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By Matthew J. Gagnon, Christopher J. DeGroff, and Gerald L. Maatman, Jr.

Seyfarth Synopsis: With uncertain times and profound changes anticipated for the EEOC, employers anxiously await what enforcement litigation the EEOC has in store. Although 2016 showed a marked decline in filings, fiscal year 2017 shows a return to vigorous enforcement filings, with a substantial number of filings in the waning days of the fiscal year.

Employers are living in uncertain times. The impact of a Trump Administration and the EEOC’s new Strategic Enforcement Plan (SEP) for fiscal years 2017-2021 are still working themselves out in the FY 2017 filing trends. Nonetheless, one trend has reemerged: a vigorous number of EEOC case filings. It looks like the anemic numbers of FY 2016 were just a bump in the road, as FY 2017 has revealed an increase in total filings, even eclipsing the numbers from FY 2015 and 2014. (Compare here to here and here.) This year, the EEOC filed 202 actions, 184 merits lawsuits and 18 subpoena enforcement actions.

The September filing frenzy is still an EEOC way-of-life, as this past month yet again holds the title for most filings compared to any other month. At the time of publication, 88 lawsuits were filed in September, including 21 in the last two days alone. In fact, the EEOC filed more cases in the last three months of FY 2017 than it did during all of FY 2016. The total number of filings for the remaining months remains consistent with prior years, including a noticeable ramp up period boasting double digit numbers through the summer.

Filings out of the Chicago district office were back up in FY 2017 after an uncharacteristic decline to just 7 total filings in 2016. This year, Chicago hit 21 filings, an enormous increase from last year. This is closer to the total number of Chicago filings in FY 2015 and 2014 (26 in each year). The Los Angeles district office also increased its filings, hitting a high of 22, a substantial jump compared to previous years and the most of any district office in FY 2017. On the other end of the spectrum, the Phoenix district office has seen a notable drop, with only 7 filings compared to 17 in FY 2016.

New SEP, Same Focus

Every year we analyze what the EEOC says about its substantive focus as a way to understand what conduct it is targeting. This year, Title VII takes center stage. Although Title VII has consistently been the largest category of filings, last year showed a dip in the percentage of filings alleging Title VII violations, at only 41%. Nonetheless, this year Title VII has regained its previous proportion, accounting for 53% of all filings. This is on par with FY 2015 and 2014, showing once again that FY 2016 seems to have been an outlier.

Although the 2017-2021 SEP outlined the same general enforcement priorities as the previous version of the SEP (covering FY 2012 to 2016), the new SEP added “backlash discrimination” towards individuals of Muslin/Sikh/Arab/Middle Eastern/South Asian communities as an additional focus. One would expect this focus might increase the number of Title VII claims alleging either religious, racial, or national origin discrimination. However, those filings stayed relatively even, and were even a bit down from previous years. Religious, national origin, and race discrimination claims made up 42% of all Title VII claims, compared to 50% in 2016 and 46% in 2015.

Uncertainty For Equal Pay Claims

With a new administration came a new Acting Chair for the EEOC. President Trump appointed Victoria Lipnic as Acting Chair on January 25, 2017. Employers expected the EEOC’s new leader to steer the EEOC’s agenda in a different direction. Some believed Lipnic was foreshadowing future trends when she made it clear at her first public appearance – hosted by none other than Seyfarth Shaw – that she is “very interested in equal pay issues.” (See here.) And indeed, we have seen a slight uptick in the number of EPA claims filed in FY 2017. In FY 2017, The EEOC filed 11 EPA claims, compared to 6 in 2016, 5 in 2015, and 2 in 2014.

However, on June 28, 2017, President Trump tapped Janet Dhillon as Chair of the EEOC. Dhillon would come to the EEOC with extensive experience in a big law firm and as the lead lawyer at three large corporations, US Airways, J.C. Penney, and Burlington Stores Inc. Although it is too early to know how she could change the direction of the agency if confirmed, it is entirely possible that she could back away from previous goals to pursue equal pay claims more aggressively.

The Trump Administration has also made other moves that may indicate a change in direction with respect to equal pay initiatives. On February 1, 2016, the EEOC proposed changes to the EEO-1 report that would require all employers with more than 100 employees to submit more detailed compensation data to the EEOC, including information regarding total compensation and total hours worked by race, ethnicity, and gender. This was a change from the previous EEO-1 report, which only required employers to report on employee gender and ethnicity in relation to job titles. However, on August 29, 2017, the new EEO-1 reporting requirements were indefinitely suspended. We will have to wait and see whether the slight uptick in EPA claims in FY 2017 was a one-year anomaly.

Implications For Employers

The changes brought by the Trump Administration are still in the process of working themselves down into the rank and file of many federal agencies. The EEOC is no exception. Despite all of the unrest and uncertainty about where the EEOC may be headed, the FY 2017 filing trends largely show a return to previous years, albeit with a slight uptick in EPA claims. Certainly, changes in top personnel will have an impact on how the EEOC pursues its enforcement agenda. Exactly what that impact will be remains to be seen.

Loyal readers know that this post is merely a prelude to our full analysis of trends and developments affecting EEOC litigation, which will be published at the end of the calendar year. Stay tuned for our continued analysis of FY 2017 EEOC filings, and our thoughts about what employers should keep an eye on as we enter FY 2018. We look forward to keeping you in the loop all year long!

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

th7Y6M6GN7By Gerald L. Maatman, Jr., Christina M. Janice and Alex W. Karasik

Seyfarth Synopsis: Following the NLRB’s expansion of the definition of “joint employer” in the high-profile Browning-Ferris case and the employer’s subsequent appeal to the D.C. Circuit, the EEOC filed an amicus brief supporting the broadening of both agencies’ tests for determination of joint employer status. This is a signal to employers of future agency positions on the expansion of Title VII liability.

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With government agencies and plaintiffs’ counsel alike seeking giant paydays from employers with the deepest pockets, governmental expansion of “joint employer” status is a critical development in employment law.  In the 2015 landmark decision in Browning-Ferris Industries of California (“Browning-Ferris”), 362 NLRB No. 186 (Aug. 27, 2015), which was the subject of Seyfarth Shaw’s Client Alert here, the NLRB significantly lowered the bar for establishing joint employer status.  Under Browning-Ferris, the NLRB may find an unrelated entity to be an “employer” for purposes of the National Labor Relations Act based on a number of possible factors, including the existence of unexercised authority over terms and conditions of employment, or by the “indirect” exercise of that authority through agents.  Following Browning-Ferris’s appeal to the U.S. Court of Appeals for the District of Columbia Circuit, the EEOC recently filed its amicus brief supporting the NLRB’s expanded view of joint employer status. . . and articulating an expanded view of its own.

The EEOC’s filing is an important roadmap for employers to understand and anticipate how the EEOC will expand its own investigations and claims involving complex relationships in such contexts as staffing agencies, franchises, contractors, and corporate enterprises comprised of affiliated entities.

Case Background

Upon the petition of the International Brotherhood of Teamsters, Local 350, to represent employees of Leadpoint, the Teamsters sought to have Browning-Ferris, which contracted for temporary labor from Leadpoint, to be found to be a joint employer for purposes of the petition.  At that time, the prevailing standard for determining whether a putative employer was whether the putative employer “meaningfully affect[ed]  matters relating to the employment relationship, such as hiring, firing, discipline, supervision and direction.”  Laerco Transportation, 269 NLRB 324, 325 (1984).  This standard required a putative employer to have immediate and direct control over terms and conditions of employment.  Under this standard, a regional director of the NLRB originally found that Browning-Ferris was not a joint employer with its contractor.  EEOC at 2-3.

Upon review of that decision and with the support of the EEOC as amicus, the NLRB abandoned its standard and reverted to an earlier, broader standard articulated in NLRB v. Browning-Ferris Industries, 691 F.2d 1117 (3d Cir. 1982).  Id.  This earlier standard provides that “two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.”  Id. at 2.  Further, the NLRB “will no longer require that a joint employer not only possess the authority to control employees’ terms and conditions of employment, but also exercise that authority.”  Id. at 3.  In this respect, the NLRB stated it would apply an “inclusive approach” to defining “essential terms and conditions of employment,” including the setting wages and hours; dictating the number of workers to be supplied; controlling scheduling, seniority, and overtime; assigning work; and determining the manner and method of work performance.  Id.

Despite acknowledging the dissent’s argument that its new standard, which allows for unexercised or indirectly exercised authority or control, lacks certainty or predictability, the NLRB reasoned that joint employer issues are nonetheless best examined and resolved in the context of specific factual circumstances.  Id. at 3-4.  Accordingly, applying the new, broadened standard to the facts of this case, the NLRB reversed the regional director and found that Browning-Ferris was a joint employer with its contractor.  Id. at 4.  Following Browning-Ferris’s appeal, the EEOC filed its amicus brief in support of the NLRB.

The EEOC’s Amicus Brief

Predictably, the EEOC supports the broadened, more ambiguous standard now adopted by the NLRB.  This broadened standard more closely resembles the EEOC’s own expansive interpretation of “joint employer” status in its Compliance Manual here and Guidance here, neither of which have the force of law or are universally followed by federal courts taking up EEOC claims involving joint employer liability.

For instance, in the context of staffing companies, EEOC’s Guidance provides that a client of a staffing company may be a joint employer if the client “exercises significant supervisory control over the worker.” The Guidance further qualifies:

Clients of contract firms and other types of staffing firms also qualify as employers of the workers assigned to them if the clients have sufficient control over the workers….   For example, the client is an employer of the worker if it supplies the work space, equipment, and supplies, and if it has the right to control the details of the work to be performed, to make or    change assignments, and to terminate the relationship. . . .

EEOC Enforcement Guidance: Application of EEO Laws to Contingent Workers Placed by Temporary Employment Agencies and Other Staffing Firms (Dec. 3, 1997), 1997 WL 3315961, at *5-6 (emphasis added).

The standard articulated by the NLRB and supported by the EEOC potentially inoculate the “joint employer” determinations by these agencies as fact-driven and interpretive – particularly on such vague and speculative notions as unexercised or indirect control.  Nevertheless, the EEOC supports the elusive new standard by asserting three arguments.  First, the EEOC argues that its own test, like that of the NLRB, appropriately looks at the totality of the circumstances.  EEOC at 8.  Noting that its approach is “intentionally flexible” and “consistent with common law,” the EEOC explains that it does not consider one factor to be decisive, but rather all of the circumstances in the worker’s relationship with each business involved should be considered to determine who is an employer.  Id. at 9-11 (citations omitted).

Second, the EEOC argues that its standard correctly allows courts to consider an entity’s right to control and indirect control of the terms and conditions of employment.  Specifically, the EEOC contends that an entity’s right to control the terms and conditions of employment, whether or not it exercises that right, is relevant to joint employer status.  Id. at 12.  Because the right to control terms and conditions of employment is one factor among many the EEOC considers relevant to joint employer status, the EEOC concludes that the NLRB’s newly articulated standard recognizing right to control as a relevant consideration, is correct.  Id. at 13.

With respect to indirect control, the EEOC similarly explains that it “has long considered indirect control to be relevant to joint employer status.”  Id.  After explaining that “[a] putative joint employer exercises indirect control of the terms and conditions of employment by acting through an intermediary,” the EEOC identifies several of its own determinations in which it has applied this logic.  Id. at 14.  The EEOC cites to no court decisions, however, in support of its expansive position.

Finally, the EEOC asserts that contrary to Browning-Ferris’s argument, a broad, fact-specific inquiry is neither vague nor unworkable.  Id. at 15.  The EEOC posits that “[g]iven the complexity and variety of the situations implicating joint employer status, the NLRB correctly declined to rank the elements of its test in order of importance.  Id. 

Although the EEOC concedes that “[t]he EEOC’s flexible joint-employer test, like the NLRB’s, carries more uncertainty than the NLRB’s now-discarded rule, which looked only at authority exercised directly and immediately,”  id. at 16, the EEOC boldly contends that “[u]ncertainty, however, is no basis for rejecting a rule that is consistent with statutory language, common law, and legislative purpose.”  Id.

Further, after acknowledging Browning-Ferris’s argument that the uncertain nature of the new standard will make it difficult for organizations to anticipate whether they will be deemed joint employers, and deprives employers of their right to due process, the EEOC asserts in conclusory fashion that the joint employer test itself does not violate due process.  Id. at 17.  Quoting Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318, 327 (1992), the EEOC concludes that the Supreme Court effectively rejected Browning-Ferris’s argument when it stated the application of “the traditional agency law criteria . . . generally turns on factual variables within an employer’s knowledge.”  Id.

Implications For Employers

In its recent “Enforcement Guidance on Retaliation and Related Issues” publication, which we blogged about here, the EEOC made it well-known that it maintains a watchful eye on the NLRB’s interpretations of protected activity.  The EEOC’s amicus brief stands as another in a recent spate of advocacy pieces seeking to advance the EEOC’s own expansive view of joint employer status in the context of federal antidiscrimination laws.  Here, the EEOC is looking to secure a circuit court opinion legitimizing a broad definition of joint employer that it then can use to pursue multiple alleged employers in discrimination claims.  Accordingly, businesses contracting labor should scrutinize their workforce relationships carefully for indicia of potential for indirect as well as direct control over the terms and conditions of employment of the workforce.  We will continue to update our readers as events unfold in this critical litigation.

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

th7Y6M6GN7By Gerald L. Maatman, Jr., Mark Casciari, and Christina M. Janice

Seyfarth Synopsis: For the first time since 1998, the EEOC has updated its enforcement guidance on retaliation claims brought under the various anti-discrimination laws the Commission is charged with enforcing.  Observing that retaliation is now the single largest category of claims presented in its charges, the EEOC’s new enforcement guidance advocates expansive interpretations of law to broaden retaliation protections for federal and private sector applicants and employees, creating new burdens on employers who decide to attempt to comply with this new EEOC directive.

Making good on its stated objective to transform itself from a “nationwide law firm” to a “national law enforcement agency,”[1] the EEOC on August 29, 2016 issued its new Enforcement Guidance on Retaliation and Related Issues along with a Small Business Fact Sheet.  After a period of public comment on its Proposed Enforcement Guidance on Retaliation, see here, the EEOC has now asserted even stronger, more expansive positions than it first proposed on defining actionable retaliation under Title VII of the Civil Rights Act of 1964 (Title VII), the Age Discrimination in Employment Act (ADEA), Title V of the Americans With Disabilities Act (ADA), Section 501 of the Rehabilitation Act (Section 501), the Equal Pay Act (EPA), and Title II of the Genetic Information Nondiscrimination Act (GINA).  While the Guidance itself does not have the force of law, it provides employers with a valuable roadmap of the EEOC’s agenda both in pursuing workplace retaliation claims and in attempting to make law in the courts.

The EEOC now clearly positions itself as interpreting anti-discrimination laws and federal decisions as it sees fit to serve its enforcement objectives: “This document sets for the Commission’s interpretation of the law of retaliation and related issues. . . . Where the lower courts have not consistently applied the law or the EEOC’s interpretation of the law differs in some respect, the guidance sets forth the EEOC’s considered position and explains its analysis.” (Emphasis added.)  Rather than enforce existing law as interpreted by courts throughout the country, the EEOC supports its nationwide objective to expand employee protections by relying on court decisions favoring its approach, while at the same time rejecting court decisions that do not.

What Is Retaliation?

The Guidance says that the preconditions to a retaliation claim include: 1) protected activity being either “participation in an EEO process” or “opposition to discrimination”; 2) materially adverse action taken by the employer; and 3) a requisite level of causal connection between the protected activity and materially adverse action.  The EEOC considers these three elements to be fluid concepts, to be read and enforced expansively.

The Guidance also focuses on the concept of “anticipatory retaliation” or “pre-emptive retaliation” articulated by the Seventh and Tenth Circuits, that retaliation occurs “…when an employer takes a materially adverse action because an individual has engaged in, or may engage in, activity in furtherance of the EEO laws the Commission enforces” (emphasis added, citing Beckel v. Wal-Mart Assocs., Inc., 301 F.3d 621, 624 (7th Cir. 2002); Sauers v. Salt Lake Cty., 1 F.3d 1122, 1128 (10th Cir. 1993)). Employers concerned about the EEOC’s scrutiny now must be vigilant to document or otherwise be able to prove that all aspects of performance management – including, but not limited to, evaluations, warnings, reprimands, hiring, promotions, compensation, terminations and references – is conducted without regard to whether an applicant or employee may be about to participate in an EEO process or oppose discrimination.

What Is Protected Activity?

Participation In An EEO Process.  The Guidance restates the EEOC’s longstanding position that participation in an EEO process is protected whether or not an individual has a reasonable, good faith belief that the allegations are or could become unlawful. Conceding that the Supreme Court has not addressed this question, the EEOC nonetheless rejects decisions by the Seventh and Eighth Circuits that hold that the anti-retaliation protections of Title VII do not extend to individuals making false claims to the EEOC. (See Gilooly v. Mo. Dep’t of Health & Senior Servs., 421 F.3d 734, 240 (8th Cir. 2005); Mattson v. Caterpillar, Inc., 359 F.3d 885, 891 (7th Cir. 2004)).

Opposition To Discrimination.  The Guidance provides that “opposition to discrimination” must be “reasonable” in manner to receive protection. The Guidance then qualifies this position by observing that that there is overlap between what constitutes “participation in an EEO process” and “opposition to discrimination.”  Relying on Sixth Circuit case law the Guidance provides, self-servingly, that the EEOC is afforded great discretion to determine what constitutes protected activity. Employers should be on the lookout that the reasonableness of behaviors alleged to be in opposition to discrimination may be eroded as a defense to retaliation claims.

The Guidance also states that the EEOC rejects and will challenge what some courts have dubbed the “manager rule”; namely, that managers must step outside their management roles and take a position adverse to the employer in order to engage in the protected activity of opposition to discrimination.

What Is A Materially Adverse Action?

With respect to the requirement that an individual suffer a materially adverse action at the hands of an employer, the EEOC continues to broaden the actions that in its view constitute “materially adverse actions” as to include one-off incidents, warnings, dissuasive activities that do not directly affect employment, and activities outside of the workplace that may dissuade an applicant, employee or former employee from engaging in protected activity.  Further, actions purportedly taken against close family members and fiancés on account of an applicant, employee or former employee engaging in protected activity also will be challenged as retaliatory.

What Is Causation?

While the Guidance acknowledges that the Supreme Court has held that the standard for proof of retaliation under Title VII is that “but for” the a retaliatory motive, the employer would not have taken the adverse action, the Guidance introduces the “motivating factor” standard for federal sector Title VII and ADEA retaliation cases, prohibiting retaliation if it is a mere motivating factor behind an adverse action.  The Guidance provides that suspicious timing, incriminating oral or written statements, evidence of how comparable individuals were treated differently, and inconsistent or shifting explanations of the adverse action all can support a finding of retaliation, while the employer’s ignorance of the protected activity or having a legitimate, non-discriminatory reason for the adverse action may support a finding that no unlawful retaliation has occurred.

Related Issues – Requests For Accommodation

The Guidance discusses that, in addition to retaliation, the Americans With Disabilities Act prohibits interference with an applicant, employee or former employee’s rights under the ADA, including assisting another in the exercise of their rights under the ADA.  The Guidance suggests that the EEOC will aggressively challenge conduct allegedly interfering with requests for accommodation for disability under the ADA, as well as requests for religious accommodation under Title VII.

Implications For Employers

While the Guidance states that “[e]mployers remain free to discipline or terminate employees for legitimate, non-discriminatory, non-retaliatory reasons, notwithstanding any prior protected activity,” employers have no cause for reassurance from the EEOC.  The Guidance signals that the EEOC is broadening its interpretation of retaliation to include protection for activity that has not yet occurred, possible protection for “opposition” activities that may not be reasonable, and protection to the applicant and  employee who may engage in protective activity in the future.

[1] We previously blogged about the EEOC’s change in focus here.

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

thT9B6FHE7By Gerald L. Maatman, Jr. and Alex W. Karasik

In what has become an oft-used recipe in the EEOC cookbook of Title VII retaliation litigation, the government has once again utilized the strategy of taking an employer’s deposition and thereafter moving for summary judgment.

In EEOC v. Peters’ Bakery, No. 13-CV-04507, 2016 U.S. Dist. LEXIS 54379 (N.D. Cal. Apr. 21, 2016), a case we previously blogged about here, an employee filed an EEOC charge alleging race and national origin discrimination and retaliation against her employer, Peters’ Bakery (“the Bakery”).  Thereafter, following the employee’s Internet postings accusing the Bakery’s owner, Charles Peters, of being racist, Mr. Peters filed a defamation charge against the employee, which subsequently led to the EEOC’s additional retaliation claim for subjecting her to that lawsuit.  After deposing Mr. Peters, the EEOC moved for partial summary judgment.  Judge Freeman of the U.S. District Court for the Northern District of California denied the EEOC’s motion for partial summary judgment, finding there was a disputed issue of material fact as to whether the employee’s filing of the EEOC charge was the but-for cause of Mr. Peters’ filing of the defamation action.

EEOC v. Peters’ Bakery illustrates how broadly the Commission views the concept of retaliation.

Employers facing retaliation claims should take account of this case when being deposed by the EEOC as, pursuant to its “recipe for retaliation claims,” the government will use any unfavorable deposition testimony as the “ingredients” in its likely forthcoming motion for summary judgment.

Case Background

The charging party, a Hispanic employee, had worked for the Bakery for several years.  On September 27, 2011, the employee filed an EEOC charge against the Bakery alleging discrimination based on race and national origin and retaliation based upon protected activity.  On November 3, 2011, the EEOC issued a Notice of Charge of Discrimination informing the employer of the charge asserted by the employee.  After Mr. Peters’ girlfriend found Internet postings by the employee accusing him of being racist, on April 19, 2012, Mr. Peters filed a defamation action against the employee in the Small Claims Division of the Santa Clara County Superior Court, alleging defamation occurring on November 3, 2011 (the date of the EEOC Notice of Charge of Discrimination).  Id. at *2.

On September 30, 2013, the EEOC filed its lawsuit against Peters’ Bakery, asserting two claims under Title VII against the Bakery based upon Mr. Peters’ conduct toward the employee.  The first claim alleged that Mr. Peters harassed and discriminated against the employee on the basis of her race and national origin.  The second claim alleged that the Bakery retaliated against the employee after she engaged in the protected activity of filing an EEOC charge by, among other things, subjecting her to the defamation action filed by Mr. Peters; refusing to pay her back wages and benefits following her reinstatement to employment pursuant to a labor arbitration; subjecting her to retaliatory discipline; and circulating a copy of her EEOC charge to her co-workers in an attempt to chill support for her.  Id. at *2-3.

The EEOC moved for partial summary judgment with respect to the second claim, specifically, that Mr. Peters’ defamation action against the employee constituted unlawful retaliation for protected activity.

The Decision

Judge Freeman denied the EEOC’s motion for partial summary judgment regarding the retaliation claim.  The Court noted that under the relevant provision of Title VII, 42 U.S.C. § 2000e-3(a), the elements of a prima facie retaliation claim are: “(1) the employee engaged in a protected activity, (2) she suffered an adverse employment action, and (3) there was a causal link between the protected activity and the adverse employment action.”  Id. at *4-5 (quoting Davis v. Team Elec. Co., 520 F.3d 1080, 1093-94 (9th Cir. 2008)).

In regards to the first element, the Court noted it was undisputed that the employee filed an EEOC charge against her employer, which constituted protected activity.  Id. at *5.  Addressing the second element, Defendant argued that the filing of his defamation action in this particular case did not dissuade the employee from pursuing her charge and, in fact, three of her co-workers showed up at her defamation hearing to support her.  The Court rejected this argument, noting the standard was objective and looks to whether a reasonable employee may be dissuaded from pursuing or supporting such charges.  Id. at *5-6.

Thereafter, the Court reasoned that the EEOC’s motion turned on the third element — the causal link between the employer’s conduct and the protected activity.  In order to establish this element, “a plaintiff making a retaliation claim under § 2000e-3(a) must establish that his or her protected activity was a but-for cause of the alleged adverse action by the employer.”  Id. at *6-7 (quoting Univ. of Tex. Sw. Med. Ctr. v. Nassar, 133 S. Ct. 2517, 2534 (2013).  The EEOC argued that the record evidence gave rise to only one inference, i.e., that Mr. Peters filed the defamation action against the employee because she filed an EEOC charge against the Bakery.  The EEOC supported this contention by noting that Mr. Peters’ defamation complaint stated on its face that the defamation occurred on November 3, 2011, the date of the EEOC Notice of Charge of Discrimination.

In opposition to the motion, the Bakery asserted that the EEOC excluded critical testimony from Mr. Peters’ deposition excerpt, and that the excluded testimony gave rise to a reasonable inference that Mr. Peters filed the defamation action at least in part because of statements that the employee published on the Internet.  Specifically, the EEOC excluded Mr. Peters’ testimony stating that after his girlfriend found the statements online, “I was very upset about being accused of being a racist on the [I]nternet.  So I filed a defamation lawsuit in small claims court.”  Id. at *8-9.  The EEOC objected to Mr. Peters’ deposition and declaration statements regarding his girlfriend’s discovery of the statements, asserting that the challenged statements constituted inadmissible hearsay under Federal Rule of Evidence 802 and were conclusory.  The Court rejected this argument, finding that they were not presented for the truth of the matter asserted and that the employee actually published the claimed statements to the Internet, which were personally viewed by Mr. Peters after his girlfriend discovered the statements.

As to the merits, the EEOC argued in reply to the Bakery’s opposition that the only reasonable inference to be drawn from Mr. Peters’ deposition testimony is that he filed the defamation action against the employee because she filed an EEOC charge against the Bakery.  To support this argument, the EEOC cited an affidavit submitted by Mr. Peters’ which asserted “She made allegations that weren’t true in the EEOC charge,” and deposition testimony where Peters conceded that the employee never posted derogatory comments about the Bakery.  Id. at *11-12.  Rejecting this contention, the Court found that while the EEOC’s evidence was “quite strong,” it was insufficient to establish as a matter of law that the employee’s filing of the EEOC charge was the but-for cause of Peters’ filing of the defamation action against her.  Id. at *13.  Further, the Court found that “the testimony in question states only that [the employee] never posted a bad comment about the Bakery.  That statement does not actually conflict with Mr. Peters’ assertion that he believed [she] had posted negative comments on the Internet about him.”  Id. at *14.  Accordingly, the Court denied the EEOC’s motion for partial summary judgment, finding there was a disputed issue of material fact as to whether the employee’s filing of the EEOC charge was the but-for cause of Mr. Peters’ filing of the defamation action.  Id. at *14-15.

Implication For Employers

Employers must be aware of this consistently utilized EEOC “recipe for retaliation claims”, where the government takes an employer’s deposition testimony and thereafter bakes it into a motion for summary judgment.  Accordingly, employers must be careful in how they approach these depositions so as to not give the EEOC the ingredients it needs to cook-up a successful summary judgment motion.  Further, when employers have non-retaliatory reasons for actions taken against employees who previously brought EEOC charges, it is crucial that they not only get this testimony into the record on deposition, but also highlight this information when responding to the EEOC’s likely forthcoming summary judgment motion, as the government will almost certainly neglect to use any employer-friendly ingredients in its summary judgment recipe for retaliation claims.

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

Connecticut-sealBy Gerald L. Maatman, Jr. and Alex W. Karasik

Anti-discrimination laws command that “thou shall not retaliate…” The recent ruling in EEOC v. Day & Zimmerman NPS, Inc., Case No. 15-CV-01416 (D. Conn Apr. 12, 2016), is a case study in how employers can be taken to task for allegedly retaliating against workers who claim discrimination.

In this case, the EEOC brought an ADA action against the employer defendant, alleging it retaliated against an employee by sending a letter, which identified the employee and discussed his discrimination charge, to 146 other Day & Zimmerman NPS, Inc. (“DZNPS”) employees who belonged to the same union.  The EEOC also alleged that the letter interfered with the rights of 146 current and former employees under the ADA to communicate with the EEOC regarding potential unlawful discrimination.  After defendant moved to dismiss the ADA retaliation and interference claims, Judge Victor A. Bolden of the U.S. District Court for the District of Connecticut denied the employer’s motion to dismiss on the grounds that the EEOC’s allegations were sufficient to state plausible claims for retaliation and interference under Sections 503(a) and 503(b) of the ADA.

This ruling serves as a cautionary tale for employers facing discrimination charges brought by employees, and shows the breadth of anti-discrimination prohibitions on retaliation.

It illustrates how widespread internal communication regarding such charges could potentially be viewed as retaliation or interference under the ADA in the context of a motion to dismiss.

Case Background

In October 2012, a DZNPS employee, who was a member of Local 35 of the International Brotherhood of Electrical Workers (“Local 35”) filed a charge of discrimination with the EEOC, alleging that his employer failed to accommodate his disability reasonably and unlawfully terminated his employment.  In March 2014, the EEOC sought information from DZNPS as part of its investigation of the employee’s charge, including the names and contact information of other electricians who had worked for DZNPS at the Millstone Power Station in Waterford, Connecticut in the fall of 2012.

In June 2014, before providing the requested information to the EEOC, DZNPS sent a letter to approximately 146 individuals, all of whom were members of Local 35 and all of whom had worked or continued to work for DZNPS.  In the June 2014 letter, DZNPS identified the allegedly aggrieved employee by name and indicated that he had filed a charge of discrimination on the basis of disability.  The letter identified his union local, the medical restrictions on his ability to work, and the accommodation he had requested.  It further informed the recipients of their right to refuse to speak to the EEOC investigator and offered them the option to have DZNPS counsel present if they chose to speak to the EEOC.  Id. at 2-3.

On May 20, 2015, the EEOC issued a Letter of Determination to DZNPS, finding reasonable cause to believe that the ADA had been violated.  Following unsuccessful conciliation, the EEOC filed a complaint on September 28, 2015.  The EEOC alleged that since at least June 2014, DZNPS engaged in unlawful employment practices with respect to a group of electricians hired to work at the Millstone Power Station, in violation of Sections 503(a) and 503(b) of the ADA.  Id. at 3.  Thereafter, DZNPS moved to dismiss the complaint.

The Ruling

Judge Bolden denied DZNPS’s motion to dismiss without prejudice, holding that the EEOC’s claims of retaliation and interference under the ADA may proceed.  Pursuant to Section 503(a) of the ADA, the EEOC alleged that defendant unlawfully retaliated against the employee because he filed a charge of discrimination with the EEOC.  Id. at 4.  The Court noted that to plead a retaliation claim sufficiently in an employment discrimination context, the Second Circuit has held that “the plaintiff must plausibly allege that: (1) defendants discriminated—or took an adverse employment action—against him, (2) ‘because’ he has opposed any unlawful employment practice.”  Id. at 5 (quoting Vega v. Hempstead Union Free Sch. Dist., 801 F.3d 72, 90 (2d Cir. 2015)).  Defendant argued that the ADA retaliation claim should be dismissed because the EEOC’s claims failed on both prongs.  Id.  First, defendant argued that the EEOC had not alleged that DZNPS took any adverse employment action against the employee.  Second, defendant argued that even if the EEOC had plausibly alleged an adverse employment action, it did not allege facts showing that the action was caused by the employee’s protected activity.  Id. at 5.

The Court rejected both of defendant’s arguments.  First, the Court noted how case law authorities have routinely held that when an employer disseminates an employee’s administrative charge of discrimination to the employee’s colleagues, a reasonable fact-finder could determine that such conduct constitutes an adverse employment action.  Id. at 6.  As to the second prong, the Court held that the three-month gap between when the June 2014 letter was sent and when the EEOC contacted DZNPS to request names and contact information for other electricians who had worked for defendant in the Fall of 2012 provided sufficient temporal proximity to satisfy the causation prong.  Id. at 7-8.  Specifically, the Court found it was plausible that the first opportunity to retaliate against the employee, whom they had already terminated, was when the EEOC provided a list of fellow union members to whom defendant could disseminate the potentially damaging EEOC charge.  Id.  Accordingly, denying the motion to dismiss, the Court noted that it could not conclude as a matter of law that defendant’s disclosure of the details of the employee’s EEOC disability discrimination charge in the June 2014 letter could not plausibly have been a retaliatory act in violation of the employee’s rights under the ADA.  Id. at 8.

In regards to the ADA Section 503(b) interference claim asserted by the EEOC, the Court initially noted that neither the Supreme Court nor the Second Circuit has yet outlined a test for an interference claim under the ADA.  Id. at 9.  Thereafter, the Court found that while it was true that the EEOC did not allege any direct evidence of DZNPS’s intent behind the June 2014 letter, the issue of an employer’s intent is a question of fact that cannot be resolved on a motion to dismiss.  Further, the Court held that “the disclosure of sensitive personal information about an individual could well dissuade that individual from making or supporting a charge of discrimination under the ADA. Therefore, the Court reasonably could infer that the letter could have the effect of interfering with or intimidating [the employee] and the letter’s recipients with respect to communicating with the EEOC about potential disability discrimination by [d]efendant.”  Id. at 10.  Accordingly, the Court denied defendant’s motion to dismiss the retaliation and interference claims brought under the ADA, while also deferring to rule on DZNPS’s arguments regarding the available prayers for relief.  Id. at 13-14.

Implications For Employers

This ruling is instructive as to why employers should exercise restraint when considering whether to internally disclose information about charges of discrimination filed by an employee, especially on a widespread basis.  Courts may view such conduct as obstructive to employees’ rights to file charges with administrative agencies.  Accordingly, employers should carefully limit internal communication about such charges to avoid creating the perception that they are retaliating against employees who bring charges or interfering with other employees’ rights to file future charges.

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

thNB9IMGHGBy Julie G. Yap and Alison H. Hong 

In Arizona Ex Rel. Horne v. The Geo Group, No. 13-16081 (9th Cir. Mar. 14, 2016), the U.S. Court of Appeal for the Ninth Circuit vacated the district court’s summary judgment orders and reinstated a pattern or practice action brought by the Equal Employment Opportunity Commission and the Arizona Civil Rights Division against The Geo Group, Inc. (“Geo”).  Most significant is the Ninth Circuit’s ruling that the EEOC and the Division sufficiently conciliated its class claims in light of Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015).  Further, the Ninth Circuit held that Title VII’s 300-day limitations period starts to run from the date the first aggrieved employee files an agency charge and that, in an EEOC pattern or practice action, an aggrieved employee is not required to file a new agency charge for acts occurring after the reasonable cause determination if the claims are “like or reasonably related” to the initial charge.

In sum, the Ninth Circuit’s decision emphasized that the EEOC deserves “flexibility” and “discretion” to investigate and litigate claims with limited interference from the courts, and shows that Mach Mining, while helpful, is not a panacea for all overreaching agency conduct.

Background

On June 5, 2009, a female corrections officer, Alice Hancock, filed a charge of discrimination with the Arizona Civil Rights Division (“the Division”) against her employer The Geo Group, Inc. alleging gender-based discrimination and harassment as well as retaliation for reporting such conduct.  Id. at 7.  After agency investigations led to identification of other potential aggrieved employees, the Division issued a reasonable cause determination concluding Geo had violated Arizona state laws prohibiting discrimination, harassment, and retaliation against “Hancock and a class of female employees” at two correctional facilities operated and managed by Geo.  Id. at 8-9.  After conveying a settlement proposal to Geo and completing a conciliation session, the Division and the EEOC filed suit on behalf of Hancock and similarly situated employees at the two correctional facilities.  Id. at 10.  The District Court then granted Geo’s motions for partial summary judgment dismissing, in part, the claims of several employees who were not identified until after filing of the complaint on the basis that these individuals’ claims were not conciliated, and also, dismissing several employees who had not alleged acts within 300 days of the reasonable cause determination.  Id. at 11-12.

The Ninth Circuit’s Review And Decision

In reversing the District Court’s holding that the EEOC must identify and conciliate on behalf of each aggrieved employee prior to bringing a pattern or practice action, the Ninth Circuit began by analyzing the U.S. Supreme Court’s ruling in Mach Mining.  While recognizing that the EEOC’s pre-suit conciliation efforts are subject to judicial review, the Ninth Circuit emphasized the Supreme Court’s discussion on the “limited” and “relatively bare bones review” process, and further, reiterated that any analysis of good faith efforts would improperly extend such review.  Id. at 15-17.  The Ninth Circuit held that pre-suit conciliatory requirements are satisfied in an EEOC pattern or practice action if there have been attempts to conciliate “on behalf of an identified class of individuals.”  Id. at 18.  The Ninth Circuit refused to impose any additional requirements, such as identification of each aggrieved employee, on the grounds that the Supreme Court in Mach Mining did not require anything more.   Id. at 18-19.

The Ninth Circuit further reasoned that requiring conciliation on an individual basis would effectively bar recovery on behalf of those class members not yet identified at the time of filing suit, noting private litigants are able to do.  Id. at 19.  The Ninth Circuit recognized, however, that there may be limits where a class extends nationwide, but the investigation is based on less than a dozen employees.  Id. at 19 fn. 6.  Here, such limitation did not exist where there was investigation into multiple aggrieved employees in two facilities, the two facilities were identified in the reasonable cause determination and part of pre-suit conciliations efforts, and the pattern or practice action was limited in scope to the two facilities.  Id.  The Ninth Circuit additionally stated its holding is consistent with “the Supreme Court’s broad interpretation of the EEOC’s enforcement powers” and its prior acknowledgement of case law holding “the EEOC is not required to provide documentation of individual attempts to conciliate on behalf of each potential claimant in a [pattern or practice action].”  Id. at 19-20.

Next, the Ninth Circuit reversed the dismissal of employees who had not alleged acts within 300 days of the Division’s reasonable cause determination, holding that  the timeliness of other aggrieved employees’ claims in an EEOC pattern or practice action is calculated from 300 days prior to the first aggrieved employee’s charge, the same as for private litigants.  Id. at 24.  The Ninth Circuit further held that an aggrieved employee in an EEOC pattern or practice action who alleges unlawful conduct occurring after the reasonable cause determination is not required to file a new agency charge if the claim is “like or reasonably related” to the initial charge.  Id. at 27.  As such, the Ninth Circuit determined that the District Court’s per se exclusion of any discrimination or retaliation that occurred after the date of the reasonable cause determination was improper.  Id. at 28-29.

Implications For Employers

The Ninth Circuit’s ruling in The Geo Group, Inc. appears to be a win for the EEOC, but it is not without limits as the pattern or practice action against Geo dealt with a more limited class of alleged victims.  While the Ninth Circuit ruled that the EEOC does not need to conciliate on behalf of each aggrieved employee by name, it also noted there must be a sufficiently clear scope of the class of alleged victims, and further cautioned that any investigation must be related in scope to the actual litigation.  Time will show how far the EEOC tries to push the ruling in The Geo Group, Inc. as well as the Ninth Circuit’s interpretation of Mach Mining to broaden the scope of any future pattern or practice actions.

calmBy Gerald L. Maatman, Jr.

Today I had the privilege of attending the 24th Annual Employment Practices Liability Insurance Program hosted by the American Conference Institute in New York City (I moderated a session on EEOC litigation).

Constance Barker, one of the five Commissioners at the U.S. Equal Employment Opportunity Commission, gave the keynote address at the Program. Her presentation was fascinating, and focused largely on the future enforcement litigation activities of the EEOC for 2016. As the tag line of the old E.F. Hutton TV commercial suggested, “when the EEOC talks, employers should listen….” Commissioner Barker’s views and pronouncements are important for employers in crafting their workplace compliance strategies.

Focus Of Possible EEOC Activities

Commissioner Barker noted that 2016 is apt to see the EEOC issuing various regulations and guidance as the final year of the Obama Administration winds down. As she said at today’s Program, “expect a lot of activity…” In addition to regulations on GINA, the ADA, and wellness plans, Commissioner Barker asserted that other guidance is likely in the areas of retaliation, joint employer liability, leave policies, and national origin discrimination relative to Muslim workers. Commission Barker advised employers to take a close look at the proposed retaliation guidance, which she termed was “huge, huge, huge…” In particular, she cited the guidance’s expansive view of what constitutes protected activity, and how even discipline over “do not discuss compensation” policies would constitute retaliation (on the premise that discussing pay is protected activity).

Systemic Litigation Targets

Commissioner Barker opined that the healthcare, restaurant, and manufacturing industries would see significant litigation activity in 2016. Moreover, race, gender, pregnancy, and leave issues will be “litigation hot spots” for those industries. With nearly 25% of the EEOC’s docket now focus on systemic litigation involving assertion of claims on behalf of groups of employees, Commissioner Barker said that “leave and accommodation policies” also will be prime targets for systemic litigation.

Commissioner Barker shared the view that certain leave policies are on the EEOC’s litigation radar screen, such as policies that cap leave at a certain number of days; policies that have no accommodation safeguards; “100% healed” policies; and policies prohibiting leave if a worker is not FMLA-eligible.

New Developing Areas

Commissioner Barker also predicted a continuing commitment by the EEOC to “develop the law” on joint employer concepts, LGBT rights, workplace arbitration, and protections for workers in the gig economy. She noted that various agencies – such as the NLRB – have been quite aggressive in expanding traditional notions of employer liability, and that employers should be mindful that the EEOC is sometimes aligned to those views too.

In broader terms, this squarely raises the issue of the proper role and responsibility of the EEOC. Should it enforce the law as written or expand the law to maximize the reach and public policies within employment discrimination prohibitions? Many critics of the EEOC have cited its litigation focus as further evidence that the Commission is an activist agency that is result-oriented and willing to do whatever it takes to pursue litigation enforcement strategies it deems appropriate.

This issue is sure to heat up further in 2016.

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

apple-full2.jpgBy Christopher DeGroff and Robb McFadden

Fresh on the heels of a full defense verdict in one of the EEOC’s highest profile sexual harassment cases of 2012-2013, the Commission was dealt another blow on April 19, 2013, when the U.S. District Court for the Eastern District of Washington dismissed a closely related retaliation case because of the lack of admissible evidence supporting those claims. The ruling — EEOC v. Evans Fruit, No 10-CV-3093, 2013 U.S. Dist. LEXIS 56668 (E.D. Wash. Apr. 19, 2013) — represents another significant setback for the Commission and a rebuke of its questionable litigation tactics.  

Factual Background

In EEOC v. Evans Fruit, No 10-CV-3093 (E.D. Wash.), the EEOC sued Evans Fruit on behalf of 10 charging parties who claimed that they were retaliated against for participating in the EEOC’s investigation into allegations of sexual harassment. The retaliation claims stemmed from a meeting between EEOC attorneys and the claimants, a group of former Evans Fruit employees, at a public library in Sunnyside, Washington. One of the charging parties recognized two men at the library who he believed were Evans Fruit employees. The EEOC argued that the employees’ presence at the library was meant to intimidate the claimants and further asserted that several of the individuals were threatened after they attended the meeting. In moving for summary judgment, Evans Fruit challenged the evidentiary basis for the EEOC’s assertions and argued that there was no proof of retaliation. 

The Court’s Decision

On April 19, 2013, Judge Lonny R. Suko granted Evans Fruit’s motion for summary judgment, dismissing all 10 of the EEOC’s retaliation claims. Significantly, the Court noted that unlike sexual harassment claims that take into account whether the alleged victim subjectively believed the work environment was hostile or abusive, retaliation claims are based on an objective, reasonable person standard. Thus, although “out of court statements relayed to a sexual harassment claimant regarding similar acts of harassment in the workplace may be admissible for the purpose of showing the effect on the listener (the claimant),” such statements serve no legitimate purpose in evaluating the charging parties’ retaliation claims because the “subjective effect of a statement on a particular claimant is irrelevant.”  Id. at *10.

In reviewing the EEOC’s purported evidence of retaliation, the Court found that none of the claimants could reasonably have believed that their presence at the library was retaliatory based on what they knew at the time, particularly because all but one of the claimants were either unaware of the two men’s presence at the library or did not believe their presence was significant at the time. Critically, the Court ruled that the claimants’ testimony that they later came to believe that they had been retaliated against — after they learned of the men’s identities and heard that threats had been made by third parties against those who attended the meeting — was based on out of court statements offered to prove the truth of the matter asserted. Finding that nearly all of the EEOC’s evidence was based on inadmissible hearsay, the Court granted Evans Fruit’s motion for summary judgment and dismissed all 10 of the claimants’ retaliation claims.

Implications For Employers

The EEOC has shown from time to time that it will play fast and loose with the “facts,” oftentimes claiming that second-hand rumors, gossip, and even its own pleadings and arguments are “evidence” of Title VII violations. Courtesy of the rule against hearsay, the Court’s decision in Evans Fruit shattered these smoke-and-mirrors tactics. 

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

udco.bmpBy Christopher DeGroff and Gerald L. Maatman, Jr.

In yet another case regarding discovery of social media content, Magistrate Judge Michael E. Hegarty of the U.S. District Court for the District of Colorado recently sanctioned the EEOC for its efforts to evade discovery of social media content in EEOC v. The Original Honeybaked Ham, No 11-CV-2560 (D. Colo. Feb. 27, 2013), a systemic sexual harassment and retaliation case. The Defendant argued that many of its employees utilized social media to communicate and therefore claimed that the employees’ online statements were discoverable. On several occasions, the EEOC made the Defendant’s discovery efforts “more time consuming, laborious, and adversarial than it should have been.” Id. at 2. Thus, the Defendant filed a motion for sanctions in a last-ditch effort to compel the EEOC to comply with its discovery requests. Siding with the Defendant, Magistrate Judge Hegarty granted in part and denied in part the Defendant’s request for sanctions.

Background Of The Case

In 2010, the EEOC investigated allegations that the Defendant’s regional manager subjected Wendy Cabrera, and other female employees to repeated and offensive sexual comments and physical touching. One year later, the EEOC initiated claims of sexual harassment, hostile environment, and retaliation, alleging that the Defendant subjected approximately 20 women employees to sexual harassment. Id. at 1. One of the charging parties, Cabrera, claimed that her supervisor solicited sex from her and other women employees. Cabrera also claimed that after she reported the harassment, the Defendant terminated in her in retaliation. The EEOC demanded the Defendant provide back pay and compensatory and punitive damages to the allegedly aggrieved individuals. The EEOC also requested that the Court require the Defendant to initiate anti-discrimination training for its managers and human resource personnel.

In efforts to build its defense, the Defendant requested discovery of the employees’ social media accounts, text messages, and emails. The Defendant argued that such information was relevant to the lawsuit because, for example, Cabrera posted on her Facebook page her hopes to recover $400,000 from the lawsuit; statements about several personal matters; “musings about her emotional state in having lost a beloved pet as well as having suffered a broken relationship; other writings addressing her positive outlook on how her life was post-termination; her self-described sexual aggressiveness; statements about actions she engaged in as a supervisor with Defendant; sexually amorous communications with other class members; [and,] her post-termination employment and income opportunities and financial condition[.]” EEOC v. The Original Honeybaked Ham, No 11-CV-02560, at 304 (D. Colo. Nov. 7, 2012).  In objecting to the Defendant’s discovery request, th

e EEOC asserted that the Defendant’s request was overly broad and intruded on the employees’ privacy.

In November 2012, the Court ruled on the parties’ discovery dispute and held that the information the employees posted on their Facebook profiles is relevant to the lawsuit and therefore discoverable. Noting that social media presents “thorny and novel issues,” the Court reasoned that the employees’ Facebook postings are discoverable because they may contain information that could lead to discovery of admissible evidence relating to the lawsuit. Id. at 2. The Court rejected the EEOC’s privacy objections and noted that the employees shared information in a public forum, knowing that it was accessible by other people. Nevertheless, the Court did not disregard the EEOC’s privacy concerns. Instead, the Court selected a forensic expert as a special master to review the requested documents – a process it defined as necessary to “gather only discoverable information.” Id. at 4-5.

Despite the Court’s order, the EEOC continued to refuse to provide requested discovery and failed to engage in its mandatory pre-suit conciliation efforts. Thus, in January 2013, HBH filed a motion to dismiss the EEOC’s claims for failure to satisfy its pre-suit requirements under Title VII.  On January 15, 2013, the Court joined with a litany of recent rulings (discussed here, here, and here) and held that the EEOC’s pre-litigation efforts were unacceptable under Title VII’s framework.  Thus, the Court barred the EEOC from asserting claims not specifically identified during pre-suit litigation and prohibited the EEOC from seeking relief on behalf of individuals who HBH could not reasonably identify from the information provided by the EEOC. 

Then, most recently, the Defendant filed a motion for sanctions against the EEOC for its continued endeavors to thwart the discovery of social media evidence. Magistrate Judge Hegarty’s recent ruling serves as warning to the EEOC that preventing discovery of relevant social media content may result in sanctions.

The Court’s Ruling

The Court found that the EEOC prolonged the discovery process and caused unnecessary expense and delay on several occasions. The Court found that “in certain respects, the EEOC has been negligent in its discovery obligations, dilatory in cooperating with defense counsel, and somewhat cavalier in its responsibility to the United States District Court. EEOC counsel has prematurely made promises about agreed-upon discovery methodology and procedure when they apparently had no authority to do so . . . .” Id. at 2. 

Despite the EEOC’s clear foul play, the Court noted that it faced a hurdle in granting the Defendant’s motion for sanctions because although the EEOC’s conduct was “inappropriate and obstreperous,” it did not rise to a level that is sanctionable under most rules governing the litigation process. Id. at 3. However, the Court found a remedy vis-à-vis Fed. R. Civ. P. 16(f)(1). The Court explained that Rule 16(f)(1) grants courts the inherent power to sanction parties for unnecessary burdens. Thus, the under Rule 16(f)(1), the Court held that it could sanction the EEOC for its actions that negatively affected the Court’s management of its docket and caused unnecessary burdens on the Defendant and delays in the Court’s efforts to proceed with the case. Id. at 6.

Implications For Employers

The EEOC’s tactics in EEOC v. The Original Honeybaked Ham ultimately resulted in a sanction fee against the Commission. The Court’s ruling warns the EEOC that using discovery as a tool to create ongoing and unnecessary burdens is unacceptable. 

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

ndil seal.gifBy Gerald L. Maatman, Jr. and Christopher DeGroff

As we blogged about here previously, in the EEOC’s first draft of its Strategic Enforcement Plan, the Commission telegraphed that it was increasingly focused on preventing, and when necessary, litigating workplace harassment and retaliation allegations. The EEOC’s warning was no bluff, for in 2012 the EEOC filed a significant amount of harassment and retaliation lawsuits (discussed here, here, and here). The EEOC kicked off 2013 by entering a series of consent decrees resolving allegations of retaliation. One week after we blogged about the EEOC’s rash of retaliation settlements, Judge Kocoras of the U.S. District Court for the Northern District of Illinois approved a consent decree in EEOC v. South Loop Club, Case No. 12-CV-07677 (N.D. Ill. Feb. 6, 2013), resolving allegations of sex harassment and retaliation. As we predicted in our EEOC-Initiated Litigation book, the EEOC’s SEP is functioning as the blueprint for the Commission’s enforcement activity. The recent consent decree in EEOC v. South Loop Club signals that the EEOC continues to vigorously pursue its stated “big six” agenda items enunciated in its SEP.

Background Of The Consent Decree

The case began when five women who worked at South Loop Club, a Chicago bar and restaurant, filed charges with the EEOC alleging discrimination in violation of Title VII. Pursuant to its statutory obligations, the EEOC investigated the charges and found reasonable cause to believe that the Defendant discriminated against the charging parties. Through the EEOC’s investigation, the Commission allegedly found reason to believe that the Defendant also discriminated against an unnamed “class” of female employees. In July 2013, the parties discussed conciliation, but their efforts were fruitless. 

Two months later, the EEOC filed a complaint in the U.S. District Court for the Northern District of Illinois alleging that the Defendant discriminated against a “class” of female employees by subjecting them to harassment because of their sex, retaliating against them, and constructively discharging them as a result of the sexual harassment. The EEOC asserted that the Defendant harassed the charging parties by subjecting them to repeated acts and comments of a sexual nature that were demeaning and unwelcome. Specifically, the EEOC alleged that the Defendant made comments about the female employees’ bodies and touched female employees’ bodies. In October, four additional employees moved to intervene and filed a complaint.  After a series of status hearings before Judge Kocoras and before the parties even initiated discovery, they settled the litigation and filed a joint motion for entry of a consent decree. The next day, Judge Kocoras signed the parties’ motion.

Terms Of The Consent Decree

Judge Kocoras granted the EEOC’s motion for approval of the consent decree, which provides significant monetary relief to the allegedly aggrieved victims of sex harassment and retaliation (to the tune of $64,000). The consent decree also provides that the Defendant will pay $36,000 in attorneys’ fees and costs to counsel for the intervening plaintiffs.

In terms of equitable relief, the consent decree includes injunctions prohibiting the Defendant from future sexual or gender-based harassment or retaliation, including forbidding the toleration of a work environment that is sexually hostile to employees. Additionally, the Defendant must adopt a policy and training to prevent sexual harassment, gender-based harassment, and retaliation.

Implications For Employers

Although the monetary amount of this settlement is not as significant as some of the multi-million consent decrees the EEOC secured last year (discussed here and here), this case provides insight on the EEOC’s continued interest in pursuing harassment and retaliation lawsuits. Notably, much is at stake for employers that the EEOC investigates for discriminatory harassment and retaliation actions.  EEOC v. South Loop Club serves as a reminder to employers that when employees complain about workplace harassment, employers must take prompt action. Implementing a policy that requires an investigation of reported harassment or discrimination can aid in avoiding employer liability, and also work toward the goal of discrimination-free workplaces. 

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