The vast majority of settlements between an employer and the Equal Employment Opportunity Commission (“EEOC”) take the form of a court-approved consent decree. This document is a public record designed to highlight and account for certain wrongs in a way that sidesteps an admission of guilt in favor of the implementation of remedial measures to prevent further unlawful practices. A consent decree includes certain action and reporting mandates that employers must follow, providing the EEOC with the most powerful enforcement tool in its arsenal.
Consent decrees function as a heightened form of scrutiny of an employer’s actions for a set duration of time. The value of the consent decree to the EEOC is that, rather than re-litigate a claim against an employer, the EEOC may simply move for contempt of court for failure to comply with an injunctive provision of a decree, as the decree is both a contract and a court order. This effectively keeps the company on the road to compliance with a minimum of effort from the EEOC. The consent decree may contain provisions for dispute resolution or mediation in the event of noncompliance.
Where employers are concerned, however, a consent decree is the bad bet when compared with a standard settlement. A consent decree gives the EEOC far more control in enforcement as against a company than other settlement agreements, and district courts have broad powers to enforce these decrees due to the “continuing jurisdiction” language present. Continuing jurisdiction provisions allow for continuous supervision of the settlement by the district court for the duration of the decree. Courts have generally upheld this expansive power, giving significant deference to the agency in question to define the terms of the agreement. As the Second Circuit Court of Appeals held in SEC v. Citigroup, the role of court in reviewing a consent decree is to “assess (1) the basic legality of the decree; (2) whether the terms of the decree, including its enforcement mechanism, are clear; (3) whether the consent decree reflects a resolution of the actual claims in the complaint; and (4) whether the consent decree is tainted by improper collusion or corruption of some kind.” This deference gives the EEOC significant leeway in setting the terms of the consent decree, with the continuing jurisdiction of the court providing the muscle in strictly enforcing it.
Employers should seek to mitigate the effects of this particularly strong enforcement mechanism at the negotiation stage, opting for a standard settlement without injunctive relief or continuing jurisdiction whenever possible. Once continuing jurisdiction of the decree is locked in, the EEOC has gained a powerful tool, with a far stronger, more efficient and vastly quicker means for enforcing compliance. An employer must then jump through EEOC hoops on command for the duration of the consent decree, a position no employer wants to find itself in.
If you are negotiating an agreement with the EEOC or would like more information about consent decrees and their effect on your business, contact the attorneys at McBrayer.
Brandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at email@example.com or at (502) 327-5400.
This article is intended as a summary of state and federal law and does not constitute legal advice.
 U.S.S.E.C. v. Citigroup Global Markets, Inc., 752 F.3d 285, 294-95 (2d Cir. 2014)