EEOC Probable Cause Findings: Conciliation, Recovery, and Next Steps

An EEOC probable cause finding means an investigator reviewed your charge and concluded that workplace discrimination likely occurred. The statute actually calls this “reasonable cause to believe that the charge is true,” and the two terms are used interchangeably in everyday conversation.¹ It is not a verdict, and it does not decide the case. What it does is move your charge into a mandatory settlement process called conciliation, and if that fails, it opens the door either to an EEOC lawsuit or to your own suit in court.

What the Finding Actually Decides

The EEOC’s compliance manual frames the question as whether “all of the material and relevant evidence persuades the reviewer that the charging party has been discriminated against.”² That threshold sits well below what a court would need to hold an employer liable at trial. The agency is saying the complaint has enough factual support to justify pushing the parties toward a resolution, not that discrimination has been proven.

This distinction matters in both directions. Charging parties sometimes read a cause finding as a win and are surprised when the employer refuses to settle on their terms. Employers sometimes read it as a foregone loss and settle for more than they need to. Neither reaction fits the actual weight of the determination. Employers can and do prevail in court after a cause finding, and cases can also succeed in court after the EEOC found no cause. The agency’s conclusion is not binding on a judge or jury.

The finding is issued by a district director or other authorized official and delivered to both parties as a Letter of Determination.³ That letter is final when issued, though the EEOC retains limited authority to reconsider on its own initiative.

The Letter of Determination and Conciliation

The Letter of Determination explains the agency’s conclusion and invites both sides to participate in conciliation, the informal settlement process the statute requires before any lawsuit can proceed.⁴ The EEOC acts as a mediator between you and the employer. It typically proposes relief such as back pay, reinstatement, compensatory damages, policy changes, and commitments to prevent future discrimination.

Conciliation is confidential. It is voluntary in the sense that neither side can be forced to accept particular terms.⁴ If both sides agree, the terms go into a written conciliation agreement that functions like a binding contract. If either side walks away or the parties cannot reach terms, conciliation is declared unsuccessful.

Two things are worth understanding before you enter this phase. First, the cause finding shifts the negotiating dynamic but doesn’t remove the employer’s ability to say no. Second, whatever you sign in a conciliation agreement typically ends the case for good, so the terms deserve the same care as any other settlement.

What Happens If Conciliation Fails

When conciliation ends without agreement, the EEOC decides whether to file a lawsuit against the employer on behalf of the public interest. The agency only litigates a small fraction of cases. When it declines to sue, it issues a Notice of Right to Sue.

That notice gives you 90 days to file your own lawsuit in federal or state court.⁵ Missing that 90-day deadline almost always forfeits your right to bring the claim. The clock runs from the date you receive the notice, not the date the EEOC issued it, but courts don’t give much slack, so treat the earlier date as your working deadline.

If the EEOC does decide to sue, the agency takes over the litigation. You are not required to hire your own attorney in that scenario, though many charging parties do so anyway to protect their individual interests, which don’t always align perfectly with the agency’s public-interest posture.

What You Can Recover

The goal of remedies in employment discrimination cases is to put you as close as possible to the position you’d be in if the discrimination never happened.⁶ Available relief can include job placement or promotion, back pay and lost benefits, compensatory damages for out-of-pocket costs and emotional harm, punitive damages for especially reckless conduct, and attorney’s fees.

Federal law caps the combined total of compensatory and punitive damages based on employer size:⁷

15 to 100 employees: $50,000
101 to 200 employees: $100,000
201 to 500 employees: $200,000
More than 500 employees: $300,000

These caps apply per complainant and cover compensatory damages for emotional harm, future financial losses, and punitive damages combined. Back pay is calculated separately and has no statutory cap. The caps also do not apply to claims under the Age Discrimination in Employment Act or the Equal Pay Act, which have their own remedial schemes, including liquidated damages equal to the back pay award for willful violations.⁶

Beyond monetary relief, settlement agreements and court orders routinely require employers to stop the discriminatory practice, implement new policies, and conduct training.⁶ These non-monetary requirements often matter more to the broader workforce than the individual payout.

How Any Money You Receive Is Taxed

The tax treatment of a settlement or judgment surprises many charging parties. The general rule is that unless a specific exclusion applies, settlement payments and court awards are taxable income.⁸

Back pay is taxed as wages, which means your employer (or former employer) must withhold income taxes and payroll taxes just as it would from a regular paycheck. Compensatory damages for emotional distress are also taxable, but they are not subject to employment tax withholding. You pay income tax on them, typically through estimated payments or on your annual return.⁸ Punitive damages are always taxable.

The one major exclusion covers damages received for personal physical injuries or physical sickness. The statute explicitly says emotional distress alone does not count as a physical injury. The narrow exception is that medical expenses you incurred to treat emotional distress can be excluded; the distress itself cannot.⁹ In practice, this means the vast majority of employment discrimination recoveries are fully taxable. How the settlement agreement allocates the payment across different categories affects your tax liability, so review the allocation with a tax professional before signing.

Retaliation Protection While the Case Is Pending

Filing a charge and cooperating with the investigation are protected activities. An employer that punishes you for either commits a separate violation that can support its own claim and its own damages. Retaliation charges are now the single most common type of claim the EEOC receives.

Three elements make out a retaliation claim:¹⁰

Protected activity. You participated in an EEOC process (filing a charge, testifying, assisting an investigation) or opposed conduct you reasonably believed was discriminatory. Participation is protected regardless of whether the underlying charge has merit.
A materially adverse action. The employer did something that would deter a reasonable person from making a complaint. This goes beyond firing or demotion and can include a transfer to a less desirable shift, exclusion from meetings, or other changes that carry real consequences. Minor annoyances and everyday rudeness don’t qualify.
A causal connection. Evidence linking the protected activity to the adverse action. Suspicious timing, inconsistent explanations, and disparate treatment compared to coworkers who didn’t file complaints all support this element.

Remedies for retaliation match those for the underlying discrimination: back pay, compensatory and punitive damages subject to the same caps, reinstatement, and attorney’s fees.⁶ If retaliation happens after your cause finding, it can be raised as a new charge or folded into the existing case, depending on where things stand.

When to Bring In an Attorney

You are not required to have a lawyer for conciliation, and the EEOC will conduct the process either way. But conciliation is where the value of your claim is decided in most cases, and the calculations behind a fair offer (back pay periods, front pay, emotional distress valuations, the damages cap applicable to this employer’s size) are the sort of thing attorneys do routinely.

Cost is the most common reason people hesitate. Many employment discrimination attorneys work on a contingency basis, meaning they collect a percentage of your recovery rather than billing by the hour. Federal law creates a strong presumption that a prevailing employee’s attorney’s fees and litigation costs are paid by the employer.¹ Recoverable costs include expert witness fees, transcript costs, and reasonable out-of-pocket litigation expenses.¹¹ Fee-shifting is why contingency arrangements are common in this area of law.

If conciliation fails and a right-to-sue letter arrives, the 90-day filing deadline leaves little room for delay. Attorneys familiar with employment discrimination law can move quickly, but finding and retaining one takes time. Starting the search before the letter arrives is worth the effort.

1
Office of the Law Revision Counsel. 42 USC 2000e-5 – Enforcement Provisions
2
U.S. Equal Employment Opportunity Commission. CM-602 Evidence
3
eCFR. 29 CFR 1601.21 – Reasonable Cause Determination
4
U.S. Equal Employment Opportunity Commission. What You Should Know – The EEOC, Conciliation, and Litigation
5
U.S. Equal Employment Opportunity Commission. Filing a Lawsuit
6
U.S. Equal Employment Opportunity Commission. Remedies for Employment Discrimination
7
Office of the Law Revision Counsel. 42 USC 1981a – Damages in Cases of Intentional Discrimination
8
Internal Revenue Service. Tax Implications of Settlements and Judgments
9
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
10
U.S. Equal Employment Opportunity Commission. Enforcement Guidance on Retaliation and Related Issues
11
U.S. Equal Employment Opportunity Commission. Chapter 11 – Remedies