Employment Law Daily In age bias investigation, EEOC can enforce subpoena seeking data on staffing agency’s clients
Tuesday, March 8, 2016

In age bias investigation, EEOC can enforce subpoena seeking data on staffing agency’s clients

By Cynthia L. Hackerott, J.D. Nationwide staffing agency Aerotek, Inc., was required to comply with an EEOC subpoena seeking the names of more than 22,000 clients because the information sought was well within the EEOC’s investigative authority and was clearly relevant to the Commission’s age discrimination investigation, the Seventh Circuit ruled. Even though Aerotek had, by the time of oral argument, already produced all of the client data requested in the subpoena, the company’s appeal of a district court order enforcing compliance with the subpoena was not moot because Aerotek wanted the EEOC to return that data, and both parties requested that the court address the issue on its merits (EEOC v. Aerotek, Inc., March 4, 2016, Rovner, I.). Aerotek’s workforce includes primarily “contract” or “temporary” employees assigned to work for its various clients, as well as a smaller number of internal employees responsible for recruiting and managing the temporary employees placed with clients. In August 2013, the EEOC began conducting a directed investigation of possible age discrimination in which it sought information regarding Aerotek’s practices in recruitment, hiring, and placement of workers at all of the facilities owned and operated by Aerotek and/or its clients from January 1, 2009 to the present. The Commission also sought information about Aerotek’s computerized files. To this end, the EEOC served a subpoena on Aerotek requesting, for the period from January 1, 2009, to the present:


information about all persons that Aerotek referred from its Illinois facilities for employment at Aerotek’s clients;


information regarding all job requisition requests by clients of Aerotek nationwide;


information about persons hired into internal positions at Aerotek’s Illinois facilities; and


documents related to Aerotek’s analysis of its workforce.
Aerotek partially complied with the subpoena, producing some of the information sought in a database. The Commission’s initial review of that information revealed hundreds of age-based discriminatory job requests by Aerotek’s clients at 62 of Aerotek’s facilities. EEOC deems coded information insufficient. After this review, the EEOC issued another request for information about the individuals who were assigned to the company’s clients including their names, dates of birth, contact information, and the names of the clients to whom they were assigned. The company again partially complied with the request, producing a generalized form of the information but excluding the names of the clients and the names and contact information for workers hired by those clients. In place of that information, Aerotek created a code system and supplied numerical identifiers for clients and workers. The EEOC asked Aerotek to provide that redacted information, but the company refused, stating it would not produce any of the information unless the EEOC indicated which specific clients and workers it intended to contact. Earlier proceedings. The EEOC then issued the subpoena at issue, seeking the names of the clients and workers and contact information for the workers, but only for the 62 facilities where it had already identified discriminatory requests. Aerotek refused to comply with the subpoena and the EEOC sought enforcement from the district court. The district court ordered Aerotek to comply with the subpoena. Aerotek then produced the names of the workers and their contact information but did not supply the names of the clients. After the district court denied the company’s motion for modification of the court’s order, Aerotek appealed. The district court granted a partial stay pending an attempt at mediation. After the mediation produced no results, the court lifted its stay. Aerotek then moved for a stay in the Seventh Circuit, which the appeals court denied, as well as Aerotek’s motion for reconsideration. Mootness and waivers. At oral argument, the company revealed for the first time that it had produced all of the requested client information to the EEOC, but wanted the EEOC to return that data. Thus, the Seventh Circuit first addressed whether the matter was now moot. Both Aerotek and the Commission asserted at oral argument that the matter was not moot because the court could order the return of the information to Aerotek. The appeals court agreed. Although the parties could not be returned precisely to the status quo ante, the Seventh Circuit explained that it could fashion some meaningful relief in these circumstances, including ordering the return of the information or prohibiting the EEOC from contacting those of Aerotek’s clients not involved in the already-identified discriminatory requests. Even though the company did not specifically request this relief in its brief, at the time of briefing it did not yet know that the appeals court would also deny a stay pending appeal, the court observed. To the extent that the company waived its argument for relief in the form of the return of the information by not requesting it prior to oral argument, the EEOC waived the waiver by conceding that it would return the information if ordered to do so by the Seventh Circuit, and by urging the court to decide the issue on the merits. Merits. Applying the standards set forth by the Supreme Court’s 1950 decision in United States v. Morton Salt Co. and its progeny, the Seventh Circuit ruled that that the district court properly enforced the EEOC’s subpoena. Section 626 of the ADEA authorizes the EEOC to investigate employers and enforce recordkeeping requirements necessary or appropriate for ADEA enforcement in accordance with the powers and procedures provided in Sections 209 and 211 of the FLSA, the court explained. Section 211 of the FLSA, in turn, provides the EEOC with broad investigatory authority and Section 209 of the FLSA incorporates the subpoena power of the Federal Trade Commission Act. Therefore, the inquiry at issue here was undoubtedly within the authority of the EEOC, the court concluded. Fishing expedition? Aerotek argued that the district court erred in ordering the company to produce the names of more than 22,000 clients when the vast majority of those clients were not related in any manner to the hundreds of job requisitions that the EEOC identified as potentially problematic. Noting the broad nature of the request, Aerotek asserted that the EEOC was engaged in a fishing expedition totally unrelated to the matter under investigation. Addressing these issues of scope and relevance, the provisions previously cited allow the EEOC to investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not, the Seventh Circuit noted, citing Morton Salt. As such, the company’s objection to the relevance of the information must be considered in the context of the EEOC’s broad power to investigate on suspicion that the ADEA is being violated, without the necessity of bringing a charge. During its investigation, the EEOC had already identified hundreds of discriminatory requests by Aerotek’s clients, recorded in the company’s database. The Commission stated that it now wants to investigate whether Aerotek’s clients also made discriminatory requests that were not recorded in the company’s database. That effort would obviously be ineffectual if Aerotek refuses to reveal the names of its clients, the Seventh Circuit pointed out. Moreover, there was no support in the law or the facts for the proposition that the EEOC is somehow limited to investigating instances of discrimination that are actually recorded in Aerotek’s database. The identification of the clients will allow the EEOC to investigate discriminatory activity that has not been recorded in the database, information clearly relevant to the investigation. Therefore, the district court did not abuse its discretion in determining that the information sought was relevant to the EEOC’s investigation. No undue burden. Finally, noting that Aerotek made no claim that the request was too indefinite, the appeals court turned to the issue of whether the production of this information would impose an unreasonable or undue burden on Aerotek— i.e. whether compliance would threaten the normal operation of its business. No such burden existed here because the company maintained a database containing all of the requested information. Indeed, Aerotek actually increased the burden on itself by creating a coding system to mask the identity of individuals and clients in its earlier non-compliant productions to the EEOC. Further, Aerotek had since produced the information and made no claim that the process of doing so was unusually difficult or costly. Apparently, the company’s only objection was that production of this information would harm its business relationships with its clients. However, Aerotek provided no basis for this fear and “speculation is inadequate to establish undue burden,” the appeals court wrote.

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