On Friday, October 9, 2020, the Equal Employment Opportunity Commission (EEOC) released a proposed rule aimed at modifying the conciliation process that the agency employs prior to filing suit.

When the EEOC finds reasonable cause to believe that allegations in a complainant’s charge have merit, the EEOC has the option of pursuing litigation on the complainant’s behalf. But before doing so, the agency is statutorily required, pursuant to 42 U.S.C. §§ 2000e-5(b); (f), to invite the employer-respondent to participate in conciliation, which is an informal and confidential process by which the EEOC attempts to secure voluntary compliance by the employer, with any resulting settlement ordinarily providing some form of victim-specific relief. The EEOC may only commence litigation against an employer-respondent if the agency “has been unable to secure from the respondent a conciliation agreement acceptable to the Commission.” Id.

The proposed rule – the first substantive proposed amendment to the EEOC’s conciliation procedures since 1977 – would increase the amount of information the EEOC provides employer-respondents during conciliation, including requiring the EEOC to provide a written summary of known facts and nonprivileged information that led the EEOC to reach its reasonable cause finding, identifying the individuals that made the underlying allegations (unless they requested anonymity), and, if applicable, outlining the criteria EEOC representatives would use to identify other potential claimants. The proposed rule also requires the EEOC to supply employers with its legal rationale for finding reasonable those facts it unearthed during its investigation that favor the employer. Finally, the proposed rule obligates the EEOC to provide a basis for monetary remedies it seeks in the conciliation process, and to identify any “systemic, class, or pattern or practice” allegation the agency is pursuing. Employers would then have at least 14 days to respond to any initial EEOC settlement proposal.

The proposed rule is a significant expansion of the agency’s current practice, which the US Supreme Court held in Mach Mining, LLC v. EEOC, 575 U.S. 480 (2015) only requires telling the employer-respondent about the claim – essentially, what practice has harmed which person or class – and giving the employer “a chance to discuss and rectify a specified discriminatory practice.” Id. at 489. The proposed rule would go well beyond this nominal disclosure requirement and supply employers with more information regarding the scope and breadth of the EEOC’s investigation and reasoning. By disclosing potential parties, witnesses, and the strengths and weaknesses of the facts as determined during the EEOC’s investigation, employers can better assess the risks of settling versus pursuing litigation.

Employers have until November 9, 2020 to submit comments on the proposed rulemaking, particularly regarding whether the additional disclosures are likely to increase the chances of successful conciliation versus delaying proceedings. The notice of proposed rulemaking notes that, between 2016 and 2019, only 41% of EEOC conciliations were successful, with one-third of employer-respondents that receive a cause finding declining to participate in the process altogether. By improving the quality and quantity of available information pertinent to employer’s risk calculus, the proposed rule, if adopted, may result in a more robust and successful conciliation mechanism.