By Gerald L. Maatman, Jr.

In one of the first workplace rulings of 2014, the U.S. District Court for the Western District Of New York granted an employer’s motion for summary judgment in EEOC v. Sterling Jewelers Inc., Case No. 08-CV-706 (W.D.N.Y. Jan. 2, 2014), and dismissed the lawsuit because the Commission failed to show that its pre-lawsuit investigation was consistent with the scope of the nationwide pattern or practice allegations of pay and promotion discrimination in its lawsuit. The case is the largest EEOC lawsuit on its docket. The result is the complete dismissal of the EEOC’s nationwide pattern or practice claims.

Background To The Ruling

When it filed the lawsuit in 2008, the EEOC claimed that the employer discriminated against female employees starting in 2003 in setting starting pay and in making promotions. In addition to denying those allegations, the employer filed an answer and affirmative defenses asserting that the Commission’s pre-lawsuit investigation was not a nationwide investigation, and the scope of the lawsuit exceeded the pre-lawsuit investigation.

After significant discovery, including rounds of depositions of the EEOC’s investigators responsible for the case, the employer moved for partial summary judgment on the grounds of the scope of the investigation issue. The employer argued that there was no evidence that the Commission had conducted a nationwide investigation prior to commencing the lawsuit. Id. at 4.

The Court’s Opinion

Magistrate Judge Jeremiah McCarthy of the Western District Of New York granted the motion – with a 20-page report and recommendation – on January 2, 2014. He rejected the EEOC’s position that a Court may not inquire into the scope of the EEOC’s pre-suit investigation. Id. at 5-7. In analyzing the record, Magistrate Judge McCarthy concluded that there was no genuine issue of material fact as to the scope of the investigation in that the Commission’s investigation was not nationwide. Id. at 9-12.  The Court rejected all of the contentions of the EEOC in trying to show that its nationwide claims should not be dismissed.

Implications For Employers

As the EEOC is committed to prosecution of large systemic lawsuits against employers, the ruling in this case is important in elucidating the Commission’s statutory obligations in terms of the way it investigates and litigates its cases.

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