magnifier-1714172__340By Gerald L. Maatman, Jr. and Alex W. Karasik

Seyfarth Synopsis:  The Sixth Circuit recently affirmed a U.S. District Court’s decision granting the EEOC’s application to enforce a subpoena in a disability discrimination investigation, finding that company-wide information regarding the employer’s use and disclosure of medical information was relevant to the investigation of a single employee’s charge of discrimination. The ruling underscores the challenges faced by employers in objecting to EEOC subpoenas.

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As we discussed in recent blog posts (here, here, and here), the EEOC has been aggressive in issuing expansive subpoenas that seek company-wide information from employers, as opposed to limiting the subpoena to seek information about an individual charging party.  In the latest round of EEOC versus employer subpoena litigation, in EEOC v. United Parcel Service, Inc., No. 16-2132, 2017 U.S. App. LEXIS 10280 (6th Cir. June 9, 2017), the U.S. Court of Appeals for the Sixth Circuit affirmed a decision of the U.S. District Court for the Eastern District of Michigan granting the EEOC’s application to enforce a subpoena that sought company-wide information, even though investigation concerned a single employee’s charge of discrimination.

This ruling provides yet another example of courts setting the bar low when considering what is “relevant” for purposes of the scope of an EEOC subpoena.  As such, employers can and should expect the EEOC to continue to be aggressive in firing off far-reaching subpoenas as it investigates high-stakes systemic discrimination claims.

Case Background

A UPS operations manager filed an EEOC charge claiming that UPS discriminated and retaliated against him in violation of the Americans With Disabilities Act of 1990 (“ADA”).  Id. at *1-2.  In particular, he claimed that UPS published confidential medical information about him and other employees on its intranet page.  Id. at *2.  The EEOC began an investigation into the employee’s claims, which resulted in the Commission issuing a subpoena that requested information about how UPS stored and disclosed employee medical information.  UPS opposed the subpoena, claiming that the requested information was irrelevant to his charge.  The EEOC thereafter filed an application to enforce the subpoena.  The District Court granted the EEOC’s application, and UPS appealed to the Sixth Circuit.

The Sixth Circuit’s Decision

The Sixth Circuit affirmed the District Court’s grant of the EEOC’s application to enforce the subpoena.  First, the Sixth Circuit explained that a subpoena enforcement proceeding is a summary process designed to expeditiously decide whether a subpoena should be enforced, and that the purpose is not to decide the merits of the underlying claim.  Id. at *4 (citation omitted).  Citing the U.S. Supreme Court’s recent ruling in McLane v. EEOC, 137 S. Ct. 1159, 1170 (2017), which we blogged about previously here, the Sixth Circuit further instructed that it would review the District Court’s decision to enforce the subpoena under an abuse of discretion standard.  Id.

After noting that in the Title VII context the Sixth Circuit has held that the EEOC is entitled to evidence that focuses on the existence of patterns of racial discrimination in job classifications or hiring situations other than those that the EEOC’s charge specifically targeted, the Sixth Circuit opined that it saw “no reason to hold differently with respect to discrimination on the basis of disability.”  Id. at *5 (citations omitted).  Further, “so long as a charge alleges unlawful use of medical examinations and inquiries, evidence of patterns of such unlawful use is relevant to the charge under investigation.”  Id.  UPS argued that the EEOC was only entitled to information regarding similarly-situated employees.  The Sixth Circuit rejected this argument, noting that there was no such restriction under the ADA.   Id.

UPS further argued that the EEOC’s requested information was overbroad because the databases referenced in the EEOC’s subpoena contained information about employees from other regions in the United States and Canada, including one database where the Charging Party’s information never appeared.  The Sixth Circuit rejected this argument, noting that the breach of confidentiality that the employee described in his amended charge was not limited to himself since he alleged that “all other employees subject to Health and Safety incident action/reports have had their confidentiality breached in the same manner as me.”  Id. at *6.  The Sixth Circuit further determined that the EEOC was entitled to search for evidence that showed a pattern of discrimination other than the specific instance of discrimination described in the charge.  Id.

Turning to UPS’s argument that the amended charge was not valid because it “appears to have been amended for an illegitimate purpose — to obtain documents that the subpoena otherwise could not reach,” the Sixth Circuit held that UPS forfeited this argument since it did not raise it before the District Court.  Id.  Further, the Sixth Circuit rejected UPS’s argument that the EEOC’s subpoena was overbroad because it provided no temporal scope, noting that regardless of when UPS developed the criteria for posting content on its intranet site, this piece of evidence may provide insight into how UPS categorizes information as confidential.  Id. at *7.  Finally, the Sixth Circuit dismissed UPS’s argument that producing the requested information would be unduly burdensome, noting that UPS did not identify how producing the requested evidence would be difficult, especially considering that both parties acknowledged it could be produced electronically.  Accordingly, the Sixth Circuit held that the District Court did not abuse its discretion in ordering UPS to comply with the subpoena, and it affirmed the District Court’s decision.  Id. at *7-8.

Implications For Employers

Armed with yet another decision holding that an expansive EEOC subpoena was relevant to an investigation, the further emboldened EEOC likely will continue to seek far-reaching, company-wide information in its investigations, including those that stem from a single employee’s charge of discrimination.  Despite this recent trend of unfavorable rulings, employers should not let their guard down when confronted with broad EEOC subpoenas.  Rather, employers must carefully scrutinize each EEOC subpoena and aggressively attack its relevance when appropriate.

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

 

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.

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.

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.

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

Seyfarth Synopsis: Court ordered enforcement of the EEOC’s subpoena and authorized the Commission to conduct an on-site investigation without the employer’s consent.

The EEOC has conducted on-site inspections of employers’ business premises for decades, federal courts rarely have explored the authority of the Commission to conduct a warrantless, non-consensual search of such private commercial property.

In EEOC v. Nucor Steel Gallatin, Inc., No. 15-CV-53 (E.D. Ky. Apr. 28, 2016), the EEOC sought a ruling authorizing it to enter the private commercial property of defendant employer Nucor Steel Gallatin, Inc. (“Gallatin”), without Gallatin’s consent and without an administrative warrant, to investigate a hiring discrimination claim.  Judge Van Tatenhove of the U.S. District Court of the Eastern District of Kentucky ordered enforcement of the EEOC’s subpoena and authorized the Commission to conduct the on-site investigation of Gallatin’s property.

This decision arms the EEOC with precedent that it may conduct on-site investigations regardless of whether an employer consents, something employers should consider when contemplating whether to deny the EEOC access to its business during an investigation.

Case Background

On October 1, 2014, a Gallatin applicant filed a charge of employment discrimination with the EEOC alleging that Gallatin unlawfully rescinded a job offer after discovering his record of disability.  He also suggested that in his initial interview, a representative of Gallatin told him the job — titled Hot Rolling Department Shift Manager — would require only “hands off” work.  Gallatin answered the charge by stating that it rescinded his offer only after the occupational doctor who conducted his post-offer, pre-employment medical examination determined that he could not safely perform the essential functions of the highly safety sensitive position, with or without reasonable accommodation.

After issuing a Request for Information, the EEOC eventually procured a list of the persons involved in the applicant’s recruiting and interview process.  In an email sent to Gallatin on March 5, 2015, the EEOC’s investigator informed the company that “the next step in my investigation is to conduct an on-site visit and conduct interviews with individuals that I think will have relevant information to aid in my investigation.”  Id. at 2.  In its April 16, 2015 response, Gallatin replied, “we simply do not feel that coming onsite is necessary []or relevant to your investigation.”  Id.  Instead, the company offered to provide the individuals requested for interviews at the EEOC office or an alternative offsite location.

Shortly thereafter, the EEOC issued a subpoena requiring Gallatin to permit on-site access “to conduct witness interviews, examine the facility, and obtain/request any additional information as it pertains to the Rolling Shift Manager position.”  Id.  On May 5, 2015, Gallatin filed a Petition to Revoke and/or Modify the Subpoena with the EEOC, claiming that on-site interviews were not relevant nor material, placed an unnecessary burden on the employer, and required a judicial warrant.  The EEOC denied Gallatin’s petition in June 2015, directing Gallatin to permit an on-site examination of its facility within ten days of the receipt of the Determination.  In a letter sent to the EEOC a few days later, Gallatin informed the EEOC that it would not consent to an on-site visit “without a court order and/or valid warrant.”  Id. at 3.

The EEOC then petitioned the Court to order Gallatin to show cause why it should not be compelled to comply with the subpoena issued upon it.  The Court ordered the parties to convene for an oral argument, which was held on January 6, 2016, and thereafter directed the parties to file additional briefing.  In its April 28, 2016 ruling, the Court ordered (1) Gallatin shall permit an investigator of the EEOC to perform an on-site inspection of Gallatin’s business premises; and (2) the investigator shall limit his or her inspection to evidence directly related to the Hot Rolling Department Shift Manager position and its associated responsibilities.  Id. at 17.

The Decision

Before reaching the warrant issue, the Court addressed the threshold question raised by Gallatin.  Although Gallatin only objected to the EEOC’s warrantless entry in its initial briefing and at oral argument, the company tangentially claimed that the EEOC simply does not have the statutory authority to conduct any on-site examination of commercial property, regardless of whether an owner consents to that entry.  Id. at 3.  The Court rejected this argument, noting that Gallatin’s position failed to account for the EEOC’s long and untroubled history of conducting myriad on-site investigations of private commercial property throughout the United States.  Id. at 3-4.

Further, the Court addressed Gallatin’s argument that, regardless of whether the EEOC has the statutory right to enter private commercial property, that entry cannot take place without an administrative warrant.  To address this argument, the Court noted its present task was to (1) consider the “probable cause” standard for issuing an administrative warrant, and (2) compare that standard to the pre-compliance review procedures embedded in the EEOC’s enabling statute and implementing regulations.  Id. at 8.  The Court noted that to be consistent with the Fourth Amendment, the EEOC’s statute and implementing regulations must permit the Court to ensure that (1) the EEOC’s request for access flows from specific evidence of an existing violation, and (2) the investigator’s search bears an appropriate relationship to the violation alleged in the complaint.  Id. at 8-9 (quotations omitted).  Further, when the EEOC seeks enforcement of a subpoena, reviewing courts must determine whether the subpoena is within the agency’s authority, the agency has satisfied its own due process requirements, compliance would be unduly burdensome, and the information sought is relevant to the charges filed.  Id. at 10 (quotations omitted).  Ordering Gallatin to submit to the on-site investigation, the Court found that “[j]ust as the warrant process requires courts to identify ‘specific evidence of an existing violation’ and order only those inspections that bear ‘an appropriate relationship to the violation,’ the Commission’s statutory and regulatory schemes permit only those inspections that are ‘relevant to the charges filed’ and ‘not unduly burdensome.’”  Id. at 10-11.

Having concluded that a formal judicial warrant was not required here, the Court then addressed Gallatin’s five specific challenges to the EEOC’s subpoena.  First, the Court rejected Gallatin’s argument that it provided the EEOC more than sufficient information concerning the allegations, and agreed with the EEOC’s position that it cannot merely accept employer declarations as true without conducting appropriate investigations.  Id. at 12.  Second, the Court dismissed Gallatin’s argument that an on-site investigation would be “irrelevant,” noting that an on-site visit would aid in determining (1) the amount of time spent performing the function, (2) the consequences of not requiring performance of the function, and (3) the current work experience of incumbents in similar jobs.

Third, Gallatin claimed the EEOC’s subpoena was overbroad given that it did not state with any specificity what was being sought.  The Court found that the subpoena’s nebulous request to ‘examine the facility,’ without any limitation to those areas of the facility that specifically relate to the job functions in dispute, was overbroad; at the same time, the Court held that Gallatin’s related claim that the subpoena should “state with . . . specificity what is being sought” was unpersuasive.  Id. at 13.  In view of these two competing considerations, the Court ordered that the EEOC’s investigator may only inspect those areas of the facility that he or she reasonably believes to be relevant to the charges filed.  Id. at 14.  Specifically, the Court directed the investigator to focus his or her inquiry on those items of evidence directly relevant to the position at issue, noting that “[a]lthough the investigator cannot anticipate with particularity every piece of relevant information that he or she may uncover at the facility, this uncertainty does not provide the Commission with an unmitigated license to roam the property in search of relevant information.”  Id.

Fourth, Gallatin asserted that the amount of time necessary for the investigator to gain a reliable understanding of the essential functions of the shift manager position would be unduly burdensome and disruptive to business operations.  The Court rejected this argument, finding that Gallatin did not persuasively explain how the presence of an investigator at the facility would actually impose an undue burden.  Id.  Finally, Gallatin claimed that permitting the EEOC to enter the facility would raise safety concerns related to the inherent dangers of the work environment and industrial equipment machinery.  Id. at 16.  The Court dismissed this argument, noting that the EEOC is well-equipped to take reasonable precautions before inspecting potentially dangerous worksites.  Id. at 16-17.

Accordingly, the Court ordered (1) Gallatin shall permit an investigator of the EEOC to perform an on-site inspection of Gallatin’s business premises; and (2) the investigator shall limit his or her inspection to evidence directly related to the Hot Rolling Department Shift Manager position and its associated responsibilities, and that “[t]he investigator may not generally or indiscriminately search the facility for evidence relevant to [the] claims, and must only inspect those areas that he or she reasonably believes will provide evidence relevant to the position.”  Id. at 17.

Implications For Employers

Most employers are well aware that the EEOC routinely conducts on-site investigations.  For employers who may have considered challenging that governmental authority, this ruling is instructive in demonstrating how courts will likely enforce EEOC subpoenas to conduct such investigations.  Further, if the EEOC ever did have any hesitance about conducting an on-site investigation without an employer’s consent, this ruling likely alleviates any such concern.  Accordingly, employers should choose their battles carefully when thinking about opposing an EEOC on-site investigation.

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

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

Seyfarth Synopsis: This Fourth Circuit ruling opens the door for the EEOC to investigate employers as a result of EEOC charges brought by unauthorized employees, even though an illegal alien worker may not be able to seek certain legal remedies.

Undocumented workers and immigration reform are part of the political debate for the upcoming Presidential election.

The Fourth Circuit’s recent validation of an EEOC enforcement subpoena regarding the government’s investigation of an employer’s alleged discrimination against an illegal alien is certainly an eye-opener for employers. It manifests that the Commission will vigorously investigate and litigate claims involving alleged workplace discrimination against unauthorized workers.

In EEOC v. Maritime Autowash, Inc., No. 15-1947 (4th Cir. Apr. 25, 2016), the Fourth Circuit reversed a ruling from the U.S. District Court for the District of Maryland that had denied an application for subpoena enforcement following an illegal alien’s EEOC charge brought against his employer.  This ruling opens the door for the EEOC to investigate employers as a result of EEOC charges brought by illegal alien employees, even though the charging parties may not even be able to seek certain legal remedies.

Case Background

In May 2012, Maritime Autowash, Inc. (“Maritime”) hired Elmer Escalante as a vacuumer at its carwash in Edgewater, Maryland.  At the time, Escalante lacked authorization to work in the United States.  On July 27, 2013, Escalante and other Hispanic employees complained to Maritime of unequal treatment and discrimination targeting Hispanics.  All of them were terminated the day they raised the complaint.  Escalante then filed charges with the EEOC on February 6, 2014 for discrimination on the basis of national origin and retaliation as prohibited under Title VII.   The complaint detailed the unequal employment conditions facing Hispanic employees at Maritime, including longer working hours, shorter breaks, lack of proper equipment, additional duties, and lower wages.  Ten other terminated Hispanic employees lodged similar complaints with the EEOC.  The Commission served Maritime with a notice of the charges on February 25, 2014.  Id. at 3-4.

In responding to the charges, Maritime denied all allegations of discrimination and stated that Escalante had been terminated for failing to appear for a scheduled work shift.  The EEOC served Maritime with a Request for Information (“RFI”) on May 27, 2014 seeking personnel files, wage records, and other employment data related to Escalante, the other charging parties, and similarly-situated employees dating from January 1, 2012 to the time of the request.  Maritime refused to provide records for any Hispanic employee other than Escalante, and further objected that certain of the agency’s requests were unduly burdensome, overly broad, and/or irrelevant. Faced with Maritime’s incomplete response to its RFI, the EEOC issued a subpoena on June 10, 2014, which focused only on Escalante’s charges.  Maritime produced none of the subpoenaed documents.  Id. at 4-5.

The EEOC filed an application to the District Court seeking to enforce the subpoena, which was denied.  Thereafter, the EEOC appealed to the Fourth Circuit, which reversed and remanded the District Court’s denial of the application to enforce the subpoena.

The Decision

The Fourth Circuit noted that it cannot yet know whether the agency’s investigation will uncover misconduct by the employer or ever ripen into a lawsuit, nor could it assess what causes of action or remedies might lie down the road.  Id. at 2.  As such, the only issue it considered was whether the EEOC’s subpoena, designed to investigate Escalante’s Title VII charges, was enforceable.  Id. at 6.  The Fourth Circuit noted that central to the EEOC’s authority to enforce Title VII’s provisions against employment discrimination “is the power to investigate charges brought by employees, including the right to access any evidence . . . that relates to unlawful employment practices covered by [the statute] … as well as the authority to issue administrative subpoenas and to request judicial enforcement of those subpoenas.”  Id. at 6-7 (internal quotation marks omitted).  Further, “The [judicial review] process is not one for a determination of the underlying claim on its merits … courts should look only to the jurisdiction of the agency to conduct such an investigation.” Id. at 7 (quoting EEOC v. Am. & Efird Mills, Inc., 964 F.2d 300, 303 (4th Cir. 1992)).

Noting that the jurisdictional question was central to the dispute here, the Fourth Circuit reasoned that the plain language of Title VII provides that jurisdiction is attained if there is a “plausible” or “arguable” basis for the EEOC’s subpoena.  Id. at 8-9.  Also at issue was Title VII’s definition of employee, which does not specifically bar undocumented workers from filing complaints.  Id. at 9.  Since the charging party was employed at Maritime’s car wash, his charge of discrimination rested squarely on one of the protected grounds.  Accordingly, the Court held that “[t]he EEOC’s investigation of Escalante’s charges was therefore at least plausibly and arguably related to the authority that Congress conferred upon the Commission.  Since Maritime challenged only the agency’s subpoena authority, the district court should have stopped at that point and enforced the subpoena accordingly.”  Id. at 9.

Maritime argued that a reviewing court must ascertain a valid charge of discrimination, which must incorporate a viable cause of action or remedy as a “jurisdictional prerequisite” to enforcing the agency’s subpoena.  Id.  The Fourth Circuit rejected this argument, opining that courts should not venture prematurely into the merits of employment actions that have not been brought.  Id. at 11.  Considering the pragmatic effect of the employer’s argument, the Fourth Circuit explained “Maritime’s challenge to the EEOC’s subpoena envisions a world where an employer could impose all manner of harsh working conditions upon undocumented aliens, and no questions could be asked, no charges filed, and no agency investigation even so much as begun.  The employer is asking the court for carte blanche to both hire illegal immigrants and then unlawfully discriminate against those it unlawfully hired.”  Id. at 14.  Accordingly, the Fourth Circuit reversed and remanded the District Court’s judgement, holding that when the EEOC  is investigating charges plausibly within its delegated powers, the courts should not obstruct.  Id. at 15.

Implications For Employers

This ruling absolutely belongs on the radar of any employer who may have undocumented workers in its labor force.  Even if those workers are unable to seek certain legal remedies, should they bring EEOC charges, the employer will likely have to cooperate with any governmental investigation.  Accordingly, employers should exercise caution in this context, as EEOC investigations can penetrate their walls regardless of the legal status of those employees.

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

9th-circuitBy Laura J. Maechtlen and Courtney K. Bohl

As our readers may recall, in November 2012, Judge G. Murray Snow of the U.S. District Court for the District of Arizona nixed a subpoena issued by the EEOC seeking employee pedigree information (name, address, telephone number and social security number), and information regarding the reasons for employee terminations. The court held that the EEOC did not need this information in order to determine whether the employer, McLane Company, Inc., allegedly violated Title VII. The EEOC appealed.

On October 27, 2015, the Ninth Circuit reversed and sustained the EEOC’s broad subpoena in EEOC v. McLane Company, Inc., Case No. 13-15126, 2015 U.S. App. LEXIS 187702 (9th Cir. Oct. 27, 2015). The Ninth Circuit held that employee pedigree information was relevant to the EEOC’s investigation and should be produced. Further, the Ninth Circuit held that information regarding termination reasons was also relevant to the investigation, and remanded the matter to the District Court to determine whether the production of this information would be unduly burdensome.

The Ninth Circuit’s opinion is a must read for employers, especially employers doing business in Ninth Circuit states (Alaska, Arizona, California, Idaho, Montana, Oregon and Washington). It gives the EEOC broad access to information during the course of an administrative investigation, even if such information is only tangentially related to the underlying charge. This decision will likely embolden the EEOC to demand direct contact information of employees, especially in systemic discrimination cases, thereby making the defense of such charges burdensome and expensive.

Background Facts

A McLane employee, Damiana Ochoa, filed a charge of discrimination against McLane. Ochoa alleged that when she tried to return to work after taking maternity leave, McLane informed her that she could not resume her position unless she passed a physical capability strength test. Id. at *2. Ochoa attempted the test three times. Id. Each time she failed, and, as a result, was terminated. Id.

The EEOC undertook an investigation into the charge, requesting certain information from McLane, including information on the strength test, and the employees who had been required to take the test. Id. at *4. McLane complied with most of the EEOC’s requests, but refused to disclose pedigree information of its employees and it’s the reasons it terminated employee test takers. Id. The EEOC filed a subpoena enforcement action against McLane seeking this information.

The District Court denied the EEOC’s request for this information and the EEOC appealed.

The Ninth Circuit’s Ruling

In considering whether the EEOC was entitled to employee pedigree information, the Ninth Circuit clarified that the EEOC is entitled to “virtually any material that might cast light on the allegations against the employer.” Id. at *9. Under this loose standard, the Ninth Circuit held that employee pedigree information was relevant to the EEOC’s investigation because such information could be used by the EEOC to speak with other employees who took the test and determine whether there was any truth to Ochoa’s allegations. Id. at *11-12.

The Ninth Circuit rejected all three of McLane’s arguments against the enforcement of the subpoena. Id. at *12-17. First, it rejected McLane’s argument that pedigree information was not relevant to the charge because Ochoa only alleged a disparate impact claim, not a disparate treatment claim. Id. at 12. The Ninth Circuit found such information was relevant, reasoning that Ochoa’s charge is framed “general enough” to support either theory. Id.

Second, it rejected McLane’s argument that pedigree information was not necessary to the EEOC’s investigation. The Ninth Circuit stressed that the governing standard was relevance, not necessity, and noted that the pedigree information was clearly relevant to Ochoa’s charge. Id. at +13.

Third, the Ninth Circuit rejected McLane’s argument that pedigree information was not relevant because the strength test was neutrally applied, which, McLane argued cannot, by definition, give rise to disparate treatment, systemic or otherwise. Id. at *15. The Ninth Circuit reasoned that even if the strength test applied to everyone, the test still could be applied in a discriminatory manner. Id. at *15-16. For example, McLane could fire the women who failed the test but not the men who failed. Id.

Finally, the Ninth Circuit turned to the issue of whether the EEOC was entitled to the reasons McLane terminated test takers. Id. at *17-18. Although it determined that this information relevant to the EEOC’s investigation, it noted that McLane did not have to produce this information if it would be unduly burdensome. Id. The Ninth Circuit thus remanded this issue to the District Court for further consideration.

Implication For Employers

The Ninth Circuit’s opinion broadens the scope of information the EEOC may receive when investigating a charge, requiring that a request only be somehow relevant to a charge — quite a loose standard. While employers should continue to object to EEOC requests on the bases of relevance and over breadth, employers should also “tee-up” their arguments that compliance with a request or subpoena is unduly burdensome.

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

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

As we reported in our recent Annual EEOC Report (found here), the EEOC prides itself on its aggressive litigation theories and strategies.  But just one week into 2015, the EEOC’s envelope-pushing tactics have already been shot down twice.  In  EEOC v. Performance Food Group, Inc., No. 1:13-CV-01712 (D. Md. Jan. 6, 2015), the U.S. District Court for the District of Maryland denied the EEOC’s efforts to impose harsh sanctions on an employer that the agency believed was late in complying with its discovery obligations.  And in EEOC v. Royal Caribbean Cruises, Ltd., No. 13-13519 (11th Cir. Jan. 6, 2015), the EEOC failed yet again to enforce an overbroad subpoena after having lost on that issue on three separate occasions: first before the Magistrate Judge, then before the District Court Judge, and then again on appeal before an Eleventh Circuit panel.

If these decisions are any indication, it will be another year in which the agency pushes the limits of the legal envelope in terms of tactical advantage, leaving it to the Courts to police the boundaries of what is reasonable.  Here is our take of these two early 2015 cases and what employers can learn from them:

EEOC v. Performance Food Group, Inc., No. 1:13-CV-01712 (D. Md. Jan. 6, 2015)

In EEOC v. Performance Food Group, Inc., the EEOC sought sanctions against a foodservice distribution company in a gender discrimination case for allegedly failing to meet discovery deadlines.  Specifically, the EEOC argued that the company had failed to produce paper applications for some of its facilities and certain employee data that the agency had subpoenaed from the company’s third-party vendors.  The company argued that sanctions were unwarranted because it had provided most of the requested information within the time frame set by the Court and had been acting in good faith to produce the remaining documents and information.  According to the company’s filings, it was working to gather and produce all requested information and had kept the agency informed of its progress.  The company also produced approximately 300,000 pages of additional documents along with and immediately after filing its response brief to the EEOC’s motion.  The EEOC was unimpressed by these efforts and asked the Court to impose severe sanctions.  In addition to asking the Court to require the company to pay the EEOC’s attorneys’ fees for the filing of the motion, it also requested that the Court impose a daily monetary penalty for each day that the company fails to produce the requested documents.  The agency even criticized the company’s delayed production, arguing that the document “dumps” were disorganized and that they made it impossible to ascertain whether the company had complied with its discovery obligations.

The District Court of Maryland flatly rejected the EEOC’s motion.  The Court acknowledged that the company’s document production was late, but concluded from its own review of the record that sanctions were not warranted.  The Court cautioned the employer, however, noting that while it understood that the document production would be voluminous and would cover an extensive period of time and many different facilities, it still expected the company to comply with its discovery obligations in a timely manner.  The Court also appeared to warn the EEOC, noting that in the case of anticipated delays in production, it expected that counsel would engage in an open and cooperative dialogue to resolve the dispute and would only bring it to the attention of the Court if it was necessary to do so.

Employers should read the Performance Food Group case as a cautionary tale:  the EEOC can and will take unreasonable – and at times draconian – positions in discovery disputes, even in the face of reasonable efforts by an employer.  This case highlights the EEOC’s troubling view that business records and evidence are ready-made for litigation; even information and records that were never contemplated to be produced in later government-initiated litigation.

EEOC v. Royal Caribbean Cruises, Ltd., No. 13-13519 (11th Cir. Jan. 6, 2015)

In EEOC v. Royal Caribbean Cruises, Ltd., the Eleventh Circuit denied for the second time the EEOC’s attempt to enforce a subpoena against Royal Caribbean that could only charitably be called “overbroad.”  This termination case arose out of a single charge of disability discrimination.  The EEOC’s subpoena sought, among other things, a list of all employees who were discharged and applicants who were not hired, including relevant identifying information as well as employment applications and other related documents.  At the District Court level, the Magistrate Judge recommended that the subpoena be denied because the information sought was not relevant to the charge and that compliance with the disputed portions of the subpoena would be unduly burdensome.  The District Court affirmed and adopted that recommendation.  The EEOC appealed in August, 2013.  On November 6, 2014, a panel of the Eleventh Circuit upheld the District Court’s decision.  The EEOC petitioned for rehearing en banc on December 19, 2014.  That petition was denied on January 6, 2015.

The Eleventh Circuit acknowledged that certain courts have construed the EEOC’s administrative subpoena power quite broadly.  But the Court reasoned that it could not be construed so broadly as to make the requirement that the subpoena be relevant to the underlying charge a mere “nullity.”  The court faulted the EEOC for not making it clear how the requested information bore on the subject matter of the individual complaint.  This was especially true here, where the employer actually stipulated that it had terminated the charging party due to his medical condition.  The Eleventh Circuit reasoned that it would not be necessary to introduce statistical data to determine whether a facially neutral explanation for an adverse employment action was merely a pretext for discrimination.  Nor did the court credit the EEOC’s argument that it should be entitled to expand its investigation to uncover other potential violations and victims of discrimination.  Although the Court allowed that such information would be “related” to the charge, it would not countenance expanding the investigation to include information that is “related” but not necessarily “relevant” to the charge.  This case joins several other instances (that can be reviewed here, here, and here) where the EEOC has doggedly pursued subpoenas.  As reported here, the EEOC stepped up its enforcement actions in FY 2014, and we expect this trend to continue in 2015.

Implications For Employers

These decisions demonstrate that the EEOC is far from giving up on the aggressive litigation tactics that have defined EEOC litigation over the past few years.  Although these are two favorable decisions for employers, the agency will undoubtedly win some of these disputes.  Employers would be well served to keep abreast of these developments so that they do not fall victim to these types of strategies in the future.

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

By Christopher DeGroff, Paul Kehoe and Gerald L. Maatman, Jr.

Employers have become accustomed to the federal courts rubber stamping EEOC subpoenas seeking company-wide information based on a single charge of discrimination. In light of the EEOC’s systemic focus — and the agency’s desire to transform single allegations into a blockbuster systemic actions — aggressive and extensive EEOC subpoenas requests are more and more prevalent, with very little case law authority to cabin the EEOC’s authority. The Court in EEOC v. Forge Industrial Staffing Inc., No. 14-MC-90 (S. D. Ind. Nov. 24, 2014), however, had enough of the EEOC’s strong-arm tactics. In rejecting the Commission’s broad subpoena, Magistrate Judge Mark Dinsmore authored an opinion that provides employers with ammunition to fight “everything and the kitchen sink…” subpoena requests.

Factual Background

In EEOC v. Forge Industrial Staffing Inc., a former employee filed an EEOC charge four months after her termination alleging sexual harassment and retaliation. The Commission sought extensive information from the company as part of its administrative investigation. In its subpoena, the EEOC requested all employment applications for roughly a two and a half year period because the applications purportedly required employees to agree to file all employment-related claims within six months of the event, except as prohibited by law. The EEOC views this provision as an impermissible waiver of an applicant’s statutory rights. The company argued that the requested information was irrelevant to the charge and complying with it would be unduly burdensome.

The Court’s Decision

At the hearing, the EEOC argued that the application waiver related to the “overall conditions of the workplace.” Id. at 5. The Court rejected the EEOC’s position for several reasons. First, the charge did not contain pattern or practice allegations – claims that would suggest a pervasive violation of the law. Second, the charging party filed the charge within four months of the termination, meaning the clause had no impact on her willingness to file a charge. As a result, the waiver could not be relevant to the charge under investigation. The Court recognized that accepting the “overall condition of the workplace” argument would eviscerate the meaning of “relevance” because it would allow the EEOC to subpoena any information about a company at the EEOC’s whim. Id. at 5-6.

Finally, the Court rejected the EEOC’s standard argument that it has a broad mandate to promote the public interest, and therefore, can seek to remedy violations not alleged in a charge. Based on a plain reading of Title VII, which requires relevance to the charge under investigation, the Court reasoned that the EEOC could not expand a single charge into a pattern or practice case with wholly different allegations. The Court noted that the plain language of the statute does not permit an investigation into an violation not alleged in the charge.

Implications For Employers

The ruling in EEOC v. Forge Industrial Staffing Inc. marks the second time in a month that courts have limited the EEOC’s subpoena enforcement authority (see our blog posting here on the recent Eleventh Circuit’s defense ruling on an EEOC subpoena). Although many federal courts continue to grant the EEOC significant deference in subpoena matters, these recent decisions provide a glimmer of hope. Just because the EEOC says information is relevant does not make it so. When confronted with an expanded investigation based on a single charge, without pattern or practice allegations, there is a solid, common sense argument for employers to challenge the subpoena on both relevance and timeliness grounds. Employers should be aware of this and other recent decisions limiting the EEOC’s subpoena authority.

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