Crazy Statistics: Protect Your Company From The 234 Million Dollar Beast with Discrimination and Harassment Training

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Do you want to hear some CRAZY numbers? Of course you do, because just like me, you read about harassment and discrimination settlements for fun. (We are weird people, and probably need to take up a different hobby, but I digress.)

Here’s my first crazy statistic:

In 2013, the cost of the 10 most expensive discrimination class action settlements totaled more than $234 million.

Now I don’t know about you, but unless you’re Warren Buffett, $234 million isn’t exactly pocket change.

What’s especially interesting about that statistic, beyond the staggering cost of the settlements, is that the number of class action lawsuits was actually substantially lower than the previous year (12,311 in 2013 vs 14,260 in 2012.)

Here’s the breakdown of the top 10 private plaintiff settlements in 2013:

  1. $160 million – Merrill Lynch
  2. $39 million – Bank Of America
  3. $8 million – Costco Wholesale Corp.
  4. $7.5 million – The Wet Seal Inc.
  5. $6 million – City Of Los Angeles
  6. $4.5 million – U.S. Postal Service
  7. $3.7 million – City Of Chicago
  8. $3.1 million – State Of Connecticut, Department of Correction
  9. $1.3 million – City Of New York
  10. $1 million – City Of Richmond

InsideCounsel has a great article that lays out more of the details of each case, if you’re interested.

The total of the top 10 settlements in 2013 is almost 5 times as much the 2012 total – only $48.65 million. That’s a pretty significant increase, but it’s also the second lowest total since 2010. According to Seyfarth’s 2014 Workplace Class Action Litigation Report, the figures for each year were:

  • 2006 – $91 million
  • 2007 – $282.1 million
  • 2008 – $118.36 million
  • 2009 – $86.2 million
  • 2010 – $346.4 million
  • 2011 – $123.2 million
  • 2012 – $48.6 million

The 2013 figure is somewhat skewed by the $160 million Merrill Lynch settlement; Seyfarth’s report notes that when this settlement is factored out, the 2013 total is the second lowest since 2006.

This may not surprise you, but there’s doesn’t seem to be much of a correlation between the number of EEOC charges and the size of the settlements (I was surprised by this, but that may be because this is my first time matching up this particular data.) Charges really spiked in 2008, when the EEOC received 95,402 charges. Between 1997 and 2007, the number of claims fluctuated between 75,000 and 84,000. 2009-2012 stayed around 99,000 claims, and then a drop off in 2013 – a total of 93,727 discrimination charges against private sector employers. The Workplace Litigation Report doesn’t make light of this drop, though – even the relatively low number of 2013 claims is much higher than the number of 1997-2007 claims. 2012 was a record high year in terms of the number of charges, 99,412, yet the settlements were the lowest out of all the years listed above, only $48.6 million.

The report goes on to make a startling prediction for the upcoming year:

In terms of employment discrimination cases, employers can expect a significant jump in the coming year, as the charge number totals at the EEOC in 2011 and 2012 were the highest in the 48-year history of the Commission; due to the time-lag in the period from the filing of a charge to the filing of a subsequent lawsuit, the charges in the EEOC’s inventory will become ripe for initiation of lawsuits in 2014.

The EEOC continued to follow through on the enforcement and litigation strategy plan it announced in April of 2006; that plan centers on the government bringing more systemic discrimination cases affecting large numbers of workers. As 2013 demonstrated, the EEOC’s prosecution of pattern or practice lawsuits is now an agency-wide priority.

These novel challenges demand a shift of thinking in the way companies formulate their strategies. As class actions and collective actions are a pervasive aspect of litigation in Corporate America, defending and defeating this type of litigation is a top priority for corporate counsel. Identifying, addressing, and remediating class action vulnerabilities, therefore, deserves a place at the top of corporate counsel’s priorities list for 2014. {Emphasis added. All quotes from the Workplace Litigation Report}

Another interesting fact is that the number of sexual harassment settlements is rising in other countries too. This article in the Sydney Morning Herald caught my attention because Australian payouts for sexual harassment damages have increased six-fold. The courts previously limited the payouts to $20,000, yet, in a recent case, struck down this standard with a $130,000 damages award.

Sex Discrimination Commissioner Elizabeth Broderick said the increase in recent court-ordered damages awards were a sign of changing social expectations and showed that the issue of sexual harassment was “squarely on the nation’s agenda.”

That reminded me very much of the Workplace Litigation Report, which says the following:

The EEOC’s systemic litigation program is expected to expand in 2014, with more filings, larger cases, and bigger monetary demands as the agency continues its aggressive enforcement activities. Corporate counsel also can expect to see more systemic administrative investigations relative to hiring issues (use of criminal histories in background checks) and those based on pay and promotions disparate impact theories due to alleged gender or race discrimination.

It seems that discrimination and harassment are on the agenda for the US as well.

Top 6 Discrimination and Harassment Training Resources

I’ve compiled a list of our top 17 resources for discrimination and harassment training and sexual harassment training below to help you build a discrimination and harassment prevention program that protects your organization from the litigation spike the Workplace Litigation Report predicts.

As the 2014 Workplace Class Action Litigation Report suggests, an ounce of prevention is worth a pound of cure. (I just winced a little, because I realized how cliché that sounded. But it’s true!)

I hope these are helpful to you as you work on your discrimination and harassment prevention program for the upcoming year!

Bonus Video: Sexual Harassment Training for Your California-Based Business

For those of you in California, keep in mind that 2015 is an AB1825 training year. In this video, Attorney Scott Cooper explains why top labor attorneys recommend that you provide sexual harassment training, even if you have less than 50 employees and aren’t required to provide AB 1825 training.

Topics:  Best Management Practices, Class Action, Discrimination, EEOC, Employer Liability Issues, Enforcement Actions, Harassment, Hiring & Firing, Settlement, Strategic Enforcement Plan, Training

Published In: Civil Rights Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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