ndil seal.gifBy Gerald L. Maatman, Jr. and Jennifer A. Riley

After suffering a serious blow to its systemic investigation and conciliation tactics last week, the EEOC received a better result on May 11, 2012, when Judge Ruben Castillo of the U.S. District Court for the Northern District of Illinois rejected defense arguments in EEOC v. United Road Towing, Inc., Case No. 10-CV-06259 (N.D. Ill. May 11, 2012), holding that the EEOC had satisfied its pre-suit investigation requirements. 

In sharp contrast to the Eighth Circuit’s recent ruling in EEOC v. CRST Van Expedited, Inc., Case Nos. 09-3764, 09-3765 & 10-1682 (8th Cir. May 8, 2012) (discussed here, here, and here), Judge Castillo denied the employer’s motion for partial summary judgment, concluding that the EEOC’s failure to investigate the claims or disclose the identities of each claimant in a systemic lawsuit did not support dismissal for failure to satisfy its pre-suit obligations under § 706 of Title VII. 

While the EEOC continues to challenge the Eighth Circuit’s May 8, 2012 ruling, Judge Castillo’s opinion may foreshadow a split among the circuits that will support a potential bid for resolution in the U.S. Supreme Court. 

Factual Background Of EEOC v. URT

On July 23, 2009, Hazel Holmes filed a charge alleging that United Road Towing (URT) violated the Americans With Disabilities Act (ADA) by denying her a reasonable accommodation, terminating her employment, and refusing to rehire her. On September 26, 2009, another former employee, William Snyder, filed a charge with similar allegations. Id. at 2. 

On July 22, 2010, the EEOC issued a determination letter to URT stating that it had reasonable cause to believe that URT had committed three violations against Holmes and Snyder and against “a class of disabled individuals.” Id.  In particular, the EEOC alleged that URT discriminated against such individuals by applying its unpaid leave policy, denying them reasonable accommodation, and failing to rehire them. The EEOC identified only Holmes and Snyder by name. Id.

The EEOC invited URT to engage in conciliation efforts to resolve the three violations that it identified, and informed URT that it was seeking $2 million in monetary relief for the charging parties and “all affected class members.” Id. at 3. The EEOC also proposed that URT “bear the costs of searching for additional class members . . . not yet identified due to [URT’s] failure to maintain medical leave request records for employees ineligible for [FMLA].” Id. After receiving the EEOC’s demand, URT declined to participate in further conciliation. Id. at 4. 

Subsequently, the EEOC brought suit on September 30, 2010. During discovery, the EEOC disclosed 17 claimants in addition to Holmes and Snyder. URT filed a motion seeking summary judgment as to those 17 claimants on the ground that the EEOC failed to satisfy its administrative requirements before filing suit.    

Judge Castillo’s Decision

URT argued that summary judgment was appropriate because the EEOC failed to investigate or conciliate the claims of anyone other than Holmes or Snyder.

Judge Castillo rejected URT’s argument. As to pre-suit investigation, Judge Castillo reasoned that “the Seventh Circuit has made clear that courts may not review EEOC administrative investigations to determine whether a particular investigation sufficiently supports the claims that the EEOC brings in a subsequent lawsuit” because such an inquiry would shift the focus of employment discrimination litigation to the EEOC’s administrative efforts, rather than the validity of the actual claims. Id. at 7 (citing EEOC v. Caterpillar, 409 F.3d 831, 833 (7th Cir. 2005)). For this reason, Judge Castillo refused to inquire into whether the investigation adequately supported the claims of the 17 claimants on whose behalf the EEOC brought suit.

As to the conciliation requirement, Judge Castillo likewise rejected URT’s motion. He first noted that the Seventh Circuit has not decided whether a “deferential standard” or a “heightened scrutiny” standard should apply, but under either level of inquiry, the EEOC’s efforts were sufficient because: (1) the EEOC stated in its determination letter that it had found reasonable cause to believe that URT had committed violations against a class of disabled individuals; and (2) the EEOC identified the types of violations it was pursuing (i.e., application of its unpaid leave policy, denial of reasonable accommodations, and failure to rehire). Id. at 10. Judge Castillo also noted that, instead of requesting additional information or clarification when it received the EEOC’s $2 million settlement demand, URT terminated the conciliation; therefore, “any deficiencies in the conciliation process were caused by both parties.” Id. at 11. 

Although he concluded that summary judgment was not warranted, Judge Castillo stayed the proceedings for 14 days to permit the parties to attempt conciliation. 

Questions About The Court’s Rationale

Query whether Judge Castillo focused on the correct issue in opining that he could not review EEOC administrative investigation to determine whether it sufficiently supported the claims that the EEOC brought in its subsequent lawsuit. The precise issue is whether the EEOC actually investigated the claims of the class, or simply used the threat of class claims to force a settlement higher than the case was worth. The Court neglected to analyze that issue. As a result, it gave a free pass to the tactic that many employers have – and courts – have criticized where the Commission makes an exorbitant settlement demand on behalf of “a class of allegedly injured persons,” but fails to specify who, how many, or the extent of their alleged damages.

Lessons For Employers

The employer in EEOC v. United Road Towing, Inc., conceded in its briefing a key point – that the EEOC “may pursue relief in litigation for similarly situated claimants whose allegations were not individually conciliated but whom defendants were generally aware of during the conciliation process.” Id. at 9. Given that concession, Judge Castillo’s ruling is not all that surprising. Indeed, the Court faulted the employer for refusing to negotiate with the EEOC after receiving the $2 million demand, but then arguing that the case ought to be dismissed for failure to conciliate. Query whether the employer could have set up its defenses and made them stronger – and changed the result in the litigation – by responding to the EEOC’s demand by requesting the names/the number of the alleged class members, their alleged injuries, and the specific amounts claimed for each person.


Judge Castillo’s decision stands in stark contrast to the Eight Circuit’s recent decision in EEOC v. CRST Van Expedited, Inc., Case Nos. 09-3764, 09-3765 & 10-1682 (8th Cir. May 8, 2012).  In that case, the EEOC similarly issued a vague determination that CRST had subjected “a class of employees” to sexual harassment, requested CRST’s assistance in identifying persons who might be part of a settlement, then brought suit without identifying or investigating the experiences of each purported class member.  A panel of the Eighth Circuit rejected the EEOC’s contention that it need only investigate, issue a cause finding, and conciliate “each type of discrimination alleged,” and affirmed dismissal of 67 claims that the EEOC failed to investigate.  Id. at 17-23. 

Judge Castillo did not address the Eighth Circuit’s decision in his ruling – or whether the EEOC must investigate only each “type” of claim – instead finding the scope of the EEOC’s investigation outside of his judicial review.  Judge Castillo’s approach effectively would leave employers no method to ensure that the EEOC conducts any investigation prior to suit and little check on the EEOC’s fulfillment of its other statutory prerequisites.  The EEOC already is touting the decision as authorizing its “sue now, ask questions later” tactics.    

As we previously predicted, the EEOC doubtless will exhaust every available avenue to undermine the Eighth Circuit’s decision and push for broad adoption of the hands-off approach applied by Judge Castillo.