Seyfarth Synopsis: In the remand of the high profile Mach Mining litigation that was before the Supreme Court in 2015, a district court denied the EEOC’s motion for reconsideration of a discovery order pertaining to the scope of the EEOC’s investigation, and denied the EEOC’s motion to amend its complaint to add as defendants seven entities who did not receive actual notice or an opportunity to conciliate.

***

After the remand of the Mach Mining litigation from the U.S. Supreme Court, this hallmark case regarding the scope of review of the EEOC’s pre-suit duties under Title VII is still evolving and shaping the landscape of EEOC litigation. In EEOC v. Mach Mining, LLC, No. 11-CV-00879 (S.D. Ill. Aug. 22, 2016), Judge Gilbert of the U.S. District Court for the Southern District of Illinois recently denied the EEOC’s motion for clarification or reconsideration of a prior discovery order, while granting in part and denying in part the EEOC’s motion to amend its first amended complaint by adding several entities as defendants.

It is imperative that employers facing Title VII lawsuits brought by the EEOC follow this game-changing litigation, which provides insight into how the EEOC’s compliance with its pre-suit conciliation obligations shapes the parameters of EEOC litigation. For further analysis of the Supreme Court’s decision and subsequent proceedings, check out our previous blog posts here and here.

Case Background

The EEOC brought suit on behalf of a class of female applicants who had applied for non-office jobs at Mach Mining. Id. at 1. The EEOC claimed that Mach Mining had never hired a single female for a mining-related position and did not even have a women’s bathroom on its mining premises. The complaint alleged that Mach Mining’s Johnston City, Illinois, facility engaged in a pattern or practice of unlawful employment practices since at least January 1, 2006, in violation of Title VII, by engaging in sex discrimination.

In its answer, Mach Mining asserted the affirmative defense that the EEOC failed to conciliate in good faith. The issue was ultimately resolved before the U.S. Supreme Court, which held “that a court may review whether the EEOC satisfied its statutory obligation to attempt conciliation before filing suit. But we find that the scope of that review is narrow, thus recognizing the EEOC’s extensive discretion to determine the kind and amount of communication with an employer appropriate in any given case.” Id. at 2 (quoting Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1649 (2015)).

Following the Supreme Court’s decision, Mach Mining filed a renewed motion for partial summary judgment, which the Magistrate Judge denied. Mach Mining then filed a motion for a protective order requesting that the Court preclude the EEOC, “from conducting discovery related to Mach’s relationship with other entities — entities which EEOC failed to include in the investigation and conciliation stage that prompted this action.” Id. at 2. Following a hearing, the Magistrate Judge denied Mach Mining’s motion for a protective order, and Mach Mining filed Rule 72 objections to the order.

Per Rule 72, the Court found that the ruling was not clearly erroneous or contrary to law. However, the Court sua sponte reconsidered the motion and granted in part Mach Mining’s motion, finding that “[t]he EEOC had the opportunity to request any and all documents — including those on related entities —during its investigation of Mach Mining. There are no allegations that Mach Mining failed to cooperate with that investigation or that Mach Mining did not disclosure all requested information. As such, the EEOC has had ample opportunity to seek information and include any related entity in its investigation of Mach Mining.” Id. Thus, in its January 21, 2016 order, the Court limited the EEOC from seeking discovery beyond the entities named in its Letter of Determination.

Thereafter, the EEOC moved for clarification or reconsideration of that order. Prior to hearing arguments, the Court noted that the January 21, 2016 order did not intend to bar the EEOC from seeking discovery from any third party that may have relevant information pertaining to any issue in this matter. Id. at 3. Rather, the Court explained that the holding of the January 21, 2016 order was that the EEOC was barred from additional discovery for the purpose of adding parties where no notice and attempt at conciliation had been made.

The Court’s Decision

The Court denied the EEOC’s motion for clarification or reconsideration of the January 21, 2016 order. The EEOC argued that Mach Mining had, “a web of complex corporate relationships” and that Mach Mining did not have physical control over the mining location and/or physical facilities. Id. at 4. These facilities are owned by other entities from whom the EEOC was attempting to obtain discovery.

The Court explained that it did not seek to bar discovery from property owners and that the EEOC was free to seek discovery from third parties. Nonetheless, the Court noted that “such discovery is limited to Mach Mining’s hiring/firing and/or lack of female facilities. EEOC can conduct any discovery with regard to the merits of this case and/or discovery to third parties for legitimate purposes. The only discovery that was barred was discovery with regard to adding defendants that have not had notice and an opportunity for conciliation.” Id. at 4. As a result, the Court concluded that, “there is no basis for the Court to reconsider its January 21, 2016, ruling.” Id.

Thereafter, the Court granted in part the EEOC’s motion to amend the complaint. The EEOC argued that it should be permitted to add as defendants two entities named in the Letter of Determination, which the EEOC asserted had notice and an opportunity for conciliation, and seven entities as defendants for relief purposes only who did not have actual notice and an opportunity for conciliation. Id. at 5. In regards to the seven entities to which the EEOC acknowledged at the hearing that did not have actual notice and an opportunity for conciliation, the Court found that the EEOC failed to demonstrate that these entities could provide relief unavailable through Mach Mining. Id. at 6. As to the two entities named in the Letter of Determination, the Court held that if the EEOC could demonstrate that these entities had actual notice and an opportunity for conciliation in compliance with EEOC’s rules and regulations, the EEOC was granted leave to amend the complaint and to join those two entities as defendants. Accordingly, the Court granted the EEOC’s motion to amend its complaint to add two entities as defendants, while denying the remainder of its motion to amend in regards to the seven entities who had no actual notice or opportunities for conciliation. Id. at 7.

Implications For Employers

The Mach Mining litigation is a benchmark case for pattern or practice litigation brought by the EEOC, given its ramifications on the scope of review of the government’s pre-suit Title VII obligations. This ruling illustrates that in instances where the EEOC does not provide parties actual notice or an opportunity to conciliate, courts will likely not allow those parties to later be added as defendants. Nonetheless, it remains unlikely that courts will conduct in-depth reviews of such conciliations.

Readers can also find this post on our Workplace Class Action blog here.