How to Negotiate an EEO Discrimination Settlement

As an alternative to litigation, parties may settle EEOC charges at any time during an investigation.
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The Equal Employment Opportunity Commission (EEOC) offers three ways to voluntarily resolve charges: mediation, settlement and conciliation. Each of these methods is confidential, avoids an admission of liability and is enforceable in court. While the parties may voluntarily settle a claim early in the process or wait until the EEOC completes its investigation, the bargaining power of each party is impacted by the findings of that investigation. As a result, employers often decide when to settle claims based on their internal evaluations of the validity of the claims.

The EEOC will dismiss a charge upon receipt if it finds no basis for proceeding with further investigation; charges do not constitute a finding that the employer engaged in discrimination. The EEOC will investigate each claim and issue a Dismissal and Notice of Rights or a Letter of Determination depending on whether it finds reasonable cause to believe that discrimination occurred. At the start of an investigation, the EEOC will advise the employer whether the charge is eligible for mediation.

After a charge is filed, the EEOC will contact the parties to determine whether they agree to mediate. Alternatively, either party may request mediation from the EEOC. If the parties agree to this, a trained EEOC mediator --- either an EEOC employee or a mediator with whom the EEOC contracts --- will schedule a mediation. The mediator will help the parties reach a voluntary, negotiated resolution, but it does not decide what the resolution should be. One or both parties may, but are not required to, have an attorney present at the mediation. If the parties cannot reach a mutually agreed upon resolution, or if either party does not agree to participate in mediation, the EEOC will investigate the charge as it would any other charge.

While mediation usually takes place before the EEOC's investigation of a charge, the EEOC has recently clarified that mediation is available following a finding of discrimination. If, however, mediation occurs after this finding, the EEOC will participate in the mediation.

Read More: How to Sue an Employer for Discrimination

A settlement is a less formal process than mediation and may result from direct, informal negotiations between the parties. EEOC investigators will, however, work with the parties to reach satisfactory settlements if the parties wish to do so. Parties can contact the EEOC investigator directly if they are interested in resolving a charge through settlement. Upon reaching a settlement, the EEOC will dismiss the charge.

Federal law requires that the EEOC attempt to resolve findings of discrimination through informal methods, including conciliation. During conciliation the EEOC works with the parties to develop a mutually acceptable resolution. The employer typically has less negotiating power at this stage because the EEOC has already issued a probable cause finding. If the parties do not reach a resolution, the EEOC may sue. Alternatively, if the EEOC decides not to litigate, it will issue a Notice of Right to Sue, at which time the employee may file a lawsuit.

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