In all likelihood, the government will resolve the budget issues, and the automatic $1.2 trillion in budget cuts known as sequestration won't be triggered in the first week of March. But if it happens, there's been web chatter about companies' benefiting from EEOC cuts because there would be fewer discrimination lawsuits.
Actually, the exact opposite is true. I spoke with Gil Casellas, the former chairman of the EEOC, and Bob Gregg, an attorney who specializes in discrimination law and writes a monthly column for us. Your company's potential for costly lawsuits is actually much higher if sequestration or other major budget reductions occur. The EEOC would lose between 6.5 percent and 8.2 percent of its budget ($23 million to $30 million), according to the American Federation of Government Employees (AFGA).
What's important to your company is where the EEOC chooses to make the cuts.
Casellas points out that the EEOC's budget for litigation support is usually relatively small, and unless the entire category is cut, "which is not likely given the obligations the commission has to court as a litigating party," smaller decreases in this area wouldn't have much impact.
Fewer Cases Resolved Quickly
But if the cuts are directed toward field personnel, "the slowdown of investigations would be felt by charging parties as well as employers, whose wait times for charge resolution will increase dramatically," says Casellas.
In other words, the mediation and arbitration that usually results in settlements and quick ends to discrimination charges wouldn't happen, "and uncertainty of outcomes as well as delay doesn't benefit the majority of employers who seek speedy resolution."
Gregg notes that past cuts to the EEOC budget led to more work for plaintiffs' attorneys as cases dragged on. In George W. Bush's administration, from 2001–2008, the EEOC lost 25 percent of its staff and the backload of complaints grew dramatically.
"The EEOC screens out a lot of cases so employers get them resolved with a minimum of fuss," Gregg says. With diminished resources, employers end up with lengthier litigation and public-relations nightmares.
The EEOC already had its budget reduced by $7 million last year, leading to a 9 percent staff cut, according to the AFGA, the union that represents EEOC employees. This comes at a time when the caseload is up. As a result, the EEOC filed only 122 lawsuits in FY 2012, according to an article on Lexology, less than half the 261 filed in FY 2011. The authors note that if the EEOC tries to "do more with less," the emphasis may be on more high-profile, large-scale discrimination claims against employers.