Also this month, on behalf of another social services client in Chicago, I negotiated very favorable terms for a pre-trial settlement at the National Labor Relations Board.   In this case, which is similar to the NLRB’s recent spate of social networking cases involving non-union companies, the NLRB brought a complaint against my client for firing a non-union employee for complaining to a third-party that had no managerial authority or control over the employee’s issues.  Here, even though the client is non-union, and the complaining employee had no authority to insert themselves into these types of issues, the NLRB alleged that the employee was representing the rights of other employees (none of whom lost their job or were disciplined).  The settlement reached requires no posting of notices, no reinstatement, and my client only had to pay a fraction of full backpay to the employee.

Reprinted with permission from the January 2011 edition of the “Employment Law Strategist” © 2011 ALM media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.

A PRACTITIONER’S PERSPECTIVE: RESPONDING TO REGULATORY AGENCY COMPLAINTS

For business owners, one of the most troubling aspects of management is receiving an employment related complaint from a governmental regulatory agency. Such agencies include the Equal Employment Opportunity Commission, the National Labor Relations Board, the U.S. Department of Labor, the Federal Trade Commission or any of the similar state, local and municipal equivalents to these agencies.

Preparing a response is an onerous task. The process leaves a business wondering who is really in charge; what exactly are our tax dollars paying for, and why would we ever want to employ someone again?

Since America’s inception, business owners and government entities have engaged in a balancing act of regulation and free enterprise. Lately, due to increasing government intervention in private sector business operations, and due to our economy’s shortcomings, this balancing act seems swayed in government’s and big business’ favor. Big business has an advantage because small to medium-sized businesses usually do not have the same resources (money, manpower, time, energy) to devote to responding to these complaints and charges. Consequently, some of the most important questions for smaller business owners and managers include:

• Are we judged guilty before being proven innocent;
• How do we respond to an regulatory agency complaint; and
• What information is necessary to give them without jeopardizing our operations or finances?

Once it determines that the complaint is official, the business owner must ascertain the nature of the allegation. That is, what law or regulation is cited in the complaint? Also, what is the potential punishment or the amount of damages that can be awarded if the company loses the investigation? Once this has been determined, it will be easier for the company to figure out how to respond and what evidence should be included with the response.

A third factor to consider is the deadline for response. Obviously, a company does not want to miss a deadline, but if pressed for time, some agencies (not all) permit additional time for a response. Note that a request for additional time has to be made by the company — it is never implied or otherwise understood that the company needs additional time to respond.

Generally, the company’s response is an informal statement of the company’s position on the allegation (often called a “position statement” or a “statement of position”). The statement is informal because it is usually not written in a legalistic or official format similar to court filings. However, this does not mean that the business should be casual about its response. In a very detailed and organized fashion, the company should explain the what, why, when, who, where and how of what transpired.

Regarding the position statement: in addition to providing a written narrative of what occurred, the company should include any documents, recordings and files (i.e., exhibits) that support its contentions. All exhibits should be referred to in the statement. If there are more than a few exhibits, or if exhibits have numerous pages or subparts, it is helpful to include some sort of index or table of contents. Essentially, anything that helps an average reader understand the position statement, and anything that clearly and completely explains the company’s position, should be included or referred to in the statement. It is acceptable to remove any privileged or confidential information such as attorney-client communications, social security numbers and birth dates. However, it is essential not to appear as if you are hiding something. Consequently, the reasons for redacting information  should be explained if they are not obvious (e.g., why the redacted information is protected or proprietary business information, personal employee information, patented or trademarked information).

In addition, sending a very detailed response is better than sending a general and bureaucratic sounding response. With recent advances in communications and technology, transparency (i.e., openness, honesty, forthrightness) is a hot topic and an important consideration when responding to an agency. The less it looks as if you are trying to hide something, and the more you appear to be taking a respectful, problem solving approach to the matter, without admitting guilt or being overly aggressive, the better the chance that the agency will rule in your favor. Otherwise, the agency or decision-maker, at this first level of dispute resolution, will summarily kick the complaint to the next level or rule against your business.

Disclosure

How much to disclose and what to disclose are key considerations. This brief article cannot summarize all of the factors to consider in determining what to reveal in the position statement. Sound business judgment and common sense might help to resolve these concerns. Competent legal or business counsel can also help. As a general rule, stick with the facts,  i.e., what can be proven with sufficient and reasonable evidence, and what can be disclosed without compromising any business secrets and other confidential information.

The position statement is used by the agency to decide whether or not to investigate the charges further or whether to pursue some other form of dispute resolution such as mediation, settlement discussions — or even whether to file a more formal complaint or lawsuit against the company.

The agency representative making the decision is usually an appointed official, who may be an attorney. In many instances, the agency official is an experienced and competent official who is able to comprehend nuanced information. However, there are exceptions; not all decision-makers are experienced or competent. Moreover, the decision-maker may not be making a decision based on all the facts. The decision is usually based either on whatever information is available, or on the decision-maker’s perception of the response and evidence.

Often, at the investigatory stage of dispute resolution, the agency may request additional information, beyond that which is indicated in the position statement. Or sometimes, after the submission of the position statement, new information surfaces. In either instance, the company should not hesitate to send additional information to the agency. Think of it as engaging in an ongoing dialogue with the agency about the circumstances surrounding your case. Just make sure that whatever additional information is sent does not contradict anything stated in the position statement and is easily integrated into the statement.

Once the position statement has been ruled upon, the complaint will either be dismissed or will proceed ahead to some sort of trial or other dispute resolution procedure (e.g., mediation or arbitration).

As a general rule, it is not always necessary for a responding company to utilize legal or business counsel for the response. However, if the responding company is not attuned to the specific regulatory agency’s style or the alleged violations, and it does not have the benefit of counsel to assist in their response, it could adversely affect its chance of receiving a favorable response. It is not wise to use the position statement as a means to test how whether you are adept at dealing with agency complaints. This is not the time for experimentation. It could cost your business plenty.

At the core of Stephanie’s presentation is the below Slideshare/Youtube presentation (click on the link below):

Statistical Analysis as Evidence in Employment Discrimination Litigation

Additionally, there was some good back and forth discussion on my LI Group concerning the importance of statistical analysis.  Instead of summarizing the discussion, I’ve posted it in its entirety below:

Charles Krugel www.charlesakrugel.com • This is great Stephanie! Thanks for posting it.  After watching your presentation, my impression is that statistical analysis may be more important for combatting class action certification than actual disparate impact discrimination.  Am I wrong?

Stephanie R Thomas, Ph.D. • Statistical analysis has a role in class certification, disparate impact and disparate treatment cases. For class certification, statistics can be used to examine commonality and typicality – I have a separate presentation on this (http://www.slideshare.net/TheProactiveEmployer/examining-class-certification-issues-with-statistical-analysis).

For disparate impact claims, I see statistics as having two roles. First, you can statistically examine your employment practices (hiring, promotion, termination, requirements for a given position, etc.) with respect to various protected group definitions proactively to identify any potential problem areas before you get to the litigation stage. Second, in the litigation context, statistics can be used to examine the challenged policy or practice to determine if there is statistical support for the claim of disparate impact.

With respect to disparate treatment claims, statistics can be used to assess whether there is statistical support for the claim. The analysis for disparate treatment is typically more complex than for a claim of disparate impact, because of the need to carefully define comparator groups and similarly situated employee groupings. But statistics can be very useful in assessing the merits of disparate treatment claims.

Charles Krugel www.charlesakrugel.com • Thanks again Stephanie!  The use of statistical analysis in disparate treatment claims is an interesting idea.

The reason that I wonder if statistical analysis is more beneficial at the class action certification stage of litigation, in disparate impact claims, is because that ruling lies with the judge not a jury. Whereas in a disparate treatment claim, the final determination of guilt or innocence is usually made by a jury.

In my opinion, it requires incredible communication skills to get statistical analysis across to a jury in a disparate treatment case. Obviously, on a case-by-case basis, it has to be determined whether and how to get this analysis across to a jury in a such a case.

Conrad from Avvo said,

December 5, 2010 @ 10:26 am

Charles – not every lawyer appreciates the transparency that Avvo has brought to the legal industry, yet this is exactly what consumers want and deserve. This is why we will not remove profiles from Avvo. Our commitment to transparency has made us the number one legal directory in the world.

I’m disappointed to read your recommendation responding to Avvo’s transparency with fabrications. I would strongly caution any lawyer against deliberately and proactively misrepresenting their background anywhere – on a resume, at a cocktail party or on Avvo. The professional ramifications of this highly unethical behavior are severe.

Finally, if you are having trouble accessing your account, emailcustomercare@avvo.com for assistance.

Regards,
Conrad Saam

First, I’d like to thank Conrad and Avvo for responding.  However, they completely miss the point.  They argue that their system provides transparency to consumers.  To an extent, they’re right.  However, to the extent that I, and others, believe that their ratings system is biased against solo and small firms, they’re wrong (to read my arguments concerning this bias just search “Avvo” in the search box on this blog).  Moreover, there’s little transparency to a system that entices attorneys to “claim” their “profile” but doesn’t let them “unclaim” it.

Moreover, Conrad claims that there could be severe ethical ramifications for my suggestion about how to game Avvo by spiking a profile by either deflating it to zero or inflating it to ten.  I also find this contention disingenuous.  If I load my own profile with nonsensical negative information, therefore lowering my score to zero and rendering my rating incredible, how is this an ethical violation?  By making myself look ridiculous on a for profit and biased rating site like Avvo what ethical rules am I violating and how am I jeopardizing my license?  Beats me.

As I’ve said numerous times, I don’t care if my profile is removed (or not) from Avvo.  I just want to “unclaim” my profile.  It’s disingenuous for Avvo to claim transparency when they don’t explain that once you “claim” your profile it’s impossible to “unclaim” it.  Moreover, this isn’t a level playing field for all attorneys and consumers using Avvo to find attorneys.

My advice to Avvo is simple:  Allow attorneys to “unclaim” their profile.  In my mind, whether or not I’m on Avvo is superflous in light of the “claimed” profile indication, and Avvo’s refusal to permit attorneys to “unclaim” the profile.