EEOC Year-End Countdown

By Christopher DeGroff and Gerald L. Maatman, Jr.

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

Background Of The Case

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

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

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

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

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

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

The Court’s Ruling

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

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

Implications For Employers

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

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

By Christopher DeGroff and Gerald L. Maatman, Jr.

After much anticipation, heated debate, and numerous invitations for public comment on the EEOC’s Strategic Enforcement Plan, on February 20, 2013, the EEOC provided an update on its implementation of the Strategic Plan. Approved on December 18, 2012, the Strategic Plan will function as the blueprint for the Commission’s enforcement activity for the next several years. Because of the Plan’s importance to employers, corporate counsel, and HR professionals, Seyfarth Shaw LLP offered its input on the Strategic Plan from the earliest stages of the EEOC’s drafting process. Seyfarth voiced pressing concerns in both its June 2012 and September 2012 comments to the EEOC.

The EEOC opened the first portion of its meeting to the public and addressed the Commission’s progress in implementing the Strategic Plan. The EEOC’s Performance Improvement Officer, Claudia Withers, and the Director of Research, Information and Planning, Deidre Flippen, answered questions about the EEOC’s objective of strategic law enforcement and addressed the Strategic Plan’s performance measures.

An additional speaker was Constance Barker, one of the Commissioners of the EEOC. Much could be gleaned from the issues Commissioner Barker addressed (her written comments are here). Especially telling was Commissioner Barker’s prediction that the EEOC’s systemic litigation program will take precedent over the EEOC’s prevention efforts. She articulated several concerns about the EEOC’s emphasis on enforcement of discrimination laws. She sees this as driving up the amount of resources allocated on discrimination that has already occurred, whereas the EEOC would be better off allocating those resources on prevention mechanisms. Commissioner Barker explained that she is opposed to the Strategic Plan because it places the EEOC’s emphasis on litigating discrimination claims, instead of concentrating efforts on preventing discrimination from happening in the first place.

She also lamented the fact that most lawsuits are filed without the Commissioners’ knowledge. For example, Commissioner Barker stated that in FY 2012, the Commission filed 122 lawsuits in the name of the EEOC but under the rules of the delegation to the General Counsel, only 3 of the 122 lawsuits were sent to the Commissioners for their review and vote. Her speech pointedly suggested that the EEOC rescind the delegation to the General Counsel, which would allow Commissioners to carry out their fundamental responsibility of reviewing, deliberating, and voting on proposed litigation.

In all, this meeting resulted in a robust exchange of ideas and viewpoints from the EEOC. The question remains, of course, will those key decision-makers at the EEOC take control of litigating systemic issues? If the EEOC acts on the written recommendations that were submitted, along with those voiced in last week’s meeting, it would mean a fundamental change in the way that the EEOC views and approaches cases. Further, if the EEOC does embrace a dialogue focused on education and outreach efforts – as Commissioner Barker urged – it would value the efforts that many large employers have made to promote diversity in their workforces and the prospects for reducing discrimination in the workplace will come closer to full realization.

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

By Gerald L. Maatman, Jr. and Christopher DeGroff

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

Background Of The Consent Decree

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

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

Terms Of The Consent Decree

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

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

Implications For Employers

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

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

By Christopher DeGroff and Gerald L. Maatman, Jr.

Calling all loyal readers of our blog – our annual EEOC litigation study is here: the launch of our book entitled EEOC-Initiated Litigation: Case Law Developments In 2012 And Trends To Watch For In 2013.

This publication is what we hope you will agree is a definitive source of information that focuses exclusively on EEOC-related litigation. To order a copy, please click here. This year for the first time, we are also offering this publication for immediate download as an eBook. To download the eBook, please click here.  This year’s book covers more decisions than ever before and provides readers with a detailed Executive Summary on the unique challenges of litigating against the EEOC.

This publication is what we hope you will agree is a definitive source of information that focuses exclusively on EEOC-related litigation.  This year’s book covers more decisions than ever before and provides readers with a detailed Executive Summary on the unique challenges of litigating against the EEOC. 

In November, we blogged that the EEOC’s Performance and Accountability Report (“PAR”) reported a striking drop in the number of lawsuits the EEOC filed in FY 2012.  The PAR noted that the EEOC only filed 122 lawsuits in FY 2012, down from 261 merits lawsuits in FY 2011. This precipitous drop in the total cases filed, however, did not affect the EEOC’s bottom-line of systemic discrimination lawsuits. In furtherance of its strategic objectives, the EEOC continued its ever-increasing focus on pursuing large-scale, high-impact, and high-profile cases with the hope that this brand of high-stakes litigation will channel employers’ behavior. To that end, the EEOC reported that by the end of FY 2012, systemic suits accounted for 20% of all of the EEOC’s active merits suits, the largest proportion on the EEOC’s active docket since it began tracking in FY 2006. 

Our EEOC-Initiated Litigation book also includes a discussion of five substantive trends in the EEOC’s 2012 litigation: (1) A rush on ADA cases; (2) subpoena enforcement actions; (3) a focus on workplace harassment cases; (4) attacking novel theories – expanding coverage of existing laws, and (5) rulings that apply § 706’s limitation period to EEOC pattern or practice allegations brought under § 707 of Title VII. With this retrospective in mind, each year we select a short list of what we consider the five most intriguing EEOC-related decisions handed down this past.

So what are the 5 most intriguing decisions? Here are our pick for 2012.

1.  EEOC v. Interstate Distributor Co., Case No. 12-CV-02591 (D. Col. Nov. 8, 2012). We start with a focus on the ADA. The EEOC’s Strategic Enforcement Plan released just last month makes clear that the EEOC is going to “gear up” the investigation and subsequent litigation in this area. In FY 2012, the EEOC built significant momentum toward achieving this goal, and made sure that its focus on ADA claims would not go unnoticed by employers. Among these significant settlements included approval of a $4.85 million consent decree in EEOC v. Interstate Distributor Co. Judge Brooke Jackson of the U.S. District Court for the District of Colorado put an end to the litigation just one month after the EEOC filed its disability discrimination lawsuit. The parties negotiated a consent decree, and Judge Jackson approved the monetary payment to the class of alleged victims that provided them with back pay and compensatory damages. In terms of equitable relief, the consent decree includes injunctions prohibiting the Defendant from further discrimination or retaliation based on disability. For the next three years, the Defendant must provide periodic training on the ADA to its employees in efforts to prevent such discrimination. Additionally, every six months the Defendant must provide the EEOC with information relating to terminations of employees, FMLA extensions, employees’ requests for accommodations, and disability complaints. 

The EEOC’s $4.85 million consent decree is nothing to sneeze at. This is a big settlement for the EEOC and a reminder to employers to review their ADA-realted policies and consider whether they are over restrictive. This case also provides insight on settlements that seek quick relief. While it can take years to obtain a final resolution through settlement or trial, the parties disposed of the EEOC’s claims in record time – one month.

2.  EEOC v. McLane Company, Inc., 2012 U.S. Dist. LEXIS 164920 (D. Ariz. Nov. 19, 2012). Next, we turn to subpoena enforcement. Increasingly, the EEOC resorts to its subpoena power to launch broad-scale discovery in its investigations. In 2012, even though the total number of EEOC cases shrunk by half, the number of subpoena actions stayed roughly the same as last year. In 2012, the EEOC reported that it filed 33 subpoena/“other” actions. Courts gave the EEOC continued to give considerable latitude with respect to the breadth of the information the agency could obtain, even with respect to seemingly focused charges of discrimination. On the bright side for employers, a handful of courts issued rulings that limited or denied EEOC subpoenas. 

Employers should tuck EEOC v. McLane Company, Inc. away for future use in confronting aggressive EEOC subpoenas. In EEOC v. McLane Company, Inc., the U.S. District Court for the District of Arizona denied the EEOC’s application to enforce portions of an administrative subpoena on the grounds that:  (i) the EEOC did not have jurisdiction to investigate a generalized charge of discrimination that is not tied to a specific aggrieved party; and (ii) some of the EEOC’s information requests were overbroad and irrelevant to the underlying charge. The Court reasoned “[t]o ignore the plain language of the statute and to allow the EEOC to investigate a generalized charge of discrimination that is untethered to any aggrieved person would invite the oft-cited ‘fishing expedition’ to become a full-blown harvest operation.” Id. at *10.

The ruling in EEOC v. McLane Company, Inc. confirms that the EEOC’s investigative powers are not unlimited and the EEOC does not have unbridled reign to seek any and all information from an employer merely because a charge of discrimination was filed against it.  This case is a rare gem and can be used as ammunition for employers facing broad information requests in investigation of pattern or practice claims.

 3.  EEOC v. Yellow Transportation, Inc. and YRC, Inc., Case No. 09-CV-7693 (N.D. Ill. June 28, 2012). In the EEOC’s first draft of its SEP, the Commission telegraphed that it was increasingly focused on preventing, and when necessary, litigating workplace harassment allegations.  The EEOC’s warning was no bluff:  the EEOC filed a series of race and sex harassment lawsuits in 2012. Indeed, we saw a notable case concerning race harassment in EEOC v. Yellow Transportation, Inc. and YRC, Inc. In this somewhat complicated case from the U.S. District Court for the Northern District of Illinois, the EEOC secured approval of $11 million consent decree in its largest settlement of 2012. The EEOC alleged a pattern or practice lawsuit involving allegations of systemic race discrimination. The consent decree resolved two lawsuits (including a private plaintiff class action brought by 14 workers who also intervened in the EEOC’s lawsuit) that had been consolidated for purposes of settlement negotiations. The EEOC and a class of African-American workers employed by Yellow Transportation, Inc. and YRC, Inc. alleged that the companies discriminated against workers at their Chicago Ridge facility and subjected them to multiple incidents of hangman’s nooses and racist graffiti, comments, and cartoons. The EEOC also claimed that Yellow Transportation and YRC subjected African-American employees to harsher discipline and scrutiny than their white counterparts and gave them more difficult and time-consuming work assignments. 

Two years ago, the EEOC secured a $10 million consent decree with YRC and Roadway Express stemming from the EEOC’s claims that African-American employees at the companies’ Chicago Heights and Elk Grove Village, Illinois facilities were subjected to a racially hostile working environment and race discrimination. The consent decree, however, did not end the litigation in store for YRC.  Although it resolved the EEOC’s discrimination charges at the Chicago Heights and Elk Grove facilities, the settlement did not address pending charges against the company’s Chicago Ridge facility. To that end Magistrate Judge Cox entered a joint motion for preliminary approval of the $11 million consent decree, which provides significant monetary relief to the class of allegedly aggrieved victims, and payment of $1.1 million in attorneys’ fees and costs to private class counsel. 

The EEOC’s $11 million settlement – or looking at it in context, the $21 million settlement with the defendants involving its three Illinois facilities – underscores the Commission’s goals for prosecuting large-scale systemic harassment litigation. The defendants’ pay out of $21 million in the last two years reminds employers not to tread lightly on the EEOC’s goals to attack race and sex harassment involving groups that it has called “underserved” – young, uneducated, and/or non-English speaking employees.

4.  EEOC v. Houston Funding II, Ltd., 2012 U.S. Dist. LEXIS 13644 (S.D. Tex. Feb. 2, 2012). Next we turn to an issue of first impression. The ruling in EEOC v. Houston Funding II, Ltd., et al. is believed to be the first decision on the issue of whether lactation is a form of sex discrimination covered by Title VII. In this unusual case, the EEOC alleged that an employer unlawfully discriminated against a worker on the basis of her sex because she wanted to express breast-milk while at work.  In a terse, three-page decision, the Court rejected the EEOC’s claim out of hand. The Court reasoned that even assuming that the “real reason” the worker was fired was because she wanted to pump breast-milk at work, “firing someone because of lactation or breast-pumping is not sex discrimination” because “lactation is not pregnancy, childbirth, or a related medical condition.” Id. at *2. 

EEOC v. Houston showcases another of the EEOC’s stated goals from its SEP, namely addressing emerging and developing legal issues. The Court’s decision makes clear that expressing breast-milk is not protected under federal anti-discrimination laws and is yet another example of overreaching by the EEOC. The Commission, not apt to “give up” on this front , hosted a meeting on February 15, 2012 at its headquarters on a range of issues relative to pregnancy discrimination. Clearly, these issues remain front and center on the EEOC’s radar.

5.  EEOC v. Global Horizons, Inc., et al., 2012 U.S. Dist. LEXIS 105993 (E.D. Wash. July 27, 2012). We close with a case that manifests an issue that the EEOC feverishly battled over in 2012. Since the inception of its systemic litigation program in 2006, the EEOC has maintained that it is unencumbered by the 300-day statute of limitations in § 706 of Title VII that applies to private litigants (which frames any Title VII lawsuit as limited to events occurring within 300 days preceding the filing on an EEOC charge with the EEOC). Typically, the EEOC argues that it can sue an employer for alleged violations going back to the start of the allegedly illegal pattern or practice (e.g., a discriminatory practice of denying promotions to female employees) irrespective of the date when a charging party filed his or her EEOC administrative charge.

In our Top 5 picks from 2011, we included EEOC v. Freeman, 2011 U.S. Dist. LEXIS 8718 (D. Md. Jan. 31, 2011), and noted that in 2011 the EEOC had a mixed track record of success in convincing federal courts to adopt its view of the statute of limitations issue. By the year-end of 2012, however, a wave of similar decisions make clear that a clear trend in federal courts emerged that finds § 706’s 300-day limitations period is applicable to the EEOC’s pattern or practice allegations. We pick EEOC v. Global Horizons, Inc., as one of the top 5 most intriguing case in 2012 because this employer-friendly decision struck at the heart of the EEOC’s attempt to litigate its case unrestrained by any statute of limitations. In this case, the EEOC alleged that Global Horizons, with the help of the agricultural companies and farms with it contracted, engaged in a litany of unlawful and potentially criminal acts , including human trafficking, confiscation of passports, the provision of substandard housing, and wage and hour violations. The U.S. District Court for the Eastern District of Washington imposed § 706’s 300-day limitations period on the EEOC’s pattern or practice claims and barred the EEOC from seeking relief for employment practices occurring more than 300 days before the filing of the underlying administrative charge. 

This ruling punctuates a trend of judicial intolerance for the EEOC’s attempts to litigate broad pattern or practice claims without adherence to any statute of limitations. Only two years ago, federal courts were split on the issue of whether the charge-filing period of § 706 applies to pattern or practice cases brought by the EEOC under § 707. The decided tide of decisions addressing this issue now flow in favor of employers. Employers can confidently argue that Title VII’s language implicates and requires that Title VII’s language implicates and requires that § 707 allegations comply with § 706’s 300-day limitations period. Finally, EEOC v. Global Horizons, Inc. is particularly interesting because it illuminates the EEOC’s foray into human trafficking issues. 

We hope you find this retrospective on FY 2012 and the EEOC-Initiated Litigation helpful.  Looking ahead, on Tuesday, March 12th, we will host our annual webinar that will guide attendees through an analysis of these and many other EEOC rulings and trends, and provide an opportunity to participate in a virtual dialogue with the authors. We will follow up with more details on our EEOC webinar in the next couple of weeks, so please stay tuned. 

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