same_sex_marriage_fast_factsBy Gerald L. Maatman, Jr.

On June 26, 2015, the U.S. Supreme Court issued its long-awaited decision in Obergefell, et al. v. Hodges, Director, Ohio Department Of Health; Tanco, et al. v. Haslam, Governor Of Tennesee, et al.; DeBoer, et al. v. Snyder, Governor of Michigan, et al.; and Bourke, et al. v. Bershear, Governor of Kentucky, and ruled 5 to 4 that the equal protection guarantee provided by the 14th Amendment to opposite-sex marriages extends to same-sex marriages.  The SCOTUS opinion, authored by Justice Kennedy, holds that “same-sex couples may exercise the fundamental right to marry in all States [and] that there is no lawful basis for a State to refuse to recognize a lawful same-sex marriage performed in another State on the ground of its same-sex character.”

With same-sex couples now having the same rights as opposite-sex couples, how will the decision affect employers and what can employers expect as an outcome?

More Lawsuits?

With the new decision, much of what employers provide and are mandated to provide to employees, such as those rights granted by the Family and Medical Leave Act (“FMLA”) and other employee benefits, may change to include same-sex couples.  Although the U.S. Department of Labor modified its definition of “spouse” in the FMLA back in March 2015, employers must verify that it is granting all eligible employees in same-sex marriages their FMLA rights.  Speaking of the U.S. Department of Labor, we expect that there will be guidance from it soon.

Employers can also expect more lawsuits under Title VII of the Civil Rights Act of 1964.  Although Obergefell, Tanco, DeBoer, and Bourke are not employment cases, the Supreme Court’s decision implicates employment laws.  Claims of transgender, sexual orientation, and/or gender discrimination may increase as gender identity and expression continue to be a topic of discussion.  Likewise, discrimination based on marital status may give rise to lawsuits in certain states under state anti-discrimination laws.

Health And Welfare Plans Update

One of the biggest impacts the U.S. Supreme Court decision will have on employment is on employee benefits.  Medical insurance coverage and taxes will change, so employers should be prepared to accommodate such changes in its policies and contracts.  We expect the Internal Revenue Service will provide guidance soon.

Employee Handbook And Company Policies Update

Employers are also well-served to update their employee handbooks to reflect and extend the rights given to the opposite-sex spouses to same-sex spouses to minimize litigation risks.  Employers must also revised its enrollment processes, such as updating its consent and eligibility forms, to ensure that they comply with the new rule.

We will continue to update you on the impact of the decision on employee benefits in greater detail soon.

Capitol%20BuildingCroppedBy Matthew J. Gagnon and Gerald L. Maatman, Jr.

We have something a bit different for our loyal blog readers today: a preview of an important bill that could have a significant impact on class action litigation.

On June 24, 2015, the House Judiciary Committee voted to send H.R. 1927, the Fairness in Class Action Litigation Act, to the full House. H.R. 1927 is a short statute, but one that could have a major impact on class action litigation. The substance of the Act prohibits any federal court from certifying a class action unless the party seeking certification “affirmatively demonstrates through admissible evidentiary proof that each proposed class member suffered an injury of the same type and extent as the injury of the named class representative or representatives.”

According to House Judiciary Committee Chairman, Bob Goodlatte, the bill is intended to counteract the “proliferation of class actions filed by lawyers on behalf of classes including members who have not suffered any actual injury.” He went on to explain that, “[w]hen classes are certified that include members who do not have the same type and scope of injury as the class representatives, those members siphon off limited compensatory resources from those who are injured, or who have suffered injuries of much greater extent. That leads to substantial under-compensation for consumers who have suffered actual or significantly greater harm.” His comments are here.

Critics of the bill argued that it could effectively eliminate class actions in certain types of cases, including employment discrimination lawsuits, by imposing a standard that would be impossible to meet. In comments prepared for an April 29, 2015 hearing before the Judiciary Committee, Professor Alexandra Lahav of the University Of Connecticut School Of Law argued that existing screening mechanisms embedded in Rule 23 were sufficient to police class actions and prevent baseless claims. She argued that imposing an additional requirement that each class member suffered an injury of the same type and extent would “effectively eliminate the kinds of class actions that are widely agreed to be beneficial.” As Professor Lahav explained:

For example, suppose a bank charges an illegal fee of $2 to every customer when he or she withdraws funds with a debit card. During the class period, James engaged in 15 transactions and Sarah engaged in 20. Accordingly, James’s loss is $30 and Sarah’s is $40. Assuming that the court would interpret the loss of funds as an “impact” on their “property,” under this bill the court would still not be permitted to certify this case as a class action because the extent of their losses is different: Sarah has lost $10 more than James and H.R. 1927 requires that the extent of their injury be the same.

According to Professor Lahav, courts could interpret the new language more broadly such that plaintiffs must only demonstrate that class members’ alleged injuries can be determined on a class-wide basis. But that interpretation is consistent with Rule 23’s requirements as they already exist, so the change in language would do nothing to change the law. In other words, according to Professor Lahav, the new law would be either catastrophic for class plaintiffs or wholly irrelevant, depending on how the language is interpreted by the courts.

Proponents of the bill, including the U.S. Chamber of Commerce, have asserted that the bill is necessary to put an end to overbroad, “no-injury” class actions – those that are brought by a named plaintiff who allegedly experienced a problem with a product or service and then seeks to represent a class of every other individual who purchased the product or paid for the service regardless of whether they experienced any problem with it. The Chamber argued that those types of cases are becoming increasingly prevalent and are a departure from the traditional view that such classes are not viable.

At the heart of this criticism lies the disquieting reality familiar to any employer who has faced class action litigation. For companies that cannot bear the risk and cost of defending against a large class action, certification is effectively a defeat on the merits because it forces companies to settle regardless of the merits of the claims. This is the entirely predictable outcome when companies are forced to choose between risking a devastating loss, or settling for a fixed amount, however unpalatable. Overbroad classes that include members who were never injured only ratchets up the pressure on defendants, while at the same time providing compensation to individual class members who would never be able to recover on an individual suit.

The bill was amended at the last minute to address concerns that it would unduly burden civil rights plaintiffs. Language was added to clarify that the new requirement applies only to classes “seeking monetary relief for personal injury or economic loss,” thereby exempting classes that seek only declaratory or injunctive relief. This amendment will be small comfort to plaintiff-side class action lawyers.

Implications For Employers

Making it out of committee is just the first step for this bill. While the Chamber lauded the House action, there is still a long road ahead. If it indeed becomes law, there is little doubt that it will have a substantial impact on class action litigation. Just how much impact will depend on how the new language is interpreted by the federal judiciary. But it will be hard for courts to ignore the fact that this bill is intended to make certification more difficult for certain types of class actions. This one is worth keeping an eye on.

trophy2By Gerald L. Maatman, Jr.

We are humbled and honored by the recent review of our Annual Workplace Class Action Litigation Report by Employment Practices Liability Consultant Magazine (“EPLiC”) – the review is here. Here is what EPLiC said:

“The Report is the singular, definitive source of information, research, and in-depth analysis on employment-related class action litigation. Anyone who practices in this area, whether as an attorney, risk manager, underwriter, or broker, should not be without it. This is because the Report is the only publication of its kind in the United States.”

We are often asked – “How does it happen – how do you produce your Annual Workplace Class Action Litigation Report”?

The answer is pretty simple – we live, eat, and breathe workplace class action law 24/7.

Each and every morning we check the previous day’s filings of EEOC lawsuits and workplace class actions relative to employment discrimination, ERISA, and wage & hour claims. We do so on a national basis – both in federal courts and all 50 states. Then we check every ruling on Rule 23 certification and subsidiary issues throughout federal and state trial and appellate courts. This is also done on a national basis. We put this information in our customized database; we analyze and compare the rulings on class action issues and Rule 23 topics; and then we prepare an analysis of each decision.

Our class action practitioners – a group of over 170 Seyfarth lawyers – contribute to the process of building the database and analyzing decisional law on a daily basis.

We have being doing this on a 24/7 basis for 11 years, and publishing the Annual Workplace Class Action Litigation Report in the first week of January of each calendar year.

The result is a compendium of workplace class action law that is unique in its analysis, scope, and comprehensiveness.

We were particularly proud when EPLiC recognized our Report as the “state-of-the-art word” on workplace class action litigation. I

Thanks EPLiC. We sincerely appreciate the kudos.

By way of a progress report, we are now 6 months into the year, and we have tracked and analyzed more class action decisions to this point in 2015 than in past years. On this pace, our 2016 Report will cover more decisions than ever before.

laptopBy Christopher M. Cascino and Gerald L. Maatman, Jr.

In Maglio v. Advocate Health and Hosps. Corp., 2015 IL App (2d) 140782-U (Ill. App. Ct. June 2, 2015), the Illinois Appellate Court was asked to decide whether individuals have standing to bring suit for violations of consumer data protection laws where their personal data, while compromised, has not been used to harm the individuals. The Illinois Appellate Court, in holding that such individuals do not have standing, established that, at least in Illinois, plaintiffs who suffer no concrete harm, but instead allege only technical statutory violations, cannot sue for violations of consumer and, presumably, workplace-related laws.

The decision of the Illinois Appellate Court could have implications beyond Illinois. As we previously reported here, the U.S. Supreme Court recently granted certiorari in Spokeo, Inc. v. Robins, No. 13-1339 (U.S. Apr. 27, 2015).  In the Spokeo matter, the U.S. Supreme Court will confront a nearly identical issue: Do individuals have standing to sue for violations of the Fair Credit Reporting Act (“FCRA”) even when they have not suffered any harm or injury? If the U.S. Supreme Court reasons in the same way that the Illinois Appellate Court did and answers this question “no,” the decision would likely discourage the current wave of consumer, workplace, and other class actions seeking millions in statutory damages.

Case Background

Advocate is a network of hospitals and doctors. Maglio, 2015 IL App (2d) 140782-U at 3.  On July 15, 2013, burglars stole four computers from Advocate’s administrative building that contained the personal information of about four million of Advocate’s patients. Id. Advocate notified these patients of the theft on August 23, 2013. Id.

Two sets of plaintiffs filed class actions against Advocate, claiming that Advocate violated two state consumer data protection laws by failing to maintain adequate procedures to protect the personal information of plaintiffs and putative class members and by failing to notify the plaintiffs and putative class about the breach in a timely matter. Id. at 4-5. The plaintiffs also sued Advocate on theories of negligence and invasion of privacy. Id.

Advocate moved to dismiss both class actions, arguing that the plaintiffs lacked standing because they had not suffered any injury as a result of their data being stolen. Id. at 5. Both trial courts dismissed the class actions. Id. at 5, 7. The trial courts found that “[t]he increased risk that plaintiffs will be identity theft victims at some indeterminate point in the future . . . . did not constitute an injury sufficient to confer standing,” and that the plaintiffs’ “allegations concerning anxiety and emotional distress . . . . were insufficient to establish standing, where they were not based on an imminent threat.” Id. at 6. The plaintiffs appealed.

The Appellate Court’s Decision

The Appellate Court pointed out that, under Illinois law, a plaintiff only has standing if he or she has suffered “some injury in fact to a legally cognizable interest.” Id. at 9. “[T]he claimed injury may be actual or threatened and it must be: (1) distinct and palpable; (2) fairly traceable to the defendant’s actions; and (3) substantially likely to be prevented or redressed by the grant of the requested relief.” Id. at 10 (emphasis in original).

The Appellate Court then considered whether the plaintiffs had suffered a “distinct and palpable” injury under Illinois law. It found, in light of Chicago Teachers Union, Local 1 v. Bd. of Educ., 189 Ill. 2d 200 (2000) – a case in which the Illinois Supreme Court held that physical education teachers did not have standing to challenge a statute allowing school districts to waive mandatory physical education requirements because the teachers were not “in immediate danger of sustaining a direct injury as a result of enforcement of the challenged statute that is distinct and palpable” – that the plaintiffs allegations of injury were speculative and that the plaintiffs thus did not have standing to bring suit. Id. at 10.

The Appellate Court reasoned that this result was supported by federal case law on standing. It observed that, “[i]n federal courts, to show standing under Article III of the Constitution, a plaintiff must establish the existence of an injury that is: (1) concrete, particularized, and actual or imminent; (2) fairly traceable to the challenged action; and (3) redressable by a favorable ruling.”  Id. at 11 (citing Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1147 (2013)) (emphasis in original). To meet the first requirement, “an ‘allegation of future injury may suffice if the threatened injury is ‘certainly impending,’ or there is a ‘substantial risk’ that the harm will occur.” Id. (quoting Susan B. Anthony List v. Driehaus, 134 S. Ct. 2334, 2341 (2014)) (emphasis in original). “Allegations of possible future injury are not sufficient,” nor is an “objectively-reasonable-likelihood” that the future injury will occur. Id. (quoting Clapper, 113 S. Ct. at 1147) (emphasis in original).

The Appellate Court went on to find that an increased risk of harm is not sufficient to confer standing. While agreeing that the Seventh Circuit appears to have held that an increased risk of harm can confer standing in Posciotta v. Old Nat’l Bank Corp., 499 F.3d 629 (7th Cir. 2007), it found that the later-decided Clapper case compelled rejection of this position. Id. at 11-12 (citing Strautins v. Trustwave Holdings, Inc., 27 F. Supp. 3d 871, 876 (N.D. Ill. 2014)) (additional citations omitted).

Finally, the Appellate Court found that alleged “appreciable emotional injury” did not confer standing on the plaintiffs. Id. at 14. Specifically, the Appellate Court found that, because the purported emotional injury did not flow from an “imminent, certainly impending, or substantial risk of harm,” it could not, on its own, confer standing. Id.

Implications For Employers

This case is welcome news for Illinois employers, who can use this case to defeat consumer and workplace class actions based on technical violations of state laws without any resulting harm to consumers or employees. Outside of Illinois, if the U.S. Supreme Court interprets federal standing requirements as the Illinois Appellate Court did, employers could be handed a significant win in the Spokeo matter. If Spokeo is decided as Maglio, employers nationally should have a powerful tool to achieve dismissal of class action lawsuits based on technical violations of both federal and state consumer and worker protection laws. Stay tuned.

 

gavel on white backgroundBy William David and Laura J. Maechtlen

As we reported here to our loyal blog readers, in April 2014, the Ninth Circuit overturned an order denying class certification of age discrimination claims filed by a group of police officers in Stockwell v. City & Cnty. of San Francisco , 749 F.3d 1107 (9th Cir. 2014). On remand, the officers filed a third motion for class certification, and Judge Phyllis Hamilton of the U.S. District Court for the Northern District of California recently issued an order, denying (again) the officers bid for certification.

Background

To recap, traditionally, the City filled its investigative positions by promoting police officers over the age of 40 who took and passed a “Q-35” exam. In 2005, the SFPD abandoned use of the Q-35 exam in favor of a new “Q-50” Sergeant’s exam. Following the change, the City began assigning investigative duties to newly promoted Sergeants who had taken the Q-50 exam, rather than to Assistant Inspectors promoted from the Q-35 list. Plaintiffs alleged that the practice of filling investigative positions from the Q-50 list had a substantial adverse impact on officers over the age of 40.

Throughout this case, plaintiffs asserted two causes of action for age discrimination — one under California’s Fair Employment and Housing Act (FEHA), the other under the federal Age Discrimination in Employment Act (ADEA). The FEHA claim was asserted by five named representative plaintiffs on behalf of a putative class, and the ADEA claim was asserted by the same five plaintiffs in their individual capacities, as well as by 25 additional individual plaintiffs. Plaintiffs sought class certification under Rule 23(b)(3) on their FEHA claim only.

On two occasions, the Court denied the plaintiffs’ bid for class certification. On the second occasion, the Court denied certification because it found that the plaintiffs did not satisfy the commonality requirement under Rule 23(a). As mentioned earlier, the Ninth Circuit overturned this decision, suggesting that the district court judge overreached by going too far in its analysis of the merits. Instead, the Ninth Circuit found that the commonality prong was met simply because “the officers are challenging a single policy they contend has adversely affected them”, and remanded the case to consider whether the putative class satisfied the requirements of Rule 23(b)(3) for class certification.

The Recent District Court Decision

On remand, the Court evaluated whether plaintiffs met the requirements under Rule 23(b)(3).  The Court also reviewed plaintiffs’ claim for class certification under Rule 23(a) with the Ninth’s Circuit’s guidance in mind. Plaintiffs also presented the Court with additional points for consideration.  In their third motion seeking class certification, the plaintiffs acknowledged that even if the City had never undertaken the allegedly discriminatory hiring practice (i.e., making promotions to investigative positions from the Q-50 list), only 55 individuals from the Q-35 list could have been promoted. In light of this information, plaintiffs made two alternative arguments.  First, they argued that the damages from the 55 “but-for” promotions should be aggregated and divided pro rata among the 133 putative members.  Second, plaintiffs argued that the Court could certify a class of only 55 individuals by using the 55 highest-ranked officers on the Q-35 list. The Court then reviewed plaintiffs’ third motion for class certification for the two proposed classes of 133 and 55 under Rules 23(a) and 23(b)(3).

The Court found that plaintiffs satisfied all certification requirements under Rule 23(a). However, plaintiffs also needed to satisfy the Rule 23(b)(3) requirements for class certification. Rule 23(b)(3) requires plaintiffs to establish that questions of law or fact common to the class predominate, and that a class action is superior to other methods available for adjudicating the controversy at issue. Upon review, the Court denied plaintiffs’ third motion for class certification because it found that the plaintiffs did not satisfy either the “predominance” or “superiority” requirements under Rule 23(b)(3) for either of the proposed classes.

            Predominance

To support their argument for certification of a liability-only class of 133, plaintiffs primarily relied on Houser v. Pritzker, 28 F.Supp. 3d 222 (S.D.N.Y. 2014), which certified a class for liability purposes, but not for damages purposes. Houser expressly found that a damages class cannot be certified under Rule 23(b)(3) and certified a liability-only class only because the plaintiffs moved for such a class under Rule 23(b)(2). In denying certification in Stockwell, the Court differentiated Houser by indicating that the plaintiffs sought certification under Rule 23(b)(3) and did not invoke Rule 23(b)(2) as a basis for their motion. Further, the Court reasoned that because plaintiffs admitted that only 55 of the 133 proposed class members would have been promoted in the “but-for” scenario, the majority of the class would be made up of individuals with no claim for relief.

Next, the Court analyzed the class of 55 under the predominance test which requires that plaintiffs show that the proposed class of 55 actually suffered a common injury and that damages from the injury are measurable on a class-wide basis through the use of a common methodology. Under the first prong of the test, the Court inquired whether the proposed class of 55 actually suffered a common injury– that is, whether each of them would have been promoted but-for the City’s allegedly discriminatory policy. The Court found that the entire proposed class of 55 did not suffer a common injury for two reasons. First, based on plaintiffs’ admission, not every one of the 55 highest-ranked Q-35 officers would have been promoted to the 55 investigative positions that were filled during the last class period. Instead, at best, the Q-35 evidence suggested only that most of the 55 highest-ranked individuals would have eventually received a promotion. Second, the Court held that plaintiffs provided no basis for determining the size of the “band” from which the 55 promotions would have been made.

Under the second prong of the test, the Court expressed concern that plaintiffs’ claims would require individualized proof at trial rather than proof common to the class because the class members may have differing amounts of damages. As the defendant pointed out, some class members have taken the Q-50 exam and some even received Q-50 promotions, which would limit their recovery in this case.

            Superiority

The Court held that plaintiffs did not satisfy the superiority analysis, either. Unlike the predominance prong, the Court did not separate its analysis of both proposed classes here because it found no material difference in the outcome of its analyses of the two classes. In making its ruling, the Court noted that the current complaint includes 5 representative plaintiffs and 25 additional individual named plaintiffs, all of whom assert an ADEA claim. It further noted that plaintiffs sought certification of a FEHA-only class, which even if granted, would leave 30 ADEA claims to be individually litigated, all based on the same facts that underlie the FEHA claim. The Court also found that the plaintiffs failed to provide any explanation as to how the individual claims would be litigated alongside the class claim.  Id. at 38.

Implications for Employers

Though the Court denied class certification on remand, the Ninth Circuit’s decision still stands. Employers can expect plaintiffs to continue to challenge the Wal-Mart decision by arguing that courts have abused their discretion by delving too far into the merits of Rule 23 requirements. The extent to which courts can consider the merits is likely to continue to take shape as district courts evaluate more cases involving Rule 23 class certifications following the Ninth Circuit’s ruling in Stockwell.

gold standardBy Gerald L. Maatman, Jr. and Lorie Almon

We wanted to share a new, significant development with our loyal blog readers — Seyfarth’s Labor & Employment Practice Group has just been recognized for excellence by one of the most prestigious awards in the legal profession.

The Seyfarth L&E practice group was named Labor & Employment Team of the Year at the 10th Annual Chambers USA Awards for Excellence ceremony in New York City on Tuesday evening. Our practice group was selected as the top-ranked firm in the United States in labor & employment law from a Winners Logo 2shortlist of highly respected firms that also included Jones Day, Littler, Morgan Lewis, and Proskauer.

The Chambers Awards honor the achievements of leading law firms and lawyers across the country for pre-eminence in key practice areas and notable achievements during the past 12 months, including outstanding work, impressive strategic growth, and excellence in client service. Chambers described Seyfarth as “the market-leading labor & employment practice in the country with an expertise and track-record of successful, cutting-edge defenses to employment discrimination class actions, bet-the-company EEOC lawsuits, and complex, high-stakes  wage & hour litigation.”

The Chambers report included client quotes about Seyfarth’s work that included: “Aside from being legal experts in their fields, the firm’s attorneys are incredibly responsive and provide pragmatic, value-add legal advice,” and “I’ve had several occasions when they’ve given advice contrary to that of other firms – in every instance the lawyers at Seyfarth have been correct.”

Chambers’ 150-member research team conducted and analyzed hundreds of interviews with corporate general counsel of companies, court rulings in cases defended, and submissions provided by the firms. The Chambers selection is a gold standard award for the firm, one that holds great credibility with client companies.

To all of our clients, loyal blog readers, and colleagues, thank you so much for your support and the honor bestowed on Seyfarth’s labor & employment practice group by Chambers.

chambers picture

gavel on white backgroundBy Christopher M. Cascino and Gerald L. Maatman, Jr.

In EEOC v. DolGenCorp, LLC d/b/a Dollar General, No. 13-CV-4307 (N.D. Ill. May 5, 2015), Judge Andrea R. Wood of the U.S. District Court for the Northern District of Illinois decided several discovery issues that have become increasingly common in EEOC-initiated disparate impact litigation.  In contrast with other recent decisions by other district courts, Judge Wood decided most of these issues in the EEOC’s favor.

That the EEOC’s internal personnel procedures can be discoverable and relevant in disparate impact cases was first established in 2011 in EEOC v. Kaplan Higher Educ. Corp., No. 10-CV-2882, 2011 WL 2115878, at *4 (N.D. Ohio May 27, 2011), in a ruling we discussed here. This was the first time a federal court had ever so held, and as a result, many employers have tried a similar tactic in EEOC lawsuits over the past few years.

However, in EEOC v. DolGenCorp., the Court ordered Dollar General to turn over the contact information of Dollar General’s job applicants, even though that information did not contain any information about the race or criminal background of the job applicants.  Also in contrast with a recent decision out of the U.S. District Court for the District of South Carolina we discussed here, the Court refused to compel the EEOC to turn over its internal background check policies, despite the fact that the EEOC is alleging that Dollar General’s background check policy creates disparate impact discrimination against African-Americans.  In a better ruling for employers, the Court agreed to examine the EEOC’s internal statistical analyses of Dollar General’s hiring decisions in camera to determine whether the analyses are protected by the deliberative process privilege or work product doctrine.

This case is important for employers because the EEOC will likely use this discovery ruling against employers when similar discovery disputes arise in the future.

Case Background

The EEOC filed suit against Dollar General, alleging that Dollar General’s use of criminal background checks for applicants is discriminatory because it has a disparate impact on African-American job applicants.  EEOC v. DolGenCorp, 13-CV-4307, at 1.  During the course of discovery, the EEOC asked Dollar General to turn over the “names, complete social security numbers, addresses, phone numbers, and complete dates of birth” of job applicants, arguing that such information would allow the EEOC to “link separate databases maintained by Dollar General and two of its vendors.”  Id. at 2.  Dollar General refused, arguing that the requested information was not relevant and was not needed for the EEOC to link the databases.  Id.

Also during discovery, Dollar General also sought discovery from the EEOC relative to its internal policies and procedures regarding its own use of criminal background checks in making employment decisions.  Id. at 8.  The EEOC refused to turn over the information, arguing that it was not relevant.  Id.  Dollar General also sought any statistical analyses the EEOC had regarding the purported disparate impact of Dollar General’s background check policy.  Id. at 6.  The EEOC refused to turn its analyses over, claiming that they were protected by the deliberative process privilege and work product doctrine.  Id.

Both parties moved to compel production of the requested documents.

The Court’s Decision

The Court first decided the EEOC’s motion to compel production of the personal information of Dollar General’s conditional hires.  The Court found that the requested information was discoverable because it was “calculated to lead to the discovery of admissible evidence” insofar as it would allow “the EEOC and its experts more effectively to analyze the statistical impact of Dollar General’s use of criminal background checks” by giving the EEOC the ability to link Dollar General’s databases.  Id. at 3.  While Dollar General argued that this linking could be done by other means, the Court found that the EEOC was not required to use those means when it could use the personal information to accomplish its goal.  Id. at 3 n.1.  The Court further found that Dollar General’s suggested linking method might not be “verifiably accurate,” further supporting the Court’s conclusion that the personal information requested by the EEOC was discoverable.  Id.

The Court next considered whether the EEOC’s policies and procedures on using background checks in its own hiring decisions were discoverable.  The Court pointed out that such information would only be discoverable if Dollar General could potentially use it to show that its use of criminal background checks was “job related for the position in question.”  Id. at 9 (emphasis in original).  While agreeing with Dollar General that a government agency’s employment policies can be discoverable in employment discrimination litigation, it found that such policies would not be relevant to Dollar General’s defenses in this case because Dollar General had not shown that “the functions performed by its employees are in any way comparable to those undertaken by the EEOC’s employees.”  Id.  The Court thus denied Dollar General’s motion to compel production of the EEOC’s background check policies and procedures.  Id.

The Court finally considered whether the EEOC’s statistical analyses of Dollar General’s background check policies were protected by either the deliberative process privilege or work product doctrine.  The Court pointed out that the EEOC argued that its statistical analyses were prepared “during the EEOC’s investigation to determine whether to issue a reasonable cause determination of discrimination,” and that they were thus protected by the deliberative process privilege.  Id. at 7.  The Court further pointed out that EEOC argued that its analyses were also protected by the work product doctrine because they were used by the EEOC’s attorneys in making the decision to sue Dollar General and because one of the analyses was provided to an EEOC investigator by an EEOC attorney.  Id. at 7-8.  The Court concluded that it could not determine whether the EEOC’s privilege and work product assertions were correct based on these arguments, and thus ordered the EEOC to produce the analyses to the Court for in camera review.  Id. at 8.

Implications For Employers

This case is significant for employers because it will undoubtedly be used by the EEOC when it seeks personal information that, while not relevant in itself, could arguably be used to find or create relevant evidence, and when the EEOC seeks to block production of its own hiring practices in disparate impact litigation.  Employers who are engaged in such litigation should anticipate this and try to preempt the EEOC’s use of this case by addressing the Court’s reasoning when responding to or bringing a similar motion to compel.  For example, employers seeking the EEOC’s background check policies should present arguments for why their employees perform similar functions as the EEOC’s employees.  In the meantime, we expect other courts to confront similar discovery disputes in EEOC-initiated disparate impact litigation and to provide further guidance to employers as they work through discovery in such cases.  Stay tuned.

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

imagesThe U.S. Supreme Court recently ruled on Mach Mining v. EEOC, No. 13-1019. We have blogged extensively about this case previously –  here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here. To recap, this case was initially brought by the EEOC, in which it claimed that Mach Mining had a pattern or practice of not hiring women for mining-related positions, or, in the alternative, maintaining a neutral hiring policy that has a disparate impact on women. The company asserted a number of affirmative defenses, including that the EEOC failed to conciliate in good faith before initiating litigation. The EEOC argued that its conciliation activities not subject to judicial review.

The Supreme Court deliberated on whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit, and whether its conciliation efforts are judicially reviewable by courts. On April 29, 2015, the Supreme Court issued its long-awaited decision and concluded – in an unanimous opinion authored by Justice Kagan – that federal courts have the authority to review the EEOC’s conciliation efforts.

Our blog editor, Gerald L. Maatman, Jr. (tweet him @g_maatman) discusses the SCOTUS decision and his take on what to expect from the EEOC and implications for employers going forward with Colin O’Keefe from LXBN TV (@LXBN) and Rick Bell from Workforce (@Workforcenews) in the videos below.

5 Minutes of Management: Assessing Mach Mining v. EEOC With Rick Bell At Workforce

LXBN TV: Supreme Court Benchslaps EEOC with Mach Mining Decision With Colin O’Keefe At LXBN TV

For more information on Mach Mining v. EEOC, our readers should check out the following posts:

2015WCARFrontCoverTo stay current with EEOC news, please subscribe to us at www.workplaceclassaction.com and www.eeoccountdown.com.

Don’t forget to reserve your copy of the 2015 Annual Workplace Class Action Litigation Report and the EEOC-Initiated Litigation: Case Law Development In 2014 And Trends To Watch For In 2015 today!

Tweet and follow us on Twitter! @sswcab

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

door knockBy Christopher M. Cascino and Gerald L. Maatman, Jr.

In EEOC v. Vicksburg Healthcare, LLC, No. 13-CV-895 (S.D. Miss. Apr. 22, 2015), Magistrate Judge Michael T. Parker of the U.S. District Court for the Southern District of Mississippi denied the EEOC’s request to be allowed to inspect and observe the defendant’s facility in an Americans With Disabilities Act (“ADA”) action. As we have reported previously here, the EEOC has recently attempted to obtain discovery by invasive inspections of employers’ premises. Magistrate Judge Parker’s decision to deny the EEOC this access represents another setback for the EEOC as it ratchets up the intensity of its discovery efforts in workplace litigation. It also gives employers a case they can use when the EEOC or other workplace plaintiffs seek intrusive inspections.

Factual Background

The EEOC filed suit against Vicksburg Healthcare, LLC d/b/a River Region Medical Center (“River Region”), claiming that River Region terminated Beatrice Chambers because of a disability in violation of the ADA. Vicksburg Healthcare, 13-CV-895, at 3. Specifically, the EEOC claimed that Chambers could perform the essential functions of a Licensed Practical Nurse (“LPN”) despite the fact that, because of shoulder surgery, Chambers was unable to lift ten or more pounds.

During the course of the litigation, the EEOC served a request for entry onto River Region’s premises for three hours so that it could observe the work of LPNs, inspect the type of equipment in use at River Region, and collect measurements about the amount of force required to push and pull certain equipment. Id. at 3-4. In addition, the EEOC sought to interview River Region’s employees during the inspection. Id. at 6. River Region objected that the request was overly broad and intrusive, would reveal information protected by the physician-patient privilege and HIPPA, and would allow the EEOC to obtain statements from River Region’s employees without the protections in the Federal Rules for deposing witnesses. Id. at 4. Subsequently, the EEOC moved to compel River Region to allow the inspection. Id. at 4-5.

The Court’s Ruling

The Court began by noting that the EEOC did not identify any specific equipment that it wished to observe or measure. Id. at 6. The Court pointed out that this was problematic because a three-hour inspection would not reliably establish which tasks LPNs regularly performed or which equipment they regularly used given that the tasks LPNs performed were “not necessarily performed on any given day.” Id. at 6-7.

The Court reasoned that “the amount of force required to push, pull, and/or lift equipment such as gurneys, beds, and wheelchairs [would] depend on the weight of the patient in the gurney, bed, or wheelchair,” and that it was therefore not clear whether a three-hour inspection “would allow [the EEOC] to observe a representative sample of patients or duties.” Id. at 7. It thus found that the requested inspection “would likely be of limited use.” Id.

The Court further determined that the “possible disruption of patient care and the risk of compromising patients’ rights to confidentiality [were] significant concerns” that weighed against allowing the inspection. Id. at 8. With respect to disruption of patient care, the Court found that, because the EEOC would be testing equipment while the equipment was being used to treat patients, and because “River Region personnel would be subject to roving depositions while they attempt to perform their duties,” the proposed EEOC inspection would likely “significantly disrupt” River Region’s operations. Id.

With respect to confidentiality, the Court opined that the EEOC could receive confidential patient information as the result of the inspection. While the EEOC stated that it would not communicate with any patient or review medical records, the Court found that the “normal” operations of River Region “would likely include the communication or observation of patients’ confidential information.” Id.

Based on the foregoing, the Court concluded that it would not permit the requested inspection. Id. at 9. It further found that the EEOC could try to obtain the information it desired through other means, such as interviews of Chambers and depositions.

Implications For Employers

Employers who are the subject of discrimination litigation or an EEOC investigation can use this case for authority if the plaintiff or the EEOC seeks to investigate their premises. While the case will be especially useful for employers in the healthcare industry (given the Court’s concerns over patient confidentiality), other portions of the decision will be of use to employers in other industries. The Court’s concern that a time limited inspection might not allow an inspecting party to observe a “representative sample” of a position’s job duties would apply in many other industries, and the Court’s conclusion that an inspecting party could obtain information about essential job duties through other, less invasive means of discovery would apply in most, if not all, other industries. Employers should also take heart that the courts are becoming increasingly wary of the EEOC’s attempts to conduct invasive premises inspections.

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

as1859[1]By Gerald L. Maatman, Jr., Christopher Cascino, and Matthew Gagnon

On April 29, 2015, the U.S. Supreme Court issued its long-awaited decision in Mach Mining, LLC v. EEOC, No. 13-1019 (U.S. 2015), and concluded, in a unanimous opinion authored by Justice Kagan, that federal courts have the authority to review the EEOC’s conciliation efforts. In language that is sure to be repeated back to the EEOC for years to come, the Supreme Court held that “[a]bsent such review, the Commission’s compliance with the law would rest in the Commission’s hands alone.” This, the Supreme Court said, would be contrary to “the Court’s strong presumption in favor of judicial review of administrative action.”

While the Supreme Court did not rule that the intensive review that Mach Mining argued for was required, the case nevertheless represents a significant win for employers and resounding defeat for the EEOC. The EEOC will no longer be able to file suit against employers after paying mere lip-service to its conciliation efforts, and to give them the back of the hand in response to requests for fulsome information about liability and exposure in a threatened lawsuit. And employers will as a result be in a better position to settle meritorious claims  on reasonable terms before the EEOC files suit, thus saving employers from unnecessary litigation expense.

Case Background

This ruling is a big case for employers and for government enforcement litigation. In a game-changing decision in December 2013, the U.S. Court of Appeals for 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 EEOC.  That decision had far-reaching, real world significance to the employment community because it meant that the EEOC was virtually immune from review in terms of the settlement positions it takes – often: “pay millions or we will sue and announce it in a media release.”

We have kept our blog readers up to date on this litigation as it wound through the lower courts and progressed at the Supreme Court. Readers can find the previous posts here, here, here, here, here, here, and here. In addition, Seyfarth filed an amicus brief supporting Mach Mining’s position, a copy of which can be found here. In essence, the Seventh Circuit determined that the EEOC’s pre-lawsuit conduct in the context of conciliation activities was immune from judicial review, and the Supreme Court granted certiorari to determine whether that was correct and, if not, what standard federal courts should use to review the EEOC’s conciliation efforts.

The Supreme Court’s Ruling

The Supreme Court unanimously rejected the Commission’s position that its conciliation activities are beyond judicial review. It began by discussing the fact that Title VII of the Civil Rights Act requires the EEOC to “‘endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.’” Mach Mining, No. 13-1019, at 2 (quoting 42 U.S.C. § 2000e-5(b)). The Supreme Court observed that “Congress rarely intends to prevent courts from enforcing its directives to federal agencies,” and that, for that reason, the Supreme Court would “appl[y] a strong presumption favoring judicial review of administrative action.” Id. at 4.

The Supreme Court reasoned that “[c]ourts routinely enforce . . . . compulsory prerequisites to suit in Title VII litigation.” Id. at 5. As an example, the Supreme Court pointed to the fact that courts routinely dismiss discrimination complaints of parties that failed to file a timely charge of discrimination with the EEOC.  Id.  The Supreme Court found that this supported judicial review of the EEOC’s compliance with the conciliation requirement. Id. at 6.

The Supreme Court also rejected the EEOC’s argument that “Title VII provides no standards by which to judge the EEOC’s performance of its statutory duty,” thus showing that “Congress demonstrated its intent to preclude judicial review.” Id. at 6. The Supreme Court concluded that the EEOC’s position was incorrect because, while the lack of a standard might indicate Congress’s intent to give the EEOC wide latitude in conducting the conciliation process, it did not give the EEOC the authority to ignore the conciliation process. Id. at 6-7. Specifically, the Supreme Court opined that, if the Commission’s position were correct, the EEOC could file suit without any attempt at conciliation, and federal courts could do nothing to remedy the failure to engage in conciliation. Id.

The Supreme Court then addressed the proper scope of judicial review to determine whether the EEOC had met its conciliation obligation. The Supreme Court declined to adopt the standard offered by Mach Mining as well as the Commission. The Supreme Court started with the plain language of the statute, noting that Title VII describes the statutory obligation as requiring “conference, conciliation, and persuasion.” Id. at 7. Those specified methods must therefore involve communication between the parties, including an exchange of information and views about the alleged unlawful employment practice. In sum, the EEOC must “tell the employer about the claim – essentially, what practice has harmed which person or class – and must provide the employer with an opportunity to discuss the matter in an effort to achieve voluntary compliance.” Id.

In defining the scope of judicial review, the Supreme Court threaded a line between the EEOC’s position and the position of the defense. The EEOC argued for the most minimal review possible – facial examination of documents prepared and submitted by the agency itself.  In this case, the EEOC argued that the Supreme Court should be satisfied with two letters sent from the Commission to Mach Mining: (1) the reasonable cause letter, which informed the company that the EEOC would contact the party to initiate the conciliation process; and (2) a second, later letter, which simply stated that the conciliation process had occurred and failed.  Id. at 8. The Supreme Court rejected the EEOC’s proposed level of review, holding that it simply fails to prove what the government claims, namely, whether the agency actually did what it said it did.

Mach Mining argued for a more searching review. In its briefs, the company had argued that a federal court should satisfy itself that the EEOC had negotiated conciliation in good faith. Working off of a standard set forth in the National Labor Relations Act (“NLRA”), the company argued for some minimum prerequisites as to what “good faith” negotiation would look like, including setting forth the factual and legal basis for its positions and refraining from making “take-it-or-leave-it” offers. Id. at 9-10. The Supreme Court rejected that approach, holding that the NLRA is directed toward the process of negotiation itself. The law’s purpose is to create a sphere of bargaining to address labor disputes. Id. at *10. Title VII, on the other hand, is about compliance with the law. While the law favors cooperation and voluntary compliance, it gives the EEOC wide latitude to pursue that goal, holding that “Congress left to the EEOC such strategic decisions as whether to make a bare minimum offer, to lay all its cards on the table, or to respond to each of an employer’s counter-offers, however far afield.”  Id. at 11. Critically, the Supreme Court also held that the company’s proposed standard of review would fall afoul of Title VII’s protection of the confidentiality of the conciliation process. A detailed review of that process would necessitate public disclosure of information in violation of the statute’s non-disclosure obligations. Id. at 11-12.

The Supreme Court concluded by adumbrating the future of litigation over this issue. The Supreme Court held that a sworn affidavit from the EEOC stating that it has performed its obligations often should be enough to show that it met its conciliation efforts. Id. at 13-14. But if employers counter with a credible affidavit of their own or other evidence that demonstrates that the EEOC “did not provide the requisite information about the charge or attempt to engage in a discussion about conciliating the claim,” then a federal court must conduct the fact-finding necessary to decide that dispute. Id. at 14. If the EEOC’s efforts were inadequate, the federal court must then order the agency to undertake the necessary efforts to ensure that it has satisfied its conciliation obligations. Id.

Implications For Employers

The implications for employers as a result of this decision cannot be overstated. The EEOC has been arguing for years in courts across the country that its conciliation efforts — and other pre-suit obligations — are entrusted solely to its discretion and therefore are immune to any form of judicial review. That position has been squarely defeated.  While the scope of review articulated in the Supreme Court’s decision is a narrow one, the Supreme Court vigorously upheld the fundamental principle that judicial review of administrative action is the norm in our legal system. Given the often breathtaking scope of authority that the Commission seeks to carve out for itself, any reaffirmation of that principle comes as a welcome check on the EEOC’s activities. Further, the EEOC now has to present its position in a federal court, and its litigation strategies are apt to be very different when it must justify and show the basis for its conciliation positions before a neutral fact-finder. We will have to wait and see exactly how this issue is litigated in the lower federal courts. Suffice it to say, employers’ defense of “failure-to-conciliate” is still alive and well, and the EEOC’s litigation strategies are now likely to be in need of rebooting.

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