The EEOC Is Targeting Discrimination in the Construction Industry: A Practical Guide to Limit Risks

Jeffrey W. King, Jones Walker, LLP Outside General Counsel for the WFCA

The U.S. Equal Employment Opportunity Commission (EEOC), the nation’s top enforcer of discrimination laws in the workplace, held a hearing last year to examine discrimination in the construction sector, especially against women and people of color.

According to the Bureau of Labor Statistics, owners of companies in the construction industry are 85.9% male and 87.3% White. In its draft Strategic Enforcement Plan (“SEP”) for 2023 through 2027, the EEOC believes that the construction industry suffers from a systemic “lack of diversity” and has become an “area of particular concern.”

Following the hearing, the EEOC began filing cases against construction contractors for harassment and racial discrimination. The cases are not limited to large national construction companies. In June 2022, the EEOC reached a $140,000 settlement with a local construction company to resolve claims of harassment and retaliation by Black employees for bringing complaints.

In October 2022, a $500,000 settlement was reached with a plumbing company to resolve claims involving Spanish-speaking female employees who were subjected to sexual advances and retaliation. Recently, the EEOC announced a nearly $2.7 million default judgment against a Maryland-based construction staffing firm for refusing to hire female workers for demolition and as laborers.

Late last year EEOC filed discrimination claims against a paving contractor and a HVAC and plumbing contractor alleging that their supervisors used racial slurs and berated Black and Hispanic employees. Regardless of size, flooring dealers and contractors should expect an aggressive EEOC undertaking unannounced visits to project sites, conducting more investigations, and bringing more claims of discrimination and harassment.

So, what can flooring dealers and contractors do to ensure they do not become the EEOC’s next target? As explained below, it comes down to creating an anti-harassment and anti-discrimination policy, taking complaints seriously, providing training to avoid discrimination and harassment, ensuring subcontractors contractually agree to comply with anti-sex and racial discrimination policies, and carrying enough employment practice liability insurance to cover potential claims.

1. Create and Communicate a Strong Anti-Discrimination and Anti-Harassment Policy

You need to have an anti-discrimination and anti-harassment policy in place. The anti-harassment policy should:

● Prohibit discrimination based on sex, race, age, national origin, disability, religion, and all other characteristics protected by law;

● Define discrimination and harassment and provide examples of improper behavior;

● Explain the consequences of violating the policy;

● Set out the process for reporting and investigating complaints,

● Ensure that all complaints will promptly and impartially be investigated;

● Assure employees that the employer will protect the confidentiality of individuals who report discrimination or harassment or participate in an investigation to the greatest possible extent without compromising the scope of the investigation; and

● Proscribe any retaliation against employees who complain or participate in an investigation.

The policy should state that the company is committed to a discrimination and harassment-free workplace. The company should require all employees to follow its anti-discrimination policy and there is zero-tolerance for any misconduct.

2. Train Employees and Supervisors

It is not enough to simply have an anti-discrimination policy. An effective policy requires meaningful training of personnel. In fact, some states, like California, Connecticut, Delaware, Illinois, Maine, and New York have statutes requiring sexual harassment training, as do Chicago and New York City. Upon hiring, and at least annually, all employees should receive a copy of the policy and be trained to understand their right to a workplace free from discrimination and their responsibility to conduct themselves professionally in accordance with the policy.

Supervisors should be provided with additional training on how to recognize potential violations of the policy and when to elevate matters to designated officers with ultimate reporting obligations to the board. It is a good practice to have each employee sign a statement that they received, read, and agreed to follow the company’s anti-discrimination and anti-harassment policy.

If the company has an employee handbook, the anti-harassment policy should be included. Training can lessen the chances of becoming a target of EEOC.

3. Create a Reporting Process

A strong anti-discrimination and anti-harassment policy is only half the equation. There must also be a complaint procedure. With the sensitive topic and personal nature of sexual harassment and racial discrimination, it is important to ensure employees are comfortable reporting inappropriate behavior.

Failure of victim to report discrimination or harassment under the company’s process can often help defend against a claim and limit any liability.

Various reporting methods can be offered. Employers should consider allowing employees to complain directly to human resources, to a supervisor, or to an anonymous hotline. Employees should not be required to report any discrimination or harassment in person but should allow complaints by telephone or in writing.

The key is to create an atmosphere where employees feel they can safely report any discrimination or harassment. For example, an employee should not be required to report any discrimination of harassment to their supervisor if the supervisor is the individual discriminating or harassing the employee. The flooring dealer and contractor should also consider posted notices about how to report harassment or discrimination.

4. Respond to Discrimination or Harassment Complaints Right Away

The employer should immediately investigate and address all allegations of discrimination or harassment. Prompt and decisive action will not only decrease or eliminate your organization’s liability, but it will also let employees know that this kind of inappropriate behavior has consequences and will not be tolerated.

The employer must ensure impartiality in the process. In certain cases, which may mean hiring an outside consultant or legal counsel to conduct the investigation.

While the employer should be discreet, the investigation should be thorough. Without an impartial investigation that is respectful of all the parties, future inves- tigations will be hampered, fewer victims will report discrimination or harassment, and witnesses will be less likely to cooperate.

Having an efficient and respectful process will demonstrate the commitment of the organization to those involved.

The employer should not make any snap judgments. Rather, it is important to obtain statements from the accuser, the alleged harasser and any witnesses, and work to corroborate the information and investigate. Give the employee alleged to have discriminated or harassed an opportunity to be heard.

The investigation should not be stopped simply because the accuser suddenly says, “I don’t want to pursue it.” If the company has knowledge of allegations, it is obligated to investigate and root out discrimination or harassment. Failing to investigate can be seen as the company tolerating discrimination or harassment and be used as proof in the next complaint.

5. Prevent Retaliation

Many victims of discrimination or harassment do not come forward with their complaint because of fear of retaliation by the harasser or employer. Remind all people that the company strictly prohibits retaliation against any employee who reported discrimination or harassment or any employees who participate in an investigation.

The employer must also monitor the situation to ensure that no retaliatory takes place. Retaliation is one of those things where “the coverup can be worse than the crime.”

Federal, state, and local laws prohibit an employer from treating employees adversely because they complained about alleged discrimination or harassment. Retaliation is not limited to situations where an employer fires an employee who previously complained.

It can arise in other relatively common workplace situations, such as where an employee is demoted, passed over for a promotion, or otherwise suffers an adverse employment action.

6. Nip Problems in the Bud

Supervising personnel should be aware of potential problems and react to them before any misconduct becomes chronic and creates liability. Even if conduct does not rise to the level of legal discrimination or harassment, any inappropriate behavior in the workplace should be called out before it escalates to illegal discrimination or harassment.

It is also important that the company reminds everyone of the anti-discrimination and harassment policy before any company outings or parties—these are often breading grounds for discrimination or harassment claims.

7. Require Subcontractors to Comply with The Anti-discrimination and Anti-Harassment Policy

A flooring dealer and contractor needs to require their subcontractors to comply with the company’s anti-discrimination and anti-harassment policy. The subcontract should include a contractual obligation that the subcontractor take action to avoid harassment and discrimination. In addition, the contract should require the subcontractor to indemnify, hold harmless, and defend the flooring dealer and contractor from any harassment and discrimination by the subcontractor and its employees.

The contract should also require the subcontractor to immediately notify the dealer or contractor of any harassment and discrimination claims. If a subcontractor fails to provide the notification, that could give the dealer or contractor cover in a harassment claim.

8. Consider Insurance

All flooring dealers and contractors and their subcontractors need to carry the appropriate liability insurance against these kinds of claims. Flooring dealers and contractors may also want to consider obtaining employment practices liability insurance (EPLI). Flooring dealers and contractors should consult with their insurance broker to ensure they and their subcontractors have the appropriate insurance coverage.

9. Consult Counsel

An investigation into a claim of discrimination or harassment may result in taking action that impacts an employee’s job. An employee could be reprimanded, demoted, or fired. It is recommended that legal counsel be consulted regarding any decision.

Moreover, with the increased focus on discrimination or harassment in the construction industry, all employers should consult with legal counsel to ensure that its company is taking appropriate steps to maintain a safe workplace free from discrimination, harassment, and other misconduct. The company’s anti- discrimination and anti-harassment policy should be reviewed by legal counsel at least annually to ensure it is up to date.

Conclusion

With the EEOC’s increased focus on the construction industry, it is time for all companies to review and update their anti-discrimination and anti-harassment policies. It is not enough to have a policy—you must also communicate the policy to employees and enforce the policy.

These steps will minimize the risks of discrimination and harassment claims and limit potential liability. A simple rule of thumb is to ensure that you and your employees avoid any conduct that you would find offensive if said or done to your spouse, children, parents, or friends. It is a good starting point for any anti-discrimination and anti-harassment policy. ■

Notice: The information contained in this article is abridged from legislation, court decisions, and administrative rulings and should not be construed as legal advice or opinion and is not a substitute for the advice of counsel.