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.

f41e0e294d1b6ebf550c2badccce4b68Seyfarth Synopsis: In the high-profile EEOC race discrimination litigation against Bass Pro, the Court denied the EEOC’s motion for a ruling that would have allowed it to include in its § 706 claims those individuals who had not yet applied to work for Bass Pro when the mandatory Title VII conciliation process took place.

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The latest chapter of the EEOC’s race discrimination case against Bass Pro (which we blogged about here and here) involves yet another attempt by the government to cast a broad net and increase the number of claimants in its lawsuit.  This week, in EEOC v. Bass Pro Outdoor World, LLC, et al., Case No. 11-CV-3425 (S.D. Tex. Jan. 3, 2017), Judge Keith P. Ellison of the U.S. District Court for Southern District of Texas denied the EEOC’s motion for a ruling that would have allowed it to include claims in its lawsuit for individuals who had not yet applied to work for Bass Pro at the time conciliation took place, which is a mandatory pre-suit duty under Title VII.

For employers confronted with EEOC litigation, this ruling is positive in that shows how courts may be unwilling to allow to the EEOC to add claimants with whom it never conciliated.

Case Background

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).  On March 4, 2014, the Court issued several rulings (which we blogged about here) regarding whether the EEOC had satisfied Title VII’s pre-suit requirements.  Id. at 1.  At the outset, the Court ruled that it must undertake a distinct analyses of the EEOC’s § 706 and § 707 claims on the issue of conciliation.  Accordingly, the Court held that while the EEOC had satisfied Title VII’s conciliation requirements with regards to its § 707 claims, it failed to do so with its § 706 claims.  The Court thus ordered a stay as the remedy for the EEOC’s failure to properly conciliate the § 706 claims.  Id. at 1-2.  Further, the Court dismissed from the case all individuals who had not yet applied to work for Bass Pro by April 26, 2010, the date on which the EEOC issued its Letter of Determination (hereinafter “post-LOD applicants”).  The Court reasoned that the EEOC could not have possibly conciliated the claims of these individuals as they had not yet applied to work for Bass Pro at the time the conciliation took place.

On July 30, 2014, in reversing an earlier ruling, the Court held (as we blogged about here) that the EEOC may prove its § 706 claims using the framework established in Franks v. Bowman Transportation Company, Inc., 424 U.S. 747 (1976), and later refined in International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977).  Id. at 2.  The Court further held that the EEOC had satisfied its Title VII administrative prerequisites (including its duties to investigate and conciliate) with regards to its § 706 claims, even for individuals not specifically identified in the investigation.  After this ruling was affirmed by the Fifth Circuit, the EEOC argued that the post-LOD applicants must be restored to eligibility in the § 706 class. 

The Decision

The Court denied the EEOC’s motion for a ruling that the post-LOD applicants were eligible to participate with respect to the EEOC’s § 706 claims.  The EEOC claimed that Court’s dismissal of the post-LOD applicants was fundamentally tied to two rulings that were subsequently overturned: (1) that the § 706 and § 707 claims must be analyzed separately on the issue of conciliation, and (2) that the Franks/Teamsters model could not be applied to § 706 claims.  The Court rejected this argument, noting that when it dismissed the post-LOD applicants, it made no reference to those arguments and instead focused on the proper sequence of EEOC enforcement under Title VII.  Id. at 3.  Referencing its March 4, 2014 order, the Court explained that because by definition the post-LOD applicants applied after the EEOC’s investigation was completed, the EEOC could not possibly have conciliated their claims.  Accordingly, the Court opined that its reversal on the issues of separate conciliation and the application of the Franks/Teamsters model had no effect on the dismissal of the post-LOD applicants.  Thus, the Court denied the EEOC’s motion and held that the post-LOD applicants remained ineligible for the § 706 claims.

Implications For Employers

For employers facing EEOC litigation, any ruling that limits the size of the case is no doubt favorable in terms of minimizing potential financial exposure.  While employers should be encouraged by this Court’s willingness to hold the EEOC to its obligation to conciliate, there are several recent cases that argue that the courts’ review of the EEOC’s Title VII pre-suit duties remains limited.  Ideally, this ruling will send the EEOC a message that it must abide by the conciliation process or risk losing its ability to bring suit on behalf of claimants with whom it did not conciliate.

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

2017 EEOC Book Cover Design (3)We are once again pleased to offer our loyal readers our annual analysis of the five most intriguing developments in EEOC litigation in 2016, along with a pre-publication preview of our annual report on developments and trends in EEOC-initiated litigation. That book, titled EEOC-Initiated Litigation: FY 2016, is a thorough analysis of the lawsuits that were filed by the EEOC in FY 2016 (spanning October 2015 through September 2016), and the major decisions impacting EEOC litigation.

We have analyzed those filings and decisions to provide our loyal readers with a comprehensive examination of trends affecting EEOC litigation. Every employer wants to avoid becoming a target of a government lawsuit. We believe the best way to do that is to develop a clear understanding of the EEOC’s enforcement agenda, litigation activities, and priorities. Our annual report is intended to give corporate counsel, HR professionals, and other decision-makers the tools they need to keep their companies out of the line of fire.

This year’s report once again analyzes enforcement trends impacting employers in the retail, hospitality, manufacturing, healthcare, national resources/construction, and business services industries. That analysis can be found here.

We have also organized the substantive developments according to the EEOC’s strategic priorities. FY 2016 was the last year of the EEOC’s 2012 Strategic Enforcement Plan (SEP). Now is a perfect time to look back and take stock of what the EEOC has actually done with respect to each of those priorities over the past four years.  We think our readers will benefit from understanding how the EEOC interpreted and advanced those priorities over the past four years, especially since the new SEP (covering FY 2017-2021) identifies the exact same priorities.

The full publication will be offered for download as an eBook. To order a copy, please click here.

We always like to end our year with a look back at some of the most interesting decisions and developments of the year. Here is our list of the “top five” most intriguing developments of 2016:

FY 2017-2021 Strategic Enforcement Plan

In FY 2016, the EEOC created and announced a new SEP for fiscal years 2017 through 2021. The new SEP establishes the enforcement priorities that will guide its enforcement efforts over the next four years. Our readers can read all about it here.  We closely monitored how the EEOC adjusted its tactics and enforcement agenda in light of its previous SEP and found that it was a reliable guide to how the EEOC pursues its enforcement agenda. The same will probably be true of the new SEP as well.

The new SEP identifies the same six priorities as the earlier SEP. However, it added two substantive areas of focus regarding what it sees as developing and emerging issues in the workplace. Those include “complex” employment relationships, such as temporary workers, staffing agencies, independent contractor relationships, and those that arise in the on-demand economy. The EEOC also identified “backlash discrimination” against Muslims, Sikhs, and other persons of Arab, Middle Eastern, or South Asian descent. Employers that operate within any of the “complex” employment relationships identified by the EEOC, or who employ sizable populations of Muslim or Middle Eastern workers, should take heed.

Continuing Impact Of Mach Mining v. EEOC, 135 S. Ct. 1645 (2015).

In Mach Mining, LLC v. EEOC, the Supreme Court unanimously held that the EEOC’s statutorily-required conciliation activities are subject to judicial review. At the same time, however, the Court outlined a very narrow scope of that review. The Court then left it to the lower courts to harmonize those two aspects of its ruling. Despite some initial victories for employers, courts deciding cases in FY 2016 have tended to find that the EEOC had met its obligation, even when the evidence amounted to little more than the EEOC’s say-so and was contradicted by the employer. The die is not cast just yet, but if this trend continues, it may become much more difficult for employers to contest the EEOC’s “take it or leave it” approach to the conciliation process. Our analysis of this trend can be found here.

Continued Focus On LGBT Discrimination

The EEOC has expended considerable effort advocating for the protection of LGBT rights under the existing anti-discrimination laws. In 2012, it decided – in its own administrative decision – that transgender discrimination is a form of sex discrimination because it is tantamount to discrimination on the basis of a perceived failure to adhere to gender stereotypes. Over the next few years it successfully used that decision to obtain favorable precedent in the federal courts. The EEOC is now using the same tactics to try to establish that Title VII prohibits discrimination on the basis of sexual orientation. On July 15, 2015, the EEOC issued another administrative opinion, which held that Title VII extends to claims of sexual orientation discrimination. It then filed two lawsuits in FY 2016 that allege sexual orientation discrimination, one of which survived a motion to dismiss. Employers should expect that these LGBT issues will remain a centerpiece of the EEOC’s enforcement agenda under the new SEP. Our discussion of these developments can be found here.

New EEO-1 Reporting Requirements

The EEO-1 Report requires employers with more than 100 employees (and federal contractors or subcontractors with more than 50 employees) to collect and provide to the EEOC certain demographic information in each of ten job categories. On February 1, 2016, the EEOC proposed changes to the EEO-1 report, which would require employers to submit employee compensation data by gender, race, and ethnicity. Unless implementation is delayed or stopped, employers will have to start filing these new reports on March 31, 2018. Many employers expect and fear that the EEOC will use this new data to bring more lawsuits under the EPA and Title VII alleging wage discrimination. We discuss these new regulations here.

Political Changes

The most significant political development that will shape the EEOC’s agenda in the coming years is the election of Trump as the next president of the United States. For at least the first two years of Trump’s administration, he will have a Republican majority in both houses of Congress. The EEOC has increasingly relied on large, high-impact “systemic” cases to push forward its strategic goals. These types of cases can have a big impact because they tend to affect a larger number of employees and employers. But those tactics have also been roundly criticized by Republican members of Congress and are a likely target for reform under the new Republican leadership. At minimum, the new administration will bring significant changes to the high-level leadership at the EEOC. That alone will have a significant impact on the EEOC’s strategic direction. Our predictions regarding these changes can be found here.

FY 2016 is shaping up to be a fulcrum year in terms of the EEOC’s enforcement agenda. Not only does it mark the end of the FY 2013-2016 SEP and the beginning of a new SEP, but also it brings with it the uncertainty of an entirely new political climate and a change-over in the party occupying the White House. In that kind of environment, the only thing that is certain is change itself. We do not know exactly what to expect, but we look forward to reporting on those changes as they happen.

We wish all a happy and safe New Year!

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

dice2Seyfarth Synopsis: A seemingly innocuous case filed by the EEOC on behalf of a single charging party against a casino operator highlights some of the risks of betting at the conciliation table.  Employers take note!

As its FY 2016 wound down, the EEOC filed suit against a casino operator – in the case of EEOC v. Greektown Casino, L.L.C., Case No. 2:16-CV-13540 (E.D. Mich.) – alleging that it failed to accommodate and then terminated a pit manager because of his alleged disability – stress anxiety disorder. Obviously, the casino not yet responded to the complaint, and it may well have excellent legal defenses. Yet, the Complaint shows the EEOC’s hand (or at least part of it) and provides an example of some of the important stakes in EEOC litigation.

Is The Commission Bluffing?

Employers sometimes assume that the EEOC is only in the business of suing large companies based upon allegations of class-wide mistreatment of large groups of employees.  It is true that the EEOC makes headlines filing pattern or practice cases against big companies, but the EEOC routinely files complaints on behalf of individual charging parties against lesser known businesses and often smaller companies. In fact, the EEOC often does so strategically – because it has determined that the underlying legal issue is more important than whether there is a big-name company, thousands of employees, or big dollars involved. As noted here and here, the EEOC’s recent challenge to a wellness program, and its recent attempt to pursue a claim for transgender discrimination, for example, were pursued on behalf of individual charging parties. Obviously, though, the legal issues were deemed important and, frankly, the press coverage was just as wide as that of any of the EEOC’s behemoth cases.

Also, more than a few cases are filed by the EEOC because it simply determines justice must be done and that the charging party might not have the resources to pursue it.  So, don’t assume during the conciliation process that the EEOC is just bluffing when it threatens to bring a case on behalf of one charging party.  It happens.

Know When To Fold Them?

With each reasonable case determination, comes an invitation to the conciliation (gaming) table. The conciliation process can be long, episodic, and frustrating.  Along the way, an employer must balance the various pros and cons associated with settling a case with the EEOC.  Certainty of outcome is almost always a factor, as is money, but, for some employers, the question is whether the game is lost the instant a suit is filed by the EEOC.  Consumer product and service companies, for example, are heavily invested in brand development and the relentless pursuit of brand loyalty.  So, each employer must ask itself what it will wager on whether the failure to reach compromise will result in damage to its brand or company name if the government publicly accuses it of discriminatory treatment of employees (i.e., fellow consumers). The frustrating part is that the allegations may be wildly misleading and eventually proven wrong, but no matter how frivolous the assertions may be, the reputational damage can be done on filing day.

Know When (Not) To Run?

None of this is to suggest that employers should bend to the will of the EEOC in a meritless individual or class case just because the EEOC says it might file suit.  The fact is that the EEOC is quite choosy and has limited resources.  As we reported here, the EEOC filed only 136 cases in its fiscal year ending September 30, 2016.  By contrast, as noted here and here, the EEOC routinely receives more than 80,000 charges of discrimination per year. In other words, the odds of the EEOC filing suit are actually quite low in any given case.

Plus, not all negative publicity hits are created equal.  What is the issue?  Is there an advantage to taking a stand? Do you have strong PR advisors?  Can you turn it on the government – David v. Goliath style?

And, perhaps most importantly, settling is not always a good bet.  EEOC conciliation agreements are confidential as a matter of law and EEOC policy – except where the employer agrees to some measure of publicity.  Employers should bet that the EEOC will request an “agreed” press release if there is any level of significance to the case, and should demand to see details of that card before deciding to take it.

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

thVSDVQKXMBy Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis: In the remand of the high profile Mach Mining litigation that was before the Supreme Court in 2015, a district court denied the EEOC’s motion for reconsideration of a discovery order pertaining to the scope of the EEOC’s investigation, and denied the EEOC’s motion to amend its complaint to add as defendants seven entities who did not receive actual notice or an opportunity to conciliate.

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After the remand of the Mach Mining litigation from the U.S. Supreme Court, this hallmark case regarding the scope of review of the EEOC’s pre-suit duties under Title VII  is still evolving and shaping the landscape of EEOC litigation.  In EEOC v. Mach Mining, LLC, No. 11-CV-00879 (S.D. Ill. Aug. 22, 2016), Judge Gilbert of the U.S. District Court for the Southern District of Illinois recently denied the EEOC’s motion for clarification or reconsideration of a prior discovery order, while granting in part and denying in part the EEOC’s motion to amend its first amended complaint by adding several entities as defendants.

It is imperative that employers facing Title VII lawsuits brought by the EEOC follow this game-changing litigation, which provides insight into how the EEOC’s compliance with its pre-suit conciliation obligations shapes the parameters of EEOC litigation.  For further analysis of the Supreme Court’s decision and subsequent proceedings, check out our previous blog posts here and here.

Case Background

The EEOC brought suit on behalf of a class of female applicants who had applied for non-office jobs at Mach Mining.  Id. at 1.  The EEOC claimed that Mach Mining had never hired a single female for a mining-related position and did not even have a women’s bathroom on its mining premises.  The complaint alleged that Mach Mining’s Johnston City, Illinois, facility engaged in a pattern or practice of unlawful employment practices since at least January 1, 2006, in violation of Title VII, by engaging in sex discrimination.

In its answer, Mach Mining asserted the affirmative defense that the EEOC failed to conciliate in good faith.  The issue was ultimately resolved before the U.S. Supreme Court, which held “that a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit. But we find that the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.”  Id. at 2 (quoting Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1649 (2015)).

Following the Supreme Court’s decision, Mach Mining filed a renewed motion for partial summary judgment, which the Magistrate Judge denied.  Mach Mining then filed a motion for a protective order requesting that the Court preclude the EEOC, “from conducting discovery related to Mach’s relationship with other entities — entities which EEOC failed to include in the investigation and conciliation stage that prompted this action.”  Id. at 2.  Following a hearing, the Magistrate Judge denied Mach Mining’s motion for a protective order, and Mach Mining filed Rule 72 objections to the order.

Per Rule 72, the Court found that the ruling was not clearly erroneous or contrary to law.  However, the Court sua sponte reconsidered the motion and granted in part Mach Mining’s motion, finding that “[t]he EEOC had the opportunity to request any and all documents — including those on related entities —during its investigation of Mach Mining.  There are no allegations that Mach Mining failed to cooperate with that investigation or that Mach Mining did not disclosure all requested information. As such, the EEOC has had ample opportunity to seek information and include any related entity in its investigation of Mach Mining.”  Id.  Thus, in its January 21, 2016 order, the Court limited the EEOC from seeking discovery beyond the entities named in its Letter of Determination.

Thereafter, the EEOC moved for clarification or reconsideration of that order.  Prior to hearing arguments, the Court noted that the January 21, 2016 order did not intend to bar the EEOC from seeking discovery from any third party that may have relevant information pertaining to any issue in this matter.  Id. at 3.  Rather, the Court explained that the holding of the January 21, 2016 order was that the EEOC was barred from additional discovery for the purpose of adding parties where no notice and attempt at conciliation had been made.

The Court’s Decision

The Court denied the EEOC’s motion for clarification or reconsideration of the January 21, 2016 order.  The EEOC argued that Mach Mining had, “a web of complex corporate relationships” and that Mach Mining did not have physical control over the mining location and/or physical facilities.  Id. at 4.  These facilities are owned by other entities from whom the EEOC was attempting to obtain discovery.

The Court explained that it did not seek to bar discovery from property owners and that the EEOC was free to seek discovery from third parties.  Nonetheless, the Court noted that “such discovery is limited to Mach Mining’s hiring/firing and/or lack of female facilities. EEOC can conduct any discovery with regard to the merits of this case and/or discovery to third parties for legitimate purposes. The only discovery that was barred was discovery with regard to adding defendants that have not had notice and an opportunity for conciliation.”  Id. at 4.  As a result, the Court concluded that, “there is no basis for the Court to reconsider its January 21, 2016, ruling.”  Id.

Thereafter, the Court granted in part the EEOC’s motion to amend the complaint.  The EEOC argued that it should be permitted to add as defendants two entities named in the Letter of Determination, which the EEOC asserted had notice and an opportunity for conciliation, and seven entities as defendants for relief purposes only who did not have actual notice and an opportunity for conciliation.  Id. at 5.  In regards to the seven entities to which the EEOC acknowledged at the hearing that did not have actual notice and an opportunity for conciliation, the Court found that the EEOC failed to demonstrate that these entities could provide relief unavailable through Mach Mining.  Id. at 6.  As to the two entities named in the Letter of Determination, the Court held that if the EEOC could demonstrate that these entities had actual notice and an opportunity for conciliation in compliance with EEOC’s rules and regulations, the EEOC was granted leave to amend the complaint and to join those two entities as defendants.  Accordingly, the Court granted the EEOC’s motion to amend its complaint to add two entities as defendants, while denying the remainder of its motion to amend in regards to the seven entities who had no actual notice or opportunities for conciliation.  Id. at 7.

Implications For Employers

The Mach Mining litigation is a benchmark case for pattern or practice litigation brought by the EEOC, given its ramifications on the scope of review of the government’s pre-suit Title VII obligations.  This ruling illustrates that in instances where the EEOC does not provide parties actual notice or an opportunity to conciliate, courts will likely not allow those parties to later be added as defendants.  Nonetheless, it remains unlikely that courts will conduct in-depth reviews of such conciliations.

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

th7Y6M6GN7By Gerald L. Maatman, Jr., Christina M. Janice and Alex W. Karasik

Seyfarth Synopsis: With the publication of a ten-year review of its systemic discrimination program on July 7, 2016, the EEOC seeks to blunt employer and judicial scrutiny of the EEOC’s litigation practices by emphasizing its internal staffing and technological improvements, the gains it has made over time in number of people served, programmatic relief achieved, and monetary relief obtained, and its vision for the future as a nationwide law enforcement agency uniquely positioned to overcome challenges faced by the private bar in avoiding binding employment arbitration agreements and securing class-wide relief under Title VII.

As we have blogged about here  here,and here, the EEOC’s systemic discrimination program repeatedly has come under judicial scrutiny for its failure to satisfy Title VII’s jurisdictional requirements that it investigate, provide notice of, and attempt to conciliate claims before launching broad, expensive litigation against employers on those claims, as well as specific failures to bring legally sufficient or factually sustainable litigation. A 2006 Systemic Task Force Report to the Chair of the Equal Employment Opportunity Commission raised specific concerns about EEOC’s inconsistent investigations, lack of training and expertise, lack of capacity for data analyses, and an absence of incentives to properly implement a coordinated, nationwide systemic discrimination program.

Now under the leadership of Commissioner Jenny Yang, a former plaintiff’s class action lawyer for the Washington D.C. firm of Cohen, Milstein, Sellers & Toll, PLLC, the EEOC published on July 7, 2016 a ten-year a review of its efforts to improve its systemic discrimination litigation program and objectives.  Reporting an overall increase in litigation and raw dollars recovered from employers through litigation or conciliation, the EEOC review focuses on its internal efforts to grow its investigatory and litigation capacities and to transform itself into a “national law enforcement agency.”  Restating its purpose that “[t]ackling systemic discrimination — where a discriminatory pattern or practice or policy has a broad impact on an industry, company or geographic area — is central to the mission of EEOC,” the EEOC report signals employers, legislators, and courts alike that its systemic program will proceed undaunted by judicial challenges to its practices, and will continue to be driven by metrics that “incentivize” investigations, conciliations and systemic work.

Employers should pay particular attention to the metrics driving EEOC performance and the trajectory of its systemic litigation program.

Key Findings

From the fall of 2013 through August 2014, EEOC Commissioner Yang and her staff conducted a review of the EEOC’s systemic program since the implementation of the 2006 Systemic Task Force Report.  As a result of its review, the EEOC claims to have “made considerable progress in achieving a truly nationwide, coordinated, and strategic systemic program.”  Some of the key findings published in the report include:

– Investments in hiring and training staff focused on systemic work have produced a 250 percent increase in systemic investigations in the past five years.

– Concerted efforts to reach voluntary resolutions of systemic investigations have resulted in the conciliation success rate tripling from 21% in fiscal year 2007 to 64 percent in fiscal year 2015.

– The systemic litigation program has achieved significant impact, with a 10-year success rate of 94 percent for systemic lawsuits.

– The EEOC tripled the amount of monetary relief recovered for victims in the past five fiscal years from 2011 through 2015, compared to the relief recovered in the first five years after the Systemic Task Force Report.

Although EEOC does not define “success,” the report makes clear that EEOC measures success in three ways: numbers of employees who benefit from a systemic investigation and/or lawsuit, targeted programmatic relief, and the realization of dollars.

In 2014, less than 1,000 individuals were said to have benefited from successful EEOC systemic lawsuits, a sharp decline from the nearly 8,000 individuals in 2013.  However, the 2015 number soared past these figures, with nearly 10,000 individuals benefiting from successful EEOC systemic lawsuits, the most since 2008.  The EEOC reports that “significantly more individuals directly have benefited from EEOC systemic lawsuits that through individual or small multi-victim suits brought by EEOC.”

While the percentage of systemic lawsuits in the active litigation docket has remained roughly the same from 2013-2015, ranging from 22% to 25%, the EEOC reports that the percentage of resolutions with targeted equitable, or “programmatic” relief has jumped from 64% to 81.2% over the last three years.

In terms of monetary relief from the combined resolutions of systemic investigations and systemic lawsuits, the EEOC trumpets that its results have jumped from 15 resolutions totaling $5.99 million in 2006 to 296 resolutions totaling $80.28 million in 2015, with over 16,000 individuals receiving monetary relief that year.

Targeting Enforcement

Statistically, the EEOC continued to focus heavily on disability and race claims. From 2011-2015, 32% of the successful conciliations of systemic investigations involved disability discrimination, with the next highest being race at 17%.  The EEOC’s challenges to employer hiring practices dominated with 23% of successful conciliations, followed by reasonable accommodation practices at 21%.  These areas can be expected to continue as target enforcement areas for the EEOC.

In terms of federal sector compliance, the EEOC reported issuing a series of federal sector decisions finding that discrimination based on gender identity and sexual orientation constitutes sex discrimination prohibited by Title VII.  The report signals the EEOC’s objective of increasing its activity in these developing areas of law.

The report also makes an unusually direct pitch for the EEOC to be the litigation partner of choice in overcoming mandatory employment arbitration agreements and the challenges to the plaintiffs’ bar of bringing statistical disparate impact cases under Title VII in the wake of the Supreme Court’s decision rendering class certification based on mere statistical evidence untenable in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011)

What This Means For Employers

While it certainly is not difficult to imagine the EEOC or any entity positing its best numbers when publishing a self-review, employers absolutely need to pay attention  to these results. First, the data illustrates that the EEOC is putting more time and resources into systemic cases, and as a result, has increasingly become more aggressive in their pursuit of “big fish” employers. While the number of individuals said to have benefited from systemic lawsuits has teeter-tottered up and down the last few years, the report manifests an aggressive agenda to pursue these prime lawsuits.  Thus, employers should expect systemic investigations to continue on the uptick.

Given their success in the disability context, especially with regards to hiring and reasonable accommodation, the EEOC likely will not stray from what has worked.  Thus, employers facing challenges in this area need to focus on strategies of compliance and risk avoidance.  For businesses with nationwide operations, this will require heightened communication amongst various regions and sectors to ensure compliance with the law.

The EEOC trumpets that it has hired systemic investigators, social scientists and labor economists to support its systemic discrimination program in every district, and boldly states that “[t]hey have the expertise and training to effectively manage complex investigations, to analyze relevant data, and to develop statistical evidence.”  The EEOC reports that “[i]n most years since 2008, EEOC has provided systemic training to lead systemic investigators and systemic coordinators.”   While this reporting now leaves the EEOC with little to no excuse when facing judicial scrutiny for failing to comply with Title VII’s mandate of investigating, notifying employers of the claims against them and attempting to conciliate those claims as predicates to litigation, this reporting also signals that the EEOC has increased its trained resources to grow its program.

Further, the EEOC reports a significant investment in technologies that allow personnel to access and analyze employer, regional or industry workforce demographic data to inform charges and investigations on a nationwide basis.  Employers cannot presume that investigators will deal with charges individually without reviewing all EEOC charges and investigations against an employer, and industry data, for potential systemic opportunities.

Finally, the EEOC reports a slow but steady increase in the use of Commissioner’s Charges as a vehicle for enforcement.  Employers may expect the EEOC to continue to increase its reliance on this tool in their toolkit.

The EEOC’s report states that in the future it will focus on three key, although vaguely defined, objectives in order to expand the agency’s impact and better serve the public, including: (1) executing national strategies to address persistent and emerging systemic issues; (2) advancing solutions that promote lasting opportunity in the workplace; and (3) strengthening the agency’s technology and infrastructure. With increases in systemic program resources and incentives to generate big outcomes in terms of individuals benefited, programmatic relief obtained and dollars generated, employers can expect the EEOC to cast a wide range of nets across the county in hopes that some of their catches will result in the next big systemic lawsuit.

Our loyal blog readers can also find this post on our EEOC Countdown Blog here

 

moneyBy Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

Yesterday the U.S. Supreme Court heard oral arguments in EEOC v. CRST Van Expedited, Inc.

Involving the largest fee sanction award ever levied against the EEOC – nearly $4.7 million –  EEOC v. CRST Van Expedited, Inc. may be one of the most important cases on EEOC litigation issues in years.  The stakes are high for employers and the EEOC alike.

At issue in this case is whether and under what circumstances an employer can recover attorneys’ fees from the EEOC where the EEOC fails to satisfy its pre-suit investigation duties under Title VII.  Here is our analysis of the course of the arguments (a copy of the hearing transcript is here).

A Thumbnail Sketch Of The Key Facts Of The Case

Section 706(k) authorizes district courts to award attorneys’ fees to the “prevailing party” in a Title VII case.  In relevant part, Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978), held that fee awards to a prevailing defendant are permissible only if the plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation.”

After CRST successfully obtained the dismissal of the EEOC’s Title VII claims for sexual harassment, the District Court granted CRST’s motion for an award of attorneys’ fees and costs and directed the EEOC to pay CRST nearly $4.7 million, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII, and imposed an unnecessary burden on both CRST and the District Court.

On the EEOC’s appeal, the Eighth Circuit reversed and held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Further, the Eighth Circuit found that the District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”  The Eighth Circuit also held that CRST could not satisfy the Christianburg standard for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”  Thereafter, following CRST’s petition for certiorari, the SCOTUS accepted the case for review.

The Employer’s Position

In its briefing, CRST asserted two arguments as to why the Eighth Circuit’s decision was improper.  First, CRST argued that the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg, and severely undermines the policy of Section 706(k).

Second, CRST posited that even if the “on the merits” standard applied, CRST was successful on the merits when it defeated certain claims by demonstrating that the EEOC did not investigate, find reasonable cause for, or attempt to conciliate any of these claims as required by the statute. Accordingly, CRST asserted that the precedent created by the Eighth Circuit’s decision would allow the EEOC to entirely abandon its pre-suit responsibilities with impunity, which would lead to one-sided and inefficient conciliations.

Following the briefs submitted by the EEOC, which clearly abandoned its argument that the Eighth Circuit’s rule that a resolution “on the merits” is a precondition for a fee award, CRST’s reply briefing requested that the SCOTUS abrogate the Eighth Circuit’s rule as being without any foundation under Title VII.  CRST also attacked the EEOC’s newly asserted theory that attorneys’ fees were unwarranted because only preclusive judgments in favor of defendants support “prevailing party” status.  CRST argued that because the EEOC did not raise this “prevailing party” argument at any time during the last six years of litigation, the argument had been waived.  CRST also asserted that the only substantive issue properly before the SCOTUS was whether the EEOC’s pre-suit conduct rendered its lawsuit “frivolous, unreasonable, or groundless” under Christianburg, and that the District Court acted within its discretion when it found that the EEOC abandoned its Title VII obligations.

The Government’s Position

Having abandoned its contention that only a dismissal “on the merits” may be the subject of an attorney fee award, the EEOC argued that the District Court’s finding that the EEOC failed to satisfy Title VII’s administrative preconditions to filing a lawsuit did not authorize an award of attorneys’ fees under 42 U.S.C. 2000e-5(k), because such a dismissal does not make the defendant a “prevailing party.”

The EEOC further noted the District Court’s original dismissal was not “with prejudice,” and that the later agreed-upon “with prejudice” dismissal did not and could not modify the District Court’s earlier dismissal of the claims at issue here, which had already been affirmed by the Eighth Circuit.

Further, the EEOC also contended that the award of attorneys’ fees and costs in this litigation was improper because the Commission’s suit was not “frivolous, unreasonable, or groundless.”  Citing Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1656 (2015), which has become routine practice for the Government, the EEOC asserted that the District Court improperly found that the EEOC failed to satisfy its pre-suit obligations because it did not separately investigate, make a reasonable-cause determination, and conciliate with respect to each individual woman for whom it ultimately sought relief.

The SCOTUS Oral Argument

While both sides endured their fair share of questioning from the Justices at yesterday’s hearing, the questioning put to the Government was noticeably pointed and plentiful.

If a questioning scorecard is indicative of the issues, it broke out this way by our rough tally:

Questions To CRST – 46 in the opening argument and 5 questions in the rebuttal argument [questions by Justice – Kagan (16), Ginsburg (14), Sotomayor (13), Kennedy (6), Breyer (3), and Alito (0)]

Questions To The EEOC – 72 in the opposition argument [questions by Justice – Breyer (25), Roberts (21), Alito (9), Kagan (6), Kennedy (6), Sotomayor (4), and Ginsburg (1)]

The EEOC was noticeably pressed about why it should not be held responsible for bringing the lawsuit that was later dismissed.  Moments into the EEOC’s argument, Justice Alito asked “In your brief in opposition, you argued that the Eighth Circuit was correct; did you not?”  After admitting it did so, Justices Alito and Breyer followed up by asking if the EEOC had abandoned its positon.  After several attempts to dance around the question, the Government finally admitted to abandoning the Eighth Circuit’s view regarding the necessity of a disposition on the merits.  Justice Breyer then continued to hammer the Government, asking “So if they won, why isn’t that the end of it?  It says judgment — it says … the case is dismissed with prejudice.  Therefore, they won.  So why aren’t they the prevailing party?”  The EEOC’s responses hardly pleased the questioning Justice.

After constant grilling from several Justices, Justice Kennedy finally summarized the Government’s position in a question where his tone was certainly revealing: “your position that no matter how unreasonable the plaintiff has been, no matter how costly it’s been, no matter how long it’s taken, that you cannot award fees unless …  the case is dismissed, and the judge says you’re barred from bringing this claim in this suit, no fees; that’s your position.”  Not surprisingly, given its recent attitude that it can abandon the pre-suit Title VII obligations and seemingly litigate with impunity, the EEOC responded “that’s correct.”  The Government also asserted that the notion of “prevailing party” was a term of art.  As was the case with most of the Government’s responses, the Justices were left with more questions than answers.

In sum, the SCOTUS hardly seemed convinced by the Government’s ever-evolving arguments.  Justice Sotomayor did float the idea of the case being remanded to the Eighth Circuit.  But perhaps most tellingly, in light of the Government’s persistent use of Mach Mining as a crutch to avoid judicial scrutiny, Chief Justice Roberts posited the notion that conciliation without the threat of fees would not necessarily incentivize the EEOC to abide by Title VII obligations, “But if they were subject to fees because they ignored their duty to conciliate, it seems to me that might give them some incentive to get it right the first time.”

What’s Next

A future SCOTUS ruling should provide guidance regarding whether and under what circumstances an employer can recover attorneys’ fees from the EEOC when the EEOC fails to satisfy its pre-suit investigation duties under Title VII.

Reading the tea leaves at the Supreme Court, the Government offered little justification for its pre-suit conduct (or lack thereof).  The Supreme Court clearly seemed concerned with the Government’s abandonment of its duties, and while the Supreme Court may not go so far as to uphold the District Court’s award of attorneys’ fees to CRST, it would not be surprising to see a ruling that reflects the Supreme Court’s concerns about the EEOC’s pre-suit conduct.  We expect a decision within the next few months so stay tuned.

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

Bsupremecourty Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

EEOC v. CRST Van Expedited, Inc. is a key case for all employers.

We have been tracking the developments (here, here, here, here, here, here, here, and here) in this case since its inception. Now it has reached the U.S. Supreme Court on the issue of whether attorneys’ fees are appropriate in instances where the EEOC failed to satisfy its pre-suit investigation duties under Title VII, but the employer was not victorious “on the merits.”  In EEOC v. CRST Van Expedited, Inc., 774 F.3d 1169 (8th Cir. 2014), the U.S. Court of Appeals for the Eighth Circuit reversed and remanded a nearly $4.7 million award of attorneys’ fees – the largest fee sanction ever levied against the Commission – to the employer, CRST, finding that the District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations did not constitute a ruling on the merits, and therefore the employer was not a “prevailing party” entitled to a fee award as to those claims.  On remand, the District Court was instructed to individually assess each claim for which it granted summary judgment for CRST on the merits and explain why it deemed that particular claim to be frivolous, groundless, or unreasonable.

Following the decision, CRST petitioned for a rehearing en banc, which was denied on February 20, 2015.  Thereafter, CRST petitioned the U.S. Supreme Court for certiorari, which was granted on December 4, 2015.  On January 19, 2016, CRST submitted its merits brief, which presented the following question to the Supreme Court: whether a dismissal of a Title VII case, based on the EEOC’s total failure to satisfy its pre-suit investigation, reasonable cause, and conciliation obligations, can form the basis of an attorneys’ fee award to the defendant under 42 U.S.C. § 2000e-5(k).

On January 26, 2016, the Equal Employment Advisory Council, National Federation of Independent Business, and Small Business Legal Center filed an amici brief in support of CRST.  Others filing amicus briefs in support of CRST included Americans for Forfeiture Reform (here); Bass Pro Shops Outdoor World, LLC and Tracker Marine Retail, LLC (here); and the U.S. Chamber of Commerce, American Trucking Associations, Inc., and Business Roundtable (here).

Hence, the stage is set for what may well be one of the most important rulings on EEOC litigation in memory.

The Context And The Stakes

On September 27, 2007, the EEOC filed a single count complaint against CRST under Section 706(f) of Title VII on behalf of a female driver and a class of “similarly situated” but unidentified female employees of CRST.  Id. at 10.  The U.S. District Court for the Northern District of Iowa noted that in the course of discovery, “it became clear that the EEOC did not know how many allegedly aggrieved persons on whose behalf it was seeking relief,” and that “the EEOC was using discovery to find them.”  Id. at 11.  CRST successfully moved the District Court for the dismissal of Title VII claims for sexual harassment brought by the EEOC on behalf of several hundred female truckers, after demonstrating that EEOC did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it sought relief at trial before filing the Complaint — let alone issue a reasonable cause determination as to those allegations or conciliate them.

After securing the dismissals and settling the claims of the original charging party, CRST moved for the award of attorneys’ fees and costs.  The District Court granted the motion and directed the EEOC to pay CRST nearly $4.7 million in attorneys’ fees and costs, finding that the EEOC’s actions in pursuing this lawsuit were unreasonable, contrary to the procedure outlined by Title VII and imposed an unnecessary burden upon CRST and the District Court.  Id. at 18.  However, on appeal the Eighth Circuit held that the District Court “did not make particularized findings of frivolousness, unreasonableness, or groundlessness as to each individual claim” and remanded these claims to the District Court to make such individualized determinations.  Id. at 20.  Further, the Eighth Circuit found that that District Court’s dismissal of 67 claims based on the EEOC’s failure to satisfy Title VII’s pre-suit obligations “[did] not constitute a ruling on the merits,” and that “[t]herefore, CRST is not a prevailing party as to these claims.”  Id. at 21.  The Eighth Circuit also held that CRST could not satisfy the standard of Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), for the same reason: “[P]roof that a plaintiff’s case is frivolous, unreasonable, or groundless is not possible without a judicial determination of the plaintiff’s case on the merits.”  Id. (internal quotation omitted).

Following the Supreme Court’s eventual ruling, this case will provide guidance on how employers can pursue attorneys’ fees and costs in the increasingly common instances where the EEOC has abandoned its pre-suit duties required by Title VII.

CRST’s Brief

In its brief, CRST makes two arguments as to why the Eighth Circuit’s decision was improper.  First, CRST argues that the Eighth Circuit’s rule that a prevailing defendant may recover fees only when a case is decided “on the merits” has no basis in the statute, conflicts with Christiansburg, and severely undermines the policy of Section 706(k).  Id. at 23.  In relevant part, Section 706(k) authorizes district courts to award attorneys’ fees to the “prevailing party” in a Title VII case.  Id. at 22.  Christianburg held that fee awards to a prevailing defendant are permissible only if the plaintiff’s lawsuit was “frivolous, unreasonable, or without foundation.”  Id. (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)).  CRST contends that “categorically denying fees in such cases [not decided on the merits] would frustrate the congressional policy choice embodied in Section 706(k): to ensure that plaintiffs who impose unnecessary and unreasonable litigation costs on defendants will bear the costs of their own choices.”  Id. at 24.  Further, CRST notes that “[a]s lower courts applying Christiansburg have repeatedly recognized, that decision to litigate can be unreasonable for many reasons that do not bear on the ultimate merits of the claims — including, for example, when the suit is obviously time-barred or moot.”  Id. at 24.  Accordingly, CRST asserts that the precedent created by the Eighth Circuit’s decision would allow the EEOC to entirely abandon its pre-suit responsibilities with impunity, which would lead to one-sided and inefficient conciliations.  Id. at 25.

Second, CRST posits that even if Congress intended Section 706(k) to limit defendants’ fee awards to cases decided “on the merits,” which it claims Congress did not do, this case would still qualify under that standard.   Id.  CRST notes that “Title VII’s pre-suit requirements are substantive, mandatory conditions that determine whether a court may hold an employer liable in a case brought by the EEOC” and that the “EEOC’s claims were dismissed in this case because the EEOC failed…to first determine whether the allegations that it intended to litigate had sufficient merit to warrant requiring CRST to defend itself in court.”  Id. at 25-26.  Accordingly, given that these pre-suit requirements were elements of the EEOC’s cause of action, CRST argues that it prevailed on the merits when it defeated certain claims by demonstrating that the EEOC did not investigate, find reasonable cause for, or attempt to conciliate any of these claims as required by the statute.  Id. at 42.

Amici Briefs Filed In Support Of CRST

The amici submission filed by the Equal Employment Advisory Council argues that the Eighth Circuit’s decision was contrary to Title VII’s text, policy aims, and purposes and was inconsistent with the Supreme Court’s decision in Christiansburg.  Amici Brief, at 9.  The amici brief notes that while “Title VII expressly authorizes courts to award a prevailing party, ‘other than the Commission or the United States, a reasonable attorney’s fee (including expert fees) as part of the costs ….’ 42 U.S.C. § 2000e5(k)…[i]t places no conditions on the court’s discretion to award such fees, except to specify attorney’s fees are not available if the prevailing party is either the EEOC or another federal government agency.”  Id. at 10.  Accordingly, the amici brief posits that Title VII does not limit the award of attorneys’ fees and costs to parties who have prevailed on the merits, contrary to the Eighth Circuit’s holding.  Id. at 12.

Further, the amici brief asserts the Eighth Circuit misapplied Christianburg, which involved a claim for attorney’s fees based on the dismissal of an EEOC suit on procedural grounds.  Id. at 10-11.  The amici brief argues that the Eighth Circuit “purports to absolve the EEOC of any liability for a prevailing defendant’s attorneys’ fees in cases dismissed based on anything other than a final adjudication of the discrimination claim on the merits, [and] is irreconcilable with Title VII’s plain text and [the Supreme Court’s] interpretation of it in Christiansburg.”  Id. at 11.  Finally, the amici brief describes policy reasons for awarding attorneys’ fees in cases such as this one, noting “in its zeal to litigate large, high profile class-based suits, the EEOC’s enforcement priorities seemingly have focused less on informal resolution of discrimination charges, as contemplated by Title VII, and more on developing and maintaining a broad, class-based litigation docket.”  Id.  As such, contrary to the Eighth Circuit’s holding, amici assert that courts should not tolerate such improper conduct by the EEOC, which would be deterred by entitling prevailing defendants to reasonable attorneys’ fees and costs.

What’s Next

The Supreme Court is set to hear oral arguments on March 28, 2016 before ultimately issuing a final ruling.  Employers should pay close attention to the Supreme Court’s eventual ruling in this case.  While a favorable ruling for CRST would undoubtedly serve as a wake-up call to the EEOC in regards to fulfilling its pre-suit duties, an unfavorable ruling could have an adverse effect on employers as the EEOC could seemingly neglect its pre-suit responsibilities without having to fear any subsequent sanction.  We will keep our loyal blog readers updated as developments occur in this litigation.

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

sealBy Gerald L. Maatman, Jr., Christina M. Janice, and Alex W. Karasik

Following the U.S. Supreme Court’s landmark decision in Mach Mining v. EEOC, 135 S.Ct. 1645 (2015), which held that a judge may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit, and that the scope of that review is narrow, the litigation was remanded to the U.S. District Court for the Southern District of Illinois for further proceedings consistent with that ruling. Subsequently, the EEOC renewed its motion for partial summary judgment that originally had been denied by the District Court, and filed motions to strike Mach Mining’s evidence regarding the conciliation process. Applying the Supreme Court’s ruling that we previously blogged about here, Judge J. Phil Gilbert of the U.S. District Court for the Southern District of Illinois granted in part the EEOC’s  motions to strike with respect to evidence of communications during conciliation, and granted the EEOC’s renewed motion for partial summary judgment as to Mach Mining’s defense of failure to conciliate. EEOC v. Mach Mining, LLC, No. 11-cv-00879-JPG-PMF (S.D. Ill. Jan. 19, 2016).

This decision is required reading for employers engaged in EEOC investigations, conciliations and enforcement litigation.

Case Background

In 2011, the EEOC filed suit on behalf of a class of female applicants who had applied for non-office jobs at Mach Mining’s Johnston City, Illinois facility. According to the EEOC, Mach Mining “has never hired a single female for a mining-related position,” and “did not even have a women’s bathroom on its mining premises.” Id. at 1. The complaint alleged that since January 1, 2006 Mach Mining engaged in a pattern or practice of unlawful discrimination on the basis of sex, in violation of Title VII. In its answer, Mach Mining asserted the EEOC’s failure to conciliate in good faith under 42 U.S.C. § 2000e-(5)(b) as an affirmative defense to the litigation.

The EEOC moved for partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate. The District Court denied the motion, finding that the EEOC was not entitled to judgment as a matter of law as the EEOC’s pre-suit duty to conciliate was subject to at least some level of judicial review. Id. at 2. The EEOC then filed a motion for reconsideration or, in the alternative, for certification for appeal under 28 U.S.C. §1292(b). The District Court held oral arguments and denied reconsideration of its order, but granted the motion to certify. The Seventh Circuit ultimately reversed and remanded the case back to the District Court for proceedings on the merits. Mach Mining then petitioned for certiorari to the Supreme Court, which was granted.

The Supreme Court heard arguments on January 13, 2015 and decided on April 29, 2015 that, a judge “may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit…[but] the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.” Mach Mining, LLC v. EEOC, 135 S.Ct. at 1649 (2015). The Supreme Court reasoned that narrow judicial review of the EEOC’s pre-suit duty to attempt conciliation prior to litigation was appropriate, given the confidential nature of conciliation and the discretion afforded the EEOC under Title VII to determine how to attempt conciliation.  Accordingly, the judgment of the Court of Appeals was vacated and the matter was remanded back to the Seventh Circuit for further proceedings. The Seventh Circuit then remanded the case back to the District Court for proceedings consistent with the opinion of the Supreme Court.

The EEOC subsequently renewed its motion for partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate, arguing that it had sufficiently demonstrated attempting conciliation with Mach Mining, and compliance with 42 U.S.C. § 2000e-5(b). The EEOC also filed two motions to strike, arguing in the first motion that a portion of Mach Mining’s opposition to summary judgment revealed confidential information about the conciliation process in derogation of 42 U.S.C. § 2000e-5. The District Court previously had denied the EEOC’s attempts to strike this information, agreeing with Mach Mining that the information provided in Mach Mining’s papers was focused on what was missing from the conciliation process, as opposed to what was actually said or done during the process. The EEOC argued in the second motion that portions of Mach Mining’s exhibits and statement of additional undisputed facts in support of its opposition to the EEOC’s motion for partial summary judgment similarly should be stricken.

The District Court’s Decision

The District Court granted the EEOC’s motions to strike, in part, and granted the EEOC partial summary judgment on Mach Mining’s affirmative defense of failure to conciliate.  In doing so, the District Court observed that the Supreme Court provided guidance for limited judicial review of the informal “conference, conciliation, and persuasion” requirement of Title VII, and for what information a court may consider in its review.  The District Court relied on the Supreme Court’s reasoning that a judge “looks only to whether the EEOC attempted to confer about a charge, and not to what happened (i.e., statements made or positions taken) during those discussions.”  Mach Mining, No. 11-CV-00879, at 4. The District Court determined that while substantive details had not been disclosed by Mach Mining in its court filings, nevertheless specifics as to that was “said or done” during the conciliation process were disclosed, and went beyond “whether EEOC attempted to confer about a charge.” Id. at 5. Accordingly, the District Court granted the EEOC’s motions to strike portions of Mach Mining’ opposition papers and supporting exhibit.

The District Court declined to strike, however, portions of Mach Mining’s filings attesting to a letter sent by the EEOC stating that conciliation efforts had failed, as well as the date of the lawsuit. The District Court noted that the EEOC previously had stated that such letters were available for review, that the date of filing was a public record, and that information regarding the EEOC’s fiscal year was also publicly available. Id. at 5-6. Accordingly, the District Court found that the information in these paragraphs did not concern statements made or positions taken during conciliation.

Turning to the EEOC’s renewed motion for partial summary judgment, the District Court referred to a two part test outlined in the Supreme Court’s decision to determine whether the EEOC has complied with the statutory requirement of 42 U.S.C. § 2000e-5(b): (1) the EEOC must inform the employer about the specific allegation, as it typically does in a letter announcing its determination of reasonable cause; and (2) the EEOC must try to engage the employer in an informal method of conference, conciliation, and persuasion. The District Court also emphasized that the scope of the review was narrow, looking only to whether the EEOC attempted to confer about a charge, and not to the statements made or positions taken during those discussions. Id. at 7. The District Court found that the EEOC’s letter of determination that it sent to Mach Mining on September 17, 2010 satisfied the first prong since it described Mach Mining’s alleged improper conduct and identified the aggrieved individuals.

As to the second prong, the District Court described how the EEOC provided Mach Mining with the proper notice, and as evidenced by the declaration of its own employee, the EEOC engaged in oral and written communications with Mach Mining to provide the company with the opportunity to remedy the discriminatory practices. To refute the EEOC’s affidavit, Mach Mining was required to provide an affidavit or other evidence indicating that the EEOC did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim. The District Court determined that the affidavit provided by Mach Mining only indicated that the EEOC did not provide all of the information that Mach Mining requested, and not that it failed to provide the requisite information. Therefore, the District Court held that the EEOC met the second prong of the test set out by the Supreme Court, and granted partial summary judgment to the EEOC. Id. at 10.

It is noteworthy that at the end of its decision, the District Court commented that “[a]lthough § 2000e-5(b) of 42 U.S.C. prohibits the disclosure of ‘anything said or done’ during the informal conciliation process, it does not prohibit disclosure of information obtained during the EEOC’s investigation and such information becomes available through discovery.” Id. This observation signals a significant difference between the EEOC’s pre-suit duties to investigate and to attempt conciliation.

Implications For Employers

Following this decision, employers can expect that in EEOC-initiated litigation, the EEOC will seek the narrowest review possible of its conciliation processes, asserting that this pre-suit condition is satisfied merely by producing a letter of determination, a notice of failure of conciliation, and an affidavit by EEOC personnel. With regard to EEOC pre-suit investigations, employers should be prepared to document the EEOC’s pre-suit investigatory conduct and enforce Title VII’s requirement of an investigation prior to the EEOC’s initiation of litigation. Armed with this decision, the EEOC will likely aim for the minimum threshold of satisfying its conciliation requirements for the foreseeable future.

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

thetopfiveBy Gerald L. Maatman, Jr., Christopher J. DeGroff, and Matthew J. Gagnon

We are pleased to offer our loyal blog readers our analysis of the five most intriguing decisions in 2015 relative to EEOC lawsuits, along with a pre-publication preview of our annual report on developments and trends in EEOC-initiated litigation. That book, entitled EEOC-Initiated Litigation: Case Law Developments In 2015 And Trends To Watch For In 2016, is a thorough analysis of the lawsuits that were filed by the EEOC in FY2015 (spanning October 2014 through September 2015), and the major decisions impacting EEOC litigation. We have analyzed those filings and decisions to bring our readers the most up-to-date examination of trends affecting the EEOC’s enforcement agenda. As always, we believe that the best way for any employer to stay out of the EEOC’s cross-hairs is to develop a deep understanding of its enforcement priorities. We hope that this year’s publication gives employers the tools they need to do exactly that.

This year we have expanded our analysis to look at new case filings and important decisions on an industry-by-industry basis. This year’s book includes individual sections devoted to enforcement trends and significant decisions impacting employers in the retail, hospitality, manufacturing, healthcare, construction/national resources, and business services industries. That analysis can be found here.

The full publication will be offered for download as an eBook. To order a copy, please click here.

We like to end our year with a look back at some of the most interesting decisions of the year. We had no trouble picking those cases for 2015. The U.S. Supreme Court handed down three decisions in 2015 that we believe will significantly impact EEOC-initiated litigation for years to come. There were also some especially intriguing decisions out of the lower courts that we believe shed light on how the EEOC will adjust tactics to pursue its enforcement agenda in 2016 and beyond.

Here is our list of the top five most interesting decisions of 2015.

  1. Mach Mining v. EEOC, 135 S. Ct. 1645 (2015).

Hands down, the most interesting, exciting, and game-changing decision of the year was the U.S. Supreme Court’s decision in Mach Mining v. EEOC. Sometimes we have to guess as to how significantly a single decision will shape the future of EEOC litigation. With Mach Mining, there is no wondering; it will have a major impact. We have devoted a special section of this year’s book to this decision, including a look back at the important cases leading up to it, and the first decisions from the lower courts that offer a glimpse as to how Mach Mining will be applied in the years to come. That section begins here.

What makes this decision so intriguing? It single-handedly dismantled the EEOC’s efforts to immunize its pre-suit conduct from judicial review. The Commission has been arguing for years in lawsuits around the country that judges are simply not authorized to review its pre-suit conduct. That includes the statutorily-required duty to conciliate a charge before bringing suit in court. In theory, meaningful conciliation would allow employers the opportunity to resolve EEOC charges before a lawsuit is filed. In practice, employers too often see the EEOC making a take-it-or-leave-it offer and then proceeding directly to litigation.

The Supreme Court rejected the EEOC’s position, holding that there is a “strong presumption favoring judicial review of administrative action.” Id. at 1651. Indeed, without the power to review the EEOC’s conciliation efforts, “the Commission’s compliance with the law would rest in the Commission’s hands alone.” According to the  Supreme Court, the point of judicial review is “to verify the EEOC’s say-so,” and to “determine that the EEOC actually, and not purportedly” met its obligations. Id. at 1653. But perhaps even more important for employers, the Supreme Court acknowledged that conciliation is a crucial step in realizing Title VII’s legislative goals, which make cooperation and voluntary compliance the “preferred means” of bringing employment discrimination to an end. Id. at 1651.

This decision is still only a few months old, and the lower courts are only just beginning to grapple with its application. Despite the Supreme Court’s strong stance in favor of judicial oversight, it outlined a fairly limited view of what that oversight would look like. Some courts have interpreted the decision narrowly, applying a minimalistic review of the EEOC’s actions. Other courts have taken a more expansive view, scrutinizing how the EEOC conducted its conciliation efforts and sending the Commission back to the drawing board if those efforts did not satisfy what Title VII requires. We will continue to monitor these developments for our loyal blog readers.

  1. Young v. United Parcel Service, Inc., 135 S. Ct. 1338 (2015).

On March 25, 2015, the Supreme Court issued another decision that we expect will have far-reaching effects on EEOC litigation. In Young v. United Parcel Service, Inc., the Supreme Court declined to follow the EEOC’s Enforcement Guidance on Pregnancy Discrimination and Related Issues.. In that guidance, the EEOC had sought to apply a “most-favored nation” approach to reasonable accommodations offered to pregnant employees.

This approach was summarily rejected by the Supreme Court in Young. Although the Supreme Court acknowledged that that the rulings, interpretations, and opinions of an agency charged with enforcing a particular statute are often given deference, here the Court was unimpressed by the thoroughness of the EEOC’s consideration of the issues and declined to give the EEOC’s guidance any weight. This decision leaves employers scratching their heads as to how they should interpret and apply the EEOC’s guidance post-Young. Our more fulsome review of the Young decision and its potential aftermath can be found here.

  1. EEOC v. Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028 (2015).

The Commission’s guidance on religious garb and grooming fared much better before the Supreme Court. In Abercrombie & Fitch Stores, Inc., the Supreme Court held that an employer that is without direct knowledge of an employee’s religious practice can be liable under Title VII for religious discrimination if the need for an accommodation was a motivating factor in the employer’s decision, whether or not the employer knew of the need for a religious accommodation. “[T]he rule for disparate-treatment claims based on a failure to accommodate a religious practice is straightforward: An employer may not make an applicant’s religious practice, confirmed or otherwise, a factor in employment decisions.” Id. at 2033. Although the EEOC’s guidance was not specifically mentioned in the Court’s decision, this rule is consistent with the “knowledge” requirement set forth in the EEOC’s guidance.

Like Mach Mining, this is a new decision that the lower courts are only just beginning to apply. Religious discrimination is a hot-button topic for the EEOC, so the repercussions of the Abercrombie decision will be an important issue to watch in 2016 and beyond. Our discussion of Abercrombie and other religious discrimination developments can be found here.

  1. EEOC v. Doherty Enterprises., Inc., No. 14-CV-81184, 2015 U.S. Dist. LEXIS 116189 (S.D. Fla. Sept. 1, 2015).

One of the most interesting decisions in 2015 to come from the lower courts was out of the U.S. District Court for the Southern District of Florida. In EEOC v. Doherty Enterprises., Inc., the court arguably recognized an entirely new cause of action under section 707(a) of Title VII, which would allow the EEOC to bring pattern or practice suits without having to engage in any of the pre-suit obligations mandated by other sections of Title VII. In effect, this would be an end-run around the Mach Mining decision because the question decided in that case – whether courts have the power to oversee how the EEOC satisfies its pre-suit obligations – is irrelevant if the EEOC can skirt those obligations altogether.

The arguments and legislative history that led to this decision are complex but well worth a read. We have included an expanded discussion of this decision in this year’s book plus a discussion of a similar case from the Northern District of Illinois that came to the opposite conclusion (a conclusion that was later affirmed by the Seventh Circuit). That discussion is available here. The EEOC has now persuaded one court that Title VII gives it the authority to bring a pattern or practice claim against employers who “resist” the full enjoyment of the rights provided for by Title VII. If other courts agree with this decision, it could become a powerful new weapon in the EEOC’s enforcement arsenal.

  1. R.G. & G.R. Harris Funeral Homes, Inc., No. 2:14-CV-13710-SFC-DRG (E.D. Mich. filed Sept. 25, 2014).

Finally, we have chosen a decision out of the U.S. District Court for the Eastern District of Michigan as one of our top five most interesting cases of the year. In R.G. & G.R. Harris Funeral Homes, Inc., the EEOC secured its most explicit endorsement to date of its theory that discrimination against transgender employees is tantamount to discrimination on the basis of sex because it is based on an employer’s gender-based expectations, preferences, or stereotypes. This theory has a fascinating history.

As recently as 2010, the EEOC was turning down employees who came to them with charges of transgender discrimination, which even the EEOC did not think were covered by Title VII. But that quickly changed after the EEOC issued its own decision in a case that (arguably) arose out of its own power to hear and decide disputes brought by federal agency employees. This is a particularly interesting “case study” in how the EEOC uses all of the tools at its disposal to expand the law to fit its enforcement priorities. Our readers can read all about it here.

Now, along with its own decision, the EEOC has a federal court decision to point to in support of its new theory. On April 21, 2015, the court in R.G. & G.R. Harris Funeral Homes, Inc. denied the employer’s motion to dismiss the EEOC’s complaint, holding that “even though transgendered/transsexual status is currently not a protected class under Title VII, Title VII nevertheless ‘protects transsexuals from discrimination for failing to act in accordance and/or identify with their perceived sex or gender.’” Id. at 599 (quotations omitted)., The Court went on to observe, however, that the EEOC “appears to seek a more expansive interpretation of sex under Title VII that would include transgendered persons as a protected class,” and noted that “there is no Sixth Circuit or Supreme Court authority to support the EEOC’s position that transgendered status is a protected class under Title VII.” Id.

These decisions and others made 2015 an exceptionally fascinating year for developments in EEOC litigation. And because these decisions often raised more questions than they answered, it portends an even more interesting year to come. We look forward to bringing those developments to our readers’ attention as they happen. We wish all a happy and safe New Year!

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