Last year, the U.S. District Court for the Northern District of Texas dismissed a high profile lawsuit brought by the State of Texas against the EEOC regarding the its “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Under Title VII.”  The District Court held that Texas lacked standing to maintain its suit because it did not allege that any enforcement action had been taken against it in relation to the EEOC’s guidance.

Texas filed an appeal with the U.S. Court of Appeals for the Fifth Circuit seeking to overturn the dismissal of its novel lawsuit.

On January 8, 2015, the EEOC filed its opposition brief in the Fifth Circuit and it is a “must read” for all employers caught in the crosshairs of the EEOC’s aggressive litigation approach concerning its criminal background guidance.

Case Background

In April 2012, the EEOC issued guidance urging businesses to avoid a blanket rule against hiring individuals with criminal convictions, reasoning that such rules could violate Title VII if they create a disparate impact on particular races or national origins. Like various other states, Texas has enacted statutes prohibiting the hiring of felons in certain job categories. In November 2013, Texas took the unprecedented step of suing the EEOC, seeking to enjoin the enforcement of this guidance, which Texas has nicknamed the “Felon Hiring Rule.”

The District Court dismissed Texas’ lawsuit due to lack of subject matter jurisdiction. Because Texas did not allege that any enforcement action had been taken against it by the Department of Justice (as the EEOC cannot bring enforcement actions against states) in relation to the Guidance, the District Court held that there was not a “substantial likelihood” that Texas would face future Title VII enforcement proceedings from the Department of Justice arising from the Guidance. As standing to bring suit cannot be premised on mere speculation, the District Court held that Texas lacked the necessary standing to maintain its suit against the EEOC.

EEOC’s Opposition Brief

In its Fifth Circuit brief, the EEOC sets forth several reasons why the District Court correctly dismissed Texas’ the suit for a lack of subject matter jurisdiction. Specifically, the EEOC asserts:

  • The guidance document is not judicially reviewable because it “has no legal consequences [as it is not a final agency action], nor does it impose any obligations on Texas, its-state agencies, or other employers.”
  • Texas lacks standing as it has not demonstrated that is has already, or will suffer any injury based on the Guidance.  To this end, the EEOC labels Texas’ concerns as “purely speculative.”
  • Texas’ challenge is not ripe for review because “because the Guidance has not caused Texas any injury, nor is injury imminent, there is no sufficiently ripe case or controversy upon which to base Article III jurisdiction.”

Id. at 11-13.

Next up in the case will be Texas’ reply brief, and then the Fifth Circuit will set the case for oral argument.

Implications For Employers

The EEOC continues to hang its hat on the argument that federal courts lack jurisdiction to hear such a case because the guidance is not legally binding and does not constitute a final agency action. This case remains “one to watch” given the stakes involved and the extent to which the EEOC has “gone to the mat” defending its criminal background guidance document.