EEOC’s right to investigate not circumscribed by judgment against charging parties
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Friday, August 18, 2017

EEOC’s right to investigate not circumscribed by judgment against charging parties

By Joy P. Waltemath, J.D.

Siding with the Ninth Circuit in a circuit split with the Fifth, the Seventh Circuit ruled that neither the issuance of a right-to-sue letter nor the entry of judgment in a lawsuit brought by individuals who originally filed EEOC charges of race discrimination and retaliation barred the EEOC from continuing its own investigation into an employer’s use of tests to qualify for an internal promotion. Both the U.S. Supreme Court and the appeals court had repeatedly recognized the EEOC’s broad role in promoting the public interest in preventing employment discrimination under Title VII, including its independent authority to investigate charges of discrimination, especially at a companywide level. The Seventh Circuit accordingly found both statutory authorization for the EEOC’s investigatory authority and that the additional information the EEOC sought about the test being administered to become eligible for promotion, and successful and unsuccessful applicants, including computerized personnel information, was relevant. As such it affirmed a district court’s order enforcing the EEOC’s subpoena (EEOC v. Union Pacific Railroad Co., August 15, 2017, Conley, W.).

While the charging parties’ race discrimination and retaliation action was still proceeding in district court, the EEOC sought further information from the employer about its electronic storage systems, additional testing and computer information, and details about individuals in the position across the company who were similarly situated to the charging parties. After the district court granted summary judgment in the employer’s favor (which the Seventh Circuit affirmed in Burks v. Union Pacific Railroad Co.), the employer believed the EEOC should be barred from continuing its own investigation. The EEOC petitioned the district court to enforce its subpoena for the employer’s records related to these charges. After denying the employer’s motion to dismiss for lack of authority to maintain the investigation under Title VII and the EEOC’s own regulations, the district court granted the petition, prompting the appeal.

Statutory authorization. The first question the Seventh Circuit addressed was one of law—whether the EEOC is authorized by statute to continue investigating an employer by seeking enforcement of its subpoena after issuing a notice of right-to-sue to the charging individuals and the dismissal of the individuals’ subsequent civil lawsuit on the merits. It was the employer’s contention that since the EEOC’s investigative authority is tied to charges filed with the Commission, and it is entitled to access only evidence relevant to the charge under investigation, then any Commission investigatory authority “surely ended” when the lower court granted judgment in the employer’s favor on the individuals’ claims.

Circuit split. In 1997’s EEOC v. Hearst, the Fifth Circuit held that the EEOC’s authority to investigate a charge ends when it issues a right-to-sue letter; in contrast, in EEOC v. Federal Express Corporation, the Ninth Circuit rejected the Fifth Circuit’s concept of distinct, linear stages of enforcement by the EEOC, holding in 2009 that “the beginning of another stage does not necessarily terminate the preceding stage.” Instead, it held that the issuance of a right-to-sue letter does not strip the EEOC of authority to continue to process the charge, including independent investigation of allegations of discrimination on a company-wide basis. Citing the text of Title VII and more recent Supreme Court and Seventh Circuit opinions, the Seventh Circuit sided with the Ninth.

Right to sue letter. A charge must meet the requirements of Title VII (42 U.S.C. § 2000e-5(b)) to serve as a prerequisite to judicial enforcement of a subpoena issued by the EEOC. It appeared undisputed that the charges here met these basic statutory requirements, meaning the EEOC was expressly authorized to conduct an investigation. Once begun, the statute does not expressly (nor implicitly, said the appeals court) limit the EEOC’s investigatory authority to the 180-day window it has to issue a notice of right-to-sue letter if requested by the charging individual. And nothing in Title VII supports a ruling that the EEOC’s authority is then limited by the actions of the charging individual, something the U.S. Supreme Court rejected in EEOC v. Waffle House, Inc., when it held that a charging party’s agreement to arbitrate did not bar further action on the part of the EEOC.

The Seventh Circuit also cited amendments to Title VII, which granted the EEOC broader authority to investigate and initiate enforcement actions to address employment discrimination, expressly beyond the specific complaints of the private charging individual, and an EEOC regulation at 29 C.F.R. § 1601.28(a)(3) that expressly contemplates the continuation of an investigation after the issuance of a notice of right-to-sue. That the EEOC has other avenues available to pursue an investigation once a notice of right-to-sue letter has been issued—either serve a Commissioner’s charge or intervene in the charging individual’s lawsuit—did not, in the court’s view, justify limiting the EEOC’s most effective investigatory approach.

Disposition on the merits. The employer also argued that any authority the EEOC had to enforce a subpoena after the right-to-sue letter was issued ended when the charging individuals’ lawsuit was dismissed on the merits. This issue was broader than that addressed by the Fifth and Ninth Circuits, but the Seventh Circuit’s holding and rationale were the same: “The entry of judgment in the charging individual’s civil action has no more bearing on the EEOC’s authority to continue its investigation than does its issuance of a right-to-sue letter to that individual.” To hold otherwise would render the EEOC’s authority as “merely derivative” of that of the charging party, contrary to the Supreme Court’s holding in Waffle House.

Relevancy. As for whether the information sought in the subpoena was relevant to the EEOC’s investigation, which the appeals court reviewed for abuse of discretion, the court pointed out that the EEOC had learned from the employer itself that all other African-Americans in the same position, not just the original claimants, who had applied for a promotion to the new position were turned down for a promotion. Based on this, the EEOC sought additional information about the test being administered to become eligible for promotion and the successful and unsuccessful applicants, including computerized personnel information. The employer claimed this information went beyond the allegations in the underlying charges, but the Seventh Circuit characterized that argument as an “overly narrow view” of the EEOC’s role in the public interest. Finding no abuse of discretion since the information sought might be relevant to “cast light on the allegations against the employer,” the appeals court affirmed enforcement of the subpoena.

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