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

As we noted in our EEOC Fiscal Year 2014 Scorecard, the EEOC has been steadily increasing its use of its subpoena power to gather as much information as possible from employers prior to filing suit. In fact, in FY 2014, the EEOC prosecuted 24 subpoena actions versus the 17 that were filed in 2013.

FY 2015 has started out with a big win for employers fending off overly broad and unduly burdensome EEOC administrative subpoenas. In EEOC v. Royal Caribbean Cruises, Ltd., No. 13-13519 (11th Cir. Nov. 6, 2014), the Eleventh Circuit Court upheld a decision of the U.S. District Court for the Southern District of Florida refusing to enforce an administrative subpoena served by the EEOC on grounds that the information sought was not relevant to the individual charge the EEOC was investigating and because compliance with the subpoena would be unduly burdensome. Id. at 4.

The Eleventh’s Circuit’s ruling is a big win for employers, and a must read for corporate counsel involved in EEOC litigation.

Background

In 2010 Royal Caribbean discharged an Argentinean national employed as an assistant waiter on one of its cruise ships because he was diagnosed with HIV and Kaposi Sarcoma. Id. at 2. The employee subsequently filed a charge with the EEOC. Id. Royal Caribbean admitted discharging the employee based on his medical condition, but argued both that the Americans With Disabilities Act was inapplicable as the charging party was a foreign national who worked on a ship that operated in the Bahamas and because the Bahamas Maritime Authority’s (“BMA”) medical standards – which Royal Caribbean is required to follow – mandated discharge given the employee’s diagnosis. Id. at 2-3.

During the investigation the EEOC issued an administrative subpoena seeking a list of all employees who were discharged due to a medical reason for the year preceding the filing of the charge along with detailed information for each of these discharged employees, including their personnel files, contact information and information concerning who from Royal Caribbean hired/fire each employee. Id. at 3. The EEOC also requested similar information with respect to any person Royal Caribbean did not hire because of a medical reason. Id. at 4. Both a Magistrate Judge and District Court Judge in the U.S. District Court for the Southern District of Florida refused to enforce the EEOC’s subpoena. Id.

The Eleventh Circuit’s Decision

The Eleventh Circuit’s acknowledged that the EEOC is entitled to inspect and copy any evidence that is “relevant to the charge under investigation,” but it cautioned that such a standard, while broad, should not be construed “so broadly that the relevancy requirement is rendered a nullity.” Id. at 4-5.

The Eleventh Circuit determined that the disputed information at issue did not concern the Charging Party who filed the EEOC charge; instead, it concerned the EEOC’s attempt to discover “a potential class of employee or applicants who suffered from a pattern or practice of discrimination rather than fleshing out [the Charging Party’s] charge.” Id. at 5. While statistical and comparative data in some cases may be relevant, the EEOC is nonetheless required to make “some showing that the requested information bears on the subject matter of the individual complaint.” Id. at 5-6.

The Eleventh Circuit rejected the EEOC’s argument that the requested information “might cast light on the allegations” against Royal Caribbean given that it is not clear “why company-wide data regarding employees and applicants around the world with any medical conditional, including conditions not specifically covered by the BMA medical standards or similar to [Charging Party’s], would shed light on [the Charging Party’s] individual charge that he was fired because of his HIV and Kaposi Sarcoma diagnoses.” Id. at 6.

In arguing that its subpoena should be enforced, the EEOC contended that the information was relevant because “the EEOC is entitled to expand the investigation to uncover other potential violations and victims of discrimination on the basis of disability.”  Id. at 7. The Eleventh Circuit rejected this argument, as it refused to construe the relevancy standard so broadly and because “the relevancy that is necessary to support a subpoena for the investigation of an individual charge is relevant to the contested issues that must be decided to resolve that charge, not relevance to issues that may be contested when and if future charges are brought by other.” Id. at 7 (emphasis added). On this basis the Eleventh Circuit rejected the EEOC’s subpoena as the information sought was “at best tangentially relevant” to the claims of the Charging Party and because it “failed to present a cogent argument as to how the additional information sought…would further aid the Commission in resolving the issues in dispute…” Id. at 9.

The Eleventh Circuit acknowledged that the EEOC has the ability to file a Commissioner’s Charge alleging a pattern or practice of discrimination that could support a request for the broad scope of information that it sought. However, the Eleventh Circuit rejected the EEOC’s apparent attempt to short circuit this process and cautioned the EEOC that it “may not enforce a subpoena in the investigation of an individual charge merely as an expedient bypass of the mechanisms required to file a Commissioner’s charge.” Id.

Finally, the Eleventh Circuit also held that the burden on producing the requested information – which Royal Caribbean estimated would require between five to seven employees working forty hours per week for two months solely to gather the requested information – outweighed the “limited need” of the subpoenaed information. Id. at 10.

Implications For Employers

Case law authority supports the notion that significant deference is accorded the EEOC’s subpoena powers, and the EEOC likes to remind employers of this when it seeks information that goes far beyond the individual charge that it is investigating. However, as this decision highlights, employers caught in the crosshairs of the EEOC’s subpoena enforcement activity are not without recourse. The Eleventh Circuit’s ruling demonstrates that simply because the EEOC says certain information is relevant does not make it so. Employers should keep this decision in their back pocket as ammunition against a runaway EEOC investigation.

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