Employment Law Daily EEOC may bring pattern-or-practice suit under Section 706 and conciliate without naming specific individuals
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Wednesday, June 22, 2016

EEOC may bring pattern-or-practice suit under Section 706 and conciliate without naming specific individuals

By Dave Strausfeld, J.D. Addressing whether the EEOC may use representative proof to obtain damages on behalf of a large number of individuals, the Fifth Circuit rejected a retail chain’s argument that pattern-or-practice claims under Title VII may be brought only under Section 707, which has no damages remedy. Nothing prevented the EEOC from proceeding under Section 706 and still using the Teamsters bifurcated proof framework, which relies on representative rather than individualized evidence of liability. On a separate issue, the EEOC was not required to identify any aggrieved individuals by name to satisfy the requirement of conciliation prior to bringing its pattern-or-practice suit, held the appeals court on interlocutory appeal, affirming the denial of summary judgment (EEOC v. Bass Pro Outdoor World, LLC, June 17, 2016, Higginbotham, P.). The case began when the EEOC issued a commissioner’s charge finding reason to believe that a sporting goods and outdoor equipment retail chain, Bass Pro, had discriminated against African-American and Hispanic applicants in its stores nationwide. On summary judgment, the district court denied the company’s motion but agreed to certify certain legal issues for interlocutory appeal, noting that the federal appellate courts have rarely had an opportunity to address the questions Bass Pro was raising. Bass Pro’s argument about Sections 706 and 707. Bass Pro contended that the EEOC could not bring its pattern-or-practice suit under Section 706, which is typically used to bring civil actions on behalf of individual claimants. Rather, in the company’s view, the agency needed to rely on Section 707—the provision of Title VII specifically authorizing "pattern or practice" actions—under which damages are not recoverable. Bass Pro also insisted that the EEOC could not prove its case using the Teamsters bifurcated framework. Under Teamsters, which is an alternative to the McDonnell Douglas model, the EEOC first establishes that discrimination was essentially the company’s "standard operating procedure." If it makes such a showing, the burden of proof shifts and there is a subsequent remedial phase. According to Bass Pro, the EEOC should have to prove its claims using the McDonnell Douglas framework. EEOC could rely on Section 706. The Fifth Circuit rejected Bass Pro’s arguments, holding that the EEOC may bring pattern-or-practice claims under Section 706. In reaching this conclusion, the appeals court relied on General Tel. Co. of the Northwest, Inc. v. EEOC, a 1980 Supreme Court decision on a different issue—i.e., whether the EEOC must comply with Rule 23—where the Court recognized that a bifurcated proof framework could be used in a Section 706 action. The Court repeated its General Telephone holding earlier this year in CRST Van Expedited, Inc. v. EEOC, indicating thatthe case remained good law even though it was decided before the 1991 amendments made damages available in Section 706 actions. This was enough to persuade the Fifth Circuit. "We conclude," the court wrote, "that Congress did not prohibit the EEOC from bringing pattern or practice suits under Section 706 and, in turn, from carrying them to trial with sequential determinations of liability and damages in a bifurcated framework." No due process violation. But using the Teamsters bifurcated framework for proving pattern-or-practice claims here would offend both due process and the Seventh Amendment, Bass Pro asserted. The company was especially concerned about having its liability for punitive damages determined under the Teamsters framework. The appeals court was not persuaded. While Bass Pro’s arguments were not "fanciful," the complexities of this case did not make it "categorically impossible to apply the Teamsters framework to a § 706 action." Bass Pro "slights the management tools at the hand of the district court," the court suggested. EEOC could conciliate without naming names. Bass Pro also challenged whether the EEOC met its obligation to conciliate prior to filing suit. Although the agency told Bass Pro it had identified an estimated 100 individuals who were victims of discriminatory hiring, it did not provide specific names, and this, Bass Pro claimed, violated the agency’s conciliation duty. The appeals court again rejected the company’s position, observing that the Supreme Court held last year in Mach Mining that judicial review of the EEOC’s conciliation efforts is "barebones." Since Mach Mining, only one court of appeals has considered whether the EEOC can meet its conciliation duty without naming individual class members. In Arizona ex rel. Horne v. Geo Group, Inc., the Ninth Circuit concluded that it could. The Fifth Circuit was inclined to agree. Even if the EEOC did not initially provide the names of specific victims, it informed Bass Pro about the class it had allegedly discriminated against—i.e., African American and Hispanic applicants. The parties also negotiated for eleven months, having face-to-face meetings about the charges, so Bass Pro was clearly on notice as to the claims against it. Under Mach Mining, the EEOC’s conciliation efforts were sufficient, the appeals court ruled. Agency’s investigation sufficient. In a similar argument, Bass Pro also claimed that the EEOC’s pre-suit investigation was deficient. By relying on statistical and anecdotal evidence rather than evidence about specific aggrieved individuals, the company argued, the EEOC neglected its duty to investigate its Section 706 claims. But again the appeals court was not convinced, stating: "Since the EEOC is authorized to bring a pattern or practice suit under Section 706, the fact that it focused on pattern or practice evidence instead of individual claims during the investigation and conciliation process is of no consequence."

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