Financial Institutions Urged to Examine EEO Practices Proactively in Light of Frank-Dodd

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The Frank-Dodd Financial Reform mandates that every federal finance agency must establish an Office of Minority and Women Inclusion. Many think that this measure will eventually extend to private financial institutions. The financial services industry is no stranger to employment discrimination claims. Nearly all of the major players in this sector have gone through EEOC investigations, single- or multi-plaintiff discrimination claims, or class action litigation. Because of this, it's critical that employers in the financial services sector take a proactive approach and evaluate employment decisions with respect to equity.

"Monitoring employment decisions with respect to equity is important for all employers. But given the increased scrutiny of the financial sector, it's critical that financial services firms engage in these proactive analyses."

Since 2007, the United States economy has experienced some of the most trying times since the Great Depression. In the last three years trillions of dollars of wealth have been wiped out due to the declining stock market, millions have lost their homes due to a housing crisis, and millions more have lost their jobs as the world sinks into a global recession. In an effort to correct the serious imbalances that some believe have caused this condition, Congress has passed the Frank-Dodd Financial Reform Act. The Act focuses on oversight, and establishes some new committees and councils. The Consumer Financial Protection Bureau has been established within the Federal Reserve. A Financial Services Oversight Council has also been created to serve as an early warning detection system for storms brewing in the markets.

But there is an aspect of the financial reform act that has largely been overlooked. It mandates that every federal finance agency must establish an Office of Minority and Women Inclusion. According to the bill, the goal is to “ensure equal employment opportunity and racial, ethnic and gender diversity.” At least twenty federal agencies are expected to be affected by this, including the Federal Reserve. Existing offices or diversity programs must be replaced by January 20, 2011.

Many think that this measure will eventually extend to private financial institutions. The financial services industry is no stranger to employment discrimination claims. Nearly all of the major players in this sector have gone through EEOC investigations, single- or multi-plaintiff discrimination claims, or class action litigation.

Because of this, it’s critical to take a proactive approach. Employers in the financial services sector should begin to take a hard look at their hiring, promotion and training practices, and their compensation systems. Even if the government doesn’t require every private-sector firm to have an Office of Minority and Women Inclusion, reviewing employment decisions with respect to equity is an essential part of employment litigation risk management.

The Equal Employment Advisory and Litigation Support Division of MCG is uniquely positioned to work with employers in the financial services industry to examine their practices with respect to equity. The Division head, Stephanie R. Thomas, Ph.D., has deep consulting experience on EEO issues as they relate to the financial services sector. Her client list includes many of the leading financial services firms and brokerage houses in the country. She specializes in the statistical analysis of EEO issues, and has served as a consultant and an expert on a variety of EEOC and OFCCP investigations, multi-plaintiff discrimination claims, and employment discrimination class action litigation within the financial services sector.

Unlike some of our competitors who view proactive analyses as a “by-product” of their litigation work, we think that proactive analyses are a critical component of an organization’s overall risk management strategy. We’ve built an entire service line around employment litigation risk management and have specialists available seven days a week to assist you. To find out how we can help you manage your risk of employment practices litigation, call MCG for a free consultation at 401-331-6360.

http://mcg-site.com/equalemployment/index.shtml

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Stephanie Thomas
MCG
401-331-6360
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