    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                        H.R. 4959, EEOC TRANSPARENCY AND
                         ACCOUNTABILITY ACT, H.R. 5422,
                       LITIGATION OVERSIGHT ACT OF 2014,
                          AND H.R. 5423, CERTAINTY IN
                            ENFORCEMENT ACT OF 2014

    =======================================================================

                                    HEARING

                                   BEFORE THE

                     SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                             COMMITTEE ON EDUCATION
                               AND THE WORKFORCE

                         U.S. House of Representatives

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

               HEARING HELD IN WASHINGTON, DC, SEPTEMBER 17, 2014

                                   __________

                               Serial No. 113-67

                                   __________

      Printed for the use of the Committee on Education and the Workforce

     [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

          Available via the World Wide Web: www.gpo.gov/fdsys/browse/
               committee.action?chamber=house&committee=education
                                       or
                Committee address: http://edworkforce.house.gov

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                    COMMITTEE ON EDUCATION AND THE WORKFORCE

                        JOHN KLINE, Minnesota, Chairman

    Thomas E. Petri, Wisconsin           George Miller, California,
    Howard P. ``Buck'' McKeon,             Senior Democratic Member
        California                       Robert C. ``Bobby'' Scott,
    Joe Wilson, South Carolina               Virginia
    Virginia Foxx, North Carolina        Ruben Hinojosa, Texas
    Tom Price, Georgia                   Carolyn McCarthy, New York
    Kenny Marchant, Texas                John F. Tierney, Massachusetts
    Duncan Hunter, California            Rush Holt, New Jersey
    David P. Roe, Tennessee              Susan A. Davis, California
    Glenn Thompson, Pennsylvania         Raul M. Grijalva, Arizona
    Tim Walberg, Michigan                Timothy H. Bishop, New York
    Matt Salmon, Arizona                 David Loebsack, Iowa
    Brett Guthrie, Kentucky              Joe Courtney, Connecticut
    Scott DesJarlais, Tennessee          Marcia L. Fudge, Ohio
    Todd Rokita, Indiana                 Jared Polis, Colorado
    Larry Bucshon, Indiana               Gregorio Kilili Camacho Sablan,
    Lou Barletta, Pennsylvania             Northern Mariana Islands
    Joseph J. Heck, Nevada               Frederica S. Wilson, Florida
    Mike Kelly, Pennsylvania             Suzanne Bonamici, Oregon
    Susan W. Brooks, Indiana             Mark Pocan, Wisconsin
    Richard Hudson, North Carolina       Mark Takano, California
    Luke Messer, Indiana
    Bradley Byrne, Alabama

                        Juliane Sullivan, Staff Director
                    Megan O'Reilly, Minority Staff Director

                                    ------

                     SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                        TIM WALBERG, Michigan, Chairman

    John Kline, Minnesota                Joe Courtney, Connecticut,
    Tom Price, Georgia                     Ranking Member
    Duncan Hunter, California            Raul M. Grijalva, Arizona
    Scott DesJarlais, Tennessee          Timothy H. Bishop, New York
    Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
    Larry Bucshon, Indiana               Mark Pocan, Wisconsin
    Richard Hudson, North Carolina       Mark Takano, California

                               C O N T E N T S

                                  ----------
                                                                       Page

    Hearing held on September 17, 2014...............................     1

    Statement of Members:
        Courtney, Hon. Joe, Ranking Member, Subcommittee on Workforce
          Protections................................................     8
            Prepared statement of....................................    10
        Walberg, Hon. Tim, Chairman, Subcommittee on Workforce
          Protections................................................     1
            Prepared statement of....................................     7

    Statement of Witnesses:
        Clements, Lynn, A. Director, Regulatory Affairs, Berkshire
          Associates, Inc., Columbia, MD.............................    12
            Prepared statement of....................................    14
        Dreiband, Eric, S., Partner, Jones Day, Washington, DC.......    42
            Prepared statement of....................................    44
        Foreman, Michael, L., Director, Civil Rights Appellate
          Clinic, Pennsylvania State University, Dickinson, The
          Dickinson School of Law, State College, Pa.................    28
            Prepared statement of....................................    30
        Lloyd, William, F., General Counsel, Deloitte LLP, New York,
          NY.........................................................    21
            Prepared statement of....................................    23

    Additional Submissions:
        Mr. Courtney:
            Appendix A: Report, Public Outreach and Education Efforts
              Concerning EEOC Guidance on Arrest on Convictions
              Records................................................    75
            Appendix B: The Unvarnished Truth: 2014 Top Trends in
              Employment Background Checks...........................    92
            Letter dated Oct. 9, 2014 from Cox, Todd, A., Director,
              Office of Communications and Legislative Affairs, Equal
              Employment Opportunity Commission......................   120
        Fudge, Hon. Marcia, L., a Representative in Congress from the
          State of Ohio:
            Prepared statement of....................................   139
        Chairman Walberg:
            Letter dated Sept. 16, 2014 from Hartman Sims, Celia,
              Vice President, Government Relations, Knowledge
              Universe...............................................     4
            Letter dated Sept. 16, 2014 from Lucas, M. A., Executive
              Director, Early Care and Education Consortium..........     6
            Letter dated Sept. 17, 2014 from nineteen stakeholders...    59
            Letter dated Sept. 25, 2014 from Dombi, William, A., Vice
              President for Law, National Association for Home Care &
              Hospice................................................   142
            Letter dated Oct. 1, 2014 from Johnson, Randel, K.,
              Senior Vice President, Labor, Immigration and Employee
              Benefits...............................................   150
            Letter dated Oct. 22, 2014 from Heriot, Gail, Member,
              United States Commission on Civil Rights...............   156

                        H.R. 4959: EEOC TRANSPARENCY AND
                   ACCOUNTABILITY ACT; H.R. 5422: LITIGATION
                     OVERSIGHT ACT OF 2014; AND H.R. 5423
                      CERTAINTY IN ENFORCEMENT ACT OF 2014

                                  ----------

                         Wednesday, September 17, 2014

                         U.S. House of Representatives

                     Subcommittee on Workforce Protections

                    Committee on Education and the Workforce

                                Washington, D.C.

                                  ----------

        The subcommittee met, pursuant to call, at 10:03 a.m., in
    Room 2175, Rayburn House Office Building, Hon. Tim Walberg
    [Chairman of the subcommittee] presiding.
        Present: Representatives Walberg, Kline, Rokita, Hudson,
    Courtney, Fudge, Pocan, and Takano.
        Staff present: Molly Conway, Professional Staff Member; Ed
    Gilroy, Director of Workforce Policy; Callie Harman, Staff
    Assistant; Christie Herman, Professional Staff Member; Nancy
    Locke, Chief Clerk; James Martin, Professional Staff Member;
    Daniel Murner, Deputy Press Secretary; Brian Newell,
    Communications Director; Krisann Pearce, General Counsel;
    Lauren Reddington, Deputy Press Secretary; Molly McLaughlin
    Salmi, Deputy Director of Workforce Policy; Alissa Strawcutter,
    Deputy Clerk; Juliane Sullivan, Staff Director; Loren Sweatt,
    Senior Policy Advisor; Alexa Turner, Legislative Assistant;
    Tylease Alli, Minority Clerk/Intern and Fellow Coordinator;
    Melissa Greenberg, Minority Labor Policy Associate; Eunice
    Ikene, Minority Labor Policy Associate; Brian Kennedy, Minority
    General Counsel; and Leticia Mederos, Minority Director of
    Labor Policy.
        Chairman Walberg. A quorum being present, the Subcommittee
    on Workforce Protections will come to order. Good morning. Let
    me begin by welcoming our guests and thanking our witnesses for
    joining us today. We will discuss a number of legislative
    proposals that would bring greater transparency and
    accountability, I trust, to the Equal Employment Opportunity
    Commission (EEOC).
        We are here because every member of this Committee
    recognizes the EEOC as a vitally important agency. It has a
    responsibility to protect the right of all workers to a fair
    shot at employment opportunities and a workplace free of
    discrimination. That is what America is about. This is a
    fundamental human right each and every one of us holds dear. No
    one should be denied a job, have their wages cut, or passed
    over for a promotion because of their race, their gender,
    religion, or disability. We are here because we want the EEOC
    to do its job and, more importantly, to do its job effectively.
        That is why, in recent months, we have made oversight of
    EEOC a priority. Because we know men and women are being
    discriminated against. We know bad actors would rather put
    their own hateful prejudice before the talent and the
    experience of each individual worker. It isn't right, and it is
    EEOC's mission to help stop that from happening. Unfortunately,
    in recent years the EEOC has shifted its focus away from that
    vital mission. Instead, it has spent a great deal of time and
    resources advancing a deeply flawed enforcement and regulatory
    agenda.
        Employers have fallen under EEOC's intense scrutiny without
    any allegation of employment discrimination. Charges are being
    filed in federal court with little to no evidence of
    wrongdoing. Federal judges have harshly and appropriately
    criticized the agency for its shoddy legal work. Each day, the
    agency harasses employers without cause, and every case tossed
    out of court for legal malpractice is another lost opportunity
    to help victims of employment discrimination. It means the
    veteran, the injured and disabled, while serving our country,
    will continue waiting for his or her day in court. It means the
    single mom who worked long and hard to earn a promotion will
    continue waiting for her day in court.
        More than 70,000 individual complaints are sitting in front
    of the Commission. The backlog represents thousands of private
    sector workers who believe their rights were violated and who
    are waiting anxiously for the Commission to do its job. As the
    old saying goes, justice delayed is justice denied. It is time
    to stop denying these men and women the justice they deserve.
    Not only is the EEOC dropping the ball with its misguided
    enforcement priorities, it is also pursuing a regulatory scheme
    that is making it more difficult for employers to protect
    employees and consumers.
        In recent years, states and localities have adopted
    policies to protect Americans in vulnerable situations that
    come in contact with workers, such as at home and in the
    classroom. The EEOC has eviscerated these efforts. Quite
    simply, the agency's edict restricting the use of criminal
    background checks is putting people in harm's way, including
    women and children. It is time the agency changed course, and
    that is precisely what the legislation before us is intended to
    do. Among other provisions, the proposals will help shine more
    sunlight on EEOC activities, compel the agency to work with
    employers in good faith to resolve complaints, force the
    commissioners to do their job and oversee the agency's
    enforcement actions, and provide a safe harbor to employers
    complying with federal, state and local mandates, such as laws
    requiring criminal background checks during the hiring process.
        These are common sense reforms and should enjoy
    overwhelming bipartisan support. By supporting the legislation,
    you are supporting transparency at a vitally important federal
    agency. By supporting the legislation, you are supporting the
    ability of states to promote a safe and responsible workforce.
    By supporting the legislation, you are supporting an effort to
    get this agency back on track to better protect the rights of
    America's workers. I urge my colleagues to support a more
    effective, accountable, Equal Employment Opportunity Commission
    by supporting this legislation.
        I would like to thank my colleague, Representative Hudson,
    for his leadership on this important issue. Again, we are
    grateful to our witnesses for joining us, and I look forward to
    our discussion.
        Before I recognize the senior Democrat of the Committee, I
    would like to ask for unanimous consent to include in the
    record letters from interested stakeholders supporting the
    bills we are discussing today, including letters from
    KinderCare learning centers and the Early Care and Education
    Consortium in support of H.R. 5423, the Certainty in
    Enforcement Act of 2014.
        [The information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. With that, I will now yield to my friend
    and colleague, Representative Joe Courtney, for his opening
    remarks.
        [The statement of Chairman Walberg follows:]

       Prepared Statement of Hon. Tim Walberg, Chairman, Subcommittee on
                             Workforce Protections

        Good morning. Let me begin by welcoming our guests and thanking our
    witnesses for joining us. Today we will discuss a number of legislative
    proposals that would bring greater transparency and accountability to
    the Equal Employment Opportunity Commission.
        We are here because every member of the committee recognizes the
    EEOC is a vitally important agency. It has a responsibility to protect
    the right of all workers to a fair shot at employment opportunities and
    a workplace free of discrimination. This is a fundamental human right
    each and every one of us holds dear. No one should be denied a job,
    have their wages cut, or be passed over for a promotion because of
    their race, gender, religion, or disability.
        We are here because we want the EEOC to do its job, and more
    importantly, to do its job effectively. That is why in recent months we
    have made oversight of EEOC a priority, because we know men and women
    are being discriminated against; we know bad actors would rather put
    their own hateful prejudice before the talent and experience of each
    individual worker. It isn't right and it is EEOC's mission to help stop
    it from happening.
        Unfortunately, in recent years, the EEOC has shifted its focus away
    from that vital mission. Instead, it has spent a great deal of time and
    resources advancing a deeply flawed enforcement and regulatory agenda.
    Employers have fallen under EEOC's intense scrutiny without any
    allegation of employment discrimination. Charges are being filed in
    federal court with little to no evidence of wrongdoing. Federal judges
    have harshly and appropriately criticized the agency for its shoddy
    legal work.
        Each day the agency harasses employers without cause and every case
    tossed out of court for legal malpractice is another lost opportunity
    to help victims of employment discrimination. It means the veteran,
    injured and disabled while serving our country, will continue waiting
    for his day in court. It means the single mom, who worked long and hard
    to earn a promotion, will continue waiting for her day in court.
        More than 70,000 individual complaints are sitting in front of the
    commission. The backlog represents thousands of private-sector workers
    who believe their rights were violated and who are waiting anxiously
    for the commission to do its job. As the old saying goes, ``justice
    delayed is justice denied.'' It's time to stop denying these men and
    women the justice they deserve.
        Not only is the EEOC dropping the ball with its misguided
    enforcement priorities, it is also pursuing a regulatory scheme that is
    making it more difficult for employers to protect employees and
    consumers. In recent years, states and localities have adopted policies
    to protect Americans in vulnerable situations who come in contact with
    workers, such as at home and in the classroom. The EEOC has eviscerated
    these efforts. Quite simply, the agency's edict restricting the use of
    criminal background checks is putting people in harm's way, including
    women and children.
        It's time the agency changed course and that's precisely what the
    legislation before us is intended to do. Among other provisions, the
    proposals will help shine more sunlight on EEOC activities, compel the
    agency to work with employers in good faith to resolve complaints,
    force the commissioners to do their jobs and oversee the agency's
    enforcement actions, and provide a safe harbor to employers complying
    with federal, state, and local mandates, such as laws requiring
    criminal background checks during the hiring process.
        These are commonsense reforms that should enjoy overwhelming
    bipartisan support. By supporting the legislation, you are supporting
    transparency at a vitally important federal agency. By supporting the
    legislation, you are supporting the ability of states to promote a safe
    and responsible workforce. By supporting the legislation, you are
    supporting an effort to get this agency back on track to better protect
    the rights of America's workers.
        I urge my colleagues to support a more effective, accountable Equal
    Employment Opportunity Commission by supporting the legislation. I
    would like to thank my colleague, Representative Hudson, for his
    leadership on this important issue. Again, we are grateful to our
    witnesses for joining us and I look forward to our discussion.
        Before I recognize the senior Democrat of the subcommittee, I would
    like to ask for unanimous consent to include in the record letters from
    interested stakeholders supporting the bills we are discussing today,
    including letters from KinderCare Learning Centers and the Early Care
    and Education Consortium in support of H.R. 5423, the Certainty in
    Enforcement Act of 2014.
        With that, I will now yield to my colleague, Representative Joe
    Courtney, for his opening remarks.
                                     ______

        Mr. Courtney. Thank you, Chairman Walberg, and thank you to
    all the witnesses for finding time to join us here today. And
    again, at the outset just so I don't forget, I would just ask
    unanimous consent to submit a statement from Congresswoman
    Marcia Fudge, who is over at the Agriculture Committee. They
    are having a hearing today that conflicts with her attendance,
    but she was very adamant she wanted to make sure her passionate
    comments are entered for the record.
        [The statement of Ms. Fudge follows:]

     Fudge, Hon. Marcia, L., a Representative in Congress from the State of
                                      Ohio

        Chairman Walberg, Ranking Member Courtney, and members of the
    Committee:
        I appreciate the opportunity to submit this statement for the
    record to express my opposition to this package of bills offered by the
    majority. These bills are aimed squarely at stifling the work of the
    Equal Employment Opportunity Commission (EEOC).
        Fifty years ago we passed the Civil Rights Act of 1964, which
    established the EEOC. When employees believe they have been
    discriminated against at work, they rely on this Commission to
    investigate the merits of each allegation to the fullest extent.
    Although litigation is a critical component to the success of the
    EEOC's mission to stop and remedy unlawful employment discrimination,
    it is the last stage in a process that includes multiple attempts to
    resolve an allegation of discrimination. In fact, the EEOC has been
    able to consistently obtain monetary and nonmonetary relief for victims
    in 90% of its cases.
        The package of bills proposed by the majority each place grave
    limitations on the ability of the EEOC to achieve its goals. While the
    intent of these bills is to prevent the EEOC from ``overreach'', the
    end result will simply make it harder for the agency to fulfill its
    statutory duties through administratively burdensome and duplicative
    information gathering. Of the most egregious bills offered, however, is
    H.R. 5423, The Certainty in Enforcement Act of 2014.
        If enacted H.R. 5423 would amend Section 703 of the Civil Rights
    Act, going far beyond background checks and criminal background checks,
    to allow states and localities to exploit requirements currently
    protected under the Voter Rights Act. In effect, states and localities
    would be exempt from Title VII employment discrimination liability.
        This is clearly a step backward in our civil rights laws.
        Tasked with enforcing the federal laws which combat illegal
    discrimination against an employee on the basis of race, color,
    religion, sex, national origin, age, disability or genetic information,
    the EEOC has drastically expanded the diversity of America's workforce.
    It is my hope that as the Committee hears from today's witnesses, my
    colleagues will recognize the harm these bills will have on employers
    and businesses across the country.
                                     ______

        Chairman Walberg. Hearing no objection, and appreciating
    these comments, they will be entered.
        Mr. Courtney. Thank you, Mr. Chairman. Mr. Chairman, this
    summer we celebrated the 50th anniversary of the 1964 Civil
    Rights Act, one of the most significant steps in the fight for
    equality in this nation's history. Title VII of this landmark
    law outlaws workplace discrimination on the basis of race,
    color, religion, sex, or national origin. These provisions help
    ensure that American workers are judged on the work they do,
    not on who they are, where they are from or what they look
    like. Yet even with all the progress we have made in the last
    50 years, there is much more work to be done.
        Too many Americans suffer from discrimination by their
    employer even today. For example, just last year there were
    nearly 100,000 new charges of discrimination filed with the
    EEOC, including 1,019 Equal Pay Act charges and over 67,000
    Title VII charges. I was hopeful when the subcommittee began to
    examine the work of EEOC last year we would look at ways to
    join together to strengthen our civil rights laws and build
    upon the critical improvements made through measures like the
    Americans With Disabilities Act amendments and the Genetic
    Information Nondiscrimination Act. Instead, I would argue, we
    are wasting time here with a set of misguided bills that impede
    the operations of the EEOC and attempt to gut Title VII,
    turning the clock back on civil rights protections enacted more
    than 50 years ago.
        These bills would decimate the EEOC's ability to safeguard
    American workers from discrimination, violate long-standing
    rules regarding attorney/client confidentiality and do a great
    disservice to the nation. We just heard opening comments
    talking about how justice delayed is justice denied. If you
    look at what these bills do, and I am 27 years as a litigator
    before I came to Congress, in the name of transparency it would
    cripple the ability of a client of the Commission to deal with
    their attorney in terms of engaging in any kinds of
    administrative action or litigation strategy. It would, in the
    name of oversight, basically force the Commission to
    micromanage every decision in terms of commencing litigation.
    How that, on earth, would end delayed process makes any sense,
    again, I think just common sense tells you that would add
    additional steps and delay in terms of the agency being able to
    execute its duty.
        And lastly, 5423--which basically turns the federal
    supremacy clause on its head and puts state laws as a
    preemptive safe harbor for employers--in my opinion, on the
    50th anniversary of the Civil Rights Act, is grotesque. I mean,
    this is allowing a race to the bottom in terms of states who
    don't--haven't stepped up and enacted laws to protect people
    from racial discrimination, from gender discrimination. And
    those states exist out there. And to basically empower them to
    override the national commitment that we made 50 years ago to
    uphold equal treatment under the law for people who are simply
    trying to get ahead in their--in life--as employees. It is just
    unbelievable to me.
        The process that we are engaged in here today, sadly, is
    par for the course in terms of the way this subcommittee has
    operated. Our side got notice of this hearing eight days ago.
    The 14-day courtesy rule for the Commission, which is well
    understood--you know, we know that for the last three and a
    half years--was deftly avoided by the majority. We get one
    witness that we can invite to testify, and I thank Mr. Foreman
    for being here to, again, in an unbalanced lineup, defend a
    position which I think, you know, we will hear loud and clear
    here today. But, you know, what is missing here today is the
    agency.
        And all we had to do was, frankly, pick up the phone and
    call our side with enough notice and we could have accommodated
    that. And actually had a real dialogue today to talk about what
    is actually happening out there with the department. What I
    think we are gonna hear is that despite all the claims of, you
    know, overzealous litigation and ineffective outcomes, we are
    going to see an agency which did great work in 2013 in terms of
    recovering damages for workers who were discriminated against.
    That the number and percentage of cases that went all the way
    to litigation is less than 1 percent. So, frankly, we are
    chasing a problem which I am--certainly, from the standpoint of
    Congress doesn't exist.
        If there are individual cases out there where people are
    unhappy with the agency, I think all of us are more than happy
    to accept those calls, accept that mail, intervene with the
    Secretary. You know, the Chairman knows we have had two
    instances this year where we have been successful in terms of
    getting the Secretary to pull back cases of overzealous
    enforcement of various laws. So it is not like we are dealing
    with an agency that refuses to respond or listen to reasonable
    points of view in terms of criticisms of the way they operate.
        So, you know, I mean, we have 72 hours left before--
    everybody in this building knows we are going home until after
    the election. So we are bringing up legislation which, you
    know, it is just not the appropriate response to any of the,
    maybe, concerns that people are expressing here today to
    actually talk about passing a bill which would short-circuit a
    case that is pending before the Supreme Court. I mean, it is
    just--it is embarrassing, from my standpoint. This is not what
    Congress should be focused on right now in terms of people
    across this country who are struggling in terms of advancing
    themselves. And clearly, the middle class and working families
    are struggling in terms of a tough economy but, frankly, we
    should be knocking down the last remaining barriers to people
    that they face in terms of racial discrimination, gender
    discrimination, age discrimination.
        That should be the focus of this subcommittee. So, again,
    we look forward to the witnesses' testimony. And, again, we
    hope, at some point, you know, we are gonna sort of realize
    that we are just sort of grinding our gears here with these
    types of hearings. And, hopefully, we can try and come up with
    a new model, if not in the lame duck session, with the next
    Congress so that we can, as a nation, take that 50th
    anniversary and celebrate it the right way--which is to advance
    equal treatment under the law under Title VII in the Civil
    Rights Act.
        I yield back.
        [The statement of Mr. Courtney follows:]

      Prepared Statement of Hon. Joe Courtney, Senior Democratic Member,
                     Subcommittee on Workforce Protections

        Good morning. Thank you Mr. Chairman. And thank you to the
    witnesses for being here.
        This summer we celebrated the 50th anniversary of the 1964 Civil
    Rights Act, one of the most significant steps in the fight for equality
    in this nation's history.
        Title VII of this landmark law outlaws workplace discrimination on
    the basis of race, color, religion, sex, or national origin. These
    provisions help ensure that American workers are judged on the work
    they do - not on who they are, where they are from, or what they look
    like.
        Yet, even with all the progress we've made in the past 50 years,
    there is more work to be done as too many Americans suffer from
    discrimination by their employer even today. For example, just last
    year there were nearly 100,000 new charges of discrimination filed with
    the Equal Employment Opportunity Commission (EEOC)--including 1,019
    Equal Pay Act charges and over 67,000 Title VII charges.
        I was hopeful that when the subcommittee began to examine the work
    of the EEOC last year, we would look at ways to join together to
    strengthen our civil rights laws and build upon the critical
    improvements made through measures like the Americans with Disabilities
    Act Amendments and the Genetic Information Nondiscrimination Act.
        Instead, we are wasting valuable time with a set of misguided bills
    that impede the operations of the EEOC, and attempt to gut Title VII,
    turning back the clock on civil rights protections enacted more than 50
    years ago. These bills would decimate the EEOC's ability to safeguard
    American workers from discrimination, violate longstanding rules
    regarding attorney-client confidentiality, and do a great disservice to
    the nation.
        We should instead be finding opportunities to work together to
    bolster this nation's civil rights laws, focusing on legislation that
    combats prejudice and works to ensure that no person faces
    discrimination in the classroom or workplace because of their sexual
    orientation or gender identity. The Fair Employment Protection Act,
    Paycheck Fairness Act and Employment Non Discrimination Act would all
    help to strengthen our civil rights laws and should be the focus of
    this hearing.
        Thank you Mr. Chairman, and thanks again to our witnesses for your
    participation. I yield back the balance of my time.
                                     ______

        Chairman Walberg. I thank the gentleman, and I detect a
    disagreement between you and me on this issue. But on
    Constitution Day, we are doing our constitutional
    responsibility. We have not been given a vacation yet. And I
    think that it is good that we are here and it is good to have
    disagreements. And we hopefully can work to satisfactory
    conclusions. And that means we continually work.
        It is now my pleasure to introduce our panel of
    distinguished witnesses. First, Ms. Lynn Clements is director
    of regulatory affairs at Berkshire Associates of Columbia,
    Maryland. Prior to joining Berkshire Associates, she served in
    several positions at the Department of Labor and the Equal
    Employment Opportunity Commission, including as acting
    director, deputy director of the policy division for the Office
    of Federal Contract Compliance Programs. Welcome.
        Mr. William Lloyd serves as general counsel for Deloitte
    LLP in New York, New York. As general counsel, Mr. Lloyd is
    responsible for managing the organization's legal affairs,
    including governance, employment litigation, and regulatory
    matters. Thank you for being here.
        Mr. Michael Foreman is clinical professor of law and
    director of the Civil Rights Appellate Clinic at Penn State
    University's Dickinson School of Law in Carlisle, Pennsylvania.
    Mr. Foreman focuses on appellate representation in civil rights
    issues and employment discrimination. He has previously served
    as acting deputy general counsel for the U.S. Commission on
    Civil Rights. Welcome.
        Mr. Eric Dreiband is a partner at Jones Day law firm in
    Washington, D.C. From 2003 to 2005, he served as the general
    counsel of the Equal Employment Opportunity Commission. Prior
    to his EEOC service, Mr. Dreiband served as deputy
    administrator of the U.S. Department of Labor's Wage and Hour
    Division. Welcome.
        Thank you all for being here. Before I recognize each of
    you to provide your testimony, let me briefly explain our
    lighting system, which I think is familiar to you. If you have
    been on the highway, you have had red, green, and yellow
    lights. Green gives you your four minutes to speak, yellow
    gives a warning that a minute is left, and red we hope that you
    wrap up your remarks as quickly and concisely as possible. I
    will hold our Committee members to the same in asking questions
    of you, following your statements. Again, we will each be given
    five minutes to ask the questions of you, following your five
    minutes of testimony.
        And so now let me begin my recognizing Ms. Clements for
    your five minutes.
        Press the button on your microphone, please, there.

        STATEMENT OF MS. LYNN A. CLEMENTS, DIRECTOR, REGULATORY
           AFFAIRS, BERKSHIRE ASSOCIATES, INC., COLUMBIA, MD

        Ms. Clements. Good morning, Mr. Chairman and members of the
    subcommittee. My name is Lynn Clements. I am the director of
    regulatory affairs at Berkshire Associates, a certified small
    business enterprise that helps other small businesses comply
    with their equal employment opportunity and affirmative action
    obligations. I very much appreciate the opportunity to share my
    perspectives with you today, and ask that my written testimony
    also be entered into the record.
        For almost half of my career, I served as a staff member at
    the EEOC and the Office of Federal Contract Compliance
    Programs, where I joined a dedicated group of career staff who
    tirelessly work to open the door of opportunity. I have a deep
    respect for my former colleagues, these agencies, and their
    mission. It is my experience that employers are similarly
    dedicated to creating fair and inclusive workplaces and to
    complying with the multitude of laws that they must follow.
    This is increasingly a difficult task.
        On an almost daily basis, I help employers answer real-life
    questions about their employment decisions and hiring
    practices. I have a better appreciation now for how difficult
    it is for an employer, especially a small employer, to
    understand and comply with the lengthy documents, policy
    documents, and rules that we publish as regulators. My
    experiences have shown me that an enforcement agency can only
    be truly effective when it is respected by the public it serves
    and regulates. A robust and thoughtful, deliberative process
    and neutral fact-finding are critical to earning that respect.
    Unfortunately, as an outsider now looking in, I believe that
    the EEOC has strayed from several of its original good
    government mandates.
        Increasingly, I have found that the agency does not always
    investigate or conciliate in good faith, even though such
    efforts are statutorily required. I have worked with employers
    both large and small who have endured individual charge
    investigations spanning several years; surprise notice of a
    charge by hand delivery, with a request for immediate access by
    an army of investigators, much like an FBI raid; requests for
    extensive information, immediately followed by a
    predetermination settlement offer that sends a very clear
    message pay up or endure a burdensome investigation; and
    findings of class discrimination without a class investigation.
        Most employers and, indeed, most employees are surprised to
    learn that the commissioners do not deliberate on the filing of
    most lawsuits. Understandably, the public expects that the full
    force of the federal government will only be brought to bear
    after careful deliberation.
        In the case of the EEOC, Congress determined that the
    deliberative process should be handled by a group of five
    officials with diverse backgrounds, experiences, and
    perspectives. When I was at the Commission, it generally filed
    about 400 lawsuits each year. Due to the delegation of
    authority to its general counsel, also presidentially
    appointed, the commissioners generally reviewed between 50 and
    75 of these litigation proposals.
        I understand, however, that the current Commission only
    reviews a handful of cases; as few as 15 in almost a recent
    three year period. In the business world, a similar delegation
    of authority would really be the equivalent of unveiling a new
    product without the CEO ever even knowing about it. Quite
    simply, placing the imprimatur of the whole Commission on a
    proposed legal theory garners a level of respect by the
    regulated community that is simply not possible when decisions
    are made by a single general counsel or regional attorney, no
    matter their skill.
        Perhaps most troubling is the impact on policymaking. Make
    no mistake about it, the agency is making policy when it
    decides to litigate. Thus, the process by which the EEOC
    arrives at those decisions is just as important as whether the
    agency ultimately prevails. The Commission's efforts in one
    particular area are instructive. In April of 2012, the
    Commission issued policy guidance regarding an employer's use
    of arrest and conviction records. Although this policy guidance
    was voted on, it was not subject to public comment.
    Unfortunately, the Commission failed to provide a clear path
    for employers, particularly those who must weigh the competing
    interests of the Commission's position and other state and
    local laws aimed at public safety.
        What this means is that those hard decisions will now be
    made through litigation by the Commission, some of which may
    never be reviewed by the Commissioners before it is voted on.
    Ensuring equal opportunity is an important federal goal. How
    this work is accomplished matters, and shining more sunlight on
    the agency will help it grow and succeed at its mission of
    ensuring equal employment opportunity.
        Thank you.
        [The statement of Ms. Clements follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Thank you.
        Mr. Lloyd, we recognize your five minutes.

     STATEMENT OF MR. WILLIAM F. LLOYD, GENERAL COUNSEL, DELOITTE
                           LLP, NEW YORK, NY

        Mr. Lloyd. Thank you. Chairman Walberg, Ranking Member
    Courtney, members of the Committee--
        Chairman Walberg. I am not sure your mic is on there.
        Mr. Lloyd. There we go. Sorry, I am a novice.
        Chairman Walberg, Ranking Member Courtney, members of the
    Committee, thank you for inviting me to testify today. I am
    Bill Lloyd, the general counsel of Deloitte LLP. I am grateful
    for the invitation to testify because today's hearing is
    focused on a number of bills that I believe would improve the
    processes within, and the accountability of, the EEOC.
        Deloitte is one of the world's largest professional
    services firms, providing audit, tax, and advisory services to
    individuals, businesses of all sizes, and to federal, state and
    local governments and community organizations. We have roughly
    65,000 people in Deloitte, and about 4 percent of those are the
    owners of the business: partners. I want to make it clear that
    Deloitte strongly supports the goals of eliminating workplace
    discrimination and fostering true equality of opportunity. We
    also strongly support the EEOC's mission and we appreciate the
    dedication of its staff. Deloitte is proud that we have
    consistently been recognized as a leader in inclusion and in
    developing highly successful women and minorities in our large
    firm.
        Although we are strong supporters of the EEOC's mission,
    our recent experience with the EEOC suggests that its processes
    and transparency could use some improvement. We need to ensure
    that the EEOC enforces its important mandate in ways that are
    consistent with what Congress contemplated in the respective
    statutes that the EEOC is tasked to enforce. And we need to
    ensure that important decisions about EEOC enforcement policy
    and allocation of scarce resources are made by the
    commissioners who are appointed by the President and confirmed
    by the Senate.
        The EEOC staff has recently challenged the fundamental
    structure of Deloitte's business, our decision to organize as a
    limited liability partnership. The staff has alleged that
    Deloitte is not a true partnership and, therefore our
    retirement policy for partners violates the Age Discrimination
    in Employment Act. The impact of the EEOC's legal theory raises
    significant economic and policy questions for Deloitte and all
    limited liability partnerships across the country, which will
    negatively impact many businesses. Congress did not grant
    jurisdiction to the EEOC to act on behalf of owners of
    businesses. Yet that is exactly what the EEOC is doing.
        Deloitte is a true partnership, and our partnership
    agreements and governance processes reflect that. State
    professional regulations require that we conduct our business
    as a partnership. Deloitte's partners voluntarily enter the
    partnership agreeing to retire at age 62, and each partner is
    highly compensated both during the period of partnership and
    after retirement. In fact, many partners choose to retire
    before age 62. Thus, the EEOC is seemingly advocating on behalf
    of this group of people in lieu of seeking out true victims of
    discrimination, the very people about whom Mr. Courtney spoke.
        For every case of questionable validity that the EEOC
    brings, it requires that the agency forego many worthy cases of
    discrimination on behalf of individuals who have fewer
    resources to pursue grievances and genuinely need the
    protection of regulators in the government.
        I am also concerned by the Commission's extensive
    delegation of authority to the general counsel to initiate
    litigation. I am not a labor attorney, and I was very surprised
    to learn that the commissioners do not review the overwhelming
    majority of cases filed by the EEOC. After all, Title VII
    permits only the five-member commission to bring a civil
    action.
        But my understanding is that, in practice, the general
    counsel determines whether any particular case is subject to
    review by the Commission. This practice, in my view, should
    concern all legislators and taxpayers. In the matter involving
    Deloitte, the EEOC has been conducting a directed investigation
    since 2010. We are concerned that if conciliation fails the
    general counsel will file a lawsuit under the delegation of
    authority without consideration and a vote of the
    commissioners, even though a similar matter involving a similar
    partnership came before the commissioners last year, and the
    commissioners elected not to file litigation.
        This is not only a matter of great public controversy but,
    given the powers and rights of Deloitte's partners, it is a
    novel interpretation of law that the Commission itself clearly
    should consider and approve before any litigation is commenced.
        We are not aware of any retired partner who has complained
    to the EEOC about age discrimination at Deloitte. And
    ironically, Deloitte's retiring partners are overwhelmingly
    white males, while newly-admitted partners over the past decade
    have been significantly more diverse. Eliminating the
    retirement age would ultimately limit the partnerships
    available to an increasingly diverse population of our
    employees.
        I thank the Committee for the opportunity to share our
    perspective, and I will be happy to answer any questions. Thank
    you.
        [The statement of Mr. Lloyd follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Thank you.
        Mr. Foreman, we will recognize you now for your five
    minutes.

      STATEMENT OF MR. MICHAEL L. FOREMAN, DIRECTOR, CIVIL RIGHTS
      APPELLATE CLINIC, PENNSYLVANIA STATE UNIVERSITY, DICKINSON
                    SCHOOL OF LAW, STATE COLLEGE, PA

        Mr. Foreman. Thank you, Chairman Walberg, Ranking Member
    Courtney, and members of the Committee for the ability to
    testify on these pieces of legislation. I am sure there are
    good purposes behind them but, as my testimony reflects, they
    are premature, they are unnecessary. I think more importantly,
    they distort the function of what Title VII was passed to do
    and it will thwart any type of effective enforcement of the
    federal laws.
        Now, I know two of my colleagues that are testifying today,
    and they both worked at EEOC. And they know first-hand the
    ugliness of employment discrimination, and they know first-hand
    that you need to have an effective enforcement agency to fight
    that evil. They know that. We may not agree on much, but I
    think we will agree on that point. Now, Mr. Dreiband said it
    best. Notwithstanding EEOC's achievement, we have much work
    ahead of us. Unlawful discrimination anywhere remains a threat
    everywhere. Accordingly, we will continue to strive to obtain
    meaningful relief for victims of discrimination and achieve
    equality in the workplace.
        They are his words when he was general counsel of the EEOC,
    not mine. They were true then and they are true not--now. And
    these bills would strip EEOC's enforcement ability. For
    example, the Oversight Act would require a vote of
    commissioners, a disclosure publicly of that vote, and that
    vote would be posted within 30 days of starting of litigation.
    Now some may say, well, why is that a problem? Because much of
    that information is already available. Well, the reason it is a
    problem because that would create an affirmative defense for
    every employer in this country.
        What if EEOC does not post? What if someone challenges the
    vote? That is subject to discovery. That is not hysteria. That
    is exactly what is happening in the Mach Mining case. The
    employer community is arguing that is an affirmative defense.
    And what is the remedy? The remedy is the case gets dismissed
    and the innocent victims never see the light of day. And that
    is what is troubling about those type of bills.
        The Transparency Act would take resources--the limited
    resources--the EEOC has, and turn them into a data reporting
    and website management. There are so limited resources to fight
    employment discrimination, they should be directed toward
    fighting discrimination.
        As Congressman Courtney pointed out, there are obvious
    constitutional problems with exempting state and local
    governments from Title VII. I give the example, in my written
    materials, that it would basically overrule a case like Griggs
    v. Duke Power--as it applies to state and local governments. It
    is something we should not be doing at this time.
        These are basically a remedy in search of a problem. There
    is no pattern of EEOC abuse. If you look at the number of cases
    EEOC litigates, they are doing a wonderful job. Their
    enforcement record should be applauded and more enforcement
    agencies should work like they do.
        There are a few limited cases where they are sanctioned.
    And that shows that there is a process in place. EEOC is
    required to play by the same rules of all parties. And if they
    act improperly in a limited number of cases, rule 11 exists and
    there is a provision of Title VII that holds them accountable.
    And they can be sanctioned. So that shows the system works. We
    do not need to add another level of sanctions to EEOC thwarting
    their ability to do their effective job.
        And then finally, several of the, quote--``key parts'' of
    this legislation are before the courts now. Mach Mining has
    precisely the issue of what does the EEOC need to do in their
    conciliation efforts and what happens if they do not do it.
    That case has been briefed. My colleague, Mr. Dreiband, filed a
    brief this week in support of the business community. The court
    system has it, the Supreme Court will answer that question, and
    we will know what that means under Title VII. There should not
    be anticipatory legislation to deal with that.
        Similarly, there is litigation in Texas that was filed
    challenging EEOC's promulgation of the criminal enforcement
    guidance. Let the judicial system work, and there will be a
    determination of whether EEOC had that authority and what that
    means. Don't short-circuit the process. And I would just end,
    if I could, The Wall Street Journal, in their summary of sort
    of this issue, made the quote about EEOC, ``It is just not
    saber rattling anymore. The EEOC has shown that it means
    business.'' Isn't that the EEOC that Title VII expected? And
    isn't that the EEOC that every one of us wants--one that
    enforces the law? And these bills would hamper that ability.
        Thank you for your time, and I am available to take any
    questions.
        [The statement of Mr. Foreman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Mr. Foreman, thank you.
        Mr. Dreiband, we recognize you for your five minutes.

        STATEMENT OF MR. ERIC S. DREIBAND, PARTNER, JONES DAY,
                            WASHINGTON, D.C.

        Mr. Dreiband. Good morning, Chairman Walberg, Ranking
    Member Courtney, and members of the subcommittee. Thank you for
    inviting me to testify today. My name is Eric Dreiband, and I
    am a partner at the law firm of Jones Day here in Washington,
    D.C. Mr. Chairman, as you noted, I previously served as the
    general counsel of the United States Equal Employment
    Opportunity Commission. And in that role, I was privileged to
    work with Lynn Clements and many other talented and dedicated
    EEOC officials. It is with this background that I appear today
    at your invitation to speak about three bills that are pending
    before this subcommittee.
        First, I will start by discussing the Litigation Oversight
    Act of 2014. This bill would ensure that the EEOC cannot bring
    major or controversial litigation without a full up or down
    vote by a majority of the EEOC's five-member bipartisan
    Commission. Congress has vested the EEOC's attorneys with the
    authority to appear for, and represent, the Commission in any
    case in court, but to do so only at the direction of the
    Commission. As a result, the Commission has historically
    considered, deliberated about, and voted on whether to file
    lawsuits recommended by the Commission's general counsel.
        In recent years, however, the number and percentage of
    litigation matters presented to the commissioners has
    diminished significantly. According to one current EEOC
    commissioner, the Commission voted on three of 122 lawsuits
    filed during an entire year. These numbers give the impression
    of a commission made up of potted plants and disinterested
    bystanders.
        The available evidence suggests that the current strategy
    is not as effective as past practices. For example, the amount
    of money recovered by the EEOC's litigation program in the last
    two fiscal years is lower than at any point since the EEOC
    started reporting this data. Moreover, the EEOC has recently
    suffered several embarrassing losses. Several courts have
    dismissed all, or significant parts of, several EEOC lawsuits.
        Other courts have sanctioned the EEOC, and the taxpayers
    are on the hook for the cost of these cases and for paying
    sanctions. And these kinds of embarrassing losses and sanctions
    damage the commission's credibility. The Litigation Oversight
    Act may help restore the commission's oversight of the agency's
    litigation program.
        The second bill before this subcommittee, the EEOC
    Transparency and Accountability Act, would provide for judicial
    review of the EEOC's pre-suite conciliation efforts. The civil
    rights laws generally authorize the EEOC to file a lawsuit only
    after it has been unable to secure a pre-suit conciliation
    agreement from a potential defendant. In December of 2013, a
    U.S. court of appeals in Chicago became the first court to hold
    that EEOC's compliance with this congressionally-mandated
    obligation is subject to virtually no judicial review, and the
    Supreme Court is now considering the issue.
        The EEOC Transparency and Accountability Act would settle
    the issue by statute. The bill would require the EEOC to engage
    in bona fide conciliation, including by identifying its claims
    and any putative victims thereof before EEOC files a lawsuit.
    These provisions may preempt the sue first, ask questions later
    mentality that has troubled several federal judges and led to
    humiliating dismissals of several EEOC lawsuits.
        The third bill pending before this subcommittee is the
    Certainty in Enforcement Act of 2014. This bill would provide
    that an employer does not violate the Civil Rights Act if it
    complies with another federal, state or local law in particular
    areas.
        Some laws restrict employers from hiring persons with
    criminal convictions, and the EEOC recently issued enforcement
    guidance to suggest that such blanket hiring restrictions may
    violate the Civil Rights Act. The Certainty in Enforcement Act
    may provide a useful fix to this conflict in times--in many
    times, employers feel like they are caught between choosing to
    comply with one law and risk violating the Civil Rights Act.
        Nonetheless, for purposes of greater clarity, the
    subcommittee might consider a few amendments to the bill as it
    is presently drafted. First, you may consider limiting the
    bills to laws that require employers to conduct criminal
    background checks or credit history checks. This seems to be
    the primary concern of the bill.
        Second, you might also consider limiting the bill to allow
    employers to follow laws that are targeted to hiring practice
    in certain safety-sensitive areas like health care and child
    care, where people are serving very vulnerable individuals like
    children and the sick and injured. Third, adding the language
    that specifically addresses disparate impact liability--that
    is, so-called unintended discrimination--may help clarify that
    the Certainty in Enforcement Act is in no way intended to
    sanction intentional discrimination.
        Thank you for the opportunity to testify here today, and I
    look forward to your questions.
        [The statement of Mr. Dreiband follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. Thank you, and thanks to each of the
    witnesses for your statements. And we look forward to those
    being broadened under questioning. Before I move to recognize
    my colleagues for questions, pursuant to Committee rule 7(c),
    all members will be permitted to submit written statements to
    be included in the permanent hearing record. And without
    objection, the hearing record will remain open for 14 days to
    allow such statements and other extraneous material referenced
    during the hearing to be submitted for the official hearing
    record.
        I would also like to ask for unanimous consent to include
    in the record a letter of support signed by 19 stakeholders for
    all three bills we are discussing today, including professional
    organizations, health care organizes, construction, food
    service, you name it.
        [The information follows:]
        [Additional submission by Chairman Walberg follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Walberg. So without objection, hearing none, they
    will be included in the record.
        I will now recognize the Chairman of the full Committee,
    Education and Workforce, the gentleman from Minnesota, Chairman
    Kline.
        Mr. Kline. Thank you, Mr. Chairman. Thanks very much to the
    witnesses for being here today for your testimony.
        Ms. Clements, let me start with you because I want to get
    at this issue of preemption, federal law, state law, and all
    that sort of thing that was raised by the Ranking Member and
    others. The EEOC's criminal background checks guidance states
    that the fact a criminal background check was conducted in
    compliance with a state or local jurisdiction requirement does
    not shield the employer from liability. That is your testimony,
    and what we are talking about here. And yet there are numerous
    federal, state, and local laws requiring the use of criminal
    background checks.
        For example, the Senate passed in March, and the House
    passed this week, the Child Care and Development Block Grant
    Act, which requires states to have policies and practices in
    place requiring background checks for child care providers and
    prohibiting employment in federally-funded child care programs
    of those convicted of violent or sexual crimes. So in this
    case, we passed, and we hope the President will sign and all
    that, a law that requires states to have such practices and
    policies in place. So how is a child care provider, or another
    small business, supposed to choose between following state law
    and subjecting itself to EEOC prosecution?
        It just seems like that is really between a rock and a hard
    place. I want to give you the opportunity to expand on that for
    just a minute.
        Ms. Clements. I absolutely agree with you. It is those
    types of examples that really illustrate the difficult position
    that the EEOC's enforcement guidance put employers in. It is a
    Hobson's choice, with no good answer at this point. And really,
    I would ask what exactly is an employer supposed to do if they
    conduct the individualized assessment that is contemplated by
    the EEOC's guidance and determine that the state or local
    requirement is not job-related? They still have to follow it.
    And if the EEOC's answer is that this will never happen, that
    these types of requirements will always be job-related, then
    they should have said so in the guidance so that employers
    could avoid--especially small employers--could avoid this
    costly individualized assessment.
        I don't think these difficult decisions should be made on
    the backs of private employers. They are simply trying to
    follow the law. They don't make the law.
        Mr. Kline. Thank you.
        Mr. Lloyd, according to your testimony, in its reasonable
    cause determination the EEOC demanded elimination of the
    retirement provision, extension of offers to reinstate retired
    partners, and the creation of a compensation fund for those
    retirees forced to retire early. Could--we just probably have a
    couple of minutes here on the clock. Could you sort of briefly
    describe Deloitte's business model and what the effect of this
    would be on that? And just--I am very concerned when you get
    something like the EEOC dictating what your business model
    should be. But explain why this is a problem.
        Mr. Lloyd. Thank you, Chairman Kline. It is a big problem
    for us. As I said, we have an ownership structure, partners who
    are about 4 percent of our total population. And I could go
    into great detail about why they are real partners. And we are
    required to have that model. Not necessarily 4 percent, but to
    be a partnership under various state regulations relating to
    certified public accountants and the way they can organize.
    Beyond that, the retirement system we have in place helps
    ensure that we have appropriate succession planning, that we
    can plan for the future. Because under many statutes, such as
    Sarbanes-Oxley in the audit practice for example, we have to
    rotate people into the positions of leading the audits for
    independence purposes.
        And thus, it is very important to us that we have virtual
    certainty about how long people can serve in the role as
    partner, these leadership positions of all sorts within the
    firm, and plan so that we have orderly transitions and we groom
    people to move into those positions to comply with the
    regulations that we are subject to.
        Mr. Kline. Okay, I am about to run out of time here, Mr.
    Chairman.
        I will yield back. Thank you.
        Chairman Walberg. I thank the gentleman, and I recognize
    the Ranking Member of this Committee, the gentleman from
    Connecticut, Mr. Courtney.
        Mr. Courtney. Thank you, Mr. Chairman.
        Mr. Foreman, just to sort of focus for a second on the
    background check guidance activity by the Commission. Again,
    just for the record--and I am pretty sure you have followed
    this pretty closely--but the Commission, as a whole, did
    actually act on this. This was not something, again, that
    delegated staff created in terms of that guidance. Isn't that
    correct?
        Mr. Foreman. Yes, that is correct.
        Mr. Courtney. Yes, and it was a bipartisan vote of the
    Commission. And again, it was trying to get at what is a real-
    life impact out there, which is that criminal background checks
    if not used, you know, sensibly, can have the net effect of
    harming or excluding people from employment who--particularly
    the African-American and Latinos. And, again, that is something
    that the Commission studied before it moved forward. Isn't that
    correct?
        Mr. Foreman. Yes, absolutely. The data on that point is not
    in dispute that if you implement either arrest records or
    criminal background histories, and screen based upon that, you
    are going to screen out statistically significant parts of
    minority populations. I mean, the data is uncontroverble on
    that.
        Mr. Courtney. But it also made clear that employers are not
    required to just ignore it entirely. I mean, there was clear
    latitude that, you know, that sort of guidance allows for
    common sense decision-making by employers. So that the nature
    and gravity of prior criminal conduct, the time that has
    elapsed, the nature of the job, and how--I mean, it all
    provides safe harbor for employers who--you know, again, if
    they have got somebody they know is a violent offender that
    they should not be in a, you know, child care center or a
    health care facility or, frankly, almost any employment
    setting.
        I mean, isn't that correct? I mean, they recognize common
    sense opportunities for employers not to be helpless with
    information they know about individuals.
        Mr. Foreman. And absolutely in the guidance did not plow
    any new ground. I mean, if I could just take a moment, it
    actually started based upon a case called Green v. Missouri
    Railroad, where they said you can take these into
    consideration, but there needs to be an individual
    determination. Does this really impact the persons to do the
    job? EEOC then issued guidance that was approved by, then--now
    associate justice Clarence Thomas, saying yes, that makes
    perfect sense. The case went to the Third Circuit, El v. Septa.
    And the Third Circuit said we would like more guidance from
    EEOC on this so that we could actually defer.
        And then EEOC does hearings and develops very detailed
    guidance, but has its foundation in Green and what Associate
    Justice Clarence Thomas said was good policy, and is simply out
    there now so that employers know what the rules are.
        Mr. Courtney. So, again, all I would just say is that, you
    know, if there are issues that, you know, you feel are still a
    problem out there, Ms. Clemens--I mean, frankly, you know, that
    is something that I think that all of us up here are more than
    happy to present to the Commission and support in terms of them
    to reexamine or reevaluate how it is being implemented. But
    5423 is a blunt instrument which even Mr. Dreiband's testimony
    acknowledged, you know, kind of sets in motion a mechanism
    which sweeps up a much more damaging path as far as the--what
    it could do to individuals, who have nothing to do with the
    issue of criminal background checks.
        My few remaining seconds here. Mr. Foreman, can you talk
    about the claim of litigation crisis again in terms of what the
    real numbers are out there? I mean, we heard sue first, ask
    questions later. I mean, again, what I am seeing is really
    almost the opposite in terms of how much actually goes to
    court.
        Mr. Foreman. Well, again, the data is out there that EEOC
    has done a tremendous job in recouping damages and filing all
    suits. There are several cases that repeatedly get played back
    as EEOC gone awry. And one thing I think this Committee really
    needs to understand, if you talk about Kaplan, if you talk
    about People Mart, I think Crist is one of those also. That all
    of these bills would not have changed the outcome in those
    cases at all. Why do I say that? Because Kaplan and Peoplemark
    were approved by the commissioners. So it went through the
    process and they approved that litigation.
        And in Crist, I think also went through the system, but I
    am not 100 percent sure on that. And as the conciliation
    failure, EEOC's position is they engaged in good faith
    reasonable negotiation and so it would not have changed the
    outcome at all. But what it would do is provide another layer
    of litigation and another cost, and prevent innocent victims of
    discrimination from ever getting in the court if there is some
    procedural dismissal on the case.
        Thank you.
        Chairman Walberg. I thank the gentleman. I recognize myself
    now for my five minutes of questioning.
        Mr. Dreiband, thank you for your comments. Thank you for
    your suggestions, as well. That is what a subcommittee process
    is for. And our full Committee chair will appreciate us doing
    deliberative work here. But early this year I met with General
    Counsel Lopez, and followed up with a request for documents
    regarding EEOC's litigation policies. I had EEOC provide me
    with all the class action and systemic complaints filed between
    2009 and 2014. In that, I discovered that only 8 percent of
    these cases were pursued through Commission approval.
        Can you explain to the Committee how a Commission that has
    designed to implement the nondiscrimination policies of EEOC is
    barely involved in multiple plaintiff litigation?
        Mr. Dreiband. Well, it has certainly been a change since my
    time at the Commission. I think that the current approach has
    essentially been to delegate, in practice and in fact, nearly
    all authority to the general counsel to make a decision about
    whether or not to go forward with a lawsuit. That is not how
    the Commission operated when I served at EEOC. As Ms. Clements
    noted, I sent dozens if not hundreds of cases to the Commission
    for a vote. And I found that by doing that, it enabled us to
    speak with one voice, to send a message to actual or putative
    defendants, that the Commission's litigation was backed by the
    full Commission. And I think the results speak for themselves.
        I am flattered that Mr. Foreman saw fit to quote my remarks
    at one time when I served as general counsel. But when I
    served, with full support of the Commission, we recovered more
    money for victims of discrimination through our litigation
    program than ever in the history of the EEOC. And what we have
    seen in the last couple of fiscal years is that both filings
    are down, as well as recovery through the litigation program,
    and down significantly to the lowest levels since the
    Commission started reporting this data.
        So, you know, the Commission is currently free to operate
    how it wants to. The bills would require more involvement by
    the Commission. And I suppose my question would be, for anybody
    who opposes more Commission oversight in deliberation about
    Commission litigation recommendations exactly what they think
    these commissioners should do. I mean, the chair of the
    Commission has the operational authority of the EEOC by
    statute, but the other four commissioners have no operational
    authority at all. They don't supervise investigations, they
    don't direct litigation. All they do is vote on policy matters
    presented to them by the chair on litigation matters presented
    by the general counsel or, on occasion, subpoena enforcement
    actions. And that is it.
        Chairman Walberg. So, would you think that this potential--
    this policy, as it is being carried out right now--speaking as
    a former general counsel, creates the possibility of abuse of
    power by the general counsel in this whole process?
        Mr. Dreiband. Well, I think that the current general
    counsel is a friend and former colleague of mine. And I think
    he is well-intentioned and doing the best job he can do. I
    don't--but I don't think, though, that having oversight by the
    commissioners does anything other than strengthen the
    litigation program by the Commission. It sends a message to the
    public, to potential defendants, that the Commission stands
    behind the decision to commit resources and to file the
    lawsuit. And simply creates a review of potential litigation,
    including some of these embarrassing losses that the Commission
    has suffered lately that may or may not have occurred, of
    course, as Mr. Foreman pointed out.
        But in the same way that the grand jury reviews an
    indictment presented by the prosecutor, the Commission has
    served that function very well, certainly during my tenure and
    at various other times in the history of the agency.
        Chairman Walberg. Thank you. Let me move over.
        Mr. Lloyd, recently EEOC investigated
    PriceWaterhouseCoopers for including a mandatory retirement age
    in its partnership agreements, sounding familiar to your
    situation. The EEOC general counsel submitted that case to the
    Commission, but the Commission by a three-to-two vote did not
    approve litigation. Why is EEOC investigating Deloitte for the
    same type of partnership agreement that PriceWaterhouseCoopers
    has, when the Commission already decided the issue did not
    merit litigation?
        Mr. Lloyd. Mr. Chairman, I have to say I have no idea. I am
    sorry that I can't answer that question.
        Chairman Walberg. I figured that would be your first
    response. But are legal issues any different in the two cases?
        Mr. Lloyd. No, the legal issues are no different. If
    anything, our partnership agreement provides for more
    participation by partners than PriceWaterhouse's does. But
    essentially, we are in the same business, we have the same
    business model, we have the same partnership structure
    generally. Our age is 62 for mandatory retirement, their age is
    60. So in that sense, there is a slight difference. But we have
    not been given, thus far, any notification of the basis of the
    staff's determination that we violate the Age Discrimination
    Act other than they believe any mandatory retirement policy
    based on age is inappropriate.
        Chairman Walberg. So then do you believe the Commission's
    rejection of the PriceWaterhouseCoopers case set a precedent
    the agency should follow unless it provides a compelling
    explanation of why it is abruptly reversing course?
        Mr. Lloyd. I do believe that, yes, sir.
        Chairman Walberg. And that is the challenge that you have,
    then, in dealing with something that is now seemingly a
    precedent-setter. But going over what they have already said.
        Mr. Lloyd. It is. And, you know, one thing that we very
    much would like is an opportunity to discuss with the
    commissioners themselves the reasons why they did not elect to
    proceed against PriceWaterhouse and the reasons why they should
    not elect to proceed against Deloitte.
        Chairman Walberg. Okay, thank you. My time is up.
        I now represent--I now ask the representative--where has he
    gone? Oh, there he is, right here. Representative Takano, who
    has stepped into the Ranking Member's position here, for your
    five minutes of questioning.
        Mr. Takano. Thank you, Mr. Chairman.
        Mr. Foreman, could you comment on this colloquy on the role
    of the Commission and Deloitte's interest in having it's
    interests reviewed by the entire Commission? And maybe just
    comment on what you think the role of the Commission ought to
    be.
        Mr. Foreman. Yes. And I will give my disclaimer that I am
    not an expert on the facts of the specific case. But what I
    think this represents, and what we have heard today, is that
    everybody supports the discrimination laws except when they are
    aimed at their client. And then they come before you and say it
    is not fair that we are being targeted. And why do I say that?
    And Chairman Walberg, you used the term ``precedent-setting.''
    Here is the reason I say that. That case is based on a
    precedent that was set by EEOC years ago, where they sued a law
    firm--Sidley & Austin--arguing that their partners were
    employees.
        That was litigated--a litigation that was approved and
    brought by my colleague, General Counsel--then-General Counsel
    Dreiband, and approved by the Commission. So they had a policy
    of doing exactly what they are doing with PriceWaterhouse. So
    there is not some change of the rules. They are taking existing
    precedent and challenging it. And at some point, the courts and
    the Supreme Court will say are these individuals employees for
    purposes of coverage, or are these employees partners?
        Mr. Takano. Well, I want to shift topics a little bit. The
    majority seems to be using the EEOC's recent guidance on
    background checks as justification for acting on H.R. 5423. It
    is my understanding that the EEOC guidance allowed for
    flexibility based on the nature of the employment. I know that
    we had some of this discussion with Mr. Courtney, but can you
    elaborate on that? The scope of H.R. 5423 seems to go well
    beyond the issue of background checks. What kinds of
    repercussions could a bill of this breadth have on the EEOC?
        Mr. Foreman. Again, and it was talked about earlier, if you
    apply that bill as written it applies to intentional
    discrimination, disparate impact discrimination. A state or
    local government could pass a law that says women could not do
    X. It would be exempted by--under that bill. Now, there is a
    recognition that maybe it should be limited to criminal history
    backgrounds, but even that presents a problem because you are
    elevating local and state law over federal law. Title VII was
    written to do exactly the opposite.
        Mr. Takano. So as you covered in some of your testimony, I
    am still curious about 5423, some of the problems it would
    cause. In your opinion, if we went back to the quote, unquote--
    ``states rights schema'' to root out discrimination in the job,
    what are some of the challenges that workers would face? And
    you named a lot of them just now.
        I am just curious. Mr. Lloyd, given Deloitte Touche's
    commitment to the mission of the Commission, is H.R. 5423
    something that you could support, knowing what you know now?
        Mr. Lloyd. Sir, I think that we support all the bills that
    are proposed. I think some of them could be improved, as Mr.
    Dreiband suggested. But there are--there is guidance issued by
    the EEOC that is problematic in practice. And we think that
    things can be improved. The processes and guidance from the
    EEOC can be improved, sir.
        Mr. Takano. One last question. H.R. 4959 would mandate,
    quote--``good faith efforts to endeavor'' to resolve charges
    by, quote--``bona fide conciliation.'' In doing so, it would at
    least, in part, deal with issues set forth by the Seventh
    Circuit in EEOC v. Mach Mining, which is pending before the
    Supreme Court. Should Congress be getting involved in this
    issue? I think you already answered that, Mr. Foreman.
        Mr. Foreman. My view is absolutely not. That we have a
    Supreme Court, we have exactly that issue there. The business
    community is making their arguments. The United States
    government will be making their arguments. And probably by June
    we will have a decision on what that conciliation provision
    means in Title VII. Why change it now?
        Mr. Takano. And what exactly do good faith and bona fide
    mean, as used in this legislation?
        Mr. Foreman. Well, that is part of the underlying
    litigation. Why the Seventh Circuit said that you cannot
    utilize that as an affirmative defense. Because, one, EEOC has
    absolute discretion as to whether it fulfills--the settlement
    fulfills the duty of Title VII. So is one more offer required,
    is one more dollar required? And if EEOC says no, we are gonna
    fail conciliation, is that bad faith conciliation? And the
    court says you cannot adopt a workable standard, and that is
    the reason we can't make an affirmative defense as this bill
    would attempt to do and as the employers are arguing in Mach
    Mining.
        Mr. Takano. All right, thank you, sir.
        My time has run out.
        Chairman Walberg. I thank the gentleman.
        I now recognize my colleague from Indiana, Mr. Rokita.
        Mr. Rokita. I thank the chair, and I thank the witnesses
    for their testimony. I always learn a lot at these hearings,
    and I think that is what they are about. And perhaps unlike
    some others that were here earlier, I try not to prejudge them.
    But having said that, I do want to start off by offering some
    time to Mr. Lloyd. In Indiana, we have a saying that it is a
    pretty thin pancake that don't have two sides. And I think the
    actual quote is ``don't'' instead of ``doesn't.'' But if you
    had anything else to add to the recent comments of Mr. Foreman,
    you are welcome to say them now, for a couple seconds.
        Mr. Lloyd. Thank you. I actually know the facts of the
    Sidley matter better than Mr. Foreman because I was partner at
    Sidley & Austin and on the executive committee at the time the
    EEOC brought that litigation. And I think Mr. Dreiband made an
    error in suing Sidley. But in any event, I can tell you that on
    the one hand we have the Sidley matter--where the Commission
    approved, going forward, and I understand why. And we have the
    PWC matter, where based on very different facts the Commission
    made the decision not to go forward. And our facts are very
    similar to the PWC situation, and very dissimilar from the
    Sidley situation.
        And I would like the opportunity, as I would have, for
    example, at the SEC if the staff made a recommendation to
    proceed, to submit, in one form or another--and maybe even
    visit with--to the commissioners the facts so that they can
    make an informed decision about whether it makes sense as a
    policy matter, as a matter of whether this is a novel issue of
    law, and as a resource allocation matter. I mean, who are we
    going to protect here by initiating this litigation and tying
    up our staff time on this? And I can tell you, we take votes.
    Sidley partners did not vote, for example. That is a very
    important difference.
        And my guess is that if at Sidley we would have had votes
    taken by the partners on a routine basis for such things as
    electing leadership that the EEOC, at the time, would have made
    a different decision and would not have authorized proceeding
    against Sidley.
        Mr. Rokita. Thank you, Mr. Lloyd.
        Mr. Lloyd. Thank you.
        Mr. Rokita. And this is to you and Mr. Dreiband. In my
    prior public service, I was Indiana secretary of state. In that
    great job, I had the opportunity to oversee several boards,
    appoint several boards, create into statute boards. Some
    boards, you know, were politically divided equally: two
    Republicans, two Democrats. That usually ended in a disaster.
    But some were all my appointments, as a person being directly
    elected by the people. And then some had different varied
    degrees of political appointments. But they weren't necessarily
    partisan. It was just a way to decide things and to reflect the
    will of the people through their elected representatives.
        It seems to me, in hearing this discussion, that if you are
    having unelected attorneys, bureaucrats-- whatever word you
    want to use-- make these decisions, you are kind of tipping the
    scale of what the statute might have intended and the
    legislature might have intended in terms of the political
    appointments and how these decisions were supposed to be,
    really, made. Can you comment on that briefly, Mr. Lloyd? And
    then Mr. Dreiband, same question?
        Mr. Lloyd. Yes, I would be happy to respond. I agree
    wholeheartedly. And it has nothing to do with the competence of
    the attorney or the good faith of the attorney. Speaking as a
    general counsel myself, you know, I many times have oversight
    that sometimes I wish I didn't have. But I have found that,
    over time, that oversight and getting differing opinions from
    people who are experienced and have different insight--come
    from different backgrounds, have different points of view--is
    extremely valuable. I learn things, I then make different
    decisions on occasion from what I would normally do.
        Mr. Rokita. And then Mr. Dreiband, in the time I have
    remaining. Thank you, Mr. Lloyd.
        Mr. Dreiband. Sure. Any law enforcement agency, no matter
    who they are, can become prone to overzealousness and excess.
    That is true of prosecutors, that is true of police
    departments. And, at times, it is true even of the EEOC. To
    deal with this issue, Congress created the Commission; a
    bipartisan Commission of five people, appointed by the
    President, confirmed by the United States Senate, to serve
    staggered five year terms. No more than three of those five
    members can be of the same political party. As a result, the
    Commission, in the statute itself, is responsible for
    authorizing attorneys appointed by Title VII of the Civil
    Rights Act to appear in court at the direction of the
    Commission.
        Congress did not intend, and there is nothing in the--any
    statute to suggest that Congress did intend, for the Commission
    to delegate all of its authority about litigation entirely to
    other people in the agency. And that appears, in practice, to
    what has happened at the EEOC. In the same way as I said
    earlier that grand juries provide a check on prosecutors, even
    the most well intentioned prosecutors, the Commission can
    serve, and has historically served, that same function at the
    EEOC.
        Mr. Rokita. Thank you, Mr. Dreiband.
        Seeing my time has expired, Mr. Chairman, I am yielding
    back. But I also would like to note for the record that the
    Ranking Member indicated that the hearing was only noticed for
    eight days. That is actually a day long--extra day than what
    the rules actually require. And I would hope that the Ranking
    Member, with 25 years of law practice, would have read our
    rules.
        Chairman Walberg. I appreciate the former secretary of
    state's attention to detail. And yes, it was eight days, while
    we were only required seven days.
        I now have pleasure of recognizing the gentleman from
    Virginia, Representative Scott.
        Mr. Scott. Thank you, Mr. Chairman.
        Mr. Foreman, we have talked about the background checks.
    The case I remember from--was the Griggs case, where they
    required high school diplomas, which had nothing to do with
    your ability to do the job. And it had a disparate impact in
    the community without having any relationship to the jobs. Now,
    this background check thing comes into practice with what is
    called that box you have to check. And there is a campaign to
    ban the box because when you check the box your application
    summarily goes into the trash.
        Now, we have heard of situations where you--it would be
    illegal to hire people who have been convicted of violent
    crimes or sexual--or people who have--sexual abuse. Would it be
    improper to have a box on the application that states violent
    crime or sexual abuse as opposed to a box that generally any
    felony or any arrest or anything else that would be generally
    applicable? It seems to me that the general box, any felony,
    would be over-broad and would include a lot of people that
    would not be prohibited from being employed. And you would have
    the--you are back to the disparate impact without any job
    relation. Is that true, Mr. Foreman?
        Mr. Foreman. I mean, that would be one way to attempt to
    address it. I mean, you are absolutely right on banning the
    box. I mean, what happens is, many employers will adopt a
    policy that says have you ever been arrested or convicted of a
    crime. If the answer is yes, you are out of the screening
    process and there is no individualized assessment. And part of
    what EEOC's guidance is trying to do is say let's look at the
    person. Is this person rehabilitated? Is it proper--can this
    person do the job? Is it reasonably related to the job? That is
    really all the guidance is trying to do.
        In going back, as you said, to Griggs v. Duke Power, that
    was a GED that screened out minority employees. And the court
    there found that it was discriminatory, developed a disparate
    impact analysis, and we discovered there are other things that
    do that. And that is what the criminal guidance is supposed to
    do. The problem with the proposed bill, then, it then takes and
    exempts state and local governments from basically the
    requirements of Title VII. When it was passed, that was vital
    to Title VII. So let's not understate what the proposed bills
    are doing. You are rewriting one of the most historic civil
    rights statutes of our history in a way that doesn't add any
    benefit.
        Mr. Scott. Mr. Foreman, can you state the present law on
    discrimination cases as they relate to sex discrimination, what
    you can recover, as opposed to other forms of discrimination--
    race, religion, national origin? Are there differences in what
    you can recover?
        Mr. Foreman. Well, they are absolutely different in terms
    of what EEOC can recover as opposed to an individual who may
    bring a claim under--and I don't want to get bogged down in
    terminology, but 42-USC-Section 1981 there are uncapped
    damages. You--the jury will award whatever the damages are that
    were the cause of the discrimination. Whereas under Title VII,
    they are capped according to the size of the employer.
        Mr. Scott. Well, is it different in Title VII from other
    forms of race discrimination? They are uncapped under 1981, but
    not uncapped in others?
        Mr. Foreman. Well, 1981 only applies to race
    discrimination-based claims. So if you bring a race-based claim
    under Title VII in an employment context you are capped. But
    you are also capped in sex discrimination, any of the protected
    coverages under Title VII. Did that answer your question?
        Mr. Scott. I think--yes. Well, does the--we have the Fair
    Pay Act for sex discrimination cases. Can you say what they
    would do to improve the situation, the Equal Pay Act?
        Mr. Foreman. Well, the Equal Pay Act has a different
    regimen that does not have the same level of damages. I mean,
    the reality is that the discrimination law should provide
    whatever damages the person suffered, whether it is sex-based
    discrimination, race-based discrimination. And I think the Fair
    Pay Act is attempting to get at that to say if you are--if you
    prove that you are a victim of intentional discrimination, then
    you should be entitled to whatever economic damages that
    discrimination caused you.
        Chairman Walberg. The gentleman's time has expired. Thank
    you.
        And now I recognize the sponsor of H.R. 4959, my colleague
    from North Carolina, Mr. Hudson.
        Mr. Hudson. Thank you, Mr. Chairman.
        Mr. Lloyd, I have read your testimony and I have to tell
    you I am really deeply concerned that at a time when--with
    limited resources EEOC has, what, some 77,000 pending claims
    they are looking at, that they have just--that they have made a
    decision to go after your firm and the mandatory retirement
    age, when no one has filed any sort of complaint or there have
    been damages. This is a decision made by a group of partners
    who manage this firm. And the irony of it is, if the firm
    decided to comply with the lawyers at the EEOC's request it
    would require a vote of the partners to make the change.
    Frankly, it is outrageous to me.
        But my question to you is, do you believe that if the EEOC
    continues to pursue this line, this matter, that it would
    involve a major expenditure of resources by the EEOC and/or
    trigger the public controversy test requiring a vote of the
    Commission?
        Mr. Lloyd. Well, I strongly believe that it would meet
    those tests, as well as the tests that this would be a novel
    application of the law for reasons we discussed. It would
    require extensive expenditure of resources by the EEOC. Not
    court costs and things like that. But when you think of
    valuable staff time, this would be major litigation. We would
    defend ourselves vigorously because we think they are wrong as
    a matter of law and as a matter of fact. And so the EEOC staff
    devoted to that litigation would be fairly extensive. And those
    people would not be able to pursue those 100,000 claims, or
    charges, that they get of individuals who need real protection.
        I mean, we are talking about, at Deloitte, people who are
    real partners but, beyond that, very highly compensated. And we
    have done a study in response to this that shows that our
    partners who have retired, been required to retire in the last
    five years, have been overwhelmingly--as I said in my
    testimony--white males. And yet our population coming along
    through the staff and eligible to be admitted to the
    partnership is much more diverse. And over the last five years,
    while our white males have been retiring, 88 percent of our
    retiring partners have been white males over that last five
    years and only 12 percent women and minorities.
        On the other hand, the newly-admitted partners during that
    same period of time have been 41 percent women and minorities
    and 59 percent white males. And so the operation of the
    mandatory retirement system has actually caused our partnership
    to become more diverse, and it clearly will in the future.
        Our population of people below the partner level is
    incredibly diverse, and they are wonderful performers and they
    are going to advance to partnership. But if we were not able to
    have this mandatory retirement provision that we do have, age
    62, then--we have a limited number of partnerships--and so the
    opportunities for the women and minorities would be limited.
    Not foreclosed, but they would be limited. And, to me, that is
    a perverse result when you think of all of the objectives of
    the statutes that the EEOC is tasked to enforce, and objectives
    that we believe in quite strongly. I mean, we do our own
    internal disparate impact analyses, and we make sure that we
    are doing the best job we possibly can to provide equal
    opportunities and development opportunities for our women and
    minorities. And this would hinder that.
        Mr. Hudson. I appreciate that. And, Mr. Chairman, I do
    believe the cost involved, as well as the public controversy
    test certainly comes in play here. And I would hope that the
    EEOC, if they choose to pursue this, will move to a vote of the
    Commission. Because I think that is what the statute requires.
        Changing direction here quickly, Mr. Dreiband, my bill,
    H.R. 4959, has a provision clarifying the EEOC's conciliation
    efforts must be in good faith and are subject to judicial
    review. Professor Foreman's testimony criticizes this provision
    as undermining the separation of powers because the Supreme
    Court has granted review on this very issue in the EEOC v. Mach
    Mining. Do you believe it is appropriate for Congress to
    clarify what the duty of the conciliation entails?
        Mr. Dreiband. Well, I don't see anything wrong with
    Congress clarifying the matter if Congress decides to do that.
    Congress is an independent branch of the United States
    government, and it is not in any way limited by the fact that a
    lawsuit is pending before any particular court, including the
    Supreme Court of the United States.
        Mr. Hudson. Appreciate that. Trying to use my time as
    efficiently as I can.
        Ms. Clements, thank you for you testimony. I have read
    that, as well. You described instances of what could be
    characterized as abusive investigatory tactics at EEOC. You
    also described situations where EEOC would make a
    predetermination settlement demand, and when the employer
    declined the EEOC would quickly drop some of the charges. The
    EEOC Transparency and Accountability Act, which I have
    introduced, clarifies the EEOC must conciliate in good faith
    and provide specific information to the employer about the
    factual basis of the allegations and the effect on employees,
    and the EEOC's conciliation efforts are subject to court
    review. How would these provisions alleviate the problems you
    have seen at EEOC investigations and mandatory conciliations?
        Chairman Walberg. Seeing that time has expired, and yet
    being a sponsor of the piece of legislation I will ask you to
    respond as quickly as possible, and the rest could be put in
    writing.
        Ms. Clements. I think it is important for the Committee and
    the EEOC to recognize that employers, when faced with
    appropriate information from the Commission, are more than
    willing to come to the table and try to fix problems that the
    Commission sees. What is happening now is that employers don't
    have enough information to really evaluate the strength of the
    EEOC's findings. And it makes it difficult for employers to
    pursue negotiations in good faith. And so one of the things
    that I think your bill would help is provide that information
    so that both parties can come to the table in good faith with
    the same information about the employment practices that are at
    issue.
        Mr. Hudson. Great. I thank the Chairman for his magnanimity
    and discretion there. Thank you.
        Chairman Walberg. How is that defined in North Carolina? I
    am not sure about Michigan either, so thank you. I thank the
    gentleman. And thanks to the panel. We appreciate your very
    considered testimony, answers to question, ideas. And that,
    again, is the purpose of this subcommittee.
        And now I would ask my Ranking Member to conclude with his
    concluding remarks.
        Mr. Courtney. Thank you, Mr. Chairman. Again, thank you to
    all the witnesses for the time you devoted here this morning.
    Again, I understand that while I was over at the Agriculture
    Committee someone raised a question about whether or not I was
    challenging whether the Committee had followed the rules. That
    was not my point earlier. There is no question seven days is
    the rule. The issue, really, is that this is, I think, our
    third hearing or possibly our fourth hearing on EEOC over the
    last two years or so. Once the chair was the witness, but since
    then the scheduling of the hearing process has basically
    effectively excluded the Commission from participating in a--in
    what I think would be a helpful dialogue in terms of trying to
    express frustrations that members may have, constituents may
    have.
        Because in my opinion, you know, a legislative response,
    which is really, you know, what is on the agenda here today--is
    a fool's errand. I mean, the chances of any of these bills
    getting enacted in the 113th Congress are about as remote as
    the Red Sox getting into the playoffs. And if any of you follow
    the standings, they have been mathematically eliminated. So
    that is impossible. And so, you know, we have this exercise for
    whatever purpose. And, again, it is gonna accomplish nothing in
    terms of changing the law. And what I think would be a better
    use of time would be to actually engage with the Commission and
    the department.
        We have tangible results in the last nine months since
    Secretary Perez has taken over, where he has listened to
    bipartisan concerns that members have raised with the
    department in terms of department operations. And he has
    responded to those with real tangible results.
        And, again, I think, you know, having legislation which was
    just filed, you know, in certainly the last case, you know,
    within just a week ago, and expect that to somehow advance the
    ball here in terms of, you know, really trying to improve the
    agency's performance, again I just think is--with the
    productivity of this Congress in terms of the amount of
    legislation that has actually been enacted, you know, just not,
    in my opinion, the most effective use of time.
        And so, again, the 50th anniversary of the Civil Rights Act
    is something that we observed as a nation this year. I think,
    again, Mr. Foreman, helped try and sort of rebalance the record
    here today into showing that there still are people who suffer
    from racial and civil rights violations in this country. The
    EEOC has a very necessary role in our economy, in our country.
    And what, I think, hopefully this committee will do is come up
    with strategies that, in my opinion, does not trample on the
    mission of Title VII and the Civil Rights Act but, in fact, in
    a measured, balanced way move our country forward. Which is
    really the best way to celebrate the 50th anniversary of the
    Civil Rights Act.
        And with that, I yield back.
        Chairman Walberg. I thank the gentleman, and I take his
    points. We are also celebrating Constitution Day today. That is
    an important document as well that I think gives an awful lot
    of direction for what we are to do in Congress. You mentioned
    Boston, I will mention the Tigers right now. And we are hopeful
    that they have a better opportunity of being in the World
    Series. But that is not certain. It could change this weekend.
        There are 384--at least 384 bills that sit over in the
    Senate right now that have been passed after significant
    effort, after this body has spoken. Much of that wealth of
    legislation is bipartisan, to some degree. It sits over in the
    Senate without any action. We don't reasonably expect them to
    take action on it, sadly. But we certainly expect us--and as we
    have opportunity we expect us--to take action here, and address
    issues that have perked to the top with great concern. And that
    has been the case. We have had the EEOC over here. We have
    had--I have had the EEOC in my office. We have sent letters. We
    continue to have concerns that are expressed.
        The overriding intent of Congress in putting the EEOC into
    operation was to clearly give the opportunity to make sure that
    unnecessary--well, let me change that. That--I was going to say
    unnecessary time was not spent. But I am going to say that all
    necessary time would be spent on making sure that
    discrimination did not happen, that people were afforded--
    regardless of who they are, what they believe, the color of
    their skin, their gender, their disabilities, were not
    discriminated against. And that complaints were brought before
    a Commission. And we established a Commission to be a
    Commission with some latitude to decide how they function, to
    some degree. But a Commission to clearly make decisions that
    had impact upon equal rights and opportunity and the way
    businesses functioned.
        And so I guess today is, I hope, not an exercise in
    futility, but a laying down and establishing a claim by
    Congress on its concern that issues of concern be addressed.
    And if there are better ways of dealing--and enhancing this
    legislation that has been put forward, we are certainly willing
    to look at it. But when you have 70,000 complainants expecting
    some response by a Commission that is a backlog right now, and
    you have other complaint--other cases that are being initiated
    without complaint--I think that is a problem we ought to ask
    questions, at the very least, about. And that the EEOC ought to
    know that there are members of Congress on this subcommittee,
    on the full Committee and in Congress at large that want those
    issues of concern addressed and not just carrying on the same
    old, same old.
        When you have actions without employee complaint, when you
    have uncertainty, inconsistency being brought into the mindset
    of businesses, employers, and employees attempting to
    understand the system, we ought to address that concern. At
    least ask questions. And hopefully the EEOC is listening. They
    certainly have an opportunity to respond--and I am sure they
    are listening--respond in letter to us expressing concerns,
    expressing ideas; some that have been addressed today here
    already by our witness panel of suggestions on how legislation
    could be addressed to go forward.
        The hearing at least, as I said, lays a claim to carrying
    on our concern. Whether it is successfully concluded with this
    session of Congress, or whether it establishes a base to pursue
    more aggressively to conclusion in the next Congress, I think
    that is an important opportunity and responsibility of this
    subcommittee. Having said all of that, we will look forward to
    the response, as well as carrying on further.
        I again want to thank the panel for being here. I thank my
    committee members for their attention today.
        And there being no further business, the subcommittee
    stands adjoined.
        [Additional submission by Mr. Courtney follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        [Whereupon, at 11:32 a.m., the subcommittee was adjourned.]

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