EEOC Year-End Countdown

Court Issues Mixed Bag Discovery Decision In EEOC Nationwide Race Discrimination Case

Posted in Discovery

Bbagy 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.), a case we blogged about previously here, Judge Andrea Wood of the U.S. District Court for the Northern District of Illinois recently decided several discovery issues that have become increasingly common in large-scale, EEOC-initiated disparate impact litigation.

Judge Wood’s ruling is a mixed bag. On the one hand, Judge Wood allowed the EEOC to take discovery on certain background checks performed by Dollar General even though the EEOC did not claim that those background checks had a disparate impact. She also ruled that the EEOC could exceed the presumptive 25 interrogatory limit because the case was nationwide in scope.  She further held that pre-suit statistical analyses performed by the EEOC were protected by the deliberative process privilege. On the other hand, she ruled that EEOC documents subject to the deliberative process privilege may nonetheless be discoverable if an employer can demonstrate a particularized need for the materials that outweighs the EEOC’s need for confidentiality.

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. During the course of discovery, the EEOC sought information regarding other background checks performed by Dollar General. Dollar General refused to turn them over, arguing that the other background checks were not relevant to the EEOC’s claims.

Also during discovery, the EEOC served more than 25 interrogatories on Dollar General. In turn, Dollar General refused to answer four of the interrogatories that exceeded the presumptive 25 interrogatory limit under the applicable local rules.

Finally, Dollar General sought any statistical analyses the EEOC had regarding the purported disparate impact of Dollar General’s background check policy. The EEOC refused to turn its pre-suit analyses over, claiming that they were protected by the deliberative process privilege.

Both parties moved to compel discovery. Magistrate Judge Sheila Finnegan granted the EEOC’s motions to compel and denied Dollar General’s motion to compel. Dollar General subsequently filed Rule 72 objections to Magistrate Judge Finnegan’s report and recommendation.

The Court’s Decision

The Court began by considering whether Dollar General should be compelled to turn over documents regarding other, non-challenged background screening used by Dollar General.  Judge Wood held that the documents were relevant to Dollar General’s business necessity defense.  Id. at 4. Specifically, Judge Wood held that the EEOC was entitled to respond to Dollar General’s business necessity defense by showing that alternative, equally effective background checks were available to Dollar General. The Court found that the non-challenged background screening performed by Dollar General might represent such alternative background checks. Id. at 4-5.

The Court then rejected Dollar General’s argument that the EEOC was required to investigate any background checks it claimed were relevant before filing suit. Id. at 5. The Court held that such investigation would only be necessary if the EEOC was claiming the background checks had a disparate impact. Id. Because the EEOC was not challenging these other background screenings, the Court compelled Dollar General to turn over documents about its other background checks. Id.

The Court then addressed the excess interrogatories. The Court held that the EEOC was allowed to exceed 25 interrogatories because its claim was “nationwide in scope, raise[d] complicated data issues, and involve[d] many different legal and factual areas.” Id. at 7-8.

The Court next considered whether Dollar General could discover the EEOC’s pre-suit statistical analyses of Dollar General’s background check policies. After noting that “[t]he deliberative process privilege protects communications that are part of the decision-making process of a governmental agency,” the Court found that these analyses were protected by the deliberative process privilege because they were performed as the EEOC was determining whether to sue Dollar General. Id. at 8-9.

Nevertheless, the Court held that the EEOC might nonetheless be required to turn the analyses over if Dollar General could demonstrate a “particularized need for the documents that exceeds the EEOC’s need for confidentiality.” Id. at 11. The Court then remanded the issue to the Magistrate Judge so that she could decide whether Dollar General could make such a showing.

Implications For Employers

Employers involved in litigation with the EEOC should be aware of this decision because the EEOC will undoubtedly rely upon it when it seeks discovery regarding non-challenged employment policies and when it seeks to serve excess interrogatories in complex, nationwide cases. The EEOC will also try to use the ruling to shield any pre-suit statistical analyses it performed from discovery. However, employers also can use decision to support discovery gambits vis-à-vis the Commission; even if the EEOC’s pre-suit statistical analyses are protected by the deliberative process privilege, they are nonetheless subject to discovery because of some particularized need.

Readers can also find this post on our Workplace Class Action blog here.

Employers Beware: EEOC’s 2015 Performance And Accountability Report Reaffirms Its Commitment To High Profile, Systemic Litigation

Posted in EEOC Litigation

thCAD0SFA4By Christopher DeGroff, Gerald L. Maatman, Jr., and Jennifer A. Riley

On November 19, 2015, the EEOC released its annual 2015 Performance and Accountability Report (“PAR”). The Report reflects the progress of the EEOC’s continued efforts to meet the enforcement priorities outlined in its 2012 strategic enforcement plan (“SEP”), including its systemic litigation initiative. For employers, this is perhaps the most important document issued by the Commission. In short, it should be required reading for corporate counsel and professionals involved in compliance efforts relative to workplace litigation issues.

In its SEP, among other things, the EEOC underscored its efforts to champion bigger, more media-focused “systemic” cases, including pattern or practice cases where the alleged discrimination “has a broad impact on an industry, occupation, business, or geographic area.” In the SEP, the EEOC set forth a goal to ensure that systemic cases make up at least 20% of its annual litigation docket and at least 22% to 24% of its litigation docket by 2016. (Read more here.)

As background, the PAR is a “scorecard” of sorts for the EEOC. It provides a report on its activities during the past fiscal year, from October 1, 2014 through September 30, 2015, including its progress toward meeting the goals outlined in the SEP, and provides a preview of what we can expect to see from the EEOC in the upcoming months.

In sum, although the Report acknowledges that the EEOC filed fewer systemic lawsuits in FY 2015, the number of systemic investigations and recoveries exceeded FY 2014 levels. Despite significant setbacks in FY 2014 (read more here), the agency’s statistics trumpeted in the PAR show that, rather than backing down, the EEOC was inspired to be even more aggressive in FY 2015.

The EEOC’s Overall Results

The EEOC’s results reflect a mixed bag for employers.  The EEOC’s totals represent a slight increase in charges filed (93,727 in 2013, compared with 88,778 in 2014, and 89,385 in 2015),Monthly-Reports (2) and a slight increase in merits lawsuits (131 in 2013, compared with 133 in 2014, and 142 merits lawsuits in 2015).

However, the EEOC’s report reflects a steady decrease in the number of systemic lawsuits, both in the number filed (21 in 2013, compared with 17 in 2014, and 16 in 2015), and in the number of systemic lawsuits on-going in the court system (54 in 2013, compared with 57 in 2014, and 48 in 2015).

Although the agency completed more systemic investigations in 2015 than it completed in 2014, the EEOC’s numbers did not meet 2013 levels. In 2015, the agency completed more investigations than it completed in 2014, but fewer investigations than it completed in 2013 (300 in 2013, compared with 260 in 2014, and 268 in 2015).  The agency recovered more as a result of those investigations than it recovered in 2014, but less than it recovered in 2013 ($63 million in 2013, compared with $13 million in 2014, and $40 million in 2015).

Charges:   A Bigger Backlog

The EEOC reported that it received 89,385 charges alleging employment discrimination in 2015.  The number was up slightly over the number received in 2014 (88,778), but remains below the record-breaking recession-period numbers that we saw between 2008 and 2013.  During those years, the numbers steadily rose from 95,402 in 2008, to 93,277 in 2009, to 99,922 in 2010, and 99,947 in 2011, before starting a gradual decline to 99,412 in 2012 to 93,727 in 2013.

As of the end of FY 2015, the EEOC had a backlog of 76,408 charges, a slight increase of 750 charges over the backlog at the conclusion of FY 2014.

Settlements: Recoveries Soar

In its Report, the EEOC reported a surge in the total amount of monetary settlements.  Its administrative enforcement program produced $356.6 million from claim resolutions, up over $60 million from the $296.1 million that it collected in FY 2014.  The EEOC resolved 155 merits lawsuits in the federal district courts, for a total monetary recovery of $65.3 million, a substantial increase ($42.8 million) over the $22.5 million that it collected during FY 2014.  In addition, the EEOC resolved 6,360 complaints and secured more than $94.9 million in relief for federal employees and applicants who requested hearings in FY 2015.

Lawsuits: More Suits, Smaller Share Of Systemic Cases

In its 2015 PAR, the EEOC reported that, during fiscal year 2015, the EEOC filed 142 merits lawsuits, including 100 individual suits, and 42 suits involving “discriminatory policies or multiple victims,” of which 16 (or 11%) involved challenges to alleged systemic discrimination. According to the EEOC, in the 16 systemic lawsuits, the EEOC challenged a variety of types of alleged systemic discrimination, including an alleged age-based refusal to hire, a refusal to accommodate religious beliefs, an imposition of unnecessary medical restrictions, and a systematic failure to maintain records.

Whereas these numbers reflect an upward trend in the number of merits lawsuits, the growth of systemic lawsuits was stagnant. In 2013, the EEOC reported that it had filed 131 merits  lawsuits, compared with 133 merits lawsuits in 2014, and 142 merits lawsuits in 2015.  However, in 2013, the EEOC reported that 21 (16%) of those lawsuits were systemic suits, compared with 17 (13%) systemic lawsuits in 2014, and 16 (11%) systemic lawsuits in 2015.  These numbers might explain the agency’s effort in 2015 to report 40 (18.3%) “multiple victim” cases.

At the end of FY 2015, the EEOC had 218 cases on its active district court docket, of which 48 (22%) involved challenges to systemic discrimination. These numbers also reflect a decrease over the past two years.  At the end of FY 2013, the agency had 231 cases on its active docket, of which 54 (23%) involved challenges to systemic discrimination.  At the end of 2014, the agency had 228 cases on its active docket, of which 57 (or 25%) involved challenges to systemic discrimination.

Our “peek behind the numbers” suggests that the Commission’s prosecution of systemic lawsuits has stressed its budget, attorney workloads, and overall capacities. Big cases equate to significant hours of attorney time, and the EEOC’s capacity to file and prosecute an increasing number of systemic lawsuits has hit somewhat of a ceiling or cap due to budgetary and attorney workload limitations.

Systemic Investigations

With respect to investigations in FY 2015, the agency reported that it completed 268 systemic investigations and issued 109 cause findings. It resolved 70 systemic investigations by voluntary conciliation agreements and obtained over $33.5 million in remedies as a result of its systemic initiative.

While reflecting an increase over FY 2014, these numbers still did not achieve the agency’s FY 2013 results. One year ago, the EEOC reported completing only 260 systemic investigations and securing only $13 million in monetary relief. At the end of 2013, the EEOC had launched 300 systemic investigations, resulting in 63 settlements or conciliation agreements, and had recovered approximately $40 million in remedies.

Overall Implications For Employers

Do these numbers mean that the EEOC is backing off its systemic initiative? Not a chance in our view.  Although the EEOC filed fewer systemic lawsuits in FY 2015, the number of 7_Top_HR_Mistakes_Companies_Make_NEW_BANNER (2)systemic investigations and recoveries exceeded FY 2014 levels, and its recoveries represented a climb toward its FY 2013 numbers. As we predicted a year ago, rather than backing down, these numbers signal that the EEOC’s FY 2014 defeats inspired it to more aggressively pursue its agenda.

We expect the EEOC to continue to search for and to initiate systemic investigations to continue this upward trend in 2016. In its FY 2015 PAR, the EEOC continued to highlight its emphasis on “maximizing [its] impact” through its focus on systemic discrimination. The EEOC noted that, at the end of FY 2015, it employed more lead systemic investigators “whose work is dedicated exclusively to development and coordination of systemic investigations,” and more social science research staff.

The EEOC also noted that it continued its efforts to develop means to coordinate systemic investigations across offices. In particular, the EEOC reported that its Systemic Watch List, a software tool that matches ongoing investigations or lawsuits, has “proven integral” to improved coordination. The EEOC also reported that it completed its expansion of the CaseWorks system, a “central shared source of litigation support tools” that facilitate the collection and review of electronic discovery and enable “collaboration” in the development of cases for litigation.

In short, we do not expect the EEOC to back off its systemic initiative in 2016, but to be more aggressive in pursuing those cases that fit within its agenda. So numbers aside, these metrics reflect an agency committed to “big impact” lawsuits that “send a message” to the employer community.

Readers can also find this post on our Workplace Class Action blog here.



Ninth Circuit: The EEOC Can Subpoena Extensive Employee Information

Posted in Investigation Tactics and Administrative Subpoenas

9th-circuitBy Laura J. Maechtlen and Courtney K. Bohl

As our readers may recall, in November 2012, Judge G. Murray Snow of the U.S. District Court for the District of Arizona nixed a subpoena issued by the EEOC seeking employee pedigree information (name, address, telephone number and social security number), and information regarding the reasons for employee terminations. The court held that the EEOC did not need this information in order to determine whether the employer, McLane Company, Inc., allegedly violated Title VII. The EEOC appealed.

On October 27, 2015, the Ninth Circuit reversed and sustained the EEOC’s broad subpoena in EEOC v. McLane Company, Inc., Case No. 13-15126, 2015 U.S. App. LEXIS 187702 (9th Cir. Oct. 27, 2015). The Ninth Circuit held that employee pedigree information was relevant to the EEOC’s investigation and should be produced. Further, the Ninth Circuit held that information regarding termination reasons was also relevant to the investigation, and remanded the matter to the District Court to determine whether the production of this information would be unduly burdensome.

The Ninth Circuit’s opinion is a must read for employers, especially employers doing business in Ninth Circuit states (Alaska, Arizona, California, Idaho, Montana, Oregon and Washington). It gives the EEOC broad access to information during the course of an administrative investigation, even if such information is only tangentially related to the underlying charge. This decision will likely embolden the EEOC to demand direct contact information of employees, especially in systemic discrimination cases, thereby making the defense of such charges burdensome and expensive.

Background Facts

A McLane employee, Damiana Ochoa, filed a charge of discrimination against McLane. Ochoa alleged that when she tried to return to work after taking maternity leave, McLane informed her that she could not resume her position unless she passed a physical capability strength test. Id. at *2. Ochoa attempted the test three times. Id. Each time she failed, and, as a result, was terminated. Id.

The EEOC undertook an investigation into the charge, requesting certain information from McLane, including information on the strength test, and the employees who had been required to take the test. Id. at *4. McLane complied with most of the EEOC’s requests, but refused to disclose pedigree information of its employees and it’s the reasons it terminated employee test takers. Id. The EEOC filed a subpoena enforcement action against McLane seeking this information.

The District Court denied the EEOC’s request for this information and the EEOC appealed.

The Ninth Circuit’s Ruling

In considering whether the EEOC was entitled to employee pedigree information, the Ninth Circuit clarified that the EEOC is entitled to “virtually any material that might cast light on the allegations against the employer.” Id. at *9. Under this loose standard, the Ninth Circuit held that employee pedigree information was relevant to the EEOC’s investigation because such information could be used by the EEOC to speak with other employees who took the test and determine whether there was any truth to Ochoa’s allegations. Id. at *11-12.

The Ninth Circuit rejected all three of McLane’s arguments against the enforcement of the subpoena. Id. at *12-17. First, it rejected McLane’s argument that pedigree information was not relevant to the charge because Ochoa only alleged a disparate impact claim, not a disparate treatment claim. Id. at 12. The Ninth Circuit found such information was relevant, reasoning that Ochoa’s charge is framed “general enough” to support either theory. Id.

Second, it rejected McLane’s argument that pedigree information was not necessary to the EEOC’s investigation. The Ninth Circuit stressed that the governing standard was relevance, not necessity, and noted that the pedigree information was clearly relevant to Ochoa’s charge. Id. at +13.

Third, the Ninth Circuit rejected McLane’s argument that pedigree information was not relevant because the strength test was neutrally applied, which, McLane argued cannot, by definition, give rise to disparate treatment, systemic or otherwise. Id. at *15. The Ninth Circuit reasoned that even if the strength test applied to everyone, the test still could be applied in a discriminatory manner. Id. at *15-16. For example, McLane could fire the women who failed the test but not the men who failed. Id.

Finally, the Ninth Circuit turned to the issue of whether the EEOC was entitled to the reasons McLane terminated test takers. Id. at *17-18. Although it determined that this information relevant to the EEOC’s investigation, it noted that McLane did not have to produce this information if it would be unduly burdensome. Id. The Ninth Circuit thus remanded this issue to the District Court for further consideration.

Implication For Employers

The Ninth Circuit’s opinion broadens the scope of information the EEOC may receive when investigating a charge, requiring that a request only be somehow relevant to a charge — quite a loose standard. While employers should continue to object to EEOC requests on the bases of relevance and over breadth, employers should also “tee-up” their arguments that compliance with a request or subpoena is unduly burdensome.

Readers can also find this post on our Workplace Class Action blog here.

Progress, But Also Perpetuated Errors, In The EEOC’s Proposed GINA Rule Regarding Wellness Program Incentives

Posted in Regulatory / Guidance Issuance

thCAD0SFA4By Paul Kehoe and Larry Lorber

Today, the U.S. Equal Employment Opportunity Commission (“EEOC”) issued a Notice of Proposed Rulemaking addressing wellness program incentives under the Genetic Information Nondiscrimination Act (“GINA Proposed Rule”) in the Federal Register (here). This NRPM comes on the heels of the EEOC’s proposed rule covering wellness program incentives under the Americans With Disabilities Act (“ADA Proposed Rule”) released last April and discussed here. Today’s proposal should be required reading for corporate counsel and HR executives. The EEOC’s litigation enforcement program has targeted wellness programs, and GINA discrimination issues is also on the Commission’s radar.

Today’s Proposal

The EEOC received about 340 substantive comments from the ADA Proposed Rule, and one of many major concerns from the regulated community was the EEOC’s piecemeal approach to addressing wellness program incentives because it ignored spousal incentives. Today’s proposal attempts to fill that gap. However, the GINA Proposed Rule still ignores the primary concerns of the regulated community — that the EEOC is effectively usurping the regulations issued by the Departments of Labor, Health and Human Services, and Treasury (the “Tri-Agency Regulations”) by establishing a parallel — and more onerous — regulatory scheme related to wellness program incentives.

The new proposal likely represents an improvement over the ADA Proposed Rule on wellness programs in that the 30% incentive is calculated based on the total cost of the employee’s chosen coverage, but the devil is in the details. For example, the proposed apportionment provision permits a total incentive of $4,200 for a plan that costs $14,000, but only where the allocation to the employee is $1,800 if the single coverage plan costs $6,000 and $2,400 to the spouse and/or other dependents.  This mechanism ignores practical reality because many employers design wellness programs by providing an equal incentive for employees and spouses. As such, this requirement is inconsistent with the Tri-Agency Regulations.

In addition, the EEOC continues to assert that it has the authority to define just what is a “reasonably designed” wellness program. Congress and the Administration have already defined the term in the Affordable Care Act (“ACA”) and the Tri-Agency Regulations. Introducing a “similar” definition means that the EEOC intends to adopt a different standard than the one previously adopted by Congress in the ACA or the Departments of Labor, Treasury and HHS in the Tri-Agency Regulations.  Moreover, by importing the “reasonable design” requirement from “health-contingent wellness program,” the GINA Proposed Rule (again as in the ADA Proposed Rule) imputes the burdens previously associated only with health-contingent wellness programs to all wellness programs, which exceeds what is required under the ACA and the Tri-Agency Regulations.

Implications For Employers

While this rule, if promulgated, would provide some clarity for employers, it would, in conjunction with the ADA Proposed Rule, establish a parallel – and more onerous – compliance scheme than the scheme set forth in the Tri-Agency Regulations issued by agencies with the necessary authority and expertise. Ultimately, because more onerous regulations always establish the baseline when authority is diffused among various authorities and agencies, these EEOC regulations would become the de facto law of the land, usurping the Tri-Agency regulations and establish more roadblocks for employers to provide incentives to their workforces and their families. The comment period will be open for sixty days until December 29, 2015. Stay tuned!

Readers can also find this post on our Workplace Class Action blog here.

Another One Bites The Dust At “Mach” Speed: EEOC’s Age Discrimination Lawsuit Dismissed Based On Failure To Conciliate

Posted in EEOC Litigation

flag-28562_640By Gerald L. Maatman, Jr. and Howard M. Wexler

We’ve previously blogged about the impact the U.S. Supreme Court’s landmark decision in Mach Mining v. EEOC, 135 S. Ct. 1645 (2015), most recently here and here. As we predicted, the true impact of Mach Mining will not be known until federal courts around the country start to weigh in on its utility as a dispositive defense vis-à-vis the Commission’s conciliation obligation.  In a key case that all employers should read, Judge Lewis T. Babcock of the U.S. District Court for the District of Colorado, relying on Mach Mining, affirmed his prior dismissal of the EEOC’s lawsuit based on its conciliation failure before filing suit.

Case Background

In 2014 the EEOC filed suit against CollegeAmerica Denver Inc. alleging, in part, that the Separation Agreements that CollegeAmerica provided to the EEOC in connection with the EEOC’s investigation of Debbi Potts’ charges of discrimination denied employees other than Potts the full exercise of their rights under the Age Discrimination in Employment Act (the “ADEA”) and interfered with the statutorily assigned responsibility of the EEOC to investigate charges of discrimination in violation of Section 7(f)(4) of the ADEA, 29 U.S.C. § 626(f)(4).  Id. at 1-2. Prior to the Supreme Court’s Mach Mining decision, the Court dismissed this aspect of the EEOC’s lawsuit as a result of the EEOC’s failure to satisfy the ADEA requirements of notice and conciliation. Id. at 2. Three months after the Mach Mining decision came down, and eight months after the Court dismissed this aspect of the EEOC’s lawsuit, the EEOC filed a motion for reconsideration based on the “limited review” that judges are to apply when assessing the EEOC’s conciliation efforts. Id. at 3.

The Court’s Decision

Preliminarily, the Court criticized the EEOC’s motion for reconsideration based on timeliness, as the EEOC “inexplicably waited eight months to file its motion for reconsideration” and “did not file its motion for reconsideration for more than three months after the Supreme Court issued its decision in the Mach Mining.” Id.  As the EEOC failed “to offer any explanation for the lengthy delay in the filing of its motion for reconsideration,” the Court denied the motion on the grounds of timeliness. Id. However, the Court nonetheless addressed the merits of the EEOC’s argument that Mach Mining warranted reversal.

In reviewing the EEOC’s conciliation efforts pre-suit, the Court held that the EEOC’s conduct with respect to the Separation Agreements remained inadequate under the standards set forth in Mach Mining. Specifically, the EEOC failed to provide adequate notice to CollegeAmerica that the Separation Agreements were part of the EEOC investigation and findings of unlawful practices by CollegeAmerica. Furthermore, there was no evidence that the Separation Agreements were part of the parties’ discussions so as to give CollegeAmerica an opportunity to voluntarily revise them. Id. at 5

With respect to the appropriate remedy, the Court noted that in Mach Mining, the Supreme Court “included dictum that when a court finds in favor of an employer on the question of whether the requisite conciliation occurred, the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance.” Id. at 6. Here, however, the Court refused to grant such relief (in essence, rejecting the notion that a simply stay of the case should be entered so that the EEOC could undertake efforts to conciliate with the employer). Instead, the Court reasoned that a stay would severely prejudice CollegeAmerica (as ordering conciliation to take place at this juncture of the litigation) would require additional discovery and could significantly delay resolution of the pending retaliation claim. Id. at 7.

Implications For Employers

This decision yet again demonstrates the powerful tool that the Supreme Court provided to employers in Mach Mining. Because of the Supreme Court’s decision, the EEOC can no longer file suit against employers after paying mere lip-service to its conciliation efforts. Employers must be provided with sufficient notice of the EEOC’s allegations during the conciliation process prior to the EEOC filing suit. And as Judge Babcock determined, the EEOC cannot be assured that if called to task, a judge will simply order the Commission back to the conciliation table to negotiate over the case as it is required to do before filing a lawsuit per statute and Mach Mining. In certain circumstances, the appropriate remedy is outright dismissal of the case.

Readers can also find this post on our Workplace Class Action blog here.

The 2015 EEOC Lawsuit Filing Frenzy

Posted in EEOC Litigation

thCAD0SFA4By Gerald L. Maatman, Jr. 

As the EEOC’s fiscal year wound down as of September 30th, the Commission filed a slew of lawsuits. This year, the EEOC filed 62 lawsuits in September.

LXBN TV profiled our analysis of this “lawsuit filing frenzy,” which is offered here for our loyal blog readers.

Readers can find this post on our Workplace Class Action blog here.

Court Allows EEOC’s Discrimination Suit Over Religious Garb To Proceed To Jury

Posted in Motions for Summary Judgment

airplane_by_xfaststyle-d3a1ufjBy Gerald L. Maatman, Jr. and Christina M. Janice

In an order recently issued in EEOC v Jetstream Ground Services, Inc., Case No. 13-CV-02340 (D. Colo. Sept. 29, 2015), Judge Christine Arguello of the U.S. District Court for the District of Colorado ruled that the EEOC had satisfied all of its pre-suit conciliation requirements and demonstrated sufficient evidence to proceed to trial on behalf of a class of Muslim women who allege that Jetstream Ground Services, Inc. (“Jetstream”), failed to accommodate their wearing hajibs and long skirts on the job, failed to hire them, laid off or reduced their hours, and discriminated against them on the basis of their religion.

This case is an important primer for employers facing EEOC litigation, as well as companies with strict uniform and dress code policies.

Case Background

In October 2008, Florida-based Jetstream was awarded a cabin cleaning contract with United Airlines at Denver International Airport.  Jetstream offered job interviews to employees of its predecessor contractor. Id. at 3-4. Jetstream used several criteria in its hiring process, one of which was the applicant’s willingness to wear a gender neutral uniform of pants, shirt, and hat. Id. at 8. Five Muslim women of Ethiopian or Somali nationality, Safia Adbulle Ali, Sahra Bashi Abdirahman, Hana Bokku, Sadiyo Hassan Jama and Saida Warsame (“Intervenors”), applied for the position of Aircraft Cleaner, but were not offered employment. The Intervenors filed charges of discrimination locally with the Colorado Civil Rights Division, alleging that Jetstream discriminated against them on the basis of their sex (female) and religion (Muslim), and denied them the religious accommodations of wearing a hijab to cover their hair, ears, and neck, and of wearing long skirts to cover the form of their bodies. Id. at 3. After the charges were filed, Jetstream amended its uniform policy “based on legal issues regarding the burka headgear” to allow secured headscarves within specifications for dimension and color. Id. at 7.

The Colorado Civil Rights Division transferred the charges to the EEOC, which broadened its investigation through a series of requests for information. On August 29, 2012, the EEOC issued its Letter of Determination as to each Intervenor’s charge, stating that it had found reasonable cause to believe Jetstream had violated Title VII by: (1) refusing to provide Intervenors and a “class” of other female Muslim employees or applicants a reasonable accommodation based on their religion; (2) refusing to hire the charging parties “and others like” them for the position of Aircraft Cleaner based on sex, religion; and (3) by retaliating against them for engaging in protected activity. Id. at 9.

A number of conciliation proposals were exchanged between the EEOC and Jetstream, and the parties met once. Id. at 11. During the conciliation process, the EEOC identified two other women it characterized as “aggrieved,” and submitted a conciliation proposal including: (1) a lump sum demand for $775,000 in damages; (2) the creation of a settlement fund of $436,500 to be paid to other aggrieved individuals identified by the EEOC in the course of its investigation; and (3) Jetstream’s development of a plan for accommodating deviations from its uniform policy. Subsequently, the EEOC reduced its demand twice. Id. Jetstream, however, offered $75,000 for back pay and compensatory damages, and conciliation was terminated.  Id. at 12.

The EEOC brought its lawsuit against Jetstream on August 20, 2013. In the lawsuit, the EEOC also asserted individual claims on behalf of the two “aggrieved” individuals, Amina Oba and Milko Haji, who had been employed by Jetstream and who had not filed charges. On October 13, 2014 Jetstream made offers of full-time employment to the Intervenors, stating that the Intervenors “may wear a headscarf at work that meets their religious requirements but does not present safety risks,” but also requiring that they “wear pants at work, as they claim they are willing to do.” Id. at 12.

Jetstream filed a motion for summary judgment arguing that: (1) the EEOC failed to satisfy its pre-suit conciliation obligations; (2) Oba’s and Haji’s claims were for various reasons deficient; and (3) the damages alleged were limited by Jetstream’s offers of employment to the Intervenors. The EEOC filed a cross-motion for summary judgment regarding Jetstream’s defenses of exhaustion of administrative remedies and prerequisites, statute of limitations, waiver, estoppel and laches, and undue burden. Id. at 2. The Court granted and denied each motion, in part.

The Court’s Decision

Jetstream brought a motion for summary judgment. The EEOC also filed a cross-motion for summary judgment.

Jetstream’s Motion for Summary Judgment

Jetstream sought summary judgment against the EEOC on the basis of its failure to meet its pre-suit conciliation obligation. The Court rejected Jetstream’s arguments: (1) that the EEOC did not conduct a “sincere and reasonable conciliation” by negotiation a fund for aggrieved individuals the EEOC had not yet identified; and (2) that the EEOC acted in bad faith by making an “unsubstantiated” lump sum demand rather than individual demands for each Intervenor. Id. at 20-21. Relying on the recent decision of the U.S. Supreme Court in Mach Mining LLC v. EEOC, 135 S.Ct. 1645, 1655-56 (2015), the Court reasoned that the scope of its judicial review of the EEOC’s conciliation efforts was “narrow.” Id. at 20.  The Court further determined that the EEOC need only show that it endeavored to conciliate; that the EEOC is not required to engage in any specific steps or measures in its conciliation process; and that it is up to the EEOC to decide when conciliation has failed. Id. at 20-23.

The Court then turned to Jetstream’s motion for summary judgment on the EEOC’s claims for Amina Oba, a Jetstream employee who never requested accommodation, was observed by co-workers to change from headscarf and long skirt to the company’s uniform while at work, and who subsequently was laid off. Relying on EEOC v Abercrombie & Fitch Stores, Inc., 135 S. Ct. 2028, 2031 (2015), the Court determined that an employee need only show that his or her need for accommodation was a motivating factor in the employer’s decision. Id. at 23. Denying summary judgment on the EEOC’s claims for disparate treatment and discrimination, the Court ruled there was a triable issue of fact as to whether Jetstream knew “or, at the very least, suspected” that Oba desired an accommodation. Id. at 26, 28-29.

Turning to the EEOC’s claim for retaliation, which requires an employee to engage in “protected activity” under Title VII to be actionable, the Court considered “as a matter of first impression” whether Oba engaged in protected activity merely by wearing religious clothing on the employer’s premises but during her breaks.  Id. at 32.  On this issue, the Court granted Jetstream summary judgment on the grounds that Oba did not actually convey to Jetstream any concern about unlawful practices. Id. at 34.

Regarding the EEOC’s individual claims for Milko Haji, who allegedly had her hours reduced on account of her religion and desire to wear a hajib and pants, the Court observed that the EEOC had failed to accurately establish Haji’s actual start date at Jetstream, limiting the EEOC’s provable loss to eight hours of pay. Finding this potential amount of loss to be “de minimis,” the Court granted Jetstream summary judgment on the EEOC’s claims for discrimination, failure to accommodate, and retaliation. Id. at 39-40.

Finally, the Court rejected Jetstream’s contentions that the EEOC’s claims for Oba should be dismissed because Oba had not filed a charge and not exhausted her administrative remedies, on the grounds that the EEOC has enforcement power to bring suit in its own name on behalf of others. Id. at 42-43 (citing Gen. Tel. Co. of  the Nw., Inc. v. EEOC, 445 U.S. 319, 331 (1980)). In rejecting Jetstream’s motion for summary judgment as to damages, the Court observed that only “unconditional” offers of employment can end on-going liability for back pay. Id. at 46 (citing Toledo v. Nobel-Sysco, Inc., 892 F.2d 1481, 1493 (10th Cir. 1989)). Accordingly, the Court found there was a triable issue as to whether a reasonable person would have rejected the terms of Jetstream’s offers of employment. Id. at 47-48.

EEOC’s Motion for Summary Judgment

The Court then addressed the Commission’s cross-motion for summary judgment. Finding that Jetstream, through expert evidence, raised a triable issue of fact as to whether wearing a long skirt climbing steps constituted a “task interference” that could increase the risk of injury, the Court denied the EEOC’s motion for summary judgment regarding Jetstream’s defense of undue hardship in accommodating long skirts in the workplace. However, based on Jetstream’s own actions in amending its policy to allow hijabs to specifications and making offers of employment that conceded wearing hijabs on duty, the Court granted summary judgment to the EEOC regarding the defense of undue hardship in allowing hijabs in the workplace. Id. at 56-58.

The Court further granted summary judgment to the EEOC on Jetstream’s defenses of failure to exhaust administrative remedies, statute of limitations, waiver, and estoppel.

Implications for Employers   

As the workforce diversifies and employers with uniform or dress code policies increasingly face requests for accommodation, it is important to exercise diligence in considering the reasonableness of the accommodation sought, the reasons accommodation may constitute an undue hardship affording employers relief, and the careful crafting of policies and practices that are compliant with federal discrimination laws.

Readers can also find this post on our Workplace Class Action blog here.

Groundhog Day In September – Another Repeat Of The EEOC Fiscal Year-End Lawsuit Filing Frenzy

Posted in EEOC Litigation

calendar-660670_640By Matthew J. Gagnon, Christopher DeGroff, and Gerald L. Maatman, Jr.

As the clock ticked down on the EEOC’s fiscal year (which ended on September 30), we are struck once again by the eerily consistent trend in the agency’s federal court filing trends. Employers around the country are seemingly trapped in the “Groundhog’s-day-like” loop that occurs each September. FY2015 was a blockbuster year in major EEOC-litigation decisions from the U.S. Supreme Court on down, leaving many areas of the law in flux. But one thing has remained constant: as we have reported for several years (see here, here, and here), the EEOC has once again rushed to file a blitz of federal court complaints just under the fiscal year wire.

Although we expect some additional filings will continue to filter in overnight, as the courts on the West Coast closed for the day, the raw numbers show that the EEOC filed 157 lawsuits in FY2015 (up from the 145 filed in FY2014). But most significantly, in the last 48 hours of its fiscal year alone, the EEOC launched 27 cases from coast to coast. Indeed, as the following graph depicts, the EEOC filed more complaints in the last quarter of FY2015 than the entire rest of the year put together.

Cases By Month

Where Was The EEOC’s Subject Matter Focus In FY2015?

We have once again crunched the numbers underlying the EEOC’s FY2015 filings to tease out where the EEOC is focusing its substantive enforcement efforts. We have analyzed the EEOC’s FY2015 filings according to the statutes pursued and the theories of discrimination that it has alleged. The following two charts show our breakdown of the EEOC’s filings in FY2015 by statute, and then a further breakdown of Title VII cases by discrimination theory.

Cases By Statute

Cases By Discrimination Type

We continue to see the same focus on sex/pregnancy discrimination and disability discrimination that we have seen in prior years. This year sex/pregnancy discrimination cases made up 54% of all Title VII filings, roughly on par with the 55% in FY2014. ADA cases made up 36% of all EEOC filings, which is also fairly consistent with previous years. (Disability cases made up 32% of all EEOC filings in FY2014, and 36% in FY2013.)

Suits alleging discrimination on the basis of race, however, are back on the upswing. Race discrimination cases were somewhat underrepresented last year as compared to earlier years. There were 15 race discrimination cases launched in FY2014, as compared with 17 in FY2013. This year, there were 24 lawsuits filed alleging race discrimination, which amounts to 26% of all Title VII filings.

Our analysis of the filings also confirms yet again that the likelihood of being tagged by the EEOC is not unlike the real estate market — it is all about location, location, location. Certain district offices emerge from the pack both in terms of the sheer number of case filings and the aggressiveness with which they pursue those cases. Here is this year’s breakdown by district office.

EEOC Map 2015

As with prior years, the Chicago office, led by regional attorney John Hendrickson, is on top with 26 filings in FY2015, the same number that it filed in FY2014. The Philadelphia and Phoenix offices also continued their historical trend of filing a large number of cases. Those offices racked up 18 and 16 filings in FY 2015, respectively, as compared to the 17 and 14 from FY2014. The Indianapolis and Charlotte offices rounded out the top five with 13 filings each. Last year, we noted that the New York office had a new regional attorney appointed in May 2014, and we wondered whether he would continue that office’s tradition of aggressive enforcement. If FY2015 is any indication, we now know the answer: the New York office was quite active in FY2015, filing 10 cases – two more than it filed in FY2014. The office earning the “biggest mover” honors is Los Angeles, jumping over 400% from only two cases in FY2014 to nine in FY2015 – still modest in comparison to some of the perennially active offices, but a trend to watch for our West Coast readers.

Old Questions Answered; New Questions Raised

We are now entering the final years of the EEOC’s 2012 Strategic Enforcement Plan (“SEP”) The SEP was issued by the EEOC in 2012 as the blueprint to guide its enforcement initiatives from 2012 through 2016. We closely followed the SEP through its stages of development, and, to a large extent, have relied on it as the lens through which we view trends and developments in the EEOC’s litigation activity. (See, e.g., here, herehere, and here.)

Over the past few years, we have seen how the EEOC’s enforcement activity has progressed and taken shape under the influence of the SEP. From the beginning, it was clear that the EEOC was making the prosecution of systemic cases a key priority. We have watched as the EEOC has continued to expend considerable resources litigating high-level, pattern or practice, policy, and class cases. And we have seen that with that increased focus on systemic cases has come an increased focus on the procedural mechanisms that the EEOC relies on to prosecute those cases – and that employers use to defend against them. In our view, FY2015 was a watershed year for determining the future direction of EEOC systemic cases. The Supreme Court has decided some key procedural and substantive issues underpinning the EEOC’s strategic initiatives of the past few years. And the EEOC has weighed in with its own guidance and interpretations concerning its own powers and the scope of Title VII and other anti-discrimination statutes.

To be sure, those developments have answered many of the open questions of the past few years. But even as those questions were answered, more questions arose to take their place. Here are just a few:

  • On April 29, 2015, the Supreme Court issued its long-awaited decision in Mach Mining, LLC v. EEOC, in which it considered whether the EEOC gets to operate beyond judicial review during its pre-suit conciliation phase. (In a word: “No!”) But that has only opened the door to many new questions about how the lower federal courts will apply that decision to decide employers’ challenges to the EEOC’s conciliation process. FY2016 will be a defining year in that respect.
  • Similarly, the Supreme Court unanimously rejected the EEOC’s pregnancy discrimination guidance in Young v. United Parcel Service, leaving employers to wonder how that guidance applies to their workplace and their employees.
  • The EEOC’s boundary-pushing theory of transgender discrimination – which we saw the first glimmers of at the very end of FY2014 – has become a full-blown trend. This rapidly solidifying theory of discrimination was aggressively pursued in FY2015, and we have every reason to expect that it will continue to develop in FY2016 and beyond.
  • The EEOC has repeatedly stated its intention to continue to litigate background check cases despite its initial string of embarrassing losses on this issue. FY2015 saw the EEOC gain ground in this area. Employers will need to wait to see whether those wins embolden the agency to pursue more of those types of cases in FY2016.
  • In a widely reported decision last year, the EEOC unsuccessfully tried to stop a company’s health and wellness plan in its tracks. That litigation position resulted in torrents of withering criticism from Congress and others. On April 16, 2015, the EEOC published a Notice of Proposed Rulemaking to clarify its position. But employers are still left scratching their heads because those proposed regulations appear to conflict with the implementing regulations of the Affordable Care Act.

Insight & Implications For Employers

The fact that we are asking these questions – and not others – is a direct result of how the EEOC has interpreted and pursued the enforcement objectives that it identified for itself in the 2012 Strategic Enforcement Plan. We have seen how the SEP has guided and shaped the EEOC’s enforcement initiatives, from an increased focus on systemic litigation, to the pursuit of boundary-pushing theories of discrimination. FY2016 is the last year covered by the 2012 SEP. Now that we are entering the final year, we are starting to see clearly how those enforcement priorities have materialized into actual litigation, and what they have meant in terms of the types of case that are filed and the industries affected. Those choices, in turn, have established new precedent, both in terms of the procedural aspects of EEOC-initiated litigation, and the substance, that will have a lasting effect for years to come.

This fiscal year has just ended. As we do every year, we will continue to analyze the data and filings from FY2015 to see what else we can learn about the EEOC’s priorities, and what employers should watch out for in FY2016 and beyond. Seyfarth Shaw LLP will publish that detailed analysis in a book at the end of the calendar year. We hope that you are looking forward to that publication as much as we are, and that you continue to find it a useful reference and guide to developments in EEOC litigation. Please stay tuned, loyal blog readers!

Readers can also find this post on our Workplace Class Action blog here.

Court Rejects The EEOC’s Request For A Free Pass From Discovery In Pattern Or Practice Lawsuit

Posted in Discovery

Magnifying_Glass_PhotoBy Gerald L. Maatman Jr. and Christina M. Janice

In an order recently issued in EEOC v J.R. Baker Farms, LLC, et al., Case No. 7:14-CV-136 (M.D. Ga. Sept. 9, 2015), Senior Judge Hugh Lawson  of the U.S. District Court for the Middle District of Georgia compelled the EEOC to produce in discovery anecdotal claims information for each known “class member” in a pattern or practice lawsuit (while not a class action governed by Rule 23, allegedly injured parties for whom the EEOC sues in a pattern or practice case are often referred to as “class members,” as in this order by Judge Lawson). The Court also denied the EEOC’s motions to quash or grant protective relief regarding the depositions of its lead investigator and a Rule 30(b)(6) witness.

The order is a case study for defense initiatives to take the fight to the EEOC in high-stakes workplace litigation.

Case Background

In August 2014 the EEOC brought a pattern or practice lawsuit under Title VII of the Civil Rights Act of 1964 against a Georgia-based farm J & R Baker Farms LLC and J & R Farms Partnership. The suit alleged that Defendants engaged in systemic race and national origin discrimination by providing greater opportunities for training and work hours to foreign-born workers, while involuntarily terminating or causing the constructive discharge of a disproportionate number of American and, specifically, African-American workers.

In discovery, Defendants sought to compel the EEOC to provide comprehensive responses to interrogatories requesting that the EEOC specify – for each class member – certain claim information, including whether each class member was a victim of an involuntary termination or constructive discharge. Id. The EEOC objected to the discovery requests as both exceeding the scope of discovery in a pattern or practice litigation largely to be proved through statistical data, and seeking privileged information. Id.

Defendants also issued a notice of deposition to the EEOC’s investigator, Jennifer Vanairsdale, who led the interviews of complaining and intervening parties and also participated in a prior conciliation. The EEOC filed a motion to quash or alternatively a motion for protective order to block the deposition, arguing the deliberative process privilege. Id. Relying on the recent decision of the Supreme Court in Mach Mining LLC v. EEOC, 135 S. Ct. 1645, 1655 (2015), the EEOC also objected to the deposition to the extent the examination would include an impermissible inquiry into the conciliation process. Id. The EEOC further argued that the deposition was superfluous because the EEOC already had produced its complete investigatory file. Id.

The EEOC filed an additional motion to quash or alternatively motion for protective order seeking to bar Defendants’ notice of the Rule 30(b)(6) deposition, objecting on the basis that EEOC personnel did not have knowledge of the claims underlying the lawsuit and the notice arguably called for the deposition of its attorneys. Id.

The Court’s Decision

In granting Defendants’ motion to compel, the Court observed that it was “clear” that the EEOC had collected pertinent information from only a “very small percentage of the alleged class,” including 60 potential “class members” out of a class approximated at 2,000 workers. Id. The Court also observed that the EEOC’s lawsuit presented a “hybrid scenario” in which some the Commission asserted that some class members suffered  involuntary discharges while others were victims of a constructive discharge, and that the EEOC had developed and mailed to each potential class member a “detailed questionnaire” in order to develop its case. Id. Finding that Defendants sought only information contained in the completed questionnaires, and not the documents themselves, the Court determined that Defendants’ interrogatories were within the scope of permissible discovery and were not unduly burdensome. Id.

The Court also ordered the EEOC to provide lists of all known class members, whether their claim constituted a constructive discharge or an involuntary termination, and the date of discharge or termination.  Id.  The Court then went further by ordering the EEOC to provide “detailed anecdotal information for a representative portion of the class members,” which the Court found to be “at least 250 individuals.” Id.

The Court also denied the EEOC’s motion to quash or grant protective relief regarding the deposition of EEOC lead investigator Vanairsdale, cautioning Defendants “…not to venture into the territory of the adequacy of the conciliation process.” Id. The Court went on to deny the EEOC’s motion to quash or grant protective relief regarding Defendants’ notice for the Rule 30(b)(6) deposition, suggesting that the EEOC should notify Defendants if it has no witness meeting the criteria of the notice. Id.

Implications for Employers   

As the EEOC continues to assert deliberative privilege and Mach Mining as shields protecting it from discovery and judicial scrutiny, the order of the Court in EEOC v J.R. Baker Farms, LLC. demonstrates the importance of diligently pursuing discovery of claims underlying EEOC pattern or practice lawsuits. The Court not only ordered discovery to proceed, albeit with limitations, but also ordered the EEOC to provide detailed anecdotal information for a “representative portion” of the alleged class, quantified as 250 out of 2,000. Employers can use this order to support seeking both meaningful discovery and judicial intervention to obtain information critical to the defense of these costly and time consuming lawsuits.

Readers can also find this post on our Workplace Class Action blog here.

Court Finds Against EEOC And Holds Charging Party Who Represented Herself As Being “Totally Disabled” Was Not Qualified To Perform Her Job

Posted in Motions for Summary Judgment

thCAV77FL1By Christopher M. Cascino and Gerald L. Maatman, Jr.

In EEOC v. Vicksburg Healthcare LLC, et al., Case No. 13-CV-895 (S.D. Miss. Aug. 27, 2015), a case we have blogged about previously here and here, Judge Keith Starrett of the U.S. District Court for the Southern District of Mississippi recently rejected the EEOC’s lawsuit. He entered summary judgment in favor of the defendant and against the EEOC on its disability discrimination claims, finding that the charging party was not able to perform her job duties in light of the fact she described herself as “totally disabled” in making a disability insurance claim.

This case should be of interest to employers engaged in EEOC disability discrimination litigation because it provides a potential route to summary judgment when plaintiffs claim outside of litigation that they were not able to perform their job duties because of their disabilities.

Case Background

Beatrice Chambers (“Chambers”) was a nurse for Vicksburg Healthcare, LLC d/b/a River Region Medical Center (“River Region”). After taking medical leave for shoulder surgery, Chambers’ physician sent a note to River Region stating that she could return to duty as long as she was limited to “light work.” Because River Region concluded that Chambers could not perform the essential functions of her job when limited to “light work,” River Region terminated Chambers.

The day after Chambers was terminated, Chambers’ physician filled out a disability insurance claim form that stated that Chambers had a “temporary total disability.” Chambers reviewed this form and sent it to her insurer.

The EEOC filed suit on Chambers’ behalf, claiming she could perform the essential functions of her job while being limited to light duty and that her termination thus violated the ADA.

The Court’s Decision

The Court began by noting that “[t]o establish a prima facie discrimination claim under the ADA, a plaintiff must prove: (1) that he has a disability; (2) that he was qualified for the job; and (3) that he was subject to an adverse employment decision on account of his disability.” Vicksburg Healthcare, at 5. It then moved on to consider whether Chambers could prove that she was qualified to perform the essential functions of her job in light of the statement in her insurance claim that she was totally disabled. Id. at 6-7.

Judge Starrett noted that, in Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S. 795, 806 (1999), the U.S. Supreme Court held that “‘when faced with a plaintiff’s previous sworn statement asserting ‘total disability’ or the like, the court should require an explanation of any apparent inconsistency with the necessary elements of an ADA claim.’” Id. (quoting Cleveland, 526 U.S. at 806). The Court concluded that the EEOC would, in light of Cleveland, have to present an explanation that would allow the Court to conclude that Chambers could perform the essential functions of her job despite her insurance claim. Vicksburg Healthcare, at 7.

The Court then considered the EEOC’s explanation. According to the EEOC, the fact that Chambers applied for disability benefits after her termination explained the discrepancy between her insurance claim and her litigation position. Id. at 8. The Court disagreed, finding the explanation insufficient to explain the discrepancy. Id. at 8-9. The Court thus granted summary judgment to River Region, finding that the EEOC had not met its burden of producing sufficient evidence that Chambers was qualified to perform the essential functions of her job. Id.

Implications For Employers

Individuals who are terminated because they are unable to perform their jobs due to disability often seek disability benefits through private insurers or the Social Security Administration. In the course of seeking those benefits, these individuals frequently represent that they are totally disabled or are wholly unable to do their job due to their disability. Employers involved in ADA discrimination litigation should be on the lookout for such representations and, relying on Vicksburg Healthcare and the language of Cleveland, employers can use such representations to seek summary judgment.

Readers can also find this post on our Workplace Class Action blog here.