By Gerald L. Maatman, Jr. and Jennifer A. Riley

On June 2, 2014, Mach Mining filed its Reply in support of its Petition for a writ of certiorari from the U.S. Supreme Court in EEOC v. Mach Mining, Case No. 13-1019 (U.S. June 2, 2014).

In a game-changing decision, in December 2013, the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit brought by the Commission. (Read more here.) Mach Mining asked the U.S. Supreme Court to review the Seventh Circuit’s decision.

We blogged about the EEOC’s Response here. Although the EEOC prevailed in the Seventh Circuit, it backed Mach Mining’s request for review to resolve disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

In its Reply, Mach Mining argued less about whether the Supreme Court should grant review and, instead, offered a preview of its arguments as to why the Supreme Court should reject the Seventh Circuit’s rationale.

If the Supreme Court grants the Petition, it ultimately may decide whether the EEOC has any enforceable obligation to engage in good faith settlement discussions prior to filing a lawsuit. This is an important issue for any employer engaged in dealings with the EEOC.

Mach Mining’s Reply

In its Reply, Mach Mining criticized the EEOC for largely ignoring its arguments and simply reiterating the Seventh Circuit’s reasoning “which is not made any more convincing through repetition.” Id. at 2.

Mach Mining argued that, instead of addressing legal arguments, the EEOC dedicated much of its Response to accusing Mach Mining (and other employers) of using the conciliation process “to develop an affirmative defense for litigation” and to delay adjudication of the merits of the EEOC’s allegations. Id. at 3.

Mach Mining responded that, in this case, the EEOC did not provide Mach Mining with any information regarding the damages it sought on behalf of individual claimants and then delayed the litigation by two years while it resisted Mach Mining’s efforts to take discovery regarding its conciliation efforts.  Id. at 3-4.

Finally, Mach Mining argued that the EEOC mischaracterized the incentives that employers face when negotiating with the EEOC. It argued the employers have substantial incentives to settle even arguably meritorious discrimination claims informally but, given their fiduciary duties to stockholders, often cannot responsibly do so without some reasonable basis. Id. at 4. “And experience has shown that the Commission attorneys are sometimes inclined to make demands first, then develop the legal and factual basis for those demands later.” Id.

Implications For Employers

Both Mach Mining and the EEOC have filed papers asserting that the Seventh Circuit’s ruling is cert-worthy. An eventual ruling by the Supreme Court on these issues will be important for any employer dealing with the EEOC.  If federal district courts cannot review its pre-lawsuit conciliation efforts, the EEOC will have free reign to pay mere lip service to its conciliation obligations and approach any negotiations in a “take-it-or-leave-it” manner. It remains to be seen whether the Supreme Court will step in and whether it will agree with the Seventh Circuit’s approach. Stay tuned.

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