The Dotted Line: How contractors can avoid becoming EEOC’s next target

The Equal Employment Opportunity Commission, the nation’s top enforcer of discrimination laws in the workplace, recently put construction on notice by calling out the industry by name in its proposed Strategic Enforcement Plan.

While it hasn’t been formally adopted yet — the politics of an unfilled commissioner’s seat have stalled it — observers say the document, which acts as the EEOC’s five-year operating roadmap, has already set the tone and course of enforcement at the agency.

That certainly appears to be the case, given a string of EEOC lawsuits and settlements with construction firms since last May, when it held an exploratory hearing to investigate reports of discrimination and harassment in the sector. A recent JD Supra post highlighted at least eight construction-related cases the agency has pursued since that time, which have resulted in companies being on the hook for nearly $3 million combined in damages and settlement charges.

Then, just last week, the EEOC announced a nearly $2.7 million default judgment against Hanover, Maryland-based construction staffing firm Green JobWorks. The agency’s suit against the company alleged it had refused to hire female workers for demolition and laborer positions because of their sex. Green JobWorks, whose website now appears to be defunct, could not be reached for comment.

Taken together, employment and construction lawyers say the writing is on the wall for an industry that is 85.9% male and 87.3% White, according to the Bureau of Labor Statistics, both overrepresentations compared to the broader labor force.

“It will be a busy several years for the construction industry,” said Cameron Hill, a construction and employment attorney in the Chattanooga, Tennessee, office of Baker Donelson. “Contractors should expect a more aggressive EEOC, more unannounced visits to project sites and more investigations and time spent answering questions, and, possibly, more litigation.”

So, what can contractors do to ensure they don’t become the EEOC’s next target? Lawyers say it all comes down to taking complaints seriously, training around discrimination and harassment, ensuring contracts spell out expectations for GCs and subs and making certain all stakeholders carry enough employment practice liability insurance to cover any potential claims.

That last point is important, since the EEOC’s increased focus on the industry will likely lead to a higher awareness of the rules among employees themselves.

“As employees gain knowledge over the next few years about what the EEOC is doing, that could lead to increased litigation as well,” Hill said.

Avoiding retaliation

Lawyers say there is a common pattern in these types of discrimination cases:

• Someone does or says something inappropriate at a jobsite.
• The target of that behavior complains to a supervisor.
• Shortly after complaining, the worker is terminated.
• The former employee sues.

“The fact pattern that keeps me up at night is the retaliation in these cases,” said Kevin Carr, an employment lawyer in Jacksonville, Florida, with Spilman Thomas & Battle. “Not all jurors can relate to being discriminated against, but all jurors understand the idea of being able to complain to their boss without getting fired. Retaliation is one of those things where the coverup can be worse than the crime.”

To avoid falling into that pattern, employers should have multiple channels for filing complaints, and those channels should include individuals other than direct supervisors.

“I like having diversity of individuals identified as people to whom you can report throughout the organization,” Carr said. “Ideally, there would be people of color and different genders, someone young, someone older. But there should be more than just one person.”

When those complaints are fielded, companies need to take them seriously and follow a set policy to investigate them, lawyers say.

Training first

Lessening the chances of becoming a discrimination target hinges on training. Tool talks and sessions about appropriate behavior on the jobsite should now be a given, lawyers say. Indeed, some states, such as New York, already require mandatory sexual harassment training.

But supervisors at all levels of the company also need heightened awareness, direction and training around want to do when a complaint arises.

“Employee handbooks are great, but they aren’t worth the paper they’re written on unless managers are trained to adhere to those policies and practices,” said Jeff Daitz, a partner and co-chair of the labor and employment law group at Hall Booth Smith in Paramus, New Jersey. “Training can make the difference between liability or no liability in these cases.”

For example, Carr said one common Catch-22 that supervisors find themselves in is when an employee comes forward to lodge a complaint, but then backs away from wanting any action to be pursued.

“The worker comes to a supervisor and says, ‘Hey, I don’t want you to do anything, I just want you to know,’” Carr says. “Well, an untrained supervisor may not do anything with the complaint. That’s a problem.”

Instead, supervisors should tell the employee they’ll keep the matter as confidential as possible, but that the company insists on a harassment- and discrimination-free envrionment. “They need to say, ‘You’ve raised this issue, and I need to address it for you and others in the workplace,’” Carr said.

Taking that zero-tolerance approach when an issue comes up will also help contractors apply the policies they have in place consistently. “If you start selectively enforcing the policy, that’s a red flag and that’s where you’re going to get yourself in trouble,” said Joseph Herbert III, a partner and co-chair of the construction practice group at Hall Booth Smith.

Put it in writing

Beyond training, expectations should also be codified in contracts at all levels, ensuring there’s uniform application for all stakeholders. “You want a contractual obligation for all parties to comply with that antiharassment and antidiscrimination standpoint,” Carr said. That includes mandatory notification requirements when an issue arises.

“A lot of the allegations I see against GCs don’t necessarily involve a sin of commission, but rather a sin of omission,” Carr said. “It’s the situation where the general contractor knew, or should have known, but did nothing.”

On the other hand, if a notification requirement is included in a contract but a subcontractor, for example, didn’t follow it, that could give the GC cover in a harassment claim. “If they didn’t notify us, I think you could certainly make the argument that there was a contractual indemnification associated with the failure of the sub to abide by the terms and provisions in the contract,” Carr said.

Of course, indemnification clauses that hold other stakeholders harmless from one party’s malfeasance in a construction contract are common. What might be less so is the requirement for all contractors and subs to carry the appropriate amount of liability insurance against these kinds of claims. How much insurance? Lawyers say it should start at no less than $3 million.

“Quite frankly, that may not even be enough,” Daitz said. “Employment practice liability insurance is the necessary evil here. If you don’t have it, get it, because a single claim could put you out of business.”

Contractors should also keep in mind that while the overall goal of instituting these policies and provisions should be a more inclusive jobsite, the offshoot of paying more than just lip service to today’s focus on diversity and equity on jobsites could also give them cover if a claim arises.

“Training, documentation, investigating complaints, carrying the right insurance and complying with EEO best practices is the best way to avoid, or certainly mitigate, claims from happening,” Dietz said. “This is a litigious society, and you may not be able to prevent all claims. But you could put your best practices forward when they happen.”