Chicago, IL ~ November 8 - 10, 2006

2006 International 2006 International ConferenceConference

Hot Topics in EPLHot Topics in EPL

Charges Trending DownCharges Trending Down

• 75,428 discrimination charges Drop of 4,004 charges (-5%) from 2004 Drop of more than 9,000 charges since the

recent peak of over 84,000 charges (-11%) in 2002.

• Sources of downward trend? Relatively strong labor market EEOC attributes to outreach, education

and technical assistance efforts nationwide Employer training, diversity, and RIF best

practice improvements

EPL StatisticsEPL Statistics

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Age Disability Equal Pay Act National Origin

Pregnancy Race Religion Retaliation (All Statutes)

Sex Sexual Harassment

CHARGE STATISTICS - EEOC

FY 1992 - FY 2005

Nu

mb

er o

f c h

arge

s

EPL StatisticsEPL StatisticsMONETARY BENEFITS - EEOC

FY 1992 - FY 2005

0

20

40

60

80

100

120

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Year

Age Disability Equal Pay Act National Origin Pregnancy Race Religion Sex Sexual Harassment

Mo n

e ta r

y b

enef

its

in m

illi

o ns

Industry TrendsIndustry Trends

• The percentage of Title VII charges by Industry has remained relatively constant

• Service Industries represent over ¼ of all charges

• Retail represents the next largest %• Manufacturing and wholesales

trades have shown the greatest decrease by percentage

Industry DataIndustry Data

   2000

Percent2001

Percent2002

Percent2003

Percent2004

Percent

SIC Services 27.6% 26.9% 27.9% 27.4% 27.9%

  Retail Trade 11.7% 12.1% 12.8% 12.1% 12.2%

  Manufacturing Goods 14.4% 14.3% 12.8% 11.1% 9.8%

  Transportation & Public Utilities 8.6% 8.6% 8.6% 8.0% 7.7%

  Finance, Insurance, and Real Estate 8.2% 8.1% 8.0% 7.0% 6.9%

  Non-classifiable Establishments 5.2% 5.8% 4.9% 4.9% 4.7%

  Wholesale Trade 15.3% 15.2% 15.4% 9.0% 4.5%

  Construction 1.8% 1.8% 1.6% 2.0% 2.3%

  Agriculture, Forestry, and Fishing 2.7% 2.5% 2.6% 2.3% 1.7%

  Mining 0.7% 0.8% 0.8% 0.6% 0.8%

Severity Trending Up?Severity Trending Up?

• Direct litigation suits brought by the EEOC increased in 2005 for the third year in a row from 364 suits in 2002 to 417 suits in 2005

• EEOC announced in April 2006 shift of focus to systemic discrimination

• EEO class actions more than doubled since 2002 60 in 2002 to 134 in 2005

• 70 new EEOC front line hires in August 2006 – Impact?

Other Litigation ConcernsOther Litigation Concerns

• Wal*Mart Gender Case Punitive class action Lack of centralization as pattern & practice Status of litigation

• Multiple class actions against same employer

• Changes to California training law• Demographic statistics still reflect lack of

diversity particularly when gender and race combined

• Youth@Work initiative – two years later?

Chicago, IL ~ November 8 - 10, 2006

2006 International 2006 International ConferenceConference

Technology Issues Technology Issues Impacting Employment Impacting Employment

Discrimination LitigationDiscrimination Litigation

Anita Wilson – Senior Employment Counsel Anita Wilson – Senior Employment Counsel for Sara Leefor Sara Lee

Robin Symons – Epstein Becker & Green, P.C.Robin Symons – Epstein Becker & Green, P.C.

What is Electronically What is Electronically

Stored Information (ESI) ?Stored Information (ESI) ?

ESI Includes:ESI Includes:

E-Mail

Word Processed Docs.

Databases

Spreadsheets

Calendars

Address Books

Program Data

Instant Messages

Video/Audio Recordings

(including voicemail)

stored/located on PC,

laptop, network server,

PDA, CD-Rom, DVD-

Rom, MP3 player,

flash memory card,

digital voicemail, & third

party storage system

New Federal Rules New Federal Rules E Discovery E Discovery

• Effective Date December 1, 2006, unless altered by Congress (unlikely)

• SignificanceElectronically stored information now has specific rules (rather than being considered within the definition of “document”)

• Key Provisions- Must provide description by category and location of electronically stored information (even without a discovery

request) FRCP 26(a)(1)(B)- Counsel must meet and confer about preservation,

privilege and form of production of ESI FRCP 26(f)(3) & (4)

Big IssuesBig Issues

• Inadvertent Destruction

• Inadvertent Disclosure

Scheduling OrdersScheduling Orders

• May include provisions for ESI Discovery FRCP 16(b)(5) & (6)

• Agreements regarding ESI privilegeMay be

negotiated

Responses to Responses to InterrogatoriesInterrogatories

ESI business records may be

produced in response where the

burden is the sameFRCP 33(d)

Production of Production of DocumentsDocuments

• Requesting party may inspect, copy, test or sample ESI in the medium stored

• Requesting party may specify the form

in which ESI is to be produced

• If form unspecified, the producing party may elect the form

FRCP 34(a) & (b)

Shifting BurdenShifting Burden

ESI that is not “reasonably accessible” due to undue burden or cost need not be produced. The burden is on the responding party, and can be overcome by good cause, with or without conditions and cost shifting.

FRCP 26(b)(2)(B)

What is a Clawback?What is a Clawback?

A procedure for inadvertently

produced, privileged ESI

FRCP 26(b)(5)(B)

What is a Safe Harbor?What is a Safe Harbor?

A provision that avoids penalty for

ESI lost due to routine, good faith operation of electronic informationsystems FRCP 37(f)

Warning: Places the party who lost ESI on the defensive

Warning:Warning:The Timeline Starts The Timeline Starts BeforeBefore

Lawsuit is Filed!Lawsuit is Filed!

• A “Litigation Hold” to preserve evidence must be implemented once a party reasonably anticipates litigation

Broccoli v. Echostar Communications Corp., 229 FRD 506

(D. Md. 2005)

What Else Can You Do?What Else Can You Do?

• I.D. and interview key personnel• Suspend routine e-record deletion (and

paper document destruction)• Send adverse party a preservation notice• Keep a record of preservation actions taken• Develop RFP for electronic evidence

litigation support vendor

Possible PenaltiesPossible Penalties

• Loss of credibility

• Sanctions (including counsel)

• Adverse inference instructions

• Dismissal

Even Under the Old Rules,Even Under the Old Rules,Sanctions Have Been SevereSanctions Have Been Severe

• Zubulake v. UBS I - VIDefendant had to restore selected back-up tapes, court declined to waive confidentiality for report to SEC, and pay for most of the cost, suffered large verdict

• Coleman (Povent Holdings) v. Morgan Stanley (The Ron Perelman case) Adverse inference instructions, reversed burden of proofJury award: $604.3M – compensatory damages

$850.0M – punitive damages $123.0M – interest added

Total: $1.57 Billion (on appeal)

Who is Impacted?Who is Impacted?

Employers/Insureds

• In-house Counsel (must understand the company’s systems, assist in identifying & advising witnesses)

• Litigation Counsel (must take affirmative steps to monitor compliance and be fully familiar with systems, interview key witnesses and inform all key players of the litigation hold)

• 30(b)(6) Witnesses (selection & preparation is more involved, and they must be able to address ESI issues and questions)

• IT Budget (expense of halting e-mail deletion and paper document destruction)

Who is Impacted?Who is Impacted?

• Carriers

• Underwriters

• Claims Professionals

EPLI PoliciesEPLI Policies

• Insuring Agreement:The Insurer shall pay on behalf of Named Insured, any Subsidiary or any Insured Person Loss resulting from any Claim first made against the Insureds during the Policy Period or the Extended Reporting Period, if applicable, by or on behalf of a natural person who is an Employee or applicant for employment for a Wrongful Employment Practice.

Who Is An Applicant?Who Is An Applicant?Paper ApplicationsPaper Applications

• Definition of Job Applicant under Guidelines Set Out in 1979 Q & A: 44 Fed. Reg. at 11,998 (March 2, 1979):

“The precise definition of the term ‘applicant’ depends upon the user's recruitment and selection procedures. The concept of an applicant is that of a person who has indicated an interest in being considered for hiring, promotion, or other employment opportunities. This interest might be expressed by completing an application form, or might be expressed orally, depending on the employer's practice.”

Who Is An Applicant?Who Is An Applicant?Internet ApplicationsInternet Applications

• Rule Effective February 6, 2006 Adopts Definition of an “Internet Applicant.” (41 C.F.R. 60-3).

• Four Criteria:(1) The individual must submit an expression of interest in

employment through the internet or related electronic data technologies;

(2) The employer must consider the individual for employment in a particular position;

(3) The individual’s expression of interest must indicate that he or she possesses the basic qualifications for the position; and,

(4) The individual must at no point in the selection process prior to receiving an offer of employment from the employer, remove himself or herself from further consideration or otherwise indicate that he or she is no longer interested in the position.

Internet Employment Internet Employment Applications Applications

• Joe, a 25 year old minority w/ a GED, mails resume to Widget Mfg. applying for an entry level job.

• Joe has no access to the Internet.• Widget Mfg. requires its employment

application rather than a resume.• Widget Mfg requires all its applications to be

remitted via the Internet.• Due to its employment application policies

Widget never considered Joe’s resume.

Internet Employment Internet Employment ApplicationsApplications

• Sally, a 53 year old female w/25 years’ experience as senior academic research scientist, submits resume to Premier Bio Research via Monster.com.

• Sally prepared her resume without assistance from a “Resume Consultant”.

• Premier uses sophisticated computer programs to screen all resumes. Sally’s did not pass the Premier screening process. She was not considered for the position, although eminently qualified.

Internet Employment Internet Employment ApplicationsApplications

• Widget Mfg. and Premier Bio Research considering purchasing an EPLI Policy.

• Both concerned that Policies they have reviewed are too vague on who constitutes an applicant for employment.

• Should they request carriers to modify policy language?

Religious DiscriminationReligious Discrimination

• Labor & Delivery Room LPN seeks religious accommodation – objects for religious reasons to working during pregnancy termination procedures.

• LPN temporarily transferred to another job pending accommodation review.

• LPN participates in anti-abortion rallies in front of hospital.

Religious Discrimination –Religious Discrimination –continuedcontinued

• LPN encourages fellow-employees to join her at the rallies.

• Hospital offers LPN transfer without a change in schedule, hours, pay or benefits.

• LPN rejects the accommodation offer and is terminated.

Who Is An Employee?Who Is An Employee?

• Are partners protected under Title VII?

• Do partners count for determining size of workforce for Title VII purposes?

• Coverage concerns regarding claims by partners

Employee or Partner? Employee or Partner? Protected or Not?Protected or Not?

• Jennifer,43 year old female attorney has been a Junior Partner for 5 years. She supervises five associates, serves as representative on hiring committee and is up for full Partner in next 12 months.

• Over past 6 months number of “rain making” event/meetings she’s invited to has been significantly reduced; she’s no longer asked to consult on firm’s anti-trust cases – one of her areas of expertise.

• She’s concerned she’s a victim of age and gender discrimination. Is she protected under employment discrimination laws?

Employee or Partner? Employee or Partner? Protected or Not?Protected or Not?

• Miller and Smith, a 50 person public accounting firm, sued by partner Jose Manuel for alleged Title VII violations.

• Miller and Smith tendered the claim to their EPLI carrier.

• Does carrier owe them a defense?• If Mr. Manuel proves his allegations

will indemnity payments be due under the EPLI Policy?