gavel on white backgroundBy Gerald L. Maatman Jr. and Howard M. Wexler

Amid the flurry of major U.S. Supreme Court decisions that were decided towards the end of the 2014-2015 term, the landmark decision in Mach Mining v. EEOC, No. 13-1019 (U.S. April 29, 2015), seems like ancient history. As we previously blogged about, most recently here and here, the Supreme Court concluded in Mach Mining, in a unanimous opinion authored by Justice Kagan, that federal district courts have the authority to review the EEOC’s conciliation efforts.

After Mach Mining, class action practitioners were left to wonder how lower federal courts would view their job in reviewing the adequacy of the EEOC’s conciliation efforts. On June 29, 2015, Judge Gregory L. Frost of the U.S. District Court for the Southern District of Ohio applied Mach Mining and “bench-slapped” the EEOC, holding it failed to satisfy its obligation to pursue conciliation, and thus, stayed the case and ordered the EEOC to engage in good faith conciliation.

This decision appears to be the first post-Mach Mining decision to find that the EEOC failed to fulfill its conciliation obligation and boy, is it a doozy!

Background Facts

In August 2013, the EEOC filed a complaint alleging OhioHealth Corporation failed to reasonably accommodate a former employee in violation of the Americans With Disabilities Act. Id. at 1. OhioHealth filed a motion for summary judgment in which it argued, in part, that the EEOC failed to satisfy all required conditions precedent to filing its lawsuit, including good faith conciliation. Id. The Court held that this threshold issue of conciliation must be decided before reaching the merits since if it did otherwise, it would be “put[ting] the cart before the horse” Id.

The Court’s Decision

The Court described the EEOC’s duty under Mach Mining as two-fold: first, the EEOC must inform the employer about the specific allegation; and second the EEOC must try to engage the employer in some form of discussion so as to give the employer an opportunity to remedy the allegedly discriminatory practice. Id. at 3. In OhioHealth, the issue presented to the Court was whether the EEOC met its second required duty. Id.

In trying to demonstrate that it satisfied its conciliation obligation, the EEOC presented a sworn affidavit attesting to the agency’s conciliation efforts. Id. at 4. In relevant part, the EEOC’s affidavit indicated that it issued a determination on September 15, 2011, engaged in communications with OhioHealth until October 14, 2011, and only brought suit after OhioHealth rejected the EEOC’s conciliation proposal. Id.

OhioHealth came forward with its own declaration, the crux of which was that the EEOC presented its demand as a take-it-or-leave-it proposition, failed to provide OhioHealth with requested information and declared conciliation efforts failed even though OhioHealth made it clear they were “ready and willing to negotiate.” Id. at 4-5.

Preliminarily, the Court rejected the EEOC’s argument that OhioHealth waived its failure to conciliate defense by not raising it sooner because failure to conciliate is not an affirmative defense; rather, is a condition precedent for the EEOC brining suit which did not have to be raised prior to summary judgment. Id. at 5.

With respect to the merits, the Court held that the conciliation obligation was not satisfied because there were numerous conflicting facts which gave the appearance that the EEOC was “engaged in the production of bookend letters that failed to reflect a good faith conciliation effort” and thus,  “if the proceedings were for appearances only, then there never was a real attempt to engage in conciliation as the law requires.” Id. at 6.

The Court also found that conciliation failed because the EEOC indicated in its original determination letter that an EEOC representative would “prepare a dollar amount that includes lost wages and benefits, applicable interest, and any appropriate attorney fees and costs.” Id. at 6-7. Tellingly, nothing the EEOC presented to the Court demonstrated that it ever provided OhioHealth with such a proposal. Id. at 7. As viewed by the Court, “absent disclosure of this calculation to OhioHealth, the conciliation process could have been nothing but a sham.” Id. Absent this information, “the EEOC can hardly be said to have given the employer an opportunity to remedy the allegedly discriminatory practice.” Id. As such, the Court held that “an unsupported demand letter such as the one involved here alone cannot logically constitute an attempt to inform and engage in the conciliation process.” Id.

As a result of the EEOC’s failure to conciliate, the Court stayed the case pending the EEOC’s mandated efforts to obtain voluntary compliance. Id. at 8.

The Ruling’s Admonition

In closing, the Court took one final swing at the EEOC for its hubris. During a telephonic conference with the Court, the EEOC stated that because it had already filed a complaint, “only a public resolution would be possible,” or, “in other words…the EEOC simply would not reach a private resolution via conciliation. Id. at 8-9. In response to this position, the Court did not mince words and forcefully stated that:

This policy or position is of course contrary not only to the purpose of the workplace discrimination statutes upon which the EEOC bases this case, but is also directly contrary to the holding of Mach Mining. In that case, the United States Supreme Court expressly endorsed implementing a stay and ordering conciliation efforts when the EEOC has failed to engage in conciliation before filing suit. The EEOC’s position that resolution via conciliation is now impossible ignores controlling precedent…

The EEOC’s position is ridiculous. It defies the statutory scheme, binding case law, this Court, and common sense. Accordingly, if the EEOC continues down this dangerous path and fails to engage in good faith efforts at conciliation as ordered, this Court will impose any or all consequences available, including but not limited to contempt and dismissal of this action for failure to prosecute.

Id. at 9 (emphasis added).

Implication for Employers

This decision demonstrates the powerful tool that the Supreme Court provided to employers in Mach Mining. Because of the Supreme Court’s decision, the EEOC can no longer file suit against employers after paying mere lip-service to its conciliation efforts, and give them the back of the hand in response to requests for fulsome information about liability and exposure in a threatened lawsuit. Such a “sham” of a conciliation process is no longer countenanced. In OhioHealth, the EEOC did not even have the courtesy to give the employer a comprehensive settlement demand, as it had promised. Such conduct is diametrically opposed to the very employment discrimination statutes the EEOC is charged with enforcing and was flatly rejected in Mach Mining. As a result, we expect to see more and more decision like OhioHealth unless the EEOC meaningfully changes the way in which it conciliates. Stay tuned!

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