By Joy P. Waltemath, J.D. Once Walmart conceded that its preemployment physical abilities test (PAT) has a disparate impact on women as a class, the EEOC’s administrative subpoena seeking nationwide applicant data relating to that test’s administration would have required producing documents to support an already conceded fact and placed an “excessive” and “unwarranted” burden on the employer, a federal district court in Kentucky ruled. After first finding it had “ample justification” to hear the merits of the dispute (both parties accused the other of procedural errors), the court found that although the information requested was relevant, for Walmart to satisfy what was “an entirely unnecessary subpoena” the employer would need to spend an estimated $105,000 and utilize around 2,000 man hours, which the court concluded was unduly burdensome. Consequently, it would not enforce the subpoena (EEOC v. Wal-Mart Stores East, LP, March 29, 2016, Caldwell, K.). Alleged discriminatory hiring. The discovery dispute came about after a 2001 EEOC class action alleging sex discrimination in Walmart’s “order-filler” hiring process was resolved by a consent decree in 2010. Among other things, that decree included an “instatement” process requiring Walmart to fill certain positions with eligible female claimants who were previously denied employment. Walmart subsequently implemented the court-approved PAT that was applied to all order-filler applicants. The EEOC then filed this suit on behalf on a woman who was denied employment through the instatement process based on her PAT results. Discovery dispute. Claiming the pre-employment test had a disparate impact on women as a class, the EEOC investigated and asked for data relating to Walmart’s administration of the PAT at all 40 of Walmart’s Grocery Distribution Centers. The employer produced some of the requested data for three of its distribution centers but otherwise objected to the scope of the requests on relevance and undue burden grounds, after which the EEOC sought to enforce the subpoena. Walmart claimed the requested production would involve reviewing an “estimated 1.0-1.2 million” applicants in order to “manually align” this data for the “estimated 44,000-45,000” times it administered the PAT. Extrapolating from its earlier, more limited production, it provided a Ph.D.’s estimate that compliance with the subpoena would cost $105,000, plus 2,000 person hours. Significantly, Walmart also conceded that the PAT does have a disparate impact on females as a group. Although the parties spent much time on two procedural issues (whether Walmart’s alleged failure to file a timely petition to revoke the subpoena waived its objections, and whether the EEOC’s seeking court enforcement before addressing Walmart’s purportedly untimely petition violated EEOC procedure), the court found neither party definitively established that the other was guilty of a procedural default and, even if they had, it still had ample grounds for “exercising its discretion to proceed to the merits.” Relevant but unduly burdensome. Though the subpoena sought relevant information, the court agreed that producing the requested data would be unduly burdensome. Essentially, Walmart conceded half of the EEOC’s prima facie case when it conceded that the PAT has a disparate impact on women. For the EEOC to prevail, however, Walmart then would have to fail to demonstrate that the PAT is job related for the position and consistent with business necessity. Thus, although information the EEOC subpoenaed was relevant (nationwide PAT data would tend to show whether or not the PAT has a disparate impact), Walmart’s concession of that point meant that requiring it to produce documents to “prove” that point would place an “excessive” and “unwarranted” burden on Walmart. As to investigation. The goal of an EEOC investigation is “to determine whether there is reasonable cause to believe that the charge is true,” and Walmart had conceded as much. To that end, the court said the EEOC’s subpoena not only sought more than was reasonable or necessary, but it also was inconsistent with EEOC’s investigative authority. Nor was Walmart trying to drag out the investigation; conceding half of the EEOC’s prima facie case should accelerate the investigation, emphasized the court. As to conciliation. And though the EEOC also argued it needed the information for conciliation, Title VII is clear that “only after investigation is conciliation relevant,” and the EEOC’ right of access was limited to evidence “relevant to the charge under investigation.” That meant to the court that the EEOC’s subpoena power did not attach to its conciliation efforts, and even if it did, such a subpoena would be premature before a reasonable cause determination. Enough of a burden. The court was unconvinced by EEOC’s argument that Walmart’s sworn statement attesting to its cost and resources estimate for producing the requested information was inconsistent with two earlier data productions. Nor would it credit the agency’s attempt to ban any consideration of costs based on the complexity of an employer’s own systems from the undue burden analysis. All a party subject to the subpoena must show is that producing the documents would seriously disrupt its normal business operations, a fact-intensive, case-by-case inquiry. Because Walmart had conceded disparate impact, and the costs of compliance with this “now entirely unnecessary subpoena” would disrupt normal business operations (since employees could not perform their usual job duties), the court refused to enforce the subpoena.
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