By Courtney Bohl and Laura J. Maechtlen

In yet another case regarding the sufficiency of the EEOC’s pre-litigation conciliation efforts, Judge Marcia Kriger of the U.S. District Court for the District of Colorado recently cautioned the EEOC about “hiding the ball” during conciliation negotiations. In EEOC v. The Original Honeybaked Ham, No. 11-CV-02560 (D. Colo. Jan. 15, 2013), the Court found the EEOC’s pre-suit conciliation efforts unsatisfactory and limited the EEOC’s claims to only those identified during its conciliation negotiations. The Court also limited the number of individuals for whom the EEOC could seek relief to those sufficiently identified during conciliation, whether they were identified directly by name or identified as part of a group of which the EEOC specifically defined. This decision represents another helpful precedent for employers facing a recalcitrant EEOC during conciliation.

Background Of The Case

In EEOC v. The Original Honeybaked Ham, the EEOC filed suit on behalf of a class of female workers alleging sex discrimination and retaliation. The lawsuit stemmed from a charge of discrimination filed by Wendy Cabrera, a female who alleged she was harassed by a Manager, James Jackman, and terminated after complaining to District 8 Manager Donna Wagner-Rego and Human Resources Representative Michael Costello. 

The EEOC investigated Caberea’s charge by interviewing three employees at the Highland Ranch store, and obtaining statements from two employees stating that Jackman had harassed them and other female employees. After the investigation, the EEOC issued a letter of determination and invited HBH to engage in conciliation. 

The EEOC’s initial conciliation offer demanded monetary relief for Cabrera and eight other female employees who were subjected to Jackman’s allegedly harassing conduct. The EEOC also advised HBH that it would likely discover more victims if the case proceeded to litigation, but refused to identify any additional class members or provide any information about the scope of this unnamed class. Because the EEOC provided only nebulous information during conciliation, HBH was unable to assess its liability and declined to make a counter-offer. 

After filing its initial complaint and despite only engaging in conciliation with respect to female employees subjected to Jackman’s conduct, the EEOC amended its complaint, broadening the scope of its claims to individuals subjected to Jackman’s conduct and/or the conduct of other supervisors and managers within District 8 under Human Resource Representative Costello’s oversight. 

The parties subsequently reentered negotiations on the broadened claims. Predictably, the EEOC again refused to provide specific names of aggrieved parties or the scope of the potential class. As a result, HBH was unable to make a meaningful counter-offer and notified the EEOC that it wished to proceed with litigation. 

In response to the EEOC’s amended complaint, HBH filed a motion to dismiss, seeking to: (1) limit the scope of the EEOC’s claims to claims arising from Jackman’s unlawful conduct and not of any other supervisor or manager; and (2) limit the available remedies to injuries suffered by Cabrera and the eight aggrieved individuals identified in the pre-litigation conciliation.

The Court’s Ruling

The Court agreed with HBH’s first argument and limited the EEOC’s claims of sex discrimination and retaliation to conduct by Jackman. Id. at 11. In doing so, the Court acknowledged that the EEOC is authorized to pursue claims of illegal conduct beyond what was alleged in the initial charge, so long as the additional conduct is discovered during the course of the charge’s investigation. Id. at 9. However, if the EEOC discovers additional wrongdoing, it must give notice of this wrongdoing to the employer and provide the employer an opportunity to conciliate on all charges before a lawsuit is filed. Id. The Court found that the EEOC failed to do so, focusing its negotiations on the unlawful conduct of Jackman. Id. at 10. Moreover, the Court flatly rejected the EEOC’s argument that it gave HBH informal notice by alleging retaliation by Wagner-Rego and Castello. Id.  at 11. 

The Court also held that while the EEOC could pursue a remedy for those aggrieved individuals impacted by the conduct of Jackman, it could not do so for individuals affected by the conduct of other supervisors or managers. Id. at 15. HBH cited the Eighth Circuit’s decision in EEOC v. CRST (that we previously blogged about here) in arguing that relief could only be sought by the EEOC for aggrieved persons whose identities were disclosed in pre-litigation negotiations. Id. at 13. The Court rejected this categorical interpretation of EEOC v. CRST, finding that the amount of information required on the identities of potential class members should be viewed on more of a “sliding-scale.” Id. at 13-14. Thus, the greater specificity the EEOC gives in describing the alleged unlawful conduct, the less important it becomes for the EEOC to identify each aggrieved individual by name. Id. The Court reasoned that, if the employer is given information on the “extent, location, time period, and persons involved in the alleged unlawful conduct,” the employer would be able to reasonably estimate the number of individuals impacted. Id. at 14. Because the EEOC disclosed information about Jackman’s conduct at a specific retail store, HBH had sufficient notice of all individuals affected by Jackman’s conduct, but not individuals subjected to conduct engaged in by other supervisors. Id. at 15.

Implications For Employers

The U.S. District Court for the District of Colorado’s ruling joins a litany of recent rulings (here, here and here) that have similarly found the EEOC’s pre-litigation efforts unacceptable under Title VII’s framework. The ruling bars the EEOC from asserting claims not specifically identified during pre-suit litigation and prohibits the EEOC from seeking relief on behalf of individuals who the employer could not reasonably identify from the information provided by the EEOC. Although the Court refused to require the EEOC to identify all aggrieved individuals in its pre-suit negotiations, the Court did make clear that if the EEOC declines to name each individual, it must, at the very least, sufficiently identify an outline or definition of the class so the employer is on notice as to the extent of its liability. This case should be added to every employer’s “tool-box” of cases to use when faced with an EEOC investigation and lawsuit.

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