100px-US-CourtOfAppeals-9thCircuit-Seal_svgBy Gerald L. Maatman, Jr., Christopher J. DeGroff and Alex W. Karasik

Seyfarth Synopsis: After the U.S. Supreme Court clarified in McLane Co. v. EEOC, No. 15-1248, 2017 U.S. LEXIS 2327 (U.S. 2017), that the scope of review for employers facing EEOC administrative subpoenas was the abuse-of-discretion standard, a relatively high bar of review, the Ninth Circuit applied that standard of review on remand and vacated the District Court’s original decision that denied the enforcement of an EEOC subpoena.

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An often contentious issue in EEOC investigations involves the scope of administrative subpoenas, which can be burdensome for employers when the subpoenas seek a broad range of company-wide information.  When analyzing the standard of review for decisions relating to the enforcement of EEOC subpoenas, in McLane Co. v. EEOC, No. 15-1248, 2017 U.S. LEXIS 2327 (U.S. Apr. 3, 2017), the U.S. Supreme Court held that such decisions were examined under an abuse-of-discretion standard.  The abuse-of-discretion standard sets a relatively high bar for review, as we blogged about here.  Following the U.S. Supreme Court’s remand to the Ninth Circuit in McLane, the Ninth Circuit vacated the District Court’s denial of enforcement of the subpoena and sent the matter back to the District Court for further proceedings.  EEOC v. McLane Co., No. 13-15126, 2017 U.S. App. LEXIS 9027 (9th Cir. May 24, 2017).

For employers, this is an important case to follow as it provides clarification as to the standard of review used when Appellate Courts address district court subpoena enforcement decisions.

Background

The EEOC issued an administrative subpoena as part of its investigation into a charge of discrimination filed by a former employee of a McLane subsidiary.  Id. at *3.  The employee alleged that McLane discriminated against her on the basis of sex when it fired her after she failed to pass a physical capability strength test.  Relevant here, the subpoena requested “pedigree information” (name, Social Security number, last known address, and telephone number) for employees or prospective employees who took the test.  Following the Court’s precedent at the time, the Ninth Circuit applied a de novo review to the District Court’s ruling that the pedigree information was not relevant to the EEOC’s investigation.  Id. at *3-4.  The U.S. Supreme Court vacated the Ninth Circuit’s judgment after holding that a district court’s decision whether to enforce an EEOC subpoena should be reviewed for abuse of discretion.  The U.S. Supreme Court remanded the case to the Ninth Circuit so that the Ninth Circuit could re-evaluate the District Court’s ruling under the proper standard of review.

 The Ninth Circuit’s Decision On Remand

After reviewing the District Court’s decision under the abuse-of-discretion standard, the Ninth Circuit still held that the District Court abused its discretion by denying enforcement of the subpoena.  Id. at *4.  The District Court found that the pedigree information was not relevant “at this stage” of the EEOC’s investigation because the evidence McLane had already produced would “enable the [EEOC] to determine whether the [strength test] systematically discriminates on the basis of gender.”  Id.  The Ninth Circuit rejected this approach, noting that the District Court’s ruling was based on the wrong standard for relevance.  The Ninth Circuit stated that under Title VII, the EEOC may obtain evidence if it relates to unlawful employment practices and is relevant to the charge under investigation.  Quoting EEOC v. Shell Oil Co., 466 U.S. 54, 68-69 (1984), the Ninth Circuit opined that the relevance standard encompasses “virtually any material that might cast light on the allegations against the employer.”  Id. at *5.

Applying Shell Oil, the Ninth Circuit found that the pedigree information was relevant to the EEOC’s investigation since conversations with other McLane employees and applicants who have taken the strength test “might cast light” on the allegations against McLane.  Id.  McLane argued that, given all of the other information it had produced, the EEOC could not show that the production of nationwide pedigree information was relevant to the Charge or its investigation under either a disparate treatment or disparate impact theory.  Id. at *6. The Ninth Circuit construed the District Court’s application of relevance to be a heightened “necessity” standard, and noted that the governing standard was “relevance,” not “necessity.”  Id.

The Ninth Circuit then found that the District Court erred when it held that pedigree information was irrelevant “at this stage” of the investigation.  Id.  Rejecting the District Court’s conclusion that the EEOC did not need pedigree information to make a preliminary determination as to whether use of the strength test resulted in systemic discrimination, the Ninth Circuit held that the EEOC’s need for the evidence—or lack thereof—did not factor into the relevance determination.  Id. at *6-7. While McLane had argued that the pedigree information was not relevant because the charge alleged only a “neutrally applied” strength test, which by definition cannot give rise to disparate treatment, systemic or otherwise, the Ninth Circuit rejected this approach, holding “[t]he very purpose of the EEOC’s investigation is to determine whether the test is being neutrally applied; the EEOC does not have to take McLane’s word for it on that score.”  Id. at *7.  Accordingly, the Ninth Circuit held that because the District Court based its ruling on an incorrect view of relevance, it necessarily abused its discretion when it held that the pedigree information was not relevant to the EEOC’s investigation.

The Ninth Circuit concluded by noting that on remand, McLane was free to renew its argument that the EEOC’s request for pedigree information was unduly burdensome.  Id. at *8. Further, explaining that it did not reach the issue in its original decision, the Ninth Circuit instructed that “[o]n remand, the district court should also resolve whether producing a second category of evidence — the reasons test takers were terminated — would be unduly burdensome to McLane.”  Id.  Accordingly, the Ninth Circuit vacated the District Court’s judgment and remanded for further proceedings.

Implications For Employers

As employers who are confronted with EEOC subpoenas may ultimately find themselves in a subpoena enforcement action, the McLane case is a must-follow in terms of what standard of review will be applied if those district court decisions are later reviewed.  The U.S. Supreme Court’s adoption of the more “hands off” abuse-of-discretion standard means that greater weight will be given to district court decisions.  Nonetheless, the Ninth Circuit’s ruling here illustrates that appellate courts may still be willing to overturn district court decisions to enforce or quash EEOC subpoenas depending on the circumstances.  The decision will also, no doubt, be cited by an emboldened EEOC as authority for its position that expansive pedigree information is relevant in a broad swath of cases.  Understanding these trends will provide useful guidance for employers when deciding if and how to challenge what often can be burdensome demands for information from the EEOC.

Readers can also find this post on our EEOC Countdown blog here.

Magnifying_Glass_PhotoBy Gerald L. Maatman, Jr., Andrew Scroggins and Christopher DeGroff

Seyfarth Synopsis: An in-depth analysis by Seyfarth Shaw sheds new light on how quickly the EEOC moves matters from letter of determination, through conciliation, to litigation.  For charges that result in litigation, the EEOC spends, on average, just over two months in conciliation.  After declaring that conciliation has failed, the EEOC takes, on average, about three months to file suit.  However, there are notable differences in speed among the EEOC’s district offices.

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Employers on the wrong side of an EEOC enforcement action know all too well that there is little rhyme or reason to the timeline from investigation to litigation.  The EEOC issues Performance and Accountability Reports for each fiscal year.  Those reports can yield useful insights into the EEOC’s strategic priorities, as well as the volume of charges and litigation matters it brings.  However, the EEOC has never reported information that shows how long a charge typically is in the pipeline before it reaches litigation.

Based on our own in-depth analysis of EEOC complaints, we now have insight to how long it takes the EEOC to move a charge from determination to a declaration that conciliation has failed, and how long again from that point until a complaint is filed in federal court.

In addition to finally providing some insight to the timeline on charges that the EEOC takes to litigation, this analysis sets an important benchmark.  On January 25, 2017, President Trump appointed Victoria Lipnic as acting chair of the EEOC.  Speaking at an event sponsored by Seyfarth Shaw, Ms. Lipnic stated her intention to focus on more targeted litigation that can still have an impact on a larger scale.  Monitoring the pace at which the EEOC moves charges to litigation will be one way to measure the changes in the agency’s enforcement approach.

Background And Methodology

In April 2015, the Supreme Court issued its decision in Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015), holding that the EEOC must demonstrate that it has satisfied its statutory duty of “conference, conciliation, and persuasion” before filing suit.  (We have written extensively on the decision in prior blog posts.)  In an apparent effort to meet the Supreme Court’s directive, the EEOC began later that year to routinely include additional information in its complaints, such as when it had issued determinations in connection with the underlying charges and when it had declared conciliation efforts to have failed.

We analyzed and collected this and other information from nearly 150 complaints filed around the country by the EEOC from 2015 through January 2017.  From that data, we could roughly calculate how long it takes for the EEOC to move from step to step, as well as the relative pace of the EEOC district offices.

How Long Is Conciliation Likely To Last?

If you are an employer that has responded to a charge and just received a letter of determination, how long can you expect the EEOC to engage in conciliation?

According to our analysis, the median time spent in conciliation is 72 days.  For most employers, the EEOC will declare that conciliation has failed in three months or less.  In some instances, however, conciliation has lasted for years.

Employers are more likely to spend longer in conciliation when dealing with the EEOC’s district offices in Birmingham, Memphis, Phoenix, Houston, or Miami.  Conciliation moves faster in the EEOC’s district offices in Baltimore, Little Rock, Detroit, and Washington DC.

Additional details are summarized in the infographic.

If Conciliation Fails, How Long Until A Complaint Is Filed?

The common assumption among employers is that it is a race to the courthouse once the EEOC deems conciliation failed, but our analysis suggests otherwise.

Although about 19% of complaints are filed within the first month, the median time from the notice of conciliation failure to filing of a complaint is almost three times that:  91 days.

The quickest to file are the EEOC district offices in Kansas City, Little Rock, Oklahoma City, and Los Angeles.  The EEOC moves most slowly in its district offices in Phoenix, Dallas, St. Louis, Chicago, Indianapolis, Birmingham, and Memphis.

See the infographic for additional details.

A Determination Was Just Issued In An Intractable Case – How Long Until Court Proceedings Commence?

Taking both of these together, how much time can an employer expect to pass from determination to the start of litigation?

Our analysis found that employers have at least two months before the complaint is filed, and that short timeline is uncommon.  The median time from determination to complaint is 196 days.

Charges move most quickly to court in the EEOC’s district offices in Kansas City, Little Rock, and Baltimore.  The EEOC moves most slowly in its district offices in Phoenix, Memphis, Birmingham.

The infographic provides additional details.

 We will continue to analyze the EEOC’s complaints and monitor for results that may suggest some change in approach in response to new leadership at the agency.

EEOCBy David J. Rowland and Andrew L. Scroggins

Seyfarth Synopsis:  In a case filed May 8 in federal court in New Jersey, the EEOC sued an IT staffing firm for age discrimination on behalf of a candidate seeking placement into an position with one of the firm’s clients.  If the startling allegations are true, the case may be a lay-up for the EEOC, but even if the allegations are inaccurate, staffing firms and companies that utilize staffing resources should view this as a reminder about the process by which they evaluate candidates, and what NOT to do with potentially unlawful instructions from clients.

In EEOC v. Diverse Lynx, Inc., 3:17-CV-03220 (D.N.J), the EEOC alleges that Kadami Vijaisimh posted his resume on the website Diverse Lynx (DL) maintains for job applicants.  The EEOC alleges that at around the same time Vijaisimh posted his resume, DL was sourcing candidates for an IT project management opportunity available at one of its clients.

According to the complaint, Vijaisimh had substantial IT project management experience and was contacted by DL regarding the position. After several discussions with Vijaisimh regarding the details of the position at issue, DL allegedly wrote Vijaisimh this e-mail:

Thanks for your reply. I check the details of [sic] you. And you [sic] born in 1945. So I discussed with the client side. Age will matter. That why I can’t [sic] be able to submit your profile to client side.

Predictably, DL did not refer Vijaisimh to its client for the IT project management spot and the EEOC alleges it did not do so because of his age.

Taking these facts as true, it is hard to imagine a better case for the EEOC, and it is easy to see why the agency brought it.  But, putting that aside, the alleged actions of the staffing firm in this case serve as a stark reminder of the obligations of staffing firms to comply with employment laws as they work with their clients and candidates to fill open positions.

Here are the top takeaways from the case and some suggested strategies:

Takeaway 1:  In evaluating a candidate, a staffing firm’s recruiters cannot use candidates’ profiles for the purposes of excluding candidates based upon protected statuses.  It is not clear from the complaint what information led DL’s recruiter to conclude that Vijaisimh was born in 1945.  One reasonable presumption is that it was the result of a search of social media sources, such as Facebook, LinkedIn, or Twitter, all of which harbor dangers as a screening tool.  Another reasonable presumption is that it was the result of online searches of publicly available information, which can often be unreliable.

Takeaway 2:  Beware about making assumptions about a client’s wishes.  In this case, if the DL recruiter initiated a conversation with the client about whether age would “matter” for this IT project management job, the staffing firm has not only placed itself in potential trouble, it has also set its client up for a possible legal disaster. It is not clear in this case whether the client actually cared about age, or if that was simply the recruiter’s intuition, but either way, the candidate’s age (specifically or in general) should never have been raised or discussed with the client.

Takeaway 3: A client’s wish is not a staffing firm’s command.  Sometimes a client may make an up-front request for candidates who fit a particular paradigm without considering how the EEOC or plaintiff’s lawyers might construe the language.  Requests like “seeking recent college grads”, “need someone who fits in with our youthful culture”, “inexperienced candidates have been the most successful”, or “fresh blood is needed to replace our aging workforce” are not necessarily intended to be age-based – a recent college grad could be over 40, for example – but they are the sort of quotes that raise the eyebrow of enforcement agencies and may not play well with a jury.

Remedy 1: Publish a written policy.

Staffing firms should memorialize their policies prohibiting employment discrimination against those placed to work with clients, and make the policy available to applicants, employees, and clients.

Remedy 2: Train, train, and train.

Training employees on how and whether to use social media or other online searches is essential for every employer and staffing firm.  Too much can be learned (and put to bad use), and too much of what is learned may be inaccurate.

Staffing firm employees would benefit from training to recognize the types of job “requirements” and messages that could be perceived – rightly or wrongly – as potential problems.

In addition to training to identify potential pitfalls in requests, staffing firm employees would benefit from training on the tools to correct an issue before it becomes a problem.  At a minimum, staffing firm employees should be trained to eliminate questionable phrasing from any job posting or search materials and to fill the position with the most qualified candidate.  Even better, train and empower employees to appropriately counsel (and, where needed, correct) the client who presents a job requisition in less-than-ideal fashion.

Remedy 3: Management support.

Front line staffing employees will be better able to fulfill their duties with management support.  Staffing firm managers should remind their employees to take the extra time to look at how job requirements have been documented to ensure compliance with the letter and spirit of EEO laws.  Staffing firm managers also should lead by example,

Remedy 4:  Staffing agency / client partnership.

In addition to having and sharing a written policy, staffing firms should consider making an explicit statement about the important of equal employment opportunity in its contractual arrangements with clients, ensuring that jobs are filled by the best candidates, without regard to protected characteristics. Periodic reminders to clients will help reinforce this message.

Finally, staffing firms should approach equal employment opportunity matters as an area where their expertise can serve their own and their clients’ interests.  Avoiding potentially problematic requests, and addressing them with clients when questions arise, set up all concerned for future success when staffing.

bassBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis: After a Fifth Circuit decision affirming a ruling by a U.S. District Court in Texas allowed the EEOC to seek compensatory and punitive damages in its high-profile Title VII pattern or practice race discrimination lawsuit against Bass Pro, a deadlocked Fifth Circuit denied Bass Pro’s petition for a rehearing en banc.  The highly contentious dissenting opinion, which prompted a response from the panel in favor of denying the rehearing, is a must-read for employers regarding judicial views on the damages the EEOC can seek in Title VII pattern or practice of discrimination litigation.

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One of the EEOC’s largest pending nationwide lawsuits, a Title VII pattern or practice race discrimination case concerning retailer Bass Pro’s hiring practices, has resurfaced in an appeal.  In EEOC v. Bass Pro Outdoor World LLC, No. 15-20078, 2017 U.S. App. LEXIS 7628 (5th Cir. Apr. 28, 2017), the U.S. Court of Appeals for the Fifth Circuit was tasked with deciding whether to grant Bass Pro’s petition for a rehearing en banc after it previously affirmed a decision of the U.S. District Court for the Southern District of Texas allowing the EEOC to seek compensatory and punitive damages by bringing claims under § 706 and 707 of Title VII.  Evident in a pair of pull-no-punches opinions, the Fifth Circuit panel of judges was deadlocked in a 7-7 split on whether to grant the rehearing, thus resulting in Bass Pro’s petition being denied.

As employers continue to challenge the EEOC’s willingness to stretch the bounds of pattern or practice Title VII litigation, the highly contentious dissenting opinion (“Dissent”), and equally provocative response from the panel in favor of denying the rehearing (“Panel”), are must-reads for employers.

Case Background

As we have discussed in previous blog posts (here, here and here), the EEOC brought a lawsuit alleging discriminatory hiring practices in violation of Title VII on behalf of a group of individuals allegedly discriminated against on the basis of their gender or race, both as a representative action (under § 706) and based on a pattern or practice theory (under § 707).  The Dissent noted that the 50,000 allegedly aggrieved individuals, Black and Hispanic applicants, was a number “asserted [by the EEOC] in shotgun fashion, with no development or refinement of who or where the individuals are.”  Id. at *4.  Further, the Dissent explained that “[t]he EEOC, after a three-year investigation, could identify zero discriminatees or even potential discriminatees. Upon being pressed by the [D]istrict [C]ourt, the EEOC identified about 100, and later, about 200, of the 50,000 mass.”  Ultimately, the District Court allowed the EEOC to pursue pattern or practice claims on behalf of the 50,000 claimants under § 706, seeking individualized compensatory and punitive damages.  On June 17, 2016, the Fifth Circuit affirmed the District Court’s decision.  Bass Pro thereafter filed an interlocutory appeal.  Id. at *5.

The Fifth Circuit’s Decision

As a result of a 7-7 split between the circuit judges, the Fifth Circuit denied Bass Pro’s petition for a rehearing en banc.  The Dissent initially summarized its argument by matter-of-factly noting “this ‘pattern or practice’ case cannot be brought under § 706 or § 707 as to provide individualized compensatory and punitive damages for a mass of 50,000 persons.”  Id. at *6.  In support of this assertion, the Dissent argued that the plain language and legislative history of the Title VII forbids § 706 “pattern or practice” suits, and the Panel’s contrary holding rendered § 707 of the Act a meaningless appendage to Title VII and hence superfluous.  Second, the Dissent argued that allowing pattern or practice suits for individualized compensatory and punitive damages poses insurmountable manageability concerns, which the Supreme Court has addressed before and rejected such suits.  Finally, the Dissent opined that allowing pattern or practice suits for individualized compensatory and punitive damages for the 50,000 allegedly aggrieved individuals necessarily ran afoul of the Seventh Amendment.

After the Dissent pointedly advocated this array of arguments, the Panel countered with a 16 page response, asserting that Bass Pro ignored “the independent role of the EEOC when it sues on behalf of the United States government . . . [and] asks us to hold as a matter of law that damages authorized by the 1991 amendments to the Civil Rights Act can only be recovered in individual suits.”  Id. at *20-21.  After clarifying the role of the EEOC in light of the 1991 amendments of the Civil Right Act of 1964, the Panel opined that, “Bass Pro’s argument rests upon a fundamental premise: that the EEOC’s enforcement authority and choice of remedies is tethered to the individuals for whose benefit it seeks relief. That premise is false.”  Id. at *23.  The Panel then argued that because the EEOC brought suit under both § 706 and 707, Bass Pro’s argument that the Commission was not entitled to punitive damages failed because it “would be truly perverse to withhold the remedy of punitive damages from the EEOC when it targets discrimination in its most virulent and damaging form: polices intentionally calculated to exclude protected minorities and perpetrated on a large scale.”  Id. at *35.

Finally, the Panel addressed Bass Pro’s argument that even if Congress did grant the EEOC the authority to seek compensatory and punitive damages via the pattern-or-practice model, this grant of authority was unconstitutional.  Noting that Bass Pro’s argument appeared to implicate due process concerns under the Seventh Amendment, the Panel held that Bass Pro’s reliance on Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), was misplaced as that case involved Rule 23 class actions, which  have “no force” in EEOC litigation.  Id. at *36.  After providing a hypothetical analysis as to how a jury may award various types of damages, the Panel concluded by finding Bass Pro’s manageability concerns to be unfounded, and its “claim that this suit cannot be tried is not a statement of fact but an advocate’s prayer.  Seeking to limit its exposure to liability, Bass Pro asks us to shut down this lawsuit before it even gets off the ground.”  Id. at *41-42.

Not to be outdone, the Dissent threw the final punch in a two paragraph dissent to the Panel’s response.  In an effort to clarify the procedural uniqueness of the Panel’s response to the dissenting opinion, the Dissent noted “[l]est there be any mistake, the [P]anel’s ‘response’ must not be confused with a binding opinion on the denial of an en banc petition, because no authority authorizes any such opinion.”  Id. at *42.  As such, the Dissent concluded by instructing that in no way should the Panel’s response be treated as precedential.

Implications For Employers

The Fifth Circuit’s ruling is certainly unfavorable for employers, as this gives the EEOC ammunition to seek a broad range of damages under § 706 and 707, and essentially pick and choose which section’s procedures it wants to follow at various stages of the litigation.  But when reading the tea leaves within the tenaciously written opinions by the divided panel, employers can find encouragement in that many judges – both in the Fifth Circuit and throughout the country – support the Dissent’s belief that the EEOC conflated its rights under § 706 and 707.  As such, employers should continue to follow this case and similar large-scale EEOC pattern or practice cases, which will likely continue to percolate following this government-friendly ruling.

Readers can also find this post on our EEOC Countdown blog here.

gavel on white backgroundBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Alex W. Karasik

Seyfarth Synopsis:  A federal district court in Illinois recently granted the EEOC’s motion for partial summary judgment in EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), relative to two defenses advanced by an employer, including: (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer. The ruling should be required reading for any employer facing or engaged in litigation with the Commission.

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An increasingly common issue in EEOC litigation against employers involves the scope of the Commission’s lawsuits as related to the charges of discrimination, as well as the EEOC’s conciliation efforts, or lack thereof.  In EEOC v. Dolgencorp, LLC, No. 13-CV-4307 (N.D. Ill. Apr. 10, 2017), the EEOC moved for partial summary judgment regarding two defenses enumerated by the defendant, Dolgencorp, LLC (“Dollar General”): (1) the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation; and (2) the EEOC failed to satisfy its Title VII pre-suit duty to conciliate with the employer.  On April 10, 2017, Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois granted the EEOC’s motion for partial summary judgment as to these defenses asserted by Dollar General.

As Judge Wood acknowledged, many courts across the country have embraced defenses asserted by employers relating to the sufficiency of the EEOC’s investigation.  However, this ruling demonstrates that not all courts may be as receptive to those arguments.

Case Background

Two former Dollar General employees filed charges of discrimination with the EEOC regarding Dollar General’s allegedly discriminatory use of criminal background checks in hiring and firing determinations.  Id. at 1.  The EEOC investigated and determined that there was reasonable cause to believe that Dollar General had engaged in employment discrimination on the basis of race. The parties then engaged in written and oral communications regarding the alleged discrimination, which did not result in a conciliation agreement acceptable to the EEOC.  Id. at 2.  Thereafter, the EEOC brought a lawsuit against Dollar General under Title VII.

Amongst its enumerated defenses, Dollar General asserted that the EEOC’s claims were barred as beyond the scope of the charges of discrimination and investigation (its 7th enumerated defense), and that the EEOC failed to satisfy the statutory precondition for bringing suit when it failed to conciliate with Dollar General (its 8th enumerated defense). The EEOC moved for partial summary judgment as to Dollar General’s two enumerated defenses.  Id. at 3. The EEOC contended that, on the undisputed facts, these two defenses failed as a matter of law.

The Court’s Decision

The Court granted the EEOC’s motion for partial summary judgment regarding Dollar General’s two enumerated defenses.  Dollar General’s seventh enumerated defense relied upon two separate propositions: first, the EEOC’s claims were barred because they went beyond the claims delineated in the charges of discrimination that generated the EEOC’s lawsuit; and second, the EEOC’s claims were barred because the EEOC failed to investigate those claims adequately prior to bringing suit.  Id. at 4.  The Court rejected the first proposition, holding that when the EEOC files suit, it is not confined to claims typified by those of the charging party, and further, that any violations that the EEOC ascertains in the course of a reasonable investigation of the charging party’s complaint are actionable.  Id.  As to the second proposition, the Court similarly opined that the Seventh Circuit has held that if courts may not limit a suit by the EEOC to claims made in the administrative charge, they likewise cannot limit the suit to claims that are found to be supported by the evidence obtained in the Commission’s investigation.  Id.  Accordingly, the Court rejected Dollar General’s defenses insofar as it sought to dismiss the EEOC’s claims because they went beyond the charges of discrimination or because they were not subject to an adequate pre-suit investigation.  Id. at 4-5.

In addition, the Court addressed Dollar General’s eighth enumerated defense, which contended that the suit could not go forward because the EEOC did not satisfy its pre-suit statutory obligation to conciliate.  The EEOC sent two Letters of Determination to Dollar General that stated that the EEOC found reasonable cause to believe that Dollar General engaged in discrimination in violation of Title VII because, through application of its background check policy, a class of African-American applicants and employees were not hired, not considered for employment, or discharged.  Dollar General argued that this notice of the charge was not specific enough because it failed to identify the persons allegedly harmed and to identify the allegedly discriminatory practice.

Rejecting Dollar General’s argument regarding the specificity of notice, the Court held that the EEOC’s letters clearly set forth that there were African-American applicants and employees who were harmed by the allegedly discriminatory practice.  Id. at 6.  Further, the Court opined that as the Seventh Circuit has explained, the sufficiency of the EEOC’s investigation was not a matter for the judiciary to second-guess.  Dollar General also argued that the EEOC failed to specifically describe the allegedly discriminatory practice, and that merely pointing to the background check policy was not sufficient.  The Court rejected this argument, holding that the EEOC’s notice was sufficient since it identified the two complainants and further put Dollar General on notice that the EEOC’s allegations related to African-American applicants and employees that were not hired, not considered for employment, or discharged due to failing a background check.  Id. at 8-9.

Finally, Dollar General contended that the EEOC’s conciliation discussions were inadequate because the EEOC did not provide Dollar General with an opportunity to remedy the allegedly discriminatory practice.  Id. at 9.  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1655-56 (2015) (which we analyzed here), the Court refused to examine the sufficiency of the EEOC’s investigation, noting it was beyond the scope of its review.  Id.  The Court thus rejected Dollar General’s argument that the EEOC did not adequately engage the employer in conciliation discussions.

Accordingly, the Court granted the EEOC motion for partial summary judgment on Dollar General’s seventh and eighth enumerated defenses.

Implications For Employers

While the Court did not find in the employer’s favor, other courts have routinely held the EEOC accountable in instances where it did not fulfill its pre-suit obligations.  With rulings such as this one, it can be expected that the EEOC will continue to test courts’ willingness to force the Commission to abide by its statutory duties under Title VII.  As such, employers should continue to be aggressive in attacking instances where the EEOC improperly expands its lawsuits beyond charges or fails to conciliate.

Readers can also find this post on our EEOC Countdown blog here.

supreme court sealSeyfarth Synopsis: Yesterday the U.S. Supreme Court handed down its long-awaited decision in McLane Co. v. EEOC, No. 15-1248, 2017 U.S. LEXIS 2327 (U.S. 2017), a decision that clarifies the scope of review for employers facing EEOC administrative subpoenas. The Supreme Court held that such decisions are reviewable under the abuse-of-discretion standard, which is a relatively high bar of review. At the same time, the Supreme Court’s ruling clarifies that EEOC subpoenas are subject to a searching, fact-intensive review that does not lend itself to a “one size fits all” approach.

Background

This case arose out of a Title VII charge brought by a woman who worked as a “cigarette selector,” a physically demanding job, requiring employees to lift, pack, and move large bins of products. After the charging party returned from three months of maternity leave, she was required to undergo a physical capabilities evaluation that was required for all new employees and employees returning from leave or otherwise away from the physically demanding aspects of their job for more than 30 days, regardless of reason. The charging party was allowed three times to meet the level required for her position, but failed each time.  McLane then terminated her employment.

The charging party claimed that her termination was because of her gender, and further alleged disability discrimination. During the investigation of her EEOC charge, the Commission requested, among other things, a list of employees who were requested to take the physical evaluation. Although McLane provided a list that included each employee’s gender, role at the company, evaluation score, and the reason each employee had been asked to take the evaluation, the company refused to provide “pedigree information,” relative to names, social security numbers, last known addresses, and telephone numbers of employees on that list. In the process of negotiating the scope of information that would be provided, the EEOC learned that McLane used its physical evaluation on a nationwide basis. The EEOC therefore expanded the scope of its investigation to be nationwide in scope, and also filed its own charge alleging age discrimination.

The District Court refused to order the production of pedigree information, holding that it was not “relevant” to the charge at issue because that information (or even interviews of the employees on the list provided by McLane) could not shed light on whether an evaluation represented a tool of discrimination. EEOC v. McLane Company, Inc., No. 12-CV-02469 (D. Ariz. Nov. 19, 2012) (See our blog post of the District Court’s decision here.)

On October 27, 2015, the U.S. Court of Appeal for the Ninth Circuit reviewed the District Court’s decision de novo and held that the District Court had erred in finding the pedigree information irrelevant to the EEOC’s investigation. EEOC v. McLane Company, Inc., Case No. 13-15126, 2015 U.S. App. LEXIS 187702 (9th Cir. Oct. 27, 2015). (See our blog post of the Ninth Circuit’s decision here.)

The Supreme Court granted certiorari to resolve the disagreement among the courts of appeals regarding the appropriate scope of review on appeal. The posture of the appeal was somewhat unusual because, after the grant of certiorari, the EEOC and McLane both agreed that the District Court’s decision should be reviewed for abuse of discretion, although the EEOC argued that the Ninth Circuit’s decision should stand as a matter of law. The Supreme Court therefore appointed an amicus curiae to defend the Ninth Circuit’s use of de novo review.

The Supreme Court’s Decision

The Supreme Court began its analysis by noting that in the absence of explicit statutory command, the proper scope of appellate review is based on two factors: (1) the history of appellate practice; and (2) whether one judicial actor is better positioned than another to decide the issue in question.

Regarding the first factor, the Supreme Court noted that abuse-of-discretion review was the longstanding practice of the courts of appeals when reviewing a decision to enforce or quash an administrative subpoena. In particular, the Supreme Court noted that Title VII had conferred on the EEOC the same subpoena authority that the National Labor Relations Act had conferred on the National Labor Relations Board (“NLRB”), and decisions of district court to enforce or quash an NLRB subpoena were reviewed for abuse of discretion.

Regarding the second factor, the Supreme Court held that the decision to enforce or quash an EEOC subpoena is case-specific, and one that does not depend on a neat set of legal rules. Rather, a district court addressing such issues must apply broad standards to “multifarious, fleeting, special, narrow facts that utterly resist generalization.” McLane Co. v. EEOC, 2017 U.S. LEXIS 2327, at *14 (U.S. 2017) (quoting Pierce v. Underwood, 487 U. S. 552, 561-62 (1988)). In particular, in order to determine whether evidence is relevant, the district court has to evaluate the relationship between the particular materials sought and the particular matter under investigation. These types of fact-intensive considerations are more appropriately done by the district courts rather than the courts of appeals.

The Amicus argued that the district court’s primary role is to test the legal sufficiency of the subpoena, which does not require the exercise of discretion. The Supreme Court held that this view of the abuse-of-discretion standard was too narrow. The abuse-of-discretion standard is not only applicable where a decision-maker has a broad range of choices as to what to decide, but also extends to situations where it is appropriate to give a district court’s decision an unusual amount of insulation from appellate revision for functional reasons. Those functional considerations weighed in favor of the abuse-of-discretion standard rather than a de novo standard of review. Because the Ninth Circuit did not apply that standard on appeal, the Supreme Court remanded the case to the Ninth Circuit for further proceedings.

Implications For Employers

The McLane case is important for employers because it clarifies the standard of review that is applied to the review of district court decisions enforcing or quashing EEOC subpoenas. Although the Supreme Court adopted the more “hands off” abuse-of-discretion standard, thus giving even more weight to the district court’s judgment, it did so because it identified the fact-intensive nature of these judgment calls, including important decisions about how difficult it would be for the employer to produce the requested information weighed against the need for that information, and the relationship between the particular materials sought and the particular matter under investigation.

At the very least, this language shows that the EEOC does not get to automatically presume relevance of its administrative subpoenas at the outset, as the EEOC sometimes likes to argue. Rather, employers should be able to cite to language in the Supreme Court’s opinion to reinforce the fact that the district court must give serious consideration to issues of relevancy and burden (also whether the subpoena is “too indefinite” or for an “illegitimate purpose”) when deciding whether to enforce an EEOC subpoena.

Readers can also find this post on our EEOC Countdown blog here.

 

gavel on white backgroundBy Gerald L. Maatman, Jr., Mark W. Wallin, and Alex W. Karasik

Seyfarth Synopsis: A federal court in Tennessee denied the EEOC’s application for an Order to Show Cause why its administrative subpoena should not be enforced.  This ruling highlights the importance and benefits of employers understanding the contours of the charges being investigated by the EEOC, so that the employer can guard against improper fishing expeditions.

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Although courts typically grant the EEOC wide latitude to obtain information regarding its investigations of workplace discrimination, this access is not limitless.  One such limit was recently highlighted in EEOC. v. Southeast Food Services Company, LLC d/b/a Wendy’s, Case No. 3:16-MC-46 (E.D. Tenn. Mar. 27, 2017 ), where Magistrate Judge H. Bruce Guyton of the U.S. District Court for the Eastern District of Tennessee denied the EEOC’s Application for an Order to Show Cause Why an Administrative Subpoena Should Not Be Enforced (“Application”).  The Court refused to enforce the EEOC’s subpoena, finding that the request for contact information of all of Southeast Food Services Company, LLC, d/b/a Wendy’s (“Wendy’s”) current and former employees, among other things, was not relevant to the individual charge of discrimination being investigated by the EEOC.

This ruling illustrates the importance to employers of understanding the scope of the EEOC charge being investigated, and provides a roadmap for pushing back against agency overreach when the Commission seeks information that is not pertinent to the investigation at issue.

Case Background

In September 2014, Wendy’s hired Christine Cordero as a crew member at one of its restaurant locations.  Id. at 2.  Shortly thereafter, Wendy’s promoted Cordero to crew leader.  Id.  As part of her promotion, Wendy’s requested that Cordero sign a general release of all claims she may have against Wendy’s up to that point, but not including future claims.  Id.  For the past 20 years, Wendy’s had conditioned promotions on signing this release. Id.  Despite not having any claims against Wendy’s, Cordero refused to sign the release.  Id.  As a result of her refusal, Cordero did not receive the promotion, but still received training for the position and a small raise that accompanied the promotion.   Id.

Ms. Cordero continued to work for Wendy’s, but filed a charge of discrimination with the EEOC in December 2014.  Id.  In the charge, Cordero alleged that Wendy’s retaliated against her by not promoting her due to her refusal to sign the release. Id.  In the course of its investigation of Cordero’s charge of discrimination, the EEOC learned of Wendy’s longtime practice of requiring employees to sign a release of claims as a condition of promotion, and thereafter sent Wendy’s a letter indicating it intended to expand the investigation.  Id.  In this letter, the EEOC also requested information from Wendy’s regarding current and former employees who had worked for Wendy’s since December 2012.  Id.  Wendy’s, however, refused to provide this additional information, and the EEOC then issued a subpoena seeking the same information.  Id. at 2-3.

The EEOC’s subpoena sought the identity and contact information of all current and former employees since December 2012, including employees who signed the release of claims and who had been promoted.  Id. at 3.  In addition, the subpoena sought the employees’ dates of hire, promotion and termination, reasons for termination, and titles, as well as copies of all releases that Wendy’s had employees sign during that period, among other things.  Id.  Wendy’s continued to object, and refused to provide the information subpoenaed.  Id.  Thereafter, on November 18, 2016, the EEOC filed the Application with the Court, to which Wendy’s responded on February 22, 2017.

The Court’s Decision

The Court denied the EEOC’s Application and declined to enforce the subpoena.  The EEOC argued that it “require[d] the contact information for [Wendy’s] employees to mail questionnaires in order to determine if those employees gave up any claim in order to receive promotions.”  Id. at 4.  In response, Wendy’s asserted that the sole issue with regard to the instant charge was whether its uniform policy regarding a signed release as a condition of promotion was sufficient to sustain Cordero’s Title VII retaliation claim, and that the information sought for the questionnaires was neither relevant nor necessary to the EEOC’s investigation.  Id. at 4-5.  Siding with Wendy’s, the Court rejected the EEOC’s argument, finding that “whether other ‘employees gave up any claim in order to receive promotions’ [was] irrelevant to resolving Ms. Cordero’s charge.”  Id. at 5.

The EEOC further argued that sending the questionnaires to other employees was the only way to verify Wendy’s contention that no other employees aside from Cordero refused to sign the release.  The Court again rejected the EEOC’s argument, noting it was “unclear how another employee’s refusal to sign a release ‘might cast light’ on the instant charge, particularly where there is no dispute that for the past 20 years, all employees have been required to sign a general release of all claims as a condition of promotion.”  Id. at 6.  The Court further reasoned that the potential unlawfulness of Wendy’s employment practice was not dependent on how many other employees signed a release.  Id. at 7.  Accordingly, the Court held that the EEOC did not meet its burden in demonstrating that the information subpoenaed is relevant to Cordero’s charge, and declined to enforce the subpoena.

Implication for Employers

In what has become “go-to” play in the EEOC’s investigation playbook, the Commission has been aggressive in taking individual charges of discrimination as means to seek company-wide personnel information from employers through subpoenas.  Employers that encounter requests for expansive personnel data in the course of single employee investigations can add this ruling to their own playbooks in defending against overzealous EEOC investigations.  While the Commission likely will continue to be aggressive in seeking massive amounts of information from employers in investigations, this ruling provides optimism for employers who are willing to firmly oppose such tactics.

Readers can also find this post on our EEOC Countdown Blog here.

200px-NDAla_sealSeyfarth Synopsis: An Alabama district court granted a temporary staffing company’s motion to dismiss all claims in one of the EEOC’s most high-profile lawsuits asserting hiring discrimination and abuse of vulnerable workers. The ruling illustrates the procedural defenses that employers possess to ensure that pre-lawsuit investigations undertaken by the EEOC accord with its obligations under the law.

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A recent mission of the EEOC has been to aggressively pursue lawsuits on behalf of “vulnerable workers” who may not always be aware of their rights. A result of the EEOC’s recent aggressiveness is that the Commission often neglects to fulfill its pre-suit obligations under Title VII and overlooks jurisdictional requirements when racing to the courthouse. These tactics came under scrutiny in EEOC v. Labor Solutions of Alabama, Inc. f/k/a East Coast Labor Solutions, No. 16-CV-1848 (N.D. Ala. Mar. 17, 2017), where Judge Virginia Emerson Hopkins of the U.S. District Court for the Northern District of Alabama granted Labor Solutions of Alabama, Inc.’s (“LSA”) motion to dismiss the EEOC’s complaint. The Court found that the EEOC lacked subject-matter jurisdiction and failed to exhaust its administrative remedies after suing LSA for alleged conduct that occurred by its supposed predecessor before LSA was ever formed.

This ruling is a signal victory for employers involved in EEOC litigation regarding potential successor liability, as well as any employer involved in EEOC litigation where the Commission fails to exhaust its pre-suit duties under Title VII.

Case Background

The EEOC investigated charges of discrimination against a company called East Coast Labor Solutions, LLC (“East Coast”), alleging that East Coast discriminated against the charging parties on the basis of their national origin and failed to accommodate their disabilities. Following its investigation, the EEOC issued East Coast a letter of determination finding reasonable cause to believe that Title VII and the ADA were violated with respect to the charging parties and a class of current and former employees. Id. at 8.  The EEOC thereafter unsuccessfully attempted to conciliate with East Coast.  In November 2013, East Coast ceased operations.  LSA was formed in October 2014.

Despite the fact that LSA was not in existence when the alleged misconduct occurred, the EEOC filed a Complaint alleging that LSA subjected the Claimants to discriminatory treatment based on their national origin and failed to accommodate their disabilities. While East Coast partnered with its owner Labor Solutions (a different entity than LSA), the only Defendant named in the lawsuit was LSA.  Thereafter, LSA moved to dismiss the Complaint because it failed to allege that LSA employed the Claimants, thereby meaning the Complaint should be dismissed for lack of subject matter jurisdiction and failure to state a claim under Title VII and the ADA. Id. at 9.  LSA also argued that the EEOC failed to exhaust administrative prerequisites, noting that LSA was not named in the original EEOC charge or in any amendment thereto.

The Courts Decision

The Court granted LSA’s motion to dismiss. First, the Court addressed the EEOC’s argument that it alleged plausible facts to infer so-called “successor liability.” Id. at 11.  After thoroughly examining various Eleventh Circuit precedents regarding successor liability, the Court explained that “[a]lthough the Court agrees with the EEOC that successorship does not have to be conclusively determined at this stage of the litigation, that does not absolve the agency from pleading facts which make its existence plausible.” Id. at 26.

Applied here, the Court determined there were “no facts suggesting substantial (or even any) continuity in business operations from East Coast to LSA. The Complaint contains no allegations that there was any sale of East Coast, or any of its assets, to LSA.”  Id. at 27.  Finding there was no successor liability, the Court further reasoned that East Coast had been defunct nearly an entire year before LSA was formed; there was no allegation that LSA employed substantially the same work force and/or supervisors as East Coast; the Complaint did not allege that LSA operated at the same location as East Coast; there was no allegation as to whether East Coast could have provided relief before or after any alleged sale or transfer; and there was no allegation as to whether LSA could provide any relief now.

The Court further rejected the EEOC’s argument that East Coast and LSA were both temporary staffing agencies and that both entities shared the same managing officers, principal office address, and company email accounts, holding this was not enough to demonstrate continuity when one considered the break in time between when East Coast ceased operations and LSA began. Finally, the Court opined that even if the Complaint had plausibly alleged that LSA was the successor to East Coast, it would still be dismissed since it was undisputed that LSA was not named in the original EEOC charge, or in any subsequent amendment.  Accordingly, the Court granted LSA’s motion to dismiss, but noted the EEOC may file an amended complaint to attempt to cure its deficiencies.

Implications For Employers

For employers with intricate corporate structures and ties to defunct entities, this ruling is a major victory. Employers with corporate officers who previously worked at a similar but defunct entity can use this ruling to as a roadmap to navigate EEOC lawsuits concerning allegations from before their business was ever formed. In sum, this is yet another example of a court pumping the brakes on procedurally improper EEOC litigation.

Readers can also find this on our EEOC Countdown Blog here.

EEOCWhile the government enforcement lawsuits brought by the DOL and EEOC in 2016 were in line with their aggressive platforms, by sheer numbers of cases, their enforcement activities were arguably limited in their effectiveness, at least when measured by lawsuit filings and recoveries compared to previous years. Settlement numbers for government enforcement litigation in 2016 decreased substantially as compared to 2015, as did the litigation dockets of the DOL and the EEOC. This trends is aptly illustrated by a comparison of settlement recoveries over the past 7 years. Settlement recoveries in 2016 were the second lowest of any year during that period.

Top 10 Government Enforcementsettlement amounts by class action type

This trend is critical to employers, as both agencies have a focus on “big impact” lawsuits against companies and “lead by example” in terms of areas that the private plaintiffs’ bar aims to pursue. The content and scope of enforcement litigation undertaken by the DOL and the EEOC in the Trump Administration remains to be seen; most believe there will be wholesale changes, which may well prompt the private plaintiffs’ class action bar to “fill the void” and expand the volume of litigation pursued against employers over the coming year.

In our sixth, and final, installment outlining the top workplace class action litigation trends from 2016, we analyze the reduced suit filings by government agencies tasked with enforcing workplace regulations, as well as their ambitious enforcement goals and the industries that are most targeted.

 

 

subpoenaBy Gerald L. Maatman, Jr., Christopher DeGroff, and Alex W. Karasik

Seyfarth Synopsis: The U.S. Court of Appeals for the Tenth Circuit recently held that a district court did not abuse its discretion when it declined to enforce a far-reaching EEOC administrative subpoena relating to one employee’s charge of disability and pregnancy discrimination. The case is important for all employers involved in EEOC investigations.

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Employers facing EEOC litigation are often confronted with requests for information and subpoenas that ask for a substantial amount of personnel information, even if the investigation concerns a single employee’s charge of discrimination.  After the EEOC sought to enforce an administrative subpoena requesting information about a large number of employees of TriCore Reference Laboratories (“TriCore”) over a period of several years, the U.S. District Court for the District of New Mexico declined to enforce subpoena.  Following the EEOC’s appeal – in EEOC v. TriCore Reference Labs., No. 16-2053 (10th Cir. Feb. 27, 2017) – the Tenth Circuit affirmed the district court’s ruling, finding the subpoena was overly broad and not relevant to the EEOC’s investigation of a single employee’s charge of discrimination. In the immortal words from the Jerry Seinfeld show, the Tenth Circuit said — “no subpoena for you!”

In anticipation of the U.S. Supreme Court’s upcoming decision in EEOC v. McLane Co., Inc., No. 15-1248 (2017), which will likely determine the standard of review for appellate courts considering district court decisions to either quash or enforce EEOC subpoenas (as we blogged about here), this ruling is an excellent victory for employers facing overly broad EEOC subpoenas.  Further, this ruling deals a blow to the EEOC’s aggressive strategy of using far-reaching subpoenas in investigations.

Case Background

In 2011, Kellie Guadiana began working at the Albuquerque, New Mexico location of TriCore as a phlebotomist.  Id. at 4.  In November 2011, Guadiana requested accommodations to her work schedule and responsibilities due to her rheumatoid arthritis, which she asserted was exacerbated by her pregnancy.  After reviewing the doctors’ notes that Guadiana submitted in support of her requests, TriCore determined that she could not safely perform the essential functions of her position. TriCore offered Guadiana the opportunity to apply to other positions within the company for which she was qualified and whose essential functions she could perform.  On May 5, 2012, after Guadiana did not apply to a new position, TriCore terminated her employment.  One month later, Guadiana filed a charge of discrimination with the EEOC alleging that TriCore had discriminated against her due to her disability (rheumatoid arthritis) and sex (pregnancy).  Id. at 5.  In response, TriCore said it provided Guadiana a reasonable accommodation by offering her the chance to apply for other positions.

Based on evidence uncovered during the EEOC’s investigation of the underlying charge, the EEOC informed TriCore that the scope of its investigation was expanded to include a “[f]ailure to accommodate persons with disabilities and/or failure to accommodate women with disabilities (due to pregnancy).”  Id. at 6.  As part of its expanded investigation, the EEOC sent TriCore a letter requesting: (1) a complete list of TriCore employees who had requested an accommodation for disability, along with their personal identifying information; and (2) a complete list of TriCore employees who had been pregnant while employed at TriCore, including the employees’ personal identifying information and whether they sought or were granted any accommodations. The EEOC sought that information for a four-year time frame.  TriCore refused to comply, contending the EEOC did not have an actionable claim of discrimination.  On February 23, 2015, the EEOC submitted another letter seeking the same information but limited to a three-year time frame.  After TriCore again refused to comply, the EEOC subpoenaed the information it had sought in its letter.  TriCore petitioned the EEOC to revoke the subpoena, arguing it was unduly burdensome and a “fishing expedition.”  Id. at 7.  The EEOC denied TriCore’s petition.

After TriCore refused to comply with the EEOC’s subpoena, the EEOC submitted an application to the district court requesting an order to show cause why the subpoena should not be enforced.  TriCore responded by arguing the information requested was not relevant to Guadiana’s charge.  The district court viewed the question as a “close call,” but ultimately denied the EEOC’s application, noting that the “EEOC’s real intent in requesting this [information was], in fact, difficult to pin down.”   Id. at 8.  The district court noted that to the extent the subpoena sought evidence to show TriCore had a pattern or practice of discrimination, Tenth Circuit case law did not support such a request.  Further, to the extent the subpoena sought evidence to compare Guadiana with other TriCore employees, the pregnancy request would not provide evidence of relevant comparators.  The EEOC appealed the denial of its application to enforce the subpoena.

The Decision

The Tenth Circuit affirmed the district court’s denial of the EEOC’s application to enforce its subpoena.  As an initial matter, the Tenth Circuit explained that to show subpoenaed information is relevant, the EEOC must show that it has a realistic expectation that the information requested will advance its investigation, and must further establish the link between its investigatory power and the charges of discrimination. On appeal, the EEOC argued that the district court erred in not enforcing: (1) the disability request, which was relevant to investigate whether TriCore had a policy of discrimination (i.e., pattern-or-practice evidence), and (2) the pregnancy request, which was relevant to investigate whether TriCore treated Guadiana less favorably than similarly situated employees (i.e., comparator evidence).  Id. at 9.

First, the Tenth Circuit held that the district court did not abuse its discretion in determining that the EEOC had not satisfied its burden to justify its expanded investigation, noting “[t]he EEOC has not alleged anything to suggest a pattern or practice of discrimination beyond TriCore’s failure to reassign Ms. Guadiana.”  Id. at 15.  Second, the EEOC argued that the district court erred in denying the comparator-evidence pregnancy request.  The Tenth Circuit initially noted that the EEOC limited its comparator-evidence argument exclusively to the pregnancy request.  While the Tenth Circuit disagreed with the district court and found that the pregnancy request may uncover information that is potentially relevant to Guadiana’s charge, it nonetheless held that the EEOC did not present these relevance arguments in district court and therefore failed to meet its burden of explaining how the pregnancy request would offer information relevant to Guadiana’s charge.  Finally, the Tenth Circuit noted that even if the EEOC provided such an explanation regarding relevancy, its request was nonetheless overbroad because it sought information having no apparent connection to Guadiana’s charge, such as information about pregnant employees who never sought an accommodation.  Accordingly, the Tenth Circuit affirmed the district court’s denial of the EEOC’s request to enforce the subpoena.

Implications For Employers

For employers, responding to requests for information and subpoenas in EEOC litigation can be time-consuming and expensive.  Employers confronted with EEOC subpoenas that request a disproportionate amount of personnel information in relation to a single employee’s charge of discrimination can use this ruling to support arguments that such overly broad subpoenas should not be enforced.  Nonetheless, with the issue percolating before the U.S. Supreme Court, employers will continue to have to fight EEOC subpoenas at the investigation stage until the Supreme Court provides further clarity regarding the scope of this often abusive tactic.

Readers can also find this post on our EEOC Countdown blog here.