By Christopher J. DeGroff

The EEOC prosecuted a record number of both systemic investigations and lawsuits in 2010, all part of its mushrooming systemic litigation initiative launched in 2005. The EEOC’s end of the year report stated that it filed 250 new suits in 2010, and resolved another 285 for a total of $85 million in settlment proceeds. View EEOC Report Blog Post. Narrowing the sheer number of 2010 cases in a meaningful way is challenging, but we have collected our picks for the most interesting rulings in EEOC matters last year. These include cases that highlight the government’s increasingly aggressive litigation and investigation methods, and tactics employers have used in response.

EEOC v. Bloomberg L.P., 2010 U.S. Dist. LEXIS 92511 (S.D.N.Y. Aug. 31, 2010). In this case, the EEOC claimed that the company engaged in a pattern or practice of unlawful employment practices, including discrimination on the basis of sex/pregnancy and retaliation. This decision had components that were both helpful and vexing for employers. The Court dismissed the EEOC’s retaliation claim based on its failure to meet its prerequisite to attempt to conciliate claims before filing suit. This was a severe sanction under what has traditionally been a fairly loose standard, but the Court was mindful that the EEOC sought $41 million to settle the matter, but would not explain how it arrived at that number. On the other hand, the Court refused to dismiss the class claims based on Defendant’s “scope of the investigation” defense, arguably expanding what an employer is expected to appreciate as a class case even though it does not have particular information of the extent of the EEOC’s investigation.

EEOC o/b/o Serrano, et al v. Cintas Corp., 2010 U.S. Dist. LEXIS 18130 (E.D. Mich. Mar. 2, 2010). In EEOC o/b/o Serrano, the EEOC refused to identify the women it represented in a gender discrimination case, claiming they should only be named in a later phase of the case. The Court disagreed, noting that “Defendant quite reasonably seeks to focus its attention upon the specific women on whose behalf the EEOC intends to seek damages. The information is relevant to the issues in controversy … and the EEOC has no principled reason to withhold it.”  This case relies on and reinforces the explosive ruling in EEOC v. CRST Van Expedited, Inc., 257 F.R.D. 513 (N.D. Iowa 2008), in which the EEOC similarly stonewalled the company in explaining who it sought to represent. That tactic ultimately resulted in the EEOC being sanctioned a whopping $4.5 million (which it is now appealing).

EEOC v. Evans Fruit Co. Inc., No. 10-CV-3033-LRS (E.D. Wash. Oct. 5, 2010). In Evans Fruit, the EEOC secured a rare but chilling injunction in what first appeared to be a garden-variety discrimination case. The EEOC alleged that the company created a hostile work environment for women, targeting a particular manager as a harasser. The EEOC later claimed the manager and others were intimidating witnesses, including following them from the facility, tracking their movements, and even photographing witness meetings.  The EEOC sought emergency injunctive relief, and the Court concluded that, while an injunction was an “extraordinary remedy,” it was appropriate given the evidence that the government’s investigation would be compromised if the alleged intimidation continued. The facts of this case are fairly extreme and overt intimidation like that alleged is uncommon. Given the success of this injunction tactic in this litigation, however, the EEOC may be primed to expand its use of this tool to less obvious situations, both to gain momentum in the underlying litigation as well as early positive media coverage.

EEOC v. Kronos, Inc., 620 F.3d 287 (3d Cir. 2010). Kronos arose out of a disability discrimination claim. The charging party applied for a job with Kroger Food Stores and was not hired based on an employment test created by Kronos. The EEOC focused on the Kronos test and its potential disparate impact on disabled candidates. The EEOC sought testing information from Kronos through a third-party subpoena. The EEOC also expanded its investigation to include race discrimination, even though the charge had not alleged race discrimination.  The Third Circuit allowed the EEOC’s administrative subpoena as to the disability aspects of the test used by the company, as it related to the claim of disability discrimination. It rejected, however, the EEOC’s request race impact data. The Third Circuit reasoned that “the inquiry into potential race discrimination is not a reasonable expansion of [the] charge. Instead, the EEOC’s subpoena for materials related to race constitutes an impermissible ‘fishing expedition.’” EEOC v. Kronos gives employers ammunition to challenge overbroad EEOC demands for employment information, which is particularly important given the EEOC’s trend to greatly expand the scope of its investigations as part of its Systemic Initiative.

EEOC v. Wal-Mart Stores, Inc., 2010 U.S. Dist. LEXIS 13192 (E.D. Ky. Feb. 16, 2010). The EEOC’s agenda to target systemic employment practices necessarily includes its increased reliance on experts. In particular, using social scientists to show hiring biases and trends is a cutting edge tactic of both the government and plaintiffs’ class action lawyers. In this case, the EEOC sued Wal-Mart claiming the company under-hired women.  In support, the EEOC relied on the expert opinion of a sociologist to argue that the company was the sort of environment where gender stereotyping could occur. Wal-Mart fought to exclude the EEOC’s expert opinion, and the Court rejected the evidence. The Court noted that the sociologist could not clearly connect any stereotyping to hiring shortfalls. The Court concluded that since gender stereotyping existed in all facets of life, an opinion that somehow such stereotyping necessarily translates into unlawful hiring decisions could be more prejudicial than probative and presented a risk of unfairly confusing a jury.  The Wal-Mart case strikes a blow against the EEOC’s use of certain expert evidence to bolster an otherwise questionable case.

This is just a handful of the many cases of note from 2011. Practitioners may disagree as to the “best” (or “worst” depending on one’s point of view) EEOC cases in 2010. One thing is certain – the EEOC’s accelerating litigation agenda will undoubtedly yield additional surprises and will result in more intriguing decisions in 2011.

Seyfarth Shaw LLP will be presenting a comprehensive webinar concerning strategies for employers targeted by the EEOC’s systemic initiative on February 23, 2011. Click here for details and advance registration information.