EEOC Year-End Countdown

The Defense Amicus Briefs Submitted To The SCOTUS In EEOC v. Mach Mining

Posted in EEOC Litigation

By Gerald L. Maatman, Jr., Lorie Almon, Rebecca Bjork, and Christopher DeGroff

Today Seyfarth Shaw LLP submitted an amicus brief to the U.S. Supreme Court on behalf of the American Insurance Association in Mach Mining v. EEOC, No. 13-1019 (S. Ct.), perhaps the most important EEOC-related case to reach the SCOTUS in years. For our loyal blog readers interested in our amicus brief, a copy is here.

Mach Mining’s opening brief was filed last week – a copy is here if you missed it.

We have blogged on this case at various points before, as the litigation winded through the lower courts and culminated in the precedent-setting decision of the U.S. Court of Appeals for the Seventh Circuit reported at 738 F.3d 171 (7th Cir. 2013). Readers can find the previous posts here and here. In a game-changing decision for employers, in December 2013, the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit brought by the Commission. In essence, the Seventh Circuit determined that the EEOC’s pre-lawsuit conduct in the context of conciliation activities cannot be judicially reviewed. Subsequently, in what many SCOTUS watchers found ironic, even the though the EEOC prevailed in the Seventh Circuit, the Government backed Mach Mining’s request for SCOTUS review to resolve the disagreement among the courts of appeals regarding the EEOC’s conciliation obligations.

Our amicus brief questioned the underpinning of the Seventh Circuit’s decision – that employers asserting the failure-to-conciliate defense deflect judges from the merits and that there need not be any judicial review of the Commission’s conduct because the EEOC follows its obligations. We argued that the modern American judicial system does not work in that manner and that the Seventh Circuit’s ruling should be reversed.

Insofar as the Seventh Circuit’s ruling forbids judicial review of the EEOC’s satisfaction of its statutory obligation to conciliate discrimination claims in good faith, this undermines the ability of employers and insurers to reasonably assess settlement issues. When Congress enacted Title VII of the Civil Rights Act of 1964 (“Act”), it mandated that the EEOC engage in conciliation proceedings with employers prior to bringing lawsuits. 42 U.S.C. §2000e-5(b), (f)(1). While the language of the Act does not specify how conciliation proceedings must be conducted or the quantum of information that must be disclosed or exchanged, it clearly requires that the EEOC engage in good faith proceedings before bringing lawsuits. Id. Congress enacted this requirement in the interests of judicial economy, providing both the EEOC and employers with an avenue to resolve disputes confidentially, voluntarily, informally and without burdening the dockets of federal courts.

First, contrary to this clear Congressional intent that courts have followed over the last several decades, in EEOC v. Mach Mining, LLC, the Seventh Circuit held that this obligation is not judicially reviewable, and that, in essence, the EEOC may skip the statutory requirement of conciliation without any consequence. The Seventh Circuit opined that “failures by the EEOC in the conciliation process simply do not support an affirmative defense for employers charged with employment discrimination.” 738 F.3d at 181.  In support of its conclusion that employers may not use failure-to-conciliate as an affirmative defense, the Seventh Circuit noted “as a practical matter, there is little reason to expect the potential for dismissal to promote conciliation. The employer in a dismissed case has little incentive to resume talks, of course. The next employer the EEOC investigates will have seen the benefit of using the conciliation process as a strategic defense rather than a chance to settle.” Id. at 184-85. Contrary to Congress’s view that conciliation proceedings must be conducted as a vehicle to foster judicial economy, the Seventh Circuit decided that the requirement of conciliation proceedings was merely a formality that mostly benefitted employers who sought the dismissal of claims when the EEOC neglected to follow mandatory procedure.

Second, while the Seventh Circuit focused on critiquing certain employers’ potential defense strategies, it failed to account for the practical realities of its holding. The Seventh Circuit’s ruling encourages the EEOC to abstain from the procedural requirement of meaningful conciliation established by Congress and ignores the fact that employers and their insurance carriers – along with alleged victims of discrimination who may be desirous of settling – have both financial and business-reputation reasons to resolve litigation as quickly and cost-efficiently as possible. In reality, an insurer needs the EEOC’s help before it can authorize payment, due to insurers’ fiduciary obligations to their stockholders and legal obligations to regulators not to pay claims unless there is sufficient indicia that they have merit.  In this way, the Seventh Circuit failed to consider how the ruling impacts multiple constituents, including already over-burdened federal courts, which will now face more EEOC litigation; employers who face such claims; and the insurance industry, which bears the cost of defending the time-consuming and expensive litigation through employment practices liability insurance. In short, when the EEOC cooperates, alleged victims receive compensation more quickly, whether because insurers gain some leverage over employers who are otherwise resistant to settle, or because the carrier and the employer are better equipped to assess the EEOC’s demands and their litigation costs and risks. Employers always benefit, as fulsome information regarding the EEOC’s claims and settlement demands is necessary to make an informed and intelligent decision about whether to settle a claim or accept the reality of having to defend an EEOC lawsuit in federal court.

Implications For Employers

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

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

The EEOC Continues To Struggle To Overcome Case Law Rejecting Its Open-Ended Litigation Strategy

Posted in Procedural and Jurisdictional Issues

By Gerald L. Maatman, Jr.

The nightmare scenario for a corporate counsel is being on the receiving end of an EEOC lawsuit where the Commission sues on behalf of a class of allegedly injured individuals based on a purported discriminatory pattern or practice. More often than not, the EEOC does not limit the temporal scope of its claims, and sues for relief since the “inception” of the alleged discriminatory pattern or practice. This pleading theory poses significant risks and financial exposure to an employer, since such a litigation position is unencumbered by any statute of limitations. Indeed, having briefed this issue multiple times, the refrain I have heard from the government is “We [the EEOC] don’t have a statute of limitations for our lawsuits…”

Employers have racked victory after victory in challenging this litigation strategy by invocation of the 300-day statute of limitations in Title VII of the Civil Rights Act of 1964 (i.e, claims can only be asserted that arise within 300 days of the initial EEOC administrative charge that triggered the subsequent EEOC investigation and lawsuit). We have blogged on these decisions previously (here, here, and here). We also recently published a law review article in the ABA Journal of Labor & Employment Law on this body of case law.

This issue surfaced again this week in one of the key lawsuits brought by the EEOC over the past year – EEOC v. Freeman, a case now pending in the U.S. Court of Appeals for the Fourth Circuit. Our previous blog posts on this litigation are here and here. The case is currently pending for oral argument over the EEOC’s appeal of a summary judgment order granted to the employer (on various grounds, including previous rulings rejecting the EEOC’s litigation strategy relative to the statute of limitations).

Most recently, after briefing was concluded, the EEOC submitted an additional letter brief to the Fourth Circuit on the statute of limitations issue. The letter brief is here.

The district court’s ruling in EEOC v. Freeman seems us to have been on very solid ground, so one wonders if the EEOC has selected a poor candidate in which to raise the statute of limitations issue at the appellate level.

Implications For Employers

The growing body of case law favors the defense arguments in this area on the statute of limitations defense in EEOC lawsuits. Courts have overwhelmingly rejected the notion that the EEOC should have carte blanche to litigate in derogation of Title VII’s statute of limitations. Stay tuned for further adjudication of this issue in the Fourth Circuit.

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

Court Upholds Jury Verdict That EEOC Is Not Entitled To Award Of Punitive Damages

Posted in Defenses to Pattern or Practice Cases

By Courtney K. Bohl and Laura J. Maechtlen

On August 21, 2014, in the case EEOC v. Swissport Fueling, Inc., Case No. CV-10-02101-PHX-GMS (D. Ariz. Aug. 21, 2014) (a case we previously blogged about here), Judge G. Murray Snow of the U.S. District Court for the District of Arizona denied the EEOC’s motion to set aside the jury’s answers regarding its rejection of an award of punitive damages.  The Court also denied the EEOC’s motion for judgment as a matter of law or new trial with respect to Swissport Fueling, Inc.’s (“Swissport”) affirmative defense to punitive damages under Kolstad v. Amer. Dental Ass’n, 527 U.S. 526 (1999).

This ruling is a good read for employers faced with a trial on employment discrimination claims where the EEOC is seeking punitive damages.  The ruling provides insight into how courts handle seemingly inconsistent jury verdicts, and also provides employers tools for defending against a motion for a judgment as a matter of law on the Kolstad affirmative defense.

Background Of The Case

The EEOC brought suit against Swissport alleging claims of race, national origin, and color discrimination on behalf of fourteen current or former Swissport employees (the “Claimants”).  Id. at 1.  The Court held a jury trial in March 2014.  Id.  At the conclusion of the trial, the Court instructed the jurors that they could only award punitive damages if they found Swissport’s conduct was malicious, oppressive, or in reckless disregard of the Claimants’ rights.  Id. at 2.

The jurors were then given a verdict form that asked the jury to decide for either the EEOC or Swissport.  Id. at 2-3.  The form instructed the jurors that if they find in favor of the EEOC on any of the Claimant’s claims, they need to (i) state the amount of compensatory damages, if any, and (ii) state whether Swissport acted with malice or reckless indifference to the federally protected rights of the Claimants.  Id.

The jury reached a unanimous verdict regarding six of the Claimants’ claims, but was unable to reach a unanimous verdict regarding the other eight Claimants’ claims.  For seven of the eight remaining Claimants (“Remaining Claimants”) the jury unanimously held that the EEOC was not entitled to punitive damages.  Id. at 1.

The EEOC moved to set aside the jury’s answers regarding punitive damages for the Remaining Claimants and also renewed its Motion for Judgment as a Matter of Law Under Rule 50 Or For a New Trial Under Rule 59 with respect to Swissport’s affirmative defense to punitive damages. Id.

The Court’s Ruling

The Court denied the EEOC’s motion to set aside the jury’s answers regarding punitive damages, finding that the jury’s verdict was not inconsistent and did not violate the Court’s express instructions.  Id. at 5-6.  The EEOC argued that the jury’s answers to the punitive damages question regarding the Remaining Claimants should be dismissed as surplusage because the jury should not have answered any damages questions once they failed to reach a unanimous verdict.  Id. at 2.  The Court first noted that the jury’s responses were not internally inconsistent because it is not illogical that the jury was unable to reach a unanimous decision on Claimant’s harassment or retaliation claim, but could determine Swissport had not acted with malice or reckless indifference to the Claimant’s rights.  Id. at 5.  Next, the Court held that the jury did not disobey the Court’s express instructions.  The Court reasoned that the jury was instructed that they could only award punitive damages if they first found for the EEOC on at least one of the Claimants’ claims.  Id.  The jury instructions did not reference whether or not the jury might determine whether Swissport acted with malice or reckless indifference even in the event they could not reach a unanimous decision on liability.  Thus, the Court found there was no violation of its instructions.  Id.

The Court also denied the EEOC’s motion for judgment as a matter of law with respect to Swissport’s affirmative defense to punitive damages.  Id. at 8.  In support of its motion, the EEOC argued that there was no legally sufficient basis on which a reasonable juror could have found that Swissport was entitled to the Kolstad affirmative defense (which holds that employers may not be vicariously liable for punitive damages if they make “good faith efforts” to comply with anti-discrimination law).  Id. at 7.  Specifically, the EEOC argued that the defense cannot be asserted regarding Jim Vescio’s, Swissport’s highest ranking official in its Arizona facility, purported improper conduct because a high ranking official is a proxy for the company.  The Court, however, held that a reasonable jury could have found Vescio’s testimony more credible than conflicting testimony and determined he acted appropriately responding to the complaints and made good faith efforts to comply with the law.  The Court also ruled that Swissport did not waive this affirmative defense by failing to specifically name it in its Answer or Final Pretrial Order.  Id.

Finally, the Court denied the EEOC’s motion for a new trial, holding that the EEOC failed to demonstrate that the jury’s verdict was against the weight of the evidence.  The Court noted that Swissport was entitled to the Kolstad defense and the jury did not actually reach the issue as the jurors did not find any punitive damages liability.  Id. at 8.

Implications For Employers

In the course of his opinion, Judge Snow showed his unwillingness to disrupt the jury’s findings on the issue of whether the EEOC is entitled to punitive damages.  This is helpful authority for employers faced with post-trial motions relating to punitive damages, as it outlines useful arguments employers can make when faced with inconsistent jury verdicts and/or a motion for judgment as a matter of law on the Kolstad defense.

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

Round One – Texas Loses Its Suit Against The EEOC Over Its Criminal Background Guidance

Posted in Regulatory / Guidance Issuance

By Gerald L. Maatman Jr. and Howard M. Wexler

There continues to be growing firestorm of litigation initiated by the EEOC over hiring checks based on criminal backgrounds. In one of the most high profile cases addressing this issue (that we previously blogged about here and here,) Judge Sam R. Cummings of the U.S. District Court for the Northern District of Texas issued an decision in State of Texas v. EEOC, Case No.5:13-CV-255 (N.D. Tex. Aug. 20, 2014), granting the EEOC’s motion to dismiss a lawsuit brought against it by the State of Texas regarding the its “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Under Title VII.”

Texas argued that the EEOC did not have the authority to issue the Guidance and that the EEOC’s position that Title VII trumps conflicting state laws violates its state sovereignty. Judge Cummings rejected the State’s arguments in this first-of-its-kind attack on the EEOC’s authority.

Case Background

In April 2012, the EEOC issued guidance urging businesses to avoid a blanket rule against hiring individuals with criminal convictions, reasoning that such rules could violate Title VII if they create a disparate impact on particular races or national origins. Like various other states, Texas has enacted statutes prohibiting the hiring of felons in certain job categories.  In November 2013, Texas sued the EEOC, seeking to enjoin the enforcement of this guidance, which Texas has nicknamed the “Felon Hiring Rule.” Id. at 2. In March of this year, Texas amended its complaint to include more specific allegations of injury. Id. For example, Texas alleged that the EEOC’s issued a right-to-sue letter to an applicant who had been rejected by the Texas Department of Public Safety after disclosing on his application that he had been convicted of a felony (unauthorized use of a motor vehicle). Texas claims that the job involved “access to sensitive personal information for all 26 million Texans.”

The EEOC offered three primary arguments as to why Texas’ lawsuit should be dismissed, including: (1) lack of jurisdiction because the EEOC’s guidance is not legally binding and does not constitute a final agency action; (2) Texas lacks standing to pursue its claims given that the guidance has no binding authority; and (3) Texas’ claims are not ripe. Id.

The Court’s Decision

Judge Cummings based his decision entirely on a lack of subject matter jurisdiction. Because “Texas does not allege that any enforcement action has been taken against it by the Department of Justice (as the EEOC cannot bring enforcement actions against states) in relation to the Guidance,” Judge Cummings held that there is not a “substantial likelihood” that Texas “will face future Title VII enforcement proceedings from the Department of Justice arising from the Guidance.” Id. at 7. As standing to bring suit “cannot be premised on mere speculation” Judge Cummings determined that Texas lacked the necessary standing to maintain its suit against the EEOC.

While acknowledging that the EEOC did in fact issue a right-to-sue letter to an applicant who was rejected by the Texas Department of Public Safety who believed he was discriminated against based on a prior felony conviction, that was still not enough for the Court since “there are no allegations that any enforcement action has been taken by the EEOC or Department of Justice” based on Texas’ “felony conviction” rule. Id. Accordingly, since the Guidance is not a final agency action and because no enforcement proceeding is pending against Texas, Judge Cummings dismissed the case as “seeking a premature adjudication in the abstract without any actual facts and circumstances relating to the employment practices at issue.” Id. at 7-8.

Implications For Employers

While Judge Cummings’ decision is a blow to one of the most high profile challenges to the EEOC’s Guidance, the dismissal is solely based on procedural grounds and is in no way an acceptance of the Guidance and/or the litigation initiated by the EEOC over hiring checks based on criminal backgrounds.

Furthermore, while the EEOC may have won the battle in round one of this lawsuit, the war is likely far from over. To this end, employers obtained strong ammunition to use going forward based on certain arguments advanced by the EEOC in pursuing the dismissal of Texas’ case.  In furtherance of its lack of standing argument, the EEOC admitted that the Guidance is neither “legally binding” nor does it carry with it any “legal consequences.” As such, to the extent the EEOC attempts to rely upon the Guidance moving forward as the basis for prosecuting disparate impact cases focused on criminal background checks, particularly in cases where the EEOC alleges that an employer willfully violated Title VII, employers need only turn to the EEOC’s representations to the U.S. District Court for fodder in their own defense. It remains to be seen whether Texas will appeal this ruling. Stay Tuned!

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

EEOC Signals More Widespread Use Of Summary Judgment Tool To Obtain Relief And Defeat Affirmative Defenses

Posted in Motions for Summary Judgment

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

On August 7, 2014, the U.S. District Court for the Western District of Oklahoma entered its decision in EEOC v. Midwest Regional Medical Center, LLC, No. CIV-13-789-M (W.D. Okla. Aug. 7, 2014), and granted partial summary judgment in favor of the EEOC.

In a rare partial summary judgment win, the EEOC obtained a ruling as a matter of law that the individual on whose behalf it filed suit was disabled within the meaning of the ADA because she had a record of having skin cancer prior to her termination.

The EEOC also sought summary judgment on the defendant’s affirmative defenses of failure to conciliate and failure to mitigate damages. Although the defendant withdrew its conciliation defense, and the Court found an issue of material fact with respect to its mitigation defense, the motion may foreshadow a shift in tactics by the EEOC.

Once fairly rare, employers litigating with the EEOC should anticipate motions for summary judgment on merits issues, as well as affirmative defenses such as failure to conciliate, and plan their litigation strategy with an eye toward anticipating and defeating such motions.

Factual Background

On July 13, 2013, the EEOC filed suit against Midwest Regional Medical Center, LLC (“MRMC”) on behalf of Janice Withers, a former employee, claiming that the company discriminated against her in violation of the ADA when it terminated her employment.  Id. at 1-2.

On November 17, 2011, Withers was diagnosed with skin cancer.  She informed her supervisor, Susan Milan, of her diagnosis. Id. at 1. Withers started radiation treatments on December 9, 2011, and concluded the treatments on January 5, 2012. At the conclusion of her treatments, her physician noted that “the patient tolerated the procedure well and there was no evidence of recurrent or residual disease at the end of the therapy.” Id. at 2. Withers never returned for a follow up.

Thereafter, Withers was periodically absent from work.  She called in sick on February 9, 2012, and failed to report as scheduled on February 10, 12, 13, 14, 28, and March 2, 3, and 4, 2012. On March 5, 2012, Milan placed Withers on a leave of absence. Id. at 2. Milan issued a letter that stated, “[y]ou must bring a work release without restrictions in order to return to work. . . I expect that you will return to work no later than March 12, 2012.” Id.

On March 9, 2012, MRMC terminated Withers for no call/no show on March 6, 7, and 8, 2012. Id.

MRMC moved for summary judgment on the EEOC’s discrimination claim, and the EEOC moved for partial summary judgment on four issues: (1) whether Withers is a person with a disability under the ADA; (2) whether MRMC terminated Withers because of her disability; (3) whether Withers reasonably mitigated her damages; and (4) whether the EEOC fulfilled its conciliation obligation. Id. at 3.

The Court’s Opinion

The Court entered summary judgment in favor of the EEOC as to whether Withers was a person with a disability within the meaning of the ADA. It held that, although there was a dispute as to whether Withers was actually disabled following the conclusion of her radiation treatments, Withers had a record of having skin cancer and, thus, a “record of disability” under prong two of disability as defined by the ADA. Id. at 5-8. The Court also found a genuine issue of material fact as to whether MRMC terminated Withers because of her disability and as to whether MRMC’s proffered reason for Withers’ discharge – excessive absenteeism – was worthy of belief. It held that the “temporal proximity” between when Withers was placed on a leave of absence (March 5, 2012) and when she was discharged (March 9, 2012) “could lead to an inference of discriminatory intent.” Id. at 9-10. Further, the company failed to identify who actually made the decision to put Withers on a leave of absence, and it ostensibly required Withers to call in every day after it put her on a leave of absence, a requirement that is inconsistent with MRMC’s leave policy. Id. at 11-12.

The EEOC also moved for summary judgment on MRMC’s affirmative defenses of failure to conciliate and failure to mitigate.  MRMC withdrew its failure to conciliate defense. Id. at 3 n.2. The Court found a genuine issue of material fact as to MRMC’s failure to mitigate defense because Withers worked only part time following her termination from MRMC. Id. at 13.

Implications For Employers

Although the EEOC was successful in EEOC v. Midwest Regional Medical Center in obtaining partial summary judgment only as to whether its claimant was “disabled” within the meaning of the ADA, its attempt to win its claims and knock out MRMC’s affirmative defenses on summary judgment may foreshadow more widespread use of this litigation tactic by the EEOC. Employers litigating against the EEOC should plan their litigation strategy with this in mind and take care to position themselves to anticipate and defeat such motions.

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

Court Finds EEOC Satisfied “Low Hurdle” Of Pre-Suit Conciliation As Employers Anxiously Await Supreme Court’s Future Mach Mining Decision

Posted in Procedural and Jurisdictional Issues

By Gerald L. Maatman Jr. and Howard M. Wexler

As we previously blogged about, most recently here, the U.S. Supreme Court’s decision to grant certiorari in Mach Mining, LLC v. EEOC (No. 13-1019) could be a game changer in EEOC-related litigation. In Mach Mining, the Seventh Circuit ruled that an alleged failure to conciliate is not an affirmative defense to the merits of an employment discrimination suit and that it will not scrutinize the EEOC’s pre-suit obligations, so long as the EEOC’s complaint pleads it has complied with all procedures required under Title VII, and the relevant documents are facially sufficient. By granting certiorari, the Supreme Court is set to weigh in during its next term relative to conflicting rulings amongst the circuit courts about judicial authority and standards for reviewing the EEOC’s pre-suit conduct.

In the meantime, however, the show must go on! To that end, a recent decision out of the U.S. District Court for the Western District of Missouri highlights why the Supreme Court’s eventual ruling in Mach Mining is important. In EEOC v. New Prime, Inc., Case No. 11-CV-3367 (W.D. Mo. Aug. 14, 2014), Judge Douglas Harpool granted, in part, the EEOC’s motion for summary judgment, finding that it satisfied its pre-suit investigation and conciliation obligation despite noting that the Court was “underwhelmed by the EEOC’s attempt at conciliation.” Id. at 13.

Background

In EEOC v. New Prime, a trucking company maintained a company-wide “same-sex training policy” which required all applicants who did not meet Prime’s experience requirements to receive over-the-road training by an instructor and/or trainer who is the same gender as the applicant unless there is some pre-existing relationship between the female applicant and male instructor/trainer. Id. at 3. The effect of this policy was that when a female applicant was ready to be assigned to a trainer or instructor in order to receive the necessary “over the road” training, a female driver had to be available. Id. However, based on the number of female drivers available to train, Prime would place female applicants on a “female waiting list” when drivers were not available. Id. at 3-4. Prime implemented this policy after it was involved in a sexual harassment case brought by three female truck driver trainees. Id.

A female job applicant brought a charge with the Missouri Commission on Human Rights (“MCHR”) and alleged that Prime told her that her application had been accepted, but she could not be hired because she was female and there were no female trainers were available then or in the near future. Id. at 4. After the MCHR issued a Probable Cause finding, it transferred the case to the EEOC for further investigation. Id. at 5. On April 1, 2010, the EEOC sent Prime a letter stating “the EEOC’s investigation of this charge is nation-wide in scope.” Id. One year later the EEOC issued its Letter of Determination, which stated “[b]ased on the foregoing, there is reasonable cause to believe that Respondent has subjected Charging Party and a class of female trainees to unlawful discrimination by adopting a policy that denies female trainees training and employment opportunities that are not denied to similarly-situated male trainees.” Id. at 5. On this same date, the EEOC sent its letter regarding conciliation that focused on relief not only for the charging party who brought the charge, but also “all identified and still-to-be identified victims.” Id.

On June 7, 2011, Prime submitted its response to the conciliation proposal, which indicated that it was “not interested” in engaging in class-wide conciliation and would only negotiate concerning the individual who filed the EEOC charge. Id. at 6. One week later the EEOC informed Prime that conciliation failed and subsequently brought suit in federal court. Id.

The Decision

Both the EEOC and Prime argued that they were entitled to summary judgment on the merits as well as on several evidentiary (e.g. spoliation) and damage (punitive damages) issues. However, especially relevant with Mach Mining on the horizon is the fact that the EEOC decided to move for summary judgment on whether all conditions precedent to the filing of the lawsuit were met. Prime filed its own motion on this point, arguing that the EEOC failed to adequately investigate and conciliation the matter before filing suit.

The Court acknowledged that the EEOC is obligated to conciliate in good faith, and that in order satisfy the statutory requirement of good faith conciliation, the EEOC must “(1) outline to the employer the reasonable cause for its belief that the law has been violated; (2) offer an opportunity for voluntary compliance; and (3) respond in a reasonable and flexible manner to the reasonable attitudes of the employer.” Id. at 8. Furthermore, the Court held that whether the EEOC adequately fulfilled its obligation to conciliate is dependent upon the “reasonableness and responsiveness of the [EEOC’s] conduct under all the circumstances.” Id.

With respect to its investigatory function, the Court held that the EEOC’s initial letters put Prime on notice that it was investigating on behalf of “similarly situated individuals with regard to the same-sex training policy.” Id. at 10. Furthermore, Prime was put on notice through the initial charge and the subsequent investigation that any females that were subject to the policy, or more specifically put on the waiting list, were part of the EEOC’s investigation. Id. Since it held that “the EEOC’s scope of the investigation in this matter was clear – it pertained to the same-sex training policy implemented by Prime, including the female waiting list for potential applicants, trainees and potential employees,” the Court held that the EEOC adequately investigated the matter with respect to its class-wide claims prior to filing suit. Id. at 11.

With respect to conciliation, the Court found that the EEOC met the “low hurdle of attempting a reasonable and responsive conciliation process” despite shutting down conciliation one week after Prime submitted its initial response to the EEOC. Id. at 13. The Court was “not persuaded that this is enough to prevent the case from meeting the requirements for the filing of the instant lawsuit” given that Prime expressed no interest in considering compensation for any women affected by the policy – which is something the EEOC informed Prime it sought as a result of the company-wide alleged discriminatory policy. Id. at 14. Accordingly, the Court granted the EEOC’s motion for summary judgment, finding that it satisfied all conditions precedent to filing this lawsuit. Id.

Implication For Employers

As this case demonstrates, the eventual ruling by the Supreme Court in Mach Mining has the potential to be a game changer for any employer dealing with the EEOC. If federal courts cannot review its pre-lawsuit conciliation efforts, the EEOC, in effect, will have free reign to pay mere lip service to its conciliation obligations and approach any negotiations in a “take-it-or-leave-it” manner. We will continue to follow developments as the parties and amicus groups file their briefs, and keep our readers informed.

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

An About-Face By The Court Could Put Bass Pro Back On The Hook

Posted in EEOC Litigation

By Christopher J. DeGroff, Gerald L. Maatman, Jr., and Julie G. Yap

In the spirit of “it ain’t over ‘till it’s over,” this week’s decision in EEOC v. Bass Pro Outdoor World, LLC, et al., Case No. 11-CV-3425 (S.D. Tex. July 30, 2014), by Judge Keith Ellison of the U.S. District Court for Southern District of Texas is a stark about-face from the Court’s own ruling from earlier this year (which we blogged about previously here.) In the process, the Court makes several sweeping rulings concerning EEOC-initiated litigation procedure and addresses the very fabric of Title VII itself.  The sheer scope of the Court’s ruling makes it an important read for employers and practitioners alike. Of course, the case is not without controversy, especially given the Court’s tacit invitation to Bass Pro to appeal its ruling.

Background

Historically, the EEOC has used two avenues for suing employers for alleged discrimination under Title VII — Section 706 and Section 707 actions. Section 706 cases have traditionally been viewed as a “representative” actions, where the EEOC steps into the shoes of individual claimants and sues on their behalf (some of these actions are one-off, single-claimant actions, while others involve a group of similar claimants). Section 706 claimants can be awarded typical economic damages, as well as compensatory and punitive damages. Section 707, on the other hand, authorizes the EEOC to bring a systemic case alleging a universally applied “pattern or practice” of discrimination. Because a § 707 case is brought directly by the EEOC on its own behalf, it may only obtain equitable relief and damages, such as back pay. Pattern or practice cases follow a burden-shifting framework first articulated in Franks v. Bowman Transportation Company, Inc., 424 U.S. 747 (1976), and later refined in International Brotherhood of Teamsters v. United States, 431 U.S. 324 (1977). The Teamsters framework typically requires a showing by the EEOC that discrimination is the employer’s “standard operating procedure.” If the government meets that difficult burden of proof, it arguably creates a presumption that all individuals in the EEOC’s “class” were victims of discrimination, leaving it to the employer to rebut individual claims, often years after employment decisions were made. Obviously, a class-wide presumption of discrimination is deeply troubling for employers.

This all sets the stage for the case against Bass Pro. There, the EEOC has attempted to bring a  “hybrid” claim, where it seeks to use the Teamsters pattern or practice framework typically used under § 707, in a § 706 action (with the full boat of damages allowable under that section). Bass Pro, of course, vigorously opposed the EEOC’s play, insisting that to cut-and-paste the Teamsters model into § 706 would essentially make a § 707 case redundant and obsolete.

And the Court agreed with Bass Pro.  At least at first.

On May 31, 2012, the Court sided with Bass Pro, holding that “the EEOC cannot bring a hybrid pattern or practice claim that melds the respective frameworks of § 706 and § 707.” Id. at 29. The Court noted that § 707, unlike § 706, expressly authorized the use of a pattern-and-practice framework for determining claims and that the differences in remedies available under each section counseled in favor of applying two different frameworks. Id.

The Court’s About-Face

But the EEOC repeatedly asked the Court to revisit its decision, and eventually the Court relented and took another look.  Judge Ellison took his original ruling, and turned it on its head. Specifically, the Court held that the Teamsters analysis can apply to both § 706 and § 707 claims. Id. at 2. In doing so, the Court rejected the Defendants four primary arguments, though not without noting the strength of the Defendants’ positions:

  •  First, even though Section 707 expressly authorizes pattern-or-practice litigation (and Section 706 does not), the Court held that because Congress knew about the Teamsters framework, it must have implicitly included it in drafting Section 706, even though it expressly included it in Section 707.  Id. at 23-26.
  • Second, even though Congress authorized different damages under Sections 706 and 707, the Court concluded that this distinction did not limit the way in which the EEOC could prove facts to support any sort of relief, albeit equitable relief or monetary damages.  Id. at 26-28.
  • Third, the Court rejected Defendants’ position that applying a Teamsters framework in a jury trial on Section 706 claims — in contrast to § 707 proceedings where evidence is presented to a court — would create Seventh Amendment problems because a second jury may be required to re-examine facts already decided by a first jury.  The Court deferred the constitutional concerns for another day, noting that it “will carefully consider the Seventh Amendment implications . . . when the Court revisits a case management plan.”  Id. at 30.
  • Fourth, the Court declined to adopt the reasoning of analogous cases cited by Defendants, instead relying heavily on the Sixth Circuit’s decision in Serrano v. Cintas Corp.  The Court noted, however, that “lower courts have been riven by disagreement” and that “this is an area of law ripe for further illumination from the appellate courts.”  Id. at 2.

Finally, in the same order, the Court again addressed the EEOC’s conciliation obligations — an issue that has been a bone of contention in this case for years, as discussed here and here. Defendants moved for summary judgment, asserting that the EEOC had not sufficiently fulfilled its obligations to conciliate the Section 706 claim on behalf of individuals who had not been identified before filing suit. The Court rejected this argument, noting that the EEOC could conduct an adequate investigation, even where it does not know the specific identities of all those allegedly aggrieved. The decision appears to leave untouched the Court’s earlier ruling that the EEOC cannot sue on behalf of claimants that had not even applied at the time the parties conciliated the underlying claims.

Where does this leave Bass Pro? In a fairly stunning move, Judge Ellison acknowledged that he was “fully sensitive to the strength of the antithesis” of his decision. Id. at 2. Indeed, the Court went so far as to express that it “would look favorably upon a motion for certification” of an appeal of his decision.  Id. at 46. The Court has essentially invited Bass Pro to appeal his ruling to the U.S. Court of Appeals for the Fifth Circuit. Readers of this blog should stay tuned, as we suspect that is precisely what Bass Pro will do.

Implications For Employers

The Court’s decision in Bass Pro has sent reverberations throughout the employer community, and may further muddy the waters on some fundamental structural issues of EEOC-initiated litigation. Of course, this is just one court’s take on the Section 706/707 issue, and even the judge acknowledged that there was “ample support” for Bass Pro’s positions. Thus, this case has limited presidential value, but we expect the EEOC will attempt to expand the impact of the Bass Pro decision to other jurisdictions or even different legal theories. The EEOC v. Bass Pro decision essentially leaves employers with less clarity on the rules of the road in government-initiated litigation than ever before.

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

Is The EEOC’s Role To Enforce The Law, Or Make New Law?

Posted in Uncategorized

By Gerald L. Maatman, Jr.

Today I had the privilege of attending the 6th Annual Forum on Defending Employment Discrimination Litigation hosted by the American Conference Institute in New York, New York (I spoke on defense strategies for defending high stakes, multi-party age discrimination lawsuits).

Constance Barker, one of the five Commissioners at the Equal Employment Opportunity Commission, gave the keynote address at the program. Her presentation was fascinating, and focused largely on the swirling controversy relative to the EEOC’s recent issuance of new enforcement guidance on the Pregnancy Discrimination Act (which we blogged on previously here). Commissioner Barker made public statements about the PDA Guidance - immediately after the EEOC posted the Guidance on its website – questioning the wisdom of the EEOC’s action on procedural and substantive grounds. She asserted that in adopting the new Guidance, the Commission sought to legislate changes to, rather than interpret, Title VII (her written comments dated July 14, 2014, are here.

In broader terms, this squarely raises the issue of the proper role and responsibility of the EEOC. Should it enforce the law or expand the law to maximize the reach and public policies within employment discrimination prohibitions? Many critics of the EEOC have cited the new Guidance 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.

In response to questions from floor at today’s program in New York, Commission Barker agreed that there is some truth to the criticism that the EEOC has sought to use its enforcement power and enforcement litigation to, in a sense, “legislate” behavior in the employer community. She agreed that while societal goals and aspirations might counsel that a law like the PDA should be interpreted in the manner the new Guidance advocates, the role of the EEOC is not to engage in “social engineering.” Instead, the role of the EEOC is to enforce the law as written, and leave policy decisions about the expansion of the law to Congress. In this respect, she reiterated her position that the new PDA Guidance represented an effort by the Commission to “jump ahead” of Congress and the courts in fashioning the contours of employer obligations and employee rights under the law.

Commissioner Barker predicted that the EEOC’s action may become “an embarrassment” for the Commission depending on how the U.S. Supreme Court adjudicates certain issues in Young v. United Parcel Serv., 707 F.3d 437 (4th Cir. 2013), in its next term (and may well grant the new Guidance no deference or criticize how the EEOC went about issuing the Guidance).

This issue is sure to heat up further. Stay tuned.

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

The Need For Vigilance: The EEOC Comes Back For A Second Bite Of An Employer After A Settlement

Posted in Remedies, Uncategorized

By Chris DeGroff and Brian Wong

In the world of EEOC systemic enforcement, court-imposed injunctive relief accompanies nearly every settlement of Title VII claims. The parties memorialize this relief in the form of a consent decree to be approved by the Court and entered as an enforceable order. Though the parties and the public tend to focus primarily on the dollar value of systemic action settlements, employers bound by consent decrees must remember that failure to comply with agreed-upon injunctive mandates could result in significant exposure for the company.

In EEOC v. Supervalu, Inc. and Jewel-Osco, Case No. 1:09-CV-05637 (N.D. Ill. July 15, 2014), the EEOC tried to send this very message to employers.

Background

On September 11, 2009, the EEOC sued Supervalu, Inc. and Jewel-Osco (collectively “Jewel”) in the U.S. District Court for the Northern District of Illinois, alleging Jewel engaged in a pattern or practice of violating Title I of the Americans with Disabilities Act.  Specifically the EEOC alleged Jewel prohibited disabled employees from returning to work after disability leaves unless they could return without accommodation, and that Jewel terminated such employees at the end of their one-year leave period.

On January 14, 2011, the EEOC and Jewel entered into a three-year Consent Decree to resolve the case. Among other provisions, the Consent Decree required Jewel to make monetary payments to eligible claimants, provide training to certain employees who administer disability leaves, and engage a “job description consultant” and “accommodations consultant” to improve job descriptions and assist in identifying possible accommodations for disabled employees.

The case was over. But was it?

The next year, on March 26, 2012, the EEOC filed a motion seeking civil contempt sanctions against Jewel for failing to follow the requirements of the Consent Decree as to three former employees. The EEOC also sought limited discovery on the issue, which the Court initially denied, but thereafter granted following written objections by the parties. After the parties engaged in limited discovery, the Court conducted evidentiary hearings on March 17 and 18 and April 7, 2014, before U.S. Magistrate Judge Michael T. Mason.

The Magistrate Judge’s Recommendation

Judge Mason filed his Report and Recommendation on July 15, 2014, determining that Jewel violated the terms of the Consent Decree by failing to accommodate and ultimately terminating three disabled employees.  According to the Court, Jewel failed to follow its own interactive process guidelines and declined to consider a list of possible accommodations generated by the accommodations consultant the company itself had appointed per the Consent Decree.  According to Magistrate Judge Mason, “[q]uite simply, the evidence [was] overwhelming that the company did not do what it was supposed to do under the Decree.” Id. at 46.

After determining clear and convincing evidence showed Jewel violated the Consent Decree, the Court recommended: (i) a finding of contempt on the part of Jewel; (ii) compensatory sanctions of over $82,000 in back pay for the three aggrieved individuals; (iii) a one year extension of the term of the Consent Decree; (iv) retention of a company-paid “special master” to review prospective accommodation decisions made by Jewel in the future; and (v) company payment of reasonable fees and costs incurred by the EEOC in pursuing its contempt motion.

But the saga continues.  Jewel has until July 29, 2014 to file objections to Judge Mason’s Report and Recommendations.  So blog readers, please stay tuned.

Implications For Employers

Regardless of the outcome of the ongoing briefing, this action brought by the EEOC serves as a cautionary tale for any employer living under the terms of an EEOC consent decree.  Companies bound by consent decrees must remain vigilant, as the EEOC frequently looks for opportunities to retake the spotlight by making allegations about supposed compliance issues.  As EEOC Chicago Regional Attorney John Hendrickson has warned, “Consent decrees have teeth.” The attraction of these compliance actions for the EEOC is clear: tag-along actions like those discussed here have all of the publicity elements of an actual lawsuit, while expending minimal governmental resources. Because consent decrees often contain exhaustive injunctive mandates, robust documentation of those efforts can be a critical safeguard against aggressive EEOC allegations of non-compliance.

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

New Guidance From The EEOC Requires Employers To Provide Reasonable Accommodations Under The Pregnancy Discrimination Act

Posted in Regulatory / Guidance Issuance

By Paul Kehoe 

Today, without the fanfare of a public meeting, the U.S. Equal Employment Opportunity Commission published Guidance on its website addressing the treatment of pregnancy under Title VII. Once again, it appears as if the EEOC adopted a position exceeding the statutory mandate that Congress bestowed upon it. Requiring employers to provide a reasonable accommodation under Title VII of the Civil Rights Act of 1964 for all pregnant employees finds no statutory basis in the text of Title VII, the Americans With Disabilities Act, as amended, or the Pregnancy Discrimination Act (the “PDA”). Indeed, the overwhelming majority of the Circuit Courts of Appeals that have reviewed the issue have held that the PDA does not include a reasonable accommodation requirement.  Despite that, a majority of the EEOC’s Commissioners determined otherwise. Commissioners Barker and Lipnic both issued statements – immediately after the EEOC posted the Guidance on its website – questioning the wisdom of the majority’s actions on procedural and substantive grounds, each recognizing that in adopting the new Guidance, the Commission sought to legislate changes to, rather than interpret, Title VII.

Controversy

This is a controversial issue for employers. One might reasonably argue that when the U.S. Supreme Court reviews Young v. United Parcel Serv., 707 F.3d 437 (4th Cir. 2013), in its next term, it should grant this Guidance the deference it deserves – none.

This bald attempt to jump over a pending Supreme Court case and federal legislation, however, may backfire against the EEOC as the Supreme Court has rather routinely rejected EEOC guidance in recent years. See, e.g., Vance v. Ball State University, 133 S. Ct. 2434 (2013) (rejecting the EEOC’s definition of “supervisor” and held that an employee is a supervisor only where the employer has empowered the employee to take tangible employment actions against the employee rather than the EEOC’s more expansive definition); Univ. of Texas Southwestern Med. Ctr. v. Nassar, 133 S. Ct. 2517 (2013) (rejecting the EEOC’s position that retaliation claims under Title VII were subject to the “motivating factor” causation standard); Hosanna-Tabor Evangelical Lutheran Church v. EEOC, 132 S. Ct. 694, 707 (2012) (rejecting the EEOC’s position that the ministerial exception did not apply to ADA retaliation cases). The Supreme Court’s decisions were often based on the lack of statutory support for the EEOC’s positions.  Like all regulatory agencies, the EEOC does not operate in a vacuum or in pursuit of policies which it may desire to implement but rather may act only pursuant to the authority given to it.

Without a doubt, given the broad expansion of covered disabilities under the ADAAA, many more pregnancy-related impairments now likely rise to the level of an ADA-covered disability (e.g., anemia, pregnancy-related sciatica, pre-eclampsia, gestational diabetes).  In these instances, a pregnant employee would be afforded the same right to reasonable accommodation under the ADA as any other individual with a disability, regardless of whether the impairment was related to pregnancy.  In addition, twelve jurisdictions have adopted pregnancy accommodation statutes or ordinances. However, the Guidance asserts that the reasonable accommodation requirement applies even for those pregnant employees whose impairments do not rise to the level of a disability under the ADA (e.g., those with a “normal” pregnancy) notwithstanding that under the ADA, pregnancy is not an impairment.

The standards adopted in the Guidance are currently proposed in the Pregnant Worker’s Fairness Act (the “PWFA”), S. 942 and H.R. 1975.  The PWFA, if enacted, would make it an unlawful employment practice to not provide a reasonable accommodation to the known limitations related to pregnancy or force a pregnant employee to take leave, among other things. Rather than waiting until the legislative process is complete, the Guidance preemptively reaches the same conclusion under the theory that the reasonable accommodation requirements of the Americans with Disabilities Act of 1990 were incorporated into the PDA, which was enacted in 1978.

Implications For Employers

As a practical matter, employers will feel the greatest impact of the Guidance in the area of light duty and leave as applicable to female employees with “normal” pregnancies. Currently, under federal law, where an employer’s policy provides leave or light duty for employees injured or otherwise medically limited in their ability to work for any reason, a pregnant employee is entitled to such leave – the fact that her limitation arises from a normal pregnancy, rather than an injury or medical condition – is irrelevant. Conversely, as was permissible in Young, where an employer’s light duty or leave policy limits eligibility to those with a disability or those with on the job injuries, an employee with a normal pregnancy would not be eligible for light duty. Under the Guidance, employers would be required to provide light duty and/or leave for all pregnant employees, regardless of whether they were “disabled” under the ADA.

Notably, the EEOC’s process in adopting the anticipated Guidance ignored the standards articulated by the Office of Management and Budget (“OMB”) in its “Final Bulletin for Agency Good Guidance Practices” (No. M-07-07, January 18, 2007). That document — which “establishes policies and procedures for the development, issuance, and use of significant guidance documents by Executive Branch departments and agencies” — sets forth a number of recommendations for significant guidance documents.  While it stops short of requiring agencies to provide pre-adoption notice and comment on all significant guidance documents, it recognizes that “it is often beneficial for an agency to do so when they determine that it is practical.  Pre-adoption notice and comment can be most helpful for significant guidance documents that are particularly complex, novel, consequential, or controversial.”

As this Guidance adopted a standard that is currently pending before Congress and the Supreme Court, a standard overwhelmingly (though not unanimously) rejected by the Circuit Courts of Appeals, and one which essentially eviscerates the EEOC’s prior position that pregnancy is not a disability (which was issued during a notice and comment rulemaking), all without public comment or an opportunity for dissenting Commissioners to publicly object to the Guidance, its adoption casts a pall over its legitimacy. Unfortunately, the EEOC has decided that the legislative and judicial processes are not necessary when rewriting the statutes that it enforces.

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