By Jason J. Englund

As we have blogged previously, the EEOC is increasingly wielding its subpoena power in pre-lawsuit investigations and subpoena enforcement proceedings to conduct expansive, nationwide investigations. While courts traditionally have given the EEOC wide latitude in exercising its subpoena power, in recent years numerous courts have curbed the EEOC’s efforts to push its subpoena power beyond reasonable limits (see, for example, here and here). As a recent decision by Judge James Moody of the U.S. District Court for the Middle District of Florida shows, however, some courts continue to give the EEOC virtually free reign to conduct open-ended investigations having little or no connection with the underlying charge that ostensibly served as the initial basis for the EEOC’s jurisdiction.

The ruling in EEOC v. KB Staffing, LLC, Case No. 14-MC-41 (M.D. Fla. Sept. 16, 2014), illustrates how difficult it can be for an employer seeking to protect itself from burdensome and seemingly over broad investigations by the EEOC.

Background To The Case

The EEOC’s investigation in EEOC v. KB Staffing, LLC stemmed from a charge filed by Rose Marie Porter, alleging that KB Staffing violated the Americans With Disabilities Act (“ADA”) by requiring job applicants to complete a pre-offer health questionnaire. The charge alleged that KB Staffing refused to hire her after she declined to complete the health questionnaire in connection with her application for employment in August 2012. By the time Ms. Porter filed her charge with the EEOC in February 2013, KB Staffing had already discontinued the use of the health questionnaire as of December 2012.

While the EEOC investigation was pending, Ms. Porter filed suit in Florida state court alleging that KB Staffing’s pre-offer health questionnaire violated Florida state law. The parties later settled Ms. Porter’s individual claim, and Ms. Porter withdrew her EEOC charge pursuant to the parties’ agreement on May 13, 2014.  With Ms. Porter’s charge withdrawn and the employment practice at issue discontinued, the employer thought that the EEOC had no reason to continue its investigation. Notably, there were no class allegations raised in the charge, and the settlement seemingly resolved the issue.

Nevertheless, the EEOC issued a broad administrative subpoena against KB Staffing on May 23, 2014 — after Ms. Porter had already settled her claim and withdrawn her charge. The subpoena sought copies of the health questionnaires of every single person who applied for employment with KB Staffing within the three years prior to the date of Ms. Porter’s charge, as well as the health questionnaires for all current employees. KB Staffing filed a petition with the EEOC to revoke or modify the subpoena. KB Staffing asserted that the EEOC’s subpoena greatly exceeded the scope of the underlying charge, but the EEOC denied the petition and filed an administrative enforcement action in federal court to enforce the subpoena.

The Court’s Ruling

U.S. Magistrate Judge Anthony Porcelli enforced the EEOC’s subpoena. He found that the EEOC retained authority to continue its investigation even after the charging party withdrew the underlying charge, reasoning that the EEOC maintains discretion to vindicate the public interest in combating systemic discrimination because the EEOC’s authority is not “merely derivative” of the claims asserted by a charging party.

The Magistrate Judge also rejected the defendant’s argument that the EEOC lacked authority to seek information for three years prior to the date of the charge when the appropriate statute of limitations period was only one year. Indeed, as the defendant pointed out in its briefing, the limitations period had already run for any claims that other applicants might bring based on the questionnaire because KB Staffing had discontinued its use of the questionnaire well over a year before the date of the EEOC’s subpoena.  The magistrate gave the defendant’s limitations argument short shrift, simply noting that any statute of limitations arguments may be asserted as a defense following initiation of a court action, rather than in response to the subpoena.

Despite the fact that the Magistrate Judge’s decision failed to explain how the EEOC’s investigation could combat systemic discrimination when the defendant had already discontinued the use of the pre-offer questionnaire, KB Staffing did not file Rule 72 objections to the order.

On September 16, 2014, Judge James S. Moody adopted the Report and Recommendation of Magistrate Judge Porcelli directing KB Staffing to comply with the EEOC’s subpoena.  Judge Moody indicated that based on his independent review of the dispute, the Magistrate Judge did not abuse his discretion in ordering compliance with the Commission’s subpoena.

Implications or Employers

The ruling in EEOC v. KB Staffing is a disturbing ruling for employers dealing with EEOC investigations. If there was ever a situation where the facts suggested an overreach by the EEOC, the facts in this case seemed custom-made to do so. The decision by Judge Moody demonstrates that some courts remain willing to allow the EEOC to turn individual charges into open-ended nationwide investigations.  The case is particularly troubling because it gives the EEOC a green light to go fishing through an employer’s files even after the underlying charge and the claims of any other potential claimants are moot.

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