Let’s take a test.

In the last ten years or so, the number of charges of discrimination and retaliation filed at the EEOC has done WHAT?

a) Gone up by 40 percent

b) Gone up by 15 percent

c) Stayed relatively flat

d) Gone down by 15 percent

e) Gone down by 40 percent

Turns out the answer is actually (e)! Hard to believe, right?

2011 was actually the high water mark of claims filed at the EEOC with a total number of claims at just shy of 100,000 (99,947 to be exact). In the last fiscal year of 2021, the number of claims had plummeted to just 61,331, a level not seen in the last 25 years.

(As an aside,  claims of retaliation have dropped less than 10 percent the last ten years, and as a result, not make up 56 percent of all claims filed at the EEOC. That’s a story for another post.)

I’ll leave it to the data analysts to determine why claims have dropped so much.  But I’m more interested in what it means for employers.

In the abstract, it should mean less claims filed against employers.  And presumably, lower legal costs paid to attorneys.

Yet according to one study in 2017 of closed claims reported by companies with fewer than 500 employees, nearly a quarter of charges filed averaged $160,000 in defense and settlement costs taking 10 months on average to resolve.

Lawsuit and charges of discrimination continue to be an expensive proposition for employers.  Even the most frivolous of claims requires some response from an employer. And that response takes time and money to prepare.

And if anything, those costs have increased substantially over the last ten years and, it seems, the “nuisance” value of claims.

So what options are available to employers in the face of such depressing statistics? Actually a few things though admittedly none of this is all that new:

  1. Update your policies and handbooks to make sure your staff is up to date on the latest laws that have passed over the last ten years.
  2. Train staff on these new laws and update your harassment prevention training as well.
  3. Spend more time reviewing your performance-managed employees and the circumstances around discipline or firing.  In doing so, ask important questions about what type of documentation do you have? Is the termination decision “fair” (in the sense that your neighbor would agree with you that it’s fair)?
  4. Consider offering separation agreements in termination decisions along with severance.  You can reduce your exposure by ensuring employees never sue you to begin with through the use of separation agreements.
  5. Review your insurance policies and consider Employment Practices Liability Insurance or a rider to your existing policy.  (This one has pros and cons so don’t just buy it thinking that this will solve all your issues. In all likelihood, it only swaps out one set of issues for another.)

Claims of discrimination may be done but the state of employment litigation for employers is still expensive.  A little bit of prevention may not stop a claim from coming, but it will certainly reduce the risk.