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In the News: Lessons to be learned from the $1.45 million EEOC settlement with JP Morgan Chase

JPMorgan Chase recently reached a $1.45 million settlement with the Equal Employment Opportunity Commission (EEOC) on behalf of female employees who worked in JPMorgan Chase’s Columbus, Ohio office. While we wouldn’t normally profile a case against another company, Jamie LaPlante, Senior Associate with Porter Wright, writes in HR Strategy that there are a number of lessons in this case that your company can use to protect itself.

The case:
In the case, the EEOC alleged that the women were subjected to a hostile work environment and were denied potential sales leads and training opportunities on the basis of their gender. Specifically, mortgage consultant Aimee Doneyhue alleged that her manager and other supervisors subjected her to abusive and harassing behavior based on her gender and also claimed her manager questioned whether she could make it in the “boys club.” Doneyhue, whose position was commission-based, also claimed that her commissions and loan assignments were tampered with and she was subjected to increased scrutiny and continued ridicule after she filed her complaint until her termination in May 2008.

The EEOC took on the case, which was a class action, in September 2009 on behalf of female employees who worked in the company’s consumer direct sales department. In the case, the EEOC alleged that JPMorgan Chase assigned sales calls to sales staff in an unfair way, which directly affected female employees’ ability to earn bonuses and commissions. The agency also claimed that JPMorgan Chase permitted a hostile work environment based on gender.

Of particular note, the EEOC also obtained sanctions against the company for failing to preserve “telephone skill login data” records relating to the assignment of loans and also argued that the data were purged as a result of its routine destruction of electronically stored information despite having notice of the scope of the EEOC’s claims.

The verdict:

JPMorgan Chase and the EEOC ultimately reached a $1.45 million settlement, which includes $470,000 in punitive damages, ahead of the court trial. As part of the settement, ­JPMorgan Chase is required to institute an automatic call distribution system and maintain records regarding the system and the assignment of calls to mortgage consultants; report allegations of sexual harassment and conduct discrimination to the EEOC; and post a notice of its harassment, discrimination, and retaliation obligations to employees.

The lessons:
1.Create a defensible method of distributing sales leads, customers and territories:

LaPlante notes that sales leads, customers, and territories should be assigned equally based on legitimate nondiscriminatory criteria (e.g., experience with a territory or customers, skill level, product knowledge, and tenure). Further, your method of assigning sales leads, customers, and territories should be defensible if challenged.
1.Preserve documents as soon as litigation is anticipated

Regardless of the nature of the litigation at hand – or the parties involved – be sure to preserve any and all information that might be pertinent to the case. If this means suspending scheduled data purges, so be it. Further, have plans in place to broaden the scope of document preservation as soon as the litigation’s scope is broadened. LaPlante notes that “failing to preserve documents can turn a potentially strong case into a weak one or lead to adverse inferences about lost evidence and whether the evidence would have been helpful to the opposing side.”

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