flag-28562_640By Gerald L. Maatman, Jr. and Howard M. Wexler

We’ve previously blogged about the impact the U.S. Supreme Court’s landmark decision in Mach Mining v. EEOC, 135 S. Ct. 1645 (2015), most recently here and here. As we predicted, the true impact of Mach Mining will not be known until federal courts around the country start to weigh in on its utility as a dispositive defense vis-à-vis the Commission’s conciliation obligation.  In a key case that all employers should read, Judge Lewis T. Babcock of the U.S. District Court for the District of Colorado, relying on Mach Mining, affirmed his prior dismissal of the EEOC’s lawsuit based on its conciliation failure before filing suit.

Case Background

In 2014 the EEOC filed suit against CollegeAmerica Denver Inc. alleging, in part, that the Separation Agreements that CollegeAmerica provided to the EEOC in connection with the EEOC’s investigation of Debbi Potts’ charges of discrimination denied employees other than Potts the full exercise of their rights under the Age Discrimination in Employment Act (the “ADEA”) and interfered with the statutorily assigned responsibility of the EEOC to investigate charges of discrimination in violation of Section 7(f)(4) of the ADEA, 29 U.S.C. § 626(f)(4).  Id. at 1-2. Prior to the Supreme Court’s Mach Mining decision, the Court dismissed this aspect of the EEOC’s lawsuit as a result of the EEOC’s failure to satisfy the ADEA requirements of notice and conciliation. Id. at 2. Three months after the Mach Mining decision came down, and eight months after the Court dismissed this aspect of the EEOC’s lawsuit, the EEOC filed a motion for reconsideration based on the “limited review” that judges are to apply when assessing the EEOC’s conciliation efforts. Id. at 3.

The Court’s Decision

Preliminarily, the Court criticized the EEOC’s motion for reconsideration based on timeliness, as the EEOC “inexplicably waited eight months to file its motion for reconsideration” and “did not file its motion for reconsideration for more than three months after the Supreme Court issued its decision in the Mach Mining.” Id.  As the EEOC failed “to offer any explanation for the lengthy delay in the filing of its motion for reconsideration,” the Court denied the motion on the grounds of timeliness. Id. However, the Court nonetheless addressed the merits of the EEOC’s argument that Mach Mining warranted reversal.

In reviewing the EEOC’s conciliation efforts pre-suit, the Court held that the EEOC’s conduct with respect to the Separation Agreements remained inadequate under the standards set forth in Mach Mining. Specifically, the EEOC failed to provide adequate notice to CollegeAmerica that the Separation Agreements were part of the EEOC investigation and findings of unlawful practices by CollegeAmerica. Furthermore, there was no evidence that the Separation Agreements were part of the parties’ discussions so as to give CollegeAmerica an opportunity to voluntarily revise them. Id. at 5

With respect to the appropriate remedy, the Court noted that in Mach Mining, the Supreme Court “included dictum that when a court finds in favor of an employer on the question of whether the requisite conciliation occurred, the appropriate remedy is to order the EEOC to undertake the mandated efforts to obtain voluntary compliance.” Id. at 6. Here, however, the Court refused to grant such relief (in essence, rejecting the notion that a simply stay of the case should be entered so that the EEOC could undertake efforts to conciliate with the employer). Instead, the Court reasoned that a stay would severely prejudice CollegeAmerica (as ordering conciliation to take place at this juncture of the litigation) would require additional discovery and could significantly delay resolution of the pending retaliation claim. Id. at 7.

Implications For Employers

This decision yet again demonstrates the powerful tool that the Supreme Court provided to employers in Mach Mining. Because of the Supreme Court’s decision, the EEOC can no longer file suit against employers after paying mere lip-service to its conciliation efforts. Employers must be provided with sufficient notice of the EEOC’s allegations during the conciliation process prior to the EEOC filing suit. And as Judge Babcock determined, the EEOC cannot be assured that if called to task, a judge will simply order the Commission back to the conciliation table to negotiate over the case as it is required to do before filing a lawsuit per statute and Mach Mining. In certain circumstances, the appropriate remedy is outright dismissal of the case.

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