EEOC Systemic Discrimination Initiatives

EEOC Systemic Discrimination Initiatives Jill A. Cheskes SmithAmundsen LLC 150 N. Michigan Avenue, Suite 3300 Chicago, IL 60601 (312) 894-3200 jcheskes@salawus.com

Jill A. Cheskes is a partner in the Chicago office of SmithAmundsen. Her primary area of practice is employment litigation. Ms. Cheskes is experienced in a wide variety of employment-related cases, including those involving claims alleging violations of Title VII, the ADEA, the ADA, the FMLA, the FLSA, the Equal Pay Act and various equivalent state and local statutes, as well as disputes concerning employment agreements and various employment-based tort claims. She represents corporate clients on a national level before the EEOC and equivalent state agencies and in state and federal courts. Ms. Cheskes has tried multiple cases to verdict and has been very successful in resolving employment disputes using alternative dispute resolution. In addition to litigating employment disputes, Ms. Cheskes also counsels her clients on sound employment practices and policies for their businesses.

EEOC Systemic Discrimination Initiatives Table of Contents I. Introduction...103 II. EEOC Strategic Plan...103 III. Practical Effect of the EEOC Strategic Plan...103 IV. Broad Requests for Information...104 V. More Subpoenas Being Issued...104 VI. Subpoena Enforcement Actions...105 VII. Relevance Standard Used by Courts in Viewing Nationwide Requests...105 VIII. Cause Findings on a Class-wide Basis and Subsequent Conciliation Efforts...108 IX. Class Lawsuits...109 X. Conclusion...112 EEOC Systemic Discrimination Initiatives Cheskes 101

EEOC Systemic Discrimination Initiatives I. Introduction Since at least 2005, the EEOC has publicly committed itself to focusing on and rooting out systemic discrimination in the workplace. In 2005, the EEOC established a Systemic Discrimination Task Force, which issued a report stating that the Commission cannot effectively combat discrimination without a strong nationwide systemic program. (http://www.eeoc.gov/eeoc/newsroom/release/4-4-06.cfm). The report also stated that the EEOC does not consistently and proactively identify systemic discrimination. Instead, the agency typically focuses on individual allegations raised in charges. Id It is this precise language that has framed what employers and litigants have seen from the EEOC and its investigations over the last six years: the use of individual charges of discrimination as a springboard to systemic discrimination investigations on a company-wide basis. This paper will focus on some of the EEOC s actions in this regard and various court decisions related to these actions. II. EEOC Strategic Plan On February 2, 2012, the EEOC approved its strategic plan for the fiscal years 2012-2016. In its strategic plan, the EEOC indicated that it will dedicate a significant amount of resources to remedying systemic discrimination. (http://www.eeoc.gov/eeoc/newsroom/release/2-22-12.cfm). Although this already had been a focus of the EEOC, in light of the fact that charges of discrimination with the EEOC are at an all-time high and the EEOC s budget was cut, the agency has had to think strategically about how best to target its efforts to ensure the strongest and broadest impact possible in its efforts to stop unlawful employment discrimination. Id. The EEOC has decided that the best way to do this is to focus on big cases. Unfortunately for employers, following on the language that the task force outlined back in 2006, every charge filed with the EEOC now has the potential to become such a big case. The EEOC s initiatives are patently apparent when objectively looking at how the EEOC investigators are conducting investigations into a standard single complainant charge. III. Practical Effect of the EEOC Strategic Plan The practical effect of the EEOC s systemic discrimination initiative is being seen in the everyday investigation of charges of discrimination. The underlying claim of discrimination brought by the complainant often seems irrelevant to what the EEOC ultimately investigates. In the past, a company could assert a documented and legitimate non-discriminatory reason for an action against an employee and this would effectively end an EEOC investigation. These days, a defensible position related to an individual charge means little. In fact, in many subpoena enforcement actions brought by the EEOC to obtain broad company-wide information, the courts are finding such an assertion by an employer irrelevant to the issue of whether the EEOC should receive the information they are seeking. In a single complainant charge, the EEOC has been sending out broad requests for information covering a class of employees based on employment practices that might not even be implicated in the individual charge. In EEOC v. UPMC, 471 Fed.Appx. 96 (34d Cir. 2012), the Third Circuit held that the individual charge need not contain the legal theory under which the EEOC proceeds during its investigation. Further, the Court EEOC Systemic Discrimination Initiatives Cheskes 103

held that it is up to the EEOC to investigate whether and under what legal theories discrimination might have occurred. EEOC v. UPMC, at *11. As the EEOC has been seeking more information, employers have been pushing back on these requests. In response, the EEOC has then been issuing administrative subpoenas to employers for the information. This is well within the EEOC s authority to do. When employers have continued to balk at providing the information, the EEOC has filed civil actions to enforce its subpoenas. An additional practical effect of the EEOC s initiative is more class-wide cause findings being entered even though the underlying charge was brought solely on behalf of an individual. The cause findings result in conciliation efforts between the EEOC and the employer. These conciliation attempts have frequently become an exercise in futility for employers. The EEOC has often refused to provide the employer information on who comprises the alleged class or further identifying facts related to the alleged class, including the conduct at issue, the supervisors involved or other types of information that could allow an employer to evaluate a possible resolution. A series of recent cases demonstrate how critically important the conciliation process is becoming in framing a possible EEOC class action suit. Employers must be equipped to understand the changed landscape of EEOC investigations and conciliations in order to be in the best position to defend a class-action lawsuit. This paper will attempt to explore that new landscape. IV. Broad Requests for Information As stated, virtually any individual charge of discrimination can be a springboard to a company-wide investigation by the EEOC. This is especially true when an employer asserts a company policy as the basis for an adverse action. The EEOC has asserted that the company-wide policies open the door to company-wide investigations and the courts are often agreeing. Employers are essentially put in a Catch-22 in responding to these charges. It has long been felt that a consistently applied company policy is an effective defense to a claim of discrimination. However, this same defense is now the justification for the EEOC to investigate information on a company-wide basis even related to other policies and procedures. V. More Subpoenas Being Issued As the EEOC has become more aggressive in their investigations, employers are pushing back on these broad requests for information and refusing to provide information. This has not dissuaded the EEOC but instead has led to a surge in the number of administrative subpoenas that the EEOC is issuing to employers, and a subsequent surge in the number of subpoena enforcement actions filed in Federal Court. The EEOC has always had the power to issue administrative subpoenas for information in the course of its investigation. 42 U.S.C. 2000e-9; 29 U.S.C. 161(1). An employer wishing to fight the subpoena must respond within five business days of the issuance of the subpoena stating its objections and the reasons therefore. 29 C.F.R.1601.16(b)(1). Employers who fail to object within 5 days will waive their right to do so. EEOC v. Sunoco, 105 FEP Cases 1207 (E.D.P.A. 2009) The EEOC can either attempt to negotiate with the employer and/or file an action in Federal Court to enforce its subpoena. Over the last three to four years, there have been a large number of these subpoena enforcement actions that have primarily come down on the side of the EEOC and their right to conduct these broad investigations. 104 Employment and Labor Law May 2013

VI. Subpoena Enforcement Actions When the EEOC files a subpoena enforcement action, the inquiry frequently revolves around the scope of information requested by the EEOC. The standard that courts frequently use in determining the permissible scope of an EEOC investigation comes from a 1984 United States Supreme Court case. EEOC v. Shell Oil, 466 U.S. 54 (1984). This case provides the necessary broad standard that the EEOC is relying on today. In EEOC v. Shell Oil, the Supreme Court held that since the enactment of Title VII, courts have generously construed the term relevant and have afforded the Commission access to virtually any material that might cast light on the allegations against the employer. Id. at 68. In these subpoena enforcement actions, employers have been objecting to the subpoena on a relevance basis to what they consider to be overly broad requests for information. The Shell Oil case creates a standard that is so broad, it is nearly illusory. Generally speaking, courts are siding with the EEOC, citing the Shell Oil case as the standard to use in determining the breadth of discretion allowed to the EEOC in an investigation. The relevance standard courts use when evaluating these subpoenas is much broader than the relevance standard applied in evaluating discovery requests in litigation, which is governed by the Federal Rules of Civil Procedure. However, anyone involved in federal litigation knows that the Federal Rule of Civil Procedure standard of relevance is not particularly difficult to establish in most cases and is generally considered to be a broad standard. Compare this to the even broader standard allowed to the EEOC in the investigation stage and it is easy to see why courts are often upholding the EEOC s subpoenas. VII. Relevance Standard Used by Courts in Viewing Nationwide Requests As stated, many courts are upholding subpoenas issued by the EEOC to employers seeking information on a nationwide basis stemming out of individual charges of discrimination. One clear point to note is that Courts are rejecting the arguments made by employers that the underlying charge of discrimination is without merit and therefore the EEOC should not be entitled to broad information. A very clear example of this is in the case of EEOC v. UPS, 587 F.3d 136 (2d Cir. 2009). In this case, the Second Circuit found an EEOC subpoena valid that requested nationwide information about how UPS handled religious exemptions to its Uniform and Personal Appearance Guidelines. The subpoena grew out of an individual charge where an applicant, who was a practicing Muslim, alleged that he was not hired for a driver position for refusing to shave his beard based on UPS Personal Appearance Guidelines. The EEOC requested company-wide information on the application of that policy. UPS refused to provide it, in part, noting that there was no merit to the charge as Complainant was not hired because he provided a false social security number. The EEOC filed an action to enforce its subpoena and the Court determined that UPS s arguments as to the merits did not prevent the EEOC from investigating the alleged discrimination. Id. at 140. The Court reasoned that while such an argument might be a defense if the individual action went into litigation, the Second Circuit held that it was not relevant to the subpoena enforcement action and the information about how UPS handles religious exceptions to its appearance guidelines was relevant to the charge being investigated, thereby finding the nationwide subpoena to be valid. Id. at 143. Similarly, in EEOC v. UPMC, a district court originally denied the EEOC s attempt to enforce a subpoena and found that the EEOC was going on a fishing expedition after making little or no inquiry into EEOC Systemic Discrimination Initiatives Cheskes 105

potentially dispositive issues as to the underlying individual charge. EEOC v. UPMC, 471 Fed. Appx. 96, *6 (3 rd Cir. 2012) However, the Third Circuit reversed and held that the District Court should not have looked into the likelihood that the EEOC would be able to prove the claims on the individual charge. The Third Circuit found that this is not a district court s charge in considering relevance in a subpoena enforcement action. Id. at *12 The Third Circuit went on to hold that while such evidence and investigation would be crucial to the EEOC s case regarding the individual claimant, the EEOC is not cabined in its investigation by the specific allegations of and evidence supporting a charge if facts that support additional claims of discrimination are uncovered in the course of a reasonable investigation. Id. Of significance, the individual complainant in this case was a certified nurse s assistant at an entity called The Heritage Shadyside, which was a subsidiary of a subsidiary of the University of Pittsburgh Medical Center ( UPMC ). The complainant was terminated following the expiration of a personal medical leave pursuant to a company-wide policy that a failure to contact the employer or report to work after the expiration of a leave was considered a voluntary resignation. The Heritage asserted this policy, which was a UPMC policy, as a defense to the charge. The subsequent EEOC subpoena was not limited to The Heritage but covered all employees of UPMC who were subjected to this policy and terminated. In 2010, the Third Circuit reversed a lower court that had attempted to limit an EEOC subpoena based on geography, time and job description. EEOC v. Kronos, Inc., 620 F.3d 287 (3d Cir. 2010). This matter arose out of an individual complainant who alleged that she was not hired by Kroger based on disability discrimination related to a hearing and speech impediment. Kroger utilized a Customer Service Assessment, created by Kronos, in its hiring process, and Kroger claimed that the charging party had scored low on the assessment, which was the basis of their decision for not hiring her. The EEOC issued a subpoena directing Kronos to provide a variety of documents related to the assessment and Kroger s nationwide hiring for retail positions. Kronos asserted that this was overbroad, as it was asking for data on the impact of the testing assessment based on race, class, etc., which was not relevant to the underlying charge of disability discrimination. The Third Circuit, much like the Second, deemed this to be a valid exercise of the EEOC s investigative authority and held that once the EEOC begins an investigation, it is not required to ignore facts that support additional claims of discrimination. Id. at 297. The Court did not uphold the EEOC subpoena as it related to the race claims. This seems to be consistent completely distinct basis for discrimination from those alleged in the charge are generally not allowed. Broad nationwide subpoenas have been allowed in a string of cases in the past few years and a few of those are catalogued below. In EEOC v. Aaron s, Inc., 779 F.Supp.2d 754 (N.D. Ill 2011), a former employee filed a charge of race discrimination after he was discharged following a criminal background check. The EEOC sought companywide information on the company s criminal background policy and race statistics. Aaron s objected based on relevance since the subpoena included stores beyond the scope of the decision-maker s authority. The Court reasoned, Aaron s appears to claim to have a uniform criminal background check policy that it applies to all its corporate-owned stores. For this reason, there is no basis to limit the scope of the subpoena to stores within the particular decision-maker s responsibility. The Court concludes that the EEOC is entitled to the requested information for all Illinois corporate-owned stores. Id. at 759. Similarly, in EEOC v. Sterling Jewelers, 2011 U.S. Dist. LEXIS 126585 (W.D.N.Y. 2011), the complainant alleged age and sex discrimination and subsequent inequity in pay and promotion by Sterling Jewelers. The EEOC issued a subpoena requesting information on a company-wide basis. The employer attempted to argue that this request was overbroad. The Court found the subpoena valid citing the Shell Oil standard as well as 106 Employment and Labor Law May 2013

finding that the employer s use of a company-wide policy supports a subpoena for nationwide data on the practice. Id. at *17. Interestingly, this subpoena was issued on the charge after the EEOC had filed litigation. In EEOC v. Alliance Residential, 866 F.Supp.2d 636 (W.D. Texas 2011), an individual employee was terminated for failing to return from an FMLA leave and filed a charge of discrimination alleging disability discrimination and failure to accommodate. The employer went through great and repeated lengths to emphasize that it had a company policy relating to the failure to return from leave and that it consistently applied its policy. Id. at *4-*5. The employer submitted to the EEOC that there were no exceptions to this policy and provided evidence, without providing names or contact information, of at least 87 other employees terminated pursuant to this policy. The EEOC subsequently issued a subpoena for the names and contact information of all of these employees as well as all other employees, company-wide, who were subjected to the policy. The District Court held that the EEOC is granted access to any evidence of any person being investigated or proceeded against that relates to unlawful employment practices covered by [the ADA] and is relevant to the charge under investigation. Id. at *8. The Court also noted that relevancy at the investigatory stage was to be interpreted expansively. Id. at *10. The Court went on to specifically hold that in light of the employer s assertion that it acted pursuant to a company-wide policy, the EEOC s investigation into company-wide practices was easily relevant. Id. at *16. In EEOC v. Schwan s, 644 F.3d 742 (8th Cir. 2011), a former employee filed a charge alleging gender discrimination and failure to promote when partaking in a manager development program, where she was told that she did not demonstrate the necessary leadership skills. She also noted that had she been promoted, she would have been one of two nationwide female general managers out of 500. The EEOC issued a subpoena seeking information about demographics of the employer s managers and also demographics of those that attended the required manager development program (and may have been subsequently denied promotion). Schwan s argued that the systematic discrimination claim made by the employee was invalid, as it was merely substantiated by her belief that a pattern of discrimination existed. The Court, however, held that the charge of the systematic discrimination was valid even if the evidentiary support may have been lacking at the investigative stage; therefore, the information sought in the subpoena is within the scope of the EEOC s authority. Id. at 747. In EEOC v. Konica Minolta, 639 F.3d 366 (7th Cir. 2011), an African-American employee filed a charge of race discrimination, alleging that the employer subjected him to different terms and conditions of employment, and fired him when he complained to its human resources department. The EEOC issued a subpoena requesting information related to the hiring of sales associates at all four of the company s Chicagoarea locations. The employer claimed that responding to the subpoena would be unduly burdensome and the requests were unrelated to the underlying charge. The Court declared that broad requests for tracing patterns of racial discrimination were allowed, unless there was a legitimate argument for undue burden: Id. at 371. Here, Konica asserts that the information sought would constitute an undue burden because the company would have to obtain, organize, and produce the materials. Konica s argument merely recognizes that any request for information requires the provider to collect and tender materials. This argument falls far short of what is required to modify or quash a subpoena. Id. However, there have been some cases where the courts have found that the EEOC s subpoenas were too broad and have refused to enforce them. EEOC Systemic Discrimination Initiatives Cheskes 107

In EEOC v. Burlington Northern, 669 F.3d 1154 (10th Cir. 2012), two individuals alleged discrimination based on a perceived disability after BNSF did not hire them for a conductor or conductor trainee position, following a conditional offer of employment and medical screening. The EEOC issued a subpoena seeking nationwide hiring data and issued a letter saying that it had broadened its investigation to assess a pattern or practice of discrimination. BNSF refused to comply with the subpoena. The lower court sided with the employer, finding that it was a pervasive subpoena that was seeking information of pattern or practice without anything but individual allegations of instances of discrimination. Id. at 1156. The Tenth Circuit held that the district court had not erred in finding that there are no allegations of a pattern and practice (emphasis added). Id. at 1158. And therefore, nationwide recordkeeping data was not relevant to charges of individual disability discrimination. Id. In EEOC v. Loyola University Medical Center, 823 F. Supp. 2d 835 (N.D. Ill 2011), the Court was quite troubled with the tenuous relevance asserted by the EEOC. In an employment discrimination charge, a former employee asserted that she was required to submit to a fit for duty exam and subsequently discriminated against for a disability. The subpoena was issued in the course of an investigation of Loyola University s alleged violation of Title I of the ADA, and demanded detailed information (contacts, documentation, test results, etc.) about every individual that was subjected to an involuntary fit for duty exam. Loyola argued that this was not relevant to the underlying charge. The Court agreed with the employer, and decided that the EEOC failed to demonstrate that the information sought by the Commission was relevant to the complainant s underlying charge, nor could they establish that obtaining the information would assist in revealing related evidence of discrimination. Id. at 839. The subpoena was not directed to obtaining information about similarly situated individuals as the complainant, but rather was too broad, and therefore not relevant to the charge. Id. Most recently, in EEOC v. Nestlé Prepared Foods, the claimant alleged discrimination based on retaliation, disability and specifically, genetic information, upon being discharged by Nestlé after he was given a fitness-for-duty examination. EEOC v. Nestlé Prepared Foods, 2012 U.S. Dist. LEXIS 71864 (E.D. Ky. 2012). The EEOC issued a subpoena requesting the production of physician information for each fit-for-duty exam conducted on reference by Nestlé, and additionally, all documentation for every individual that underwent the fitfor-duty exam since January, 2010. The Kentucky federal court declared that it is not persuaded that [EEOC] has free rein to conduct a broad, company-wide investigation based on a single allegation of an isolated act of discrimination. Id. at *6. In this case, there was no significant evidence to indicate that this was a pattern and not just an individual occurrence. VIII. Cause Findings on a Class-wide Basis and Subsequent Conciliation Efforts In light of the broad nature of the investigations, it is not surprising that the EEOC is issuing more determinations of cause and finding cause on a class-wide basis even though the underlying charge may only be on behalf of an individual. These class cause findings have led to extremely frustrating and headscratching conciliation efforts with the EEOC. The EEOC s approach to conciliation on these class-wide cause findings has made it difficult for a responsible employer to resolve the dispute. This frustration is caused by the EEOC s general unwillingness to provide information about their so-called class of employees. The EEOC has often refused to release the names of class members other than the individual complainant. The EEOC has not provided information about the nature of the harassment for the other class members, nor the names of the supervisors, if different than the individual complainant. After 108 Employment and Labor Law May 2013

repeated efforts, the EEOC might provide to the employer the number of employees they claim comprise the class, but it is certainly not something that they have been immediately providing. Nonetheless and knowing full well that the information that it is withholding is extremely relevant, the EEOC expects an employer to conciliate and settle these cases and pay money on unknown employees based on unknown claims without being able to investigate or defend the class claims themselves. This issue has become the subject of litigation when the EEOC then files class lawsuits and will be discussed below. If these cases show anything, they show that the conciliation process is extremely relevant to the scope of a subsequent class action. Employers need to insist on information and document the EEOC s refusal to provide any information to identify the class. If the EEOC does provide any information to identify or limit the class, the employer must document it. This information can be used to limit class sizes in subsequent litigation. IX. Class Lawsuits Not surprisingly, as a result of the strategic initiative, the investigatory efforts, the cause findings and the conciliation efforts, the number of class or systemic-based discrimination lawsuits filed by the EEOC is on the rise. Title VII has administrative prerequisites in place for individuals as well as the EEOC that must be followed prior to bringing suit. The EEOC has brought class claims that include people who never filed a charge of discrimination and where there was no investigation, determination or conciliation efforts. Employers are fighting the EEOC s efforts to bring suits on behalf of these individuals for failure to satisfy the administrative prerequisites. The results of these efforts have been mixed. There have been several cases where the courts are not allowing the EEOC to proceed on claims for individuals who did not file charges of discrimination or who did not have investigations conducted into their claims. In EEOC v. CRST Van Expedited, an individual employee filed a charge of discrimination claiming that she had experienced sexual harassment during the company s driver s training program. EEOC v. CRST Van Expedited, 670 F.3d 897 (8th Cir. 2012). Upon receiving the charge, the EEOC notified and instructed CRST to respond to the individual claim of sexual harassment. CRST responded with a position statement denying such activity, with reference to its internal investigations, and disclosed the names of two other women who had also filed a formal charge against CRST with the EEOC. In the months that followed, the EEOC learned that several other women that had filed charges of sexual harassment. The EEOC sent further requests for information during its investigation seeking the identities of all employees trained by the alleged harassers, all dispatchers and all female drivers. The EEOC ultimately issued a Letter of Determination finding that CRST subjected the individual claimant and a class of employees to sexual harassment. The parties began conciliation efforts and the EEOC asked the company to send letters to past and present employees to try and identify the class members. Shortly thereafter, conciliation efforts failed. The EEOC then filed suit on behalf of the individual claimant and a class of similarly situated female employees. For nearly two years thereafter, the EEOC did not identify the women comprising the putative class despite repeated requests from CRST and the Court for them to do so. Accordingly, it was unclear if the class involved two, twenty or two thousand allegedly aggrieved persons. Id. at 909. The EEOC represented at one point that it anticipated about 100-150 class members. Eventually, the Court set a deadline for the EEOC to identify all class members. One week prior to the deadline, the EEOC had only named 79 class members. One week later, the EEOC identified 270 class members. CRST filed a EEOC Systemic Discrimination Initiatives Cheskes 109

motion for the EEOC to show cause related to the identification of individuals and argued that that EEOC did not have a good faith basis for naming these individuals and was naming everyone and asking questions later. Id. The Court allowed the EEOC to proceed but required the EEOC to submit the 270 people for deposition and ordered that if the EEOC failed to produce an individual by a date certain, she would be barred. Id. at 910. After a series of rulings, the Court had dismissed all but 67 of the 270 alleged class members. Finally, the Court dismissed the last 67 finding that the EEOC had not conducted a reasonable investigation or conciliation of these claims and thus had not met the statutory conditions precedent to the suit. Id. at 911. The EEOC appealed and the Eighth Circuit affirmed the dismissal. Id. The Eighth Circuit noted that the EEOC s power to bring suit and its investigative process are not unrelated activities [but] sequential steps in a unified scheme for securing compliance with Title VII. Id. at 912. The Eighth Circuit noted that the District Court determined that, based on the factual record of this case, the EEOC did not conduct any investigation of the specific allegations of the allegedly aggrieved persons for whom it seeks relief at trial before filing the Complaint let alone issue a reasonable cause determination as to those allegations or conciliate them. The Eighth Circuit held that the EEOC may seek relief on behalf of individuals beyond the individual charging party and for alleged wrongdoing beyond those originally charged, it must discover such individuals and wrongdoing during the course of its investigation. The Court recognized that the EEOC had wide latitude to investigate charges of discrimination but the Court found a clear and important distinction between facts gathered during an investigation and those gathered during the discovery phase of a lawsuit. Id. at 914-915. Similarly, in EEOC v. Dillard s, a former employee filed a charge with the EEOC alleging disability discrimination. EEOC v. Dillards, 2011 U.S. Dist. LEXIS 76206 (S.D. Cal 2011). The employee was fired after she presented a note from her doctor excusing her absence however the note only stated that the employee missed work due to medical reasons but did not state the specific condition, which was allegedly in contravention of Dillard s policy. Dillard s responded to the charge by identifying its attendance policy, which stated that for a health-related absence to be excused, the employee had to present a physician s note identifying the nature of the employee s illness as well as others who were terminated for the same reason. Upon learning of this policy, the EEOC issued a request for information seeking information on the other employees identified and whether the policy was a company-wide policy, which Dillard s confirmed was the case. Over the course of the investigation, which lasted another two years, the EEOC did not seek any further information from Dillard s. The EEOC issued a cause determination on behalf of the charging party and, at least, one other similarly situated individual. The EEOC sought to conciliate on behalf of the charging party and one other named individual. The conciliation efforts did not identify or suggest other aggrieved individuals. Conciliation efforts failed and the EEOC filed suit on behalf of the two identified individuals and other similarly-situated individuals. During discovery, the EEOC issued written discovery, nationwide in scope. Dillard s moved to preclude all claims on behalf of anyone other than the two identified individuals. Id. at *6. The Court identified the question at issue as whether the EEOC s pre-litigation efforts were sufficient to put Dillard s on notice that it potentially faced claims arising from a nationwide class of current and former employees. Id. at *20. The Court noted that when the EEOC limits an investigation in terms of geography or number or nature of claim, the EEOC may not use discovery in the resulting lawsuit as a fishing expedition to uncover more violations. Id. at *25. The Court held that the EEOC could not pursue a nationwide class action where the EEOC provided no affirmative indication during its investigation or conciliation efforts that its allegations might result in 110 Employment and Labor Law May 2013

nationwide claims on behalf of current and former Dillard s employees. Id. at *26. It emphasized the need for finding individuals during its investigation, and not during discovery. Id. Thus the EEOC has to know who comprises its class and attempt to conciliate those claims before it files suit and an employer needs to get them to identify that class or document that the EEOC won t identify the class and thus the employer is not being provided with an opportunity to conciliate on behalf of the class. However, courts are also allowing the same type of class action claims to proceed as well. In EEOC v. United Road Towing, 1:10-cv-06259 (N.D.Ill. May 11, 2012), two individuals filed two separate charges of discrimination against United Road Towing alleging violations of the Americans with Disabilities Act for failing to accommodate their disabilities and discrimination. The EEOC issued a determination of cause finding that United Road Towing discriminated against the two individual charging parties and a class of disabled employees. The EEOC then attempted to conciliate with United Road Towing. The EEOC then refused to identify to United Road Towing the names of any other class members yet expected United Road Towing to settle those claims. Conciliation efforts ended abruptly when the EEOC issued a demand for $2 million. The EEOC then filed suit on behalf of a class of employees. During the discovery phase of the litigation, the EEOC finally disclosed the names and nature of the claims for the class of employees beyond the two individual charging parties. The EEOC identified 17 claimants in all. United Road Towing filed a summary judgment motion asking the Court to grant summary judgment as to all but the two individuals who filed charges arguing that the EEOC failed to satisfy its administrative prerequisites prior to filing suit on behalf of the others. United Road Towing argued that the EEOC failed to investigate the claims of the remaining 15 class members and failed to give it an opportunity to conciliate those claims. Id. at *6. In denying the employer s motion for summary judgment, the Court held, as to the argument that the EEOC failed to investigate the claims, that [c]ourts may not review EEOC administrative investigations to determine whether a particular investigation sufficiently supports the claims that the EEOC brings in a subsequent lawsuit. Id. at p. 7. As to the argument that the EEOC did not offer the employer the opportunity to conciliate the claims, the Court also found it significant and clear that EEOC made an attempt to conciliate, and that this attempt was sufficient to satisfy the ADA s administrative requirements and further supported a good faith effort by the Commission. Id. at * 9. Moreover, it was significant that the EEOC had put the defendant on notice about pursuing a class-wide case. Id. The Court was troubled that the EEOC did not provide further information and that there was a misunderstanding between the EEOC and United Road Towing regarding the scope of the conciliation efforts, but the Court found both parties at fault for this breakdown and denied summary judgment. Id. at *11. In EEOC v. Luihn Food Systems, 2011 U.S. Dist. LEXIS 106919 (E.D.N.C., 2011), four employees filed charges of discrimination against Luihn Food Systems, which was a franchisee of Kentucky Fried Chicken restaurants, alleging sexual harassment. The EEOC issued a cause finding on behalf of those four employees and a class of similarly situated individuals. The EEOC sought to conciliate on behalf of the four employees and at least one other individual. The EEOC then filed suit on behalf of the four named individuals and all similarly situated female employees at Luihn, who had been subject to sexual harassment by the same co-worker. During discovery, the EEOC discovered an additional class member, who was allegedly subjected to sexual harassment by the same supervisor, at the same store and during the same general time period as the other named individuals. The class member had not filed a charge of discrimination, the EEOC admittedly did not investigate her claims and the EEOC admittedly did not attempt to conciliate her claim prior to filing suit. Luihn moved for summary judgment arguing that the Court lacked jurisdiction over the additional class EEOC Systemic Discrimination Initiatives Cheskes 111

member as the EEOC failed to comply with the statutorily required pre-suit requirements of a reasonable cause determination and conciliation related to her. However, the Court found it relevant that the EEOC had complied with the statutory prerequisites as to the four plaintiffs named, had issued a cause finding related to the four individuals and a class of female employees and in its proposed conciliation agreement indicated that it sought to conciliate on behalf of the four individuals and at least one other person (although admittedly not the additional class member). The presence of this one other person, according to the Court, indicated that EEOC maintained throughout conciliation that its claims related to the four charging parties and a class of similarly situated female employees. Id. at *14. The Court found it relevant that the additional class member s allegations were based upon the same actions of the same defendant at the same store during the same relevant time period as the claims of the four charging parties. Id. Under those circumstances, the Court held that the EEOC s failure to investigate and conciliate an individual s charge does not deprive a federal court of subject-matter jurisdiction under Title VII, when the Commission has met its prerequisites for the other allegedly injured and similarly-situated individuals. Id. (emphasis added). Therefore, the Court concluded that it has jurisdiction over the EEOC s class action, including the additional claimant. Id. at 16. These cases demonstrate that employers must take the conciliation process very seriously and document all communications with the EEOC especially if the EEOC is refusing to provide complete information. X. Conclusion The EEOC is publicly gunning for employers on a systemic basis and believes that it can best remedy unlawful discrimination by ferreting out systemic discrimination. To that end, the EEOC is using individual charges of discrimination as a springboard to investigate company-wide policies. Employers need to be very mindful of the type of response and the type of information they provide to the EEOC and know the rights of the EEOC to conduct an investigation. Failure to do so can result in a lot of time and money spent in futile efforts to fight the EEOC. Companies need to be well armed and know the law in order to effectively defend itself against charges of discrimination on an individual and class-wide basis. 112 Employment and Labor Law May 2013