How Does an EEOC Complaint Hurt an Employer?
The U.S. Equal Employment Opportunity Commission enforces federal civil rights laws and investigates complaints filed by current and former employees, as well as applicants facing discriminatory hiring activity. The complaints are officially referred to as charges of discrimination. A charge of discrimination can hurt an employer in a number of ways, both tangible and intangible. The only way to minimize the impact of a charge of discrimination is to deal with it swiftly and with discretion and confidentiality. Still, as prudent as employers might be about minimizing the impact, EEOC complaints can be a burden.
If your organization routinely sends EEOC complaints to legal counsel, the initial and tangible impact it has on your company comes from legal fees. Upon receipt of a charge of discrimination from the EEOC, many employers simply forward the charging documents to their attorneys to handle. This can incur substantial legal fees for handling the investigation, constructing a position statement on behalf of the organization and consulting with HR and executive leadership about the EEOC complaint process and outcome.
Employers are liable for the actions of their supervisors, according to the EEOC. When supervisors engage in conduct that violates Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and other laws that EEOC enforces, the employer is responsible. Mounting a defense on behalf of an ineffective leader is a difficult pill to swallow. It reflects negatively on the company's ability to recruit, train and retain supervisors and managers who will exemplify the organization's commitment to equal employment opportunity. Supervisor liability, as a result of an EEOC complaint, hurts employers because it may signify that the company hasn't properly vetted or trained the leadership team.
Workplace investigations are supposed to be confidential; however, word can travel fast when there is news about an EEOC complaint. Water-cooler conversations and allegations about discriminatory employment practices can significantly impact employee morale. Even employees who have never witnessed workplace discrimination and been involved in the complaint may begin to question whether the company is committed to fair employment practices. Whenever morale plummets — regardless of the underlying reason — it affects productivity, job satisfaction and, ultimately, profitability. In terms of morale, an EEOC complaint can hurt the employer in monetary and non-monetary ways.
The employer's reputation also suffers if the EEOC complaint becomes public, or if employees discuss the issue outside the workplace. The business community can be unforgiving when an organization appears to have ignored its social responsibility. An EEOC complaint isn't proof that the company has engaged in unlawful acts, but industry gossip isn't favorable to the adage "innocent until proven guilty." Therefore, an EEOC complaint can tarnish the company's reputation, which leads to business losses.
An EEOC complaint takes time to investigate and it takes time to defend. The HR department has to divide its resources among handling the complaint, interacting with lawyers and EEOC officials and managing the effects that the EEOC complaint has on the workforce. For HR departments already struggling with limited resources and budget, this is just another factor that reduces the effectiveness of HR processes.