not 
toll free numbers).
     Mail: Bernadette B. Wilson, Executive Officer, Executive 
Secretariat, U.S. Equal Employment Opportunity Commission, 131 M Street 
NE, Washington, DC 20507.
     Hand Delivery/Courier: Bernadette B. Wilson, Executive 
Officer, Executive Secretariat, U.S. Equal Employment Opportunity 
Commission, 131 M Street NE, Washington, DC 20507.
    Instructions: The Commission invites comments from all interested 
parties. All comment submissions must include the agency name and 
docket number or the Regulatory Information Number (RIN) for this 
rulemaking. Comments need be submitted in only one of the above-listed 
formats. All comments received will be posted without change to https://www.regulations.gov, including any personal information you provide.
    Docket: For access to comments received, go to https://www.regulations.gov. Although copies of comments received are usually 
also available for review at the Commission's library, given the EEOC's 
current 100% telework status due to the COVID-19 pandemic, the 
Commission's library is closed until further notice. Once the 
Commission's library is re-opened, copies of comments received in 
response to the proposed rule will be made available for viewing by 
appointment only at 131 M Street NE, Suite 4NW08R, Washington, DC 
20507, between the hours of 9:30 a.m. and 5:00 p.m.

FOR FURTHER INFORMATION CONTACT: Andrew Maunz, Legal Counsel, Office of 
Legal Counsel, (202) 663-4609 or [email protected].

SUPPLEMENTARY INFORMATION:

    Under section 706 of Title VII of the Civil Rights Act of 1964, as 
amended, Congress instructed that after the Commission finds reasonable 
cause for any charge, ``the Commission shall endeavor to eliminate any 
such alleged unlawful employment practice by informal methods of 
conference, conciliation, and persuasion.'' 42 U.S.C. 2000e-5(b).\1\ 
Congress went on to state that the Commission may only commence a civil 
action against an employer if ``the Commission has been unable to 
secure from the respondent a conciliation agreement acceptable to the 
Commission.'' Id. at Sec.  2000e-5(f).\2\ Accordingly, conciliation is 
not just a good practice for the Commission's handling of charges, but 
also attempting to conciliate after a reasonable cause finding is a 
statutory requirement and a prerequisite to the Commission filing 
suit.\3\
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    \1\ The Commission, or its officers or employees, cannot make 
public anything said or done during these informal methods ``without 
the written consent of the person concerned.'' Id.
    \2\ This includes civil actions brought pursuant to section 707 
of Title VII, which states that any action the Commission brings 
under that section shall be ``in accordance with the procedures'' of 
section 706. 42 U.S.C. 2000e-6(e); see also id. at Sec.  2000e-6(c) 
(``The Commission shall carry out such functions in accordance with 
subsections (d) and (e) of the section).
    \3\ The only exception to the Commission's obligation to attempt 
to conciliate is an action for ``temporary or preliminary relief'' 
under section 706(f)(2). 42 U.S.C. 2000e-5(f)(2).
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    The Commission first published its regulation governing the 
procedures for conciliation in 1977. 42 FR 55388, 55392 (1977). 
Subsequent amendments to this regulation have largely been minor 
changes to account for organizational changes at the Commission or 
additions of new laws within the Commission's jurisdiction, such as the 
Americans with Disabilities Act (ADA) and the Genetic Information 
Nondiscrimination Act (GINA). 48 FR 19165 (1983); 49 FR 13024 (1984); 
49 FR 13874 (1984); 52 FR 26959, (1987); 54 FR 32061 (1989); 56 FR 
9624-25 (1991) (adding the ADA); 71 FR 26828 (2006); 74 FR 63982 (2009) 
(adding GINA). Since 1977, the Commission has not significantly changed 
the substance of its regulatory procedures governing conciliation.
    In 2015, following a series of cases challenging the adequacy of 
the

[[Page 64080]]

Commission's conciliation efforts,\4\ the Supreme Court addressed the 
Commission's conciliation requirements in the case Mach Mining, LLC v. 
EEOC, 575 U.S. 480 (2015). In Mach Mining, the Court noted that 
conciliation plays an important role in achieving Congress's goal of 
ending employment discrimination. 575 U.S. at 486. The Court observed 
that Title VII not only required the EEOC to attempt to engage in 
conciliation but provided ``concrete standards pertaining to what that 
endeavor must entail.'' Id. at 488. According to the Court, the 
statute's specified methods of ``conference, conciliation, and 
persuasion . . . necessarily involve communication between parties, 
including the exchange of information and views.'' Id. To meet its 
statutory obligations the Commission must, at a minimum, ``tell the 
employer about the claim--essentially, what practice has harmed which 
person or class--and must provide the employer with an opportunity to 
discuss the matter in an effort to achieve voluntary compliance.'' Id. 
The Court held that the Commission's compliance with its statutory 
conciliation obligations could be subject to judicial review. Id. 
However, the scope of that review will generally be limited to 
examining whether the Commission afforded ``the employer a chance to 
discuss and rectify a specified discriminatory practice.'' Id. at 489. 
According to the Court, such judicial review would likely, at most, 
consist of a review of affidavits from the parties on whether the EEOC 
has fulfilled its statutory obligations. Id. at 494-95.\5\
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    \4\ See, e.g., EEOC v. Asplundh Tree Expert Co., 340 F. 3d 1256, 
1260 (11th Cir. 2003) (EEOC violated its Title VII duty to 
conciliate, warranting attorney fee award, by failing to identify 
any theory of liability); EEOC v. CRST Van Expedited, Inc., 679 F. 
3d 657, 676 (8th Cir. 2012) (EEOC's failure to identify class 
members or investigate claims deprived employer of a meaningful 
conciliation); EEOC v. Johnson & Higgins, Inc., 91 F. 3d 1529, 1534 
(2d Cir. 1996); EEOC v. Klinger Elec. Corp. 636 F. 2d 104, 107 (5th 
Cir. 1981) (application of a three part inquiry to EEOC's duty to 
conciliate); EEOC v. Keco Indus., Inc., 748 F. 2d 1097, 1102 (6th 
Cir. 1984); EEOC v. Radiator Specialty Co., 610 F. 2d 178, 183 (4th 
Cir. 1979) (requirement that EEOC's conciliation efforts reach a 
minimum of good faith).
    \5\ After Mach Mining, courts have addressed the extent to which 
a defendant can seek review of the conciliation process. See EEOC v. 
Wal-Mart Stores, Texas, LLC, __ F.Supp.3d __, *3-4 (S.D. Tex. 2019) 
(holding that it would allow only limited discovery related to 
conciliation, and not on the ``substance and detail of conciliation 
discussions''); EEOC v. Blinded Veterans Association, 128 F. Supp.3d 
33, 44 (D.D.C. 2015) (stating that courts' review of conciliation 
extends only to whether the EEOC attempted to engage the employer in 
an effort to remedy the alleged discrimination and not to the 
parties' positions during conciliation).
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    The Court noted the EEOC's ``wide latitude'' and ``expansive 
discretion'' over the conciliation process when it crafted the narrow 
judicial review it said was appropriate under Title VII. Id. at 488-89. 
Such broad discretion in its conciliation processes, and other areas, 
means the Commission ``wields significant power.'' EEOC v. Freeman, 778 
F.3d 463, 472 (4th Cir. 2015) (Agee, J., concurring). Recognizing this 
power, it is important that the Commission clearly articulate the steps 
of the conciliation process so that the parties understand what to 
expect.
    The Commission acknowledges that the preferred method for remedying 
employment discrimination is through ```cooperation and voluntary 
compliance,'' including conciliation. See Mach Mining, 575 U.S. at 486 
(``in pursuing the goal of bringing employment discrimination to an 
end, Congress chose `cooperation and voluntary compliance' as its 
preferred means''). Prior to Supreme Court's decision in Mach Mining, 
the Commission was in the process of developing internal standards for 
more robust and consistent conciliation efforts in the form of the 
Quality Enforcement Practices (QEP), which set forth specific action 
steps to promote sharing of information toward voluntary 
resolutions.\6\ Following the Mach Mining decision, the then-Chair and 
General Counsel issued internal guidance on how to ensure that the 
EEOC's conciliation processes conformed to the requirements outlined by 
the Supreme Court. In the Spring of 2017, the EEOC's Office of Field 
Programs implemented agency-wide ``Conciliation and Negotiation 
Training,'' a significant portion of which covered what the EEOC must 
do to satisfy its statutory duty to attempt conciliation. Over 800 EEOC 
staff participated in this training, including all investigators and 
their supervisors. Since then, the EEOC has endeavored to train new 
investigators on the Commission's conciliation obligations.
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    \6\ While the QEPs were in development prior to the Supreme 
Court issuing Mach Mining, they were not published until September 
2015, several months after the decision. https://www.eeoc.gov/quality-practices-effective-investigations-and-conciliations.
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    Historically, the EEOC has elected to not adopt detailed 
regulations to govern its conciliation efforts. The Commission took 
this position in the belief that retaining flexibility over the 
conciliation process would more effectively accomplish its goal of 
preventing and remediating employment discrimination. See Mach Mining, 
575 U.S at 487 (``The Government highlights the broad leeway the 
statute gives the EEOC to decide how to engage in, and when to give up 
on, conciliation.''). The Commission still believes that it is 
important to maintain a flexible approach to conciliation, and that the 
Commission has broad latitude over what it offers and accepts in 
conciliation. However, notwithstanding EEOC's efforts, including the 
extensive training outlined above, EEOC's conciliation efforts resolve 
less than half of the charges where a reasonable cause finding has been 
made.
    Between fiscal years 2016 and 2019, only 41.23% of the EEOC's 
conciliations were successful. While this number is a slight 
improvement over the previous four fiscal years,\7\ the Commission is 
successfully achieving Congress's ``preferred means'' of eliminating 
employment discrimination less than half the time.\8\ Furthermore, the 
Commission estimates that one third of respondents (employers) who 
receive a reasonable cause finding decline to participate in 
conciliation. While there are various reasons why a respondent decides 
not to participate in conciliation, such a widespread rejection of the 
process suggests a broadly held view that the process does not meet its 
full potential in providing value to all parties. These results have 
led the Commission to conclude that a change in approach is necessary. 
Through this rulemaking, the Commission is choosing to exercise its 
``wide latitude'' to fulfill its Congressional mandate of ending 
employment discrimination through ``cooperation and voluntary 
compliance'' by clearly outlining the steps necessary to carry out its 
statutory conciliation responsibility.
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    \7\ For fiscal years 2012 through 2015, the rate was 40%. See 
EEOC Statistics, All Statutes https://www.eeoc.gov/enforcement/all-statutes-charges-filed-eeoc-fy-1997-fy-2019.
    \8\ Congress has remained interested in the EEOC's conciliation 
efforts well after the initial passing of Title VII. See e.g., 
Senate Health Education Labor and Pensions Minority Staff Report, 
November 24, 2014 at p. 4, https://www.help.senate.gov/imo/media/doc/FINAL%20EEOC%20Report%20with%20Appendix.pdf (``EEOC is not 
consistently meeting its statutory mandate to attempt to resolve 
discrimination disputes out of court.'').
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    The Commission recognizes that after Mach Mining, its conciliation 
process is subject to judicial review. The purpose of these proposed 
changes is not to provide an additional avenue for litigation by 
respondents or charging parties. Indeed, Title VII provides that 
``nothing said or done during and as part of'' conciliation may be 
publicized by the Commission or ``used as evidence in a subsequent 
proceeding without the written consent of the persons concerned.'' 42 
U.S.C. 2000e-5(b); Mach Mining, 575 U.S. at 492-93 (stating that

[[Page 64081]]

judicial review of conciliation that delves too deep would violate 
Title VII's confidentiality provision). Rather, the purpose of these 
proposed regulations is to strengthen the Commission's own 
practices.\9\ The Commission is seeking input through the notice and 
comment process on the question of whether these proposed amendments 
will result in additional challenges to the Commission's conciliation 
efforts, and whether such challenges would delay or adversely impact 
litigation brought by the Commission.
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    \9\ Any judicial review that does take place is limited. As Mach 
Mining explained, the scope of judicial review will generally be 
limited to examining whether the Commission afforded ``the employer 
a chance to discuss and rectify a specified discriminatory 
practice.'' Id at 489. As noted above, a sworn affidavit from EEOC 
stating it had met its obligations ``will usually suffice.'' Id. at 
494.
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    Accordingly, the Commission is proposing to amend its procedural 
conciliation regulations governing Title VII, ADA, and GINA cases to 
outline steps that the Commission will take in the conciliation 
process. Articulating these steps meets the obligations highlighted in 
Mach Mining: (1) Inform the employer about the claim, including ``what 
practice has harmed which person or class'' and (2) ``provide the 
employer with an opportunity to discuss the matter in an effort to 
achieve voluntary compliance.'' Id. at 488.
    The Commission believes these steps will enhance efficiency and 
better encourage a negotiated resolution when possible. Among the many 
values of resolving a charge in conciliation is remedying unlawful 
discrimination more quickly and avoiding the risks inherent in 
litigation.
    The Commission proposes to require that in any conciliation the 
Commission will provide to the respondent, if it has not already done 
so: (1) A summary of the facts and non-privileged information that the 
Commission relied on in its reasonable cause finding, and in the event 
that it is anticipated that a claims process will be used subsequently 
to identify aggrieved individuals, the criteria that will be used to 
identify victims from the pool of potential class members; (2) a 
summary of the Commission's legal basis for finding reasonable cause, 
including an explanation as to how the law was applied to the facts, as 
well as non-privileged information it obtained during the course of its 
investigation that raised doubt that employment discrimination had 
occurred; (3) the basis for any relief sought, including the 
calculations underlying the initial conciliation proposal; and (4) 
identification of a systemic, class, or pattern or practice 
designation. The Commission also proposes to specify that the 
respondent participating in conciliation will have at least 14 calendar 
days to respond to the initial conciliation proposal from the 
Commission. Commission is seeking input through the notice and comment 
process on all of these requirements, and specifically, the Commission 
would like input on whether it should specify that its disclosures must 
only be done in writing or if it should allow for oral disclosures as 
well.
    In addition, the Commission is also obligated to undertake 
conciliation efforts pursuant to the Age Discrimination in Employment 
Act (ADEA). Specifically, the Commission must ``seek to eliminate any 
alleged unlawful practice by informal methods of conciliation, 
conference, or persuasion.'' 29 U.S.C. 626(d)(2). Accordingly, the 
Commission is proposing to amend its ADEA regulations to add the same 
\10\ requirements to the ADEA conciliation process.
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    \10\ While the requirements are substantively the same, the 
language in the ADEA section is slightly different due to the 
language of section 7(d)(2) of the ADEA.
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    These steps in cases under Title VII, ADA, GINA, and the ADEA, will 
support the EEOC's statutory obligations in the conciliation process, 
provide a better opportunity to resolve the matter, and remedy unlawful 
discrimination without litigation.

Regulatory Procedures

Executive Order 12866

    This proposed rule has been determined to be significant under E.O. 
12866 by the Office of Management and Budget because it raises novel 
legal or policy issues arising out of legal mandates or the President's 
priorities. The proposed rule will not have an annual effect on the 
economy of $100 million or more, nor will it adversely affect the 
economy in any material way. Thus, it is not economically significant 
for purposes of E.O. 12866 review. However, the rule will have many 
benefits as demonstrated by the following cost-benefit analysis.
    The proposed rule imposes no direct costs on any third parties and 
only imposes requirements on the EEOC itself. These requirements, if 
implemented, will likely require the EEOC to conduct training of staff 
and change its processes for investigations and conciliations to ensure 
that it is complying with the new regulation. While these changes and 
training would likely be absorbed within the Commission's normal 
operating expenses, any additional expenses that the agency would incur 
could be offset by cost savings derived from these changes. For 
example, charging parties often file Freedom of Information Act (FOIA) 
requests with the Commission after receiving a ``right to sue notice'' 
in order to receive the charge file. If more cases are resolved in 
conciliation, these cases would not result in right to sue notices and 
the Commission would receive fewer FOIA requests, resulting in cost 
savings for the government.
    Furthermore, while the parties ultimately determine whether a 
conciliation agreement is reached, if the Commission is able to 
conciliate more cases successfully, it will benefit employees, 
employers, and the economy as a whole. With respect to employees, an 
increase in successful conciliations will result in more employees 
receiving remedies for the discrimination they suffered and/or within 
an accelerated timeframe. Many employees who receive reasonable cause 
findings are unable to obtain any relief without conciliation because 
they do not pursue litigation for fiscal, emotional, or other reasons, 
or even if they do pursue litigation, ultimately do not attain relief. 
Even employees who ultimately would otherwise be successful in 
litigation may benefit from a conciliation agreement because they would 
then receive remedies sooner and avoid the time, cost, stress, and 
uncertainty of litigation.
    Employers will also receive a net benefit from the EEOC 
conciliating cases more successfully. In some cases, conciliation 
agreements may provide an opportunity for employers to more quickly 
correct any discriminatory conduct or policies and seek compliance 
assistance from the EEOC. Additionally, while employers pay $45,466 
\11\ on average to settle cases in conciliation, they will save 
resources and money by avoiding litigation. It is difficult to quantify 
the average cost of litigating an employment discrimination case for an 
employer because the cost of a case depends on several factors, such as 
the complexity of the case, length of the litigation, and the 
jurisdiction in which it is litigated.\12\
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    \11\ This was the average for fiscal year 2019.
    \12\ This analysis focuses only on an employer's litigation 
costs because most plaintiff-side attorneys use contingency-fee 
arrangements for pursuing claims, in which the attorney receives a 
portion of the recovery and charges little or nothing if no recovery 
is obtained. See Martindale-Nolo Research, Wrongful Termination 
Claims: How Much Does a Lawyer Cost? (Nov. 14, 2019), available at 
https://www.lawyers.com/legal-info/labor-employment-law/wrongful-termination/wrongful-termination-claims-how-much-does-a-lawyer-cost.html (noting that 75% of plaintiffs lawyers in employment 
litigation use contingency fee arrangements and another 15% use a 
combination of a contingency fee and hourly rate). Thus, more 
frequent conciliation will save litigation costs for those few 
plaintiffs who pay their attorneys an hourly rate.

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[[Page 64082]]

    The stage at which litigation concludes has a large effect on 
litigation costs--attorneys' fees and other litigation expenses are 
significantly higher for cases that go through trial, as opposed to 
those that end in summary judgment. For example, in 2013, one 
experienced defense attorney estimated that the average attorney's fees 
for employers for cases that end in summary judgment was between 
$75,000-$125,000; while cases that go to trial average $175,000-
$250,000 in fees.\13\ Factoring for inflationary changes in legal fees, 
the present value of those costs is closer to $83,000-$139,000 for 
cases ending in summary judgment and $195,000-$279,000 for cases that 
end after a trial.\14\ Taking the middle of each range in present value 
results in average costs of $111,000 for cases ending in summary 
judgment and $237,000 for cases that end after trial. We recognize that 
many employers will find these fee estimates to be low, but because 
there is insufficient, publicly available data for calculating the 
amount that employers have expended in defending against a charge 
through conciliation \15\ and which otherwise would be subtracted for 
purposes of this analysis, we believe such a conservative estimate is 
appropriate.
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    \13\ John Hyman, How Much Does it Cost to Defend an Employment 
Lawsuit, in Workforce, (May 14, 2013), available at https://www.workforce.com/news/how-much-does-it-cost-to-defend-an-employment-lawsuit.
    \14\ These calculations were made using the Department of Labor 
Bureau of Labor Statistics's (BLS) Consumer Price Index calculator, 
available at https://www.bls.gov/data/inflation_calculator.htm. 
These increases are likely conservative, as they are similar to 
increases in legal service costs over a shorter time frame. 
Historical data for the BLS Producer Price Index for Legal Services 
in the Mid-Atlantic region, available at https://www.bls.gov/regions/mid-atlantic/data/producerpriceindexlegal_us_table.htm, 
reveals that average costs for employment and labor legal services 
increased from 100 in December 2014 (the earliest data available) to 
109.9 in April 2020 (the most recent non-``preliminary'' data), an 
increase of approximately 10%. Similarly, the US Department of 
Justice's USAO Attorney's Fees Matrix, which only measures the 
change in fees between 2015-2020 across the legal field, reveals a 
roughly 12% change in hourly rate for the most experienced attorneys 
in the District of Columbia. See https://www.justice.gov/usao-dc/page/file/1305941/download.
    \15\ ``There do not appear to be any reliable statistics on the 
percentage of employers who retained outside counsel to defend 
charges filed with the EEOC.'' Philip J. Moss, The Cost of 
Employment Discrimination Claims, 28 Maine Bar J. 24, 25 (Winter 
2013). Supposing ``conservatively'' that 50% of employers relied on 
outside counsel at an hourly rate averaging $250 (in 2013) and 
invested 20 hours in cases during the EEO process, Id., employers 
would average $2,500 in legal costs during the EEO process ($250 x 
20 hours x 0.5), which in present value would average $2,792. The 
costs for employers who use in-house counsel or human resource 
professionals to handle their EEOC charges are more difficult to 
quantify.
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    To determine the average amount spent on attorney's fees, the 
Commission also must consider the number of cases that were the subject 
of conciliation that are either resolved in summary judgment or proceed 
to trial. The majority of cases of employment discrimination are not 
tried.\16\ Some studies suggest that two-thirds or more of employment 
discrimination lawsuits that are filed in court end in summary 
judgment.\17\ Those statistics, however, include cases filed in court 
after the EEOC dismissed the charge without a reasonable cause 
determination. In conciliation cases, by contrast, the EEOC has 
conducted an investigation and found reasonable cause to conclude that 
discrimination may have occurred. We believe it is reasonable to assume 
that more of these latter cases will survive summary judgment. With 
this assumption, the average litigation cost to employers is 
$174,000.\18\
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    \16\ Paul D. Seyfarth, Efficiently and Effectively Defending 
Employment Discrimination Cases, 63 AmJur Trials 127, Sec.  81 
(Supp. 2020) (``It is an undeniable fact that most employment 
discrimination cases do not get tried; they are either settled or 
disposed of via summary judgment.'').
    \17\ Charlotte S. Alexander, Nathan Dahlberg, Anne M. Tucker, 
The Shadow Judiciary, 39 Rev. of Lit. 303 (2020) (Table 3) (finding 
that among summary judgment motions in employment cases handled by 
magistrate judges in the Northern District of Georgia, 78% are 
granted in part or in full); Deborah Thompson Eisenberg, Stopped at 
the Starting Gate: The Overuse of Summary Judgment in Equal Pay 
Cases, 57 N.Y. L. Sch. L. Rev. 815, 817 (2012/2013) (finding that 
approximately two-thirds of all equal pay act cases end at the 
summary judgment stage).
    \18\ Average summary judgment fees ($111,000) + average trial 
fees ($237,000)/2 = $174,000. This figure is within the range of 
other estimates for average attorney fee costs. See AmTrust 
Financial, Employment Practices Liability (EPLI) Claims Trends, 
Stats & Examples, available at https://amtrustfinancial.com/blog/insurance-products/top-trends-employment-practices-liability-claims 
(asserting that attorney fee costs in 2018 averaged $160,000, which 
in present value would amount to $167,000); Moss, supra note 7 
(citing Blasi and Doherty, California Employment Discrimination Law 
and its Enforcement: The Fair Employment and Housing Act at $0, 
UCLA-RAND Center for Law and Public Policy (2010)) (estimating costs 
to employers in state-level employment discrimination cases in 
California in 2010 at $150,000, which taken to present value would 
average approximately $180,000).
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    Resolving more cases through conciliation will be beneficial to the 
economy as a whole because the litigation costs that the parties save 
can be put towards more productive uses, such as expanding businesses 
and hiring more employees. It is difficult to quantify how many cases 
in which the Commission finds reasonable cause end up being litigated 
in court because, if the EEOC decides to not litigate the case, the 
Commission does not track lawsuits filed by private plaintiffs. Cases 
in which the EEOC found reasonable cause are the most likely to be 
litigated by a private plaintiff because the EEOC has already 
determined that there is reasonable cause to believe that the case has 
merit. While not all cases in which reasonable case is found and 
conciliation is unsuccessful are litigated, there is reason to believe 
that a significant portion are. The Commission itself files lawsuits in 
roughly 10% of the cases in which reasonable cause is found and 
conciliation is not successful.\19\ It is reasonable to believe that 
private plaintiffs file lawsuits in at least an additional 40% of 
cases, so that overall half the cases in which reasonable cause is 
found, but conciliation is unsuccessful, end up being litigated in 
court.\20\
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    \19\ For fiscal year 2019, the Commission filed 157 lawsuits. 
EEOC Litigation Statistics, https://www.eeoc.gov/statistics/eeoc-litigation-statistics-fy-1997-through-fy-2019. Overall, in fiscal 
year 2019, there were 1,427 cases in which the Commission found 
reasonable cause but conciliation was unsuccessful. https://www.eeoc.gov/statistics/all-statutes-charges-filed-eeoc-fy-1997-fy-2019.
    \20\ To give some sense of the scope of cases, federal courts 
reported that 42,053 ``Civil Rights'' cases were filed in federal 
court during the most recent year. https://www.uscourts.gov/sites/default/files/data_tables/fcms_na_distprofile0630.2020.pdf. While 
not all these civil rights cases involve employment discrimination, 
and this number would include cases where a private plaintiff filed 
suit after the EEOC did not find reasonable cause, it illustrates 
that the assumption--that half of the roughly 1,400 cases in which 
conciliation is unsuccessful end up in court--is likely a low 
estimate.
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    Using the numbers above, if the Commission successfully conciliated 
only 100 more cases each year, that would save the economy over $4 
million in litigation costs.\21\
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    \21\ 100 successful conciliations x $45,466 (average 
conciliation for fiscal year 19) = $4,546,600. However, this number 
is offset by the litigation costs saved in 50 cases (assuming half 
the cases would have ended in in litigation): 50 x $174,000 = 
$8,700,000. $8,700,000 - $4,546,600 = $4,153,400 in savings for 
every 100 cases that are conciliated.
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    Therefore, the Commission's proposed rule, which establishes basic 
information disclosure requirements that will make it more likely that 
employers have a better understanding of the EEOC's position in 
conciliation and, thus, make it more likely that the conciliation will 
be successful, will result in significant economic benefits if it 
becomes a final rule and is successfully implemented.

Executive Order 13771

    This proposed rule is not expected to be an E.O. 13771 regulatory 
action

[[Page 64083]]

because it will not impose total costs greater than $0. As described 
above, the Commission's rule will result in more successful 
conciliations and therefore, overall cost reduction, so this is 
considered a deregulatory action. Details on the expected impacts of 
the proposed rule can be found in the agency's analysis above.

Paperwork Reduction Act

    This proposed rule contains no new information collection 
requirements subject to review by the Office of Management and Budget 
under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Regulatory Flexibility Act

    The Commission certifies under 5 U.S.C. 605(b) that this proposed 
rule will not have a significant economic impact on a substantial 
number of small entities because it applies exclusively to employees 
and agencies of the federal government and does not impose a burden on 
any business entities. For this reason, a regulatory flexibility 
analysis is not required.

Unfunded Mandates Reform Act of 1995

    This proposed rule will not result in the expenditure by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any one year, and it will not 
significantly or uniquely affect small governments. Therefore, no 
actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.

Congressional Review Act

    While the Commission believes the proposed rule is a rule of agency 
procedure that does not substantially affect the rights or obligations 
of non-agency parties and, accordingly, is not a ``rule'' as that term 
is used by the Congressional Review Act (Subtitle E of the Small 
Business Regulatory Enforcement Fairness Act of 1996), it will still 
follow the reporting requirement of 5 U.S.C. 801.

List of Subjects in 29 CFR Parts 1601 and 1626

    Administrative practice and procedure, Equal Employment 
Opportunity.

    For the Commission.
Janet Dhillon,
Chair.

    For the reasons set forth in the preamble, the Commission proposes 
to amend 29 CFR parts 1601 and 1626 as follows:

PART 1601--PROCEDURAL REGULATION

0
1. The authority citation is revised to read as follows:

    Authority:  42 U.S.C. 2000e to 2000e-17; 42 U.S.C. 12111 to 
12117; 42 U.S.C. 2000ff to 2000ff-11.

0
2. Amend Sec.  1601.24 by adding paragraphs (d) through (f) to read as 
follows:


Sec.  1601.24  Conciliation: Procedure and authority

* * * * *
    (d) In any conciliation process pursuant to this section, after the 
respondent has agreed to engage in conciliation, the Commission will:
    (1) To the extent it has not already done so, provide the 
respondent with a written summary of the known facts and non-privileged 
information that the Commission relied on in its reasonable cause 
finding, including identifying known aggrieved individuals or known 
groups of aggrieved individuals for whom relief is being sought, unless 
the individual(s) have requested anonymity. In the event that it is 
anticipated that a claims process will be used subsequently to identify 
aggrieved individuals, to the extent it has not already done so, 
identify for respondent the criteria that will be used to identify 
victims from the pool of potential class members; In cases in which 
that information does not provide an accurate assessment of the size of 
the class, for example, in harassment or reasonable accommodation 
cases, the Commission may, but is not required to provide more detail 
to respondent, such as the identities of the harassers or supervisors, 
or a description of the testimony or facts we have gathered from 
identified class members during the investigation. The Commission may 
also use its discretion to determine whether to disclose current class 
size and, if class size is expected to grow, an estimate of potential 
additional class members;
    (2) To the extent it has not already done so, provide the 
respondent with a summary of the Commission's legal basis for finding 
reasonable cause, including an explanation as to how the law was 
applied to the facts. If there is material information that the 
Commission obtained during its investigation that caused the Commission 
to doubt that there was reasonable cause to believe discrimination 
occurred, if it has not already done so, the Commission will explain 
how it was able to determine there was reasonable cause despite this 
information. In addition, the Commission may, but is not required to, 
provide a response to the defenses raised by respondent;
    (3) Provide the respondent with the basis for monetary or other 
relief, including the calculations underlying the initial conciliation 
proposal, and an explanation thereof;
    (4) If it has not already done so, and if there is a designation at 
the time of the conciliation, advise the respondent that the Commission 
has designated the case as systemic, class, or pattern or practice as 
well as the basis for the designation; and
    (5) Provide the respondent at least 14 calendar days to respond to 
the Commission's initial conciliation proposal.
    (e) The Commission shall not disclose any information pursuant to 
subsection (d) where another federal law prohibits disclosure of that 
information or where the information is protected by privilege.
    (f) Any information the Commission provides pursuant to paragraph 
(d) of this section to the Respondent will also be provided to the 
charging party and other aggrieved individuals upon request.

PART 1626--PROCEDURES--AGE DISCRIMINATION IN EMPLOYMENT ACT

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3. The authority citation continues to read as follows:

    Authority: Sec. 9, 81 Stat.605, 29 U.S.C. 628; sec. 2, Reorg 
Plan No. 1 of 1978, 3 CFR, 1978 Comp., p. 321.

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4. Amend Sec.  1626.12 by redesignating as paragraph (a) and adding 
paragraphs (b) through (d) to read as follows:


Sec.  1626.12  Conciliation efforts pursuant to section 7(d) of the 
Act.

* * * * *
    (b) In any conciliation process pursuant to this section the 
Commission will:
    (1) If it has not already done so, provide the respondent with a 
written summary of the known facts and non-privileged information that 
form the basis of the allegation(s), including identifying known 
aggrieved individuals or known groups of aggrieved individuals, for 
whom relief is being sought, but not if the individual(s) have 
requested anonymity. In the event that it is anticipated that a claims 
process will be used subsequently to identify aggrieved individuals, if 
it has not already done so, identify for respondent the criteria that 
will be used to identify victims from the pool of potential class 
members;

[[Page 64084]]

    (2) If it has not already done so, provide the respondent with a 
summary of the legal basis for the allegation(s). In addition, the 
Commission may, but is not required to provide a response to the 
defenses raised by respondent;
    (3) Provide the basis for any monetary or other relief, including 
the calculations underlying the initial conciliation proposal, and an 
explanation thereof;
    (4) If it has not already done so, advise the respondent that the 
Commission has designated the case as systemic, class, or pattern or 
practice, if the designation has been made at the time of the 
conciliation, and the basis for the designation; and
    (5) Provide the respondent at least 14 calendar days to respond to 
the Commission's initial conciliation proposal.
    (c) The Commission shall not disclose any information pursuant to 
subsection (b) where another federal law prohibits disclosure of that 
information or where the information is protected by privilege.
    (d) Any information the Commission provides pursuant to subsection 
(b) to the respondent will also be provided to the charging party or 
other aggrieved individuals upon request.
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5. Amend Sec.  1626.15 paragraph (d) by adding the following sentence 
at the end to read as follows:


Sec.  1626.15  Commission enforcement

* * * * *
    (d) * * * Any conciliation process under this paragraph shall 
follow the procedures as described in section 1626.12.
* * * * *
[FR Doc. 2020-21550 Filed 10-8-20; 8:45 am]
BILLING CODE 6570-01-P