Recently in the case of EEOC v Mavis Discount Tire, Inc. (S.D.N.Y. Sept. 11, 2015), a court held that the EEOC could file pattern or practice lawsuits under Section 706 of Title VII even though such lawsuits are only expressly provided for under Section 707 of Title VII. In such cases the Court also held that the EEOC could recover compensatory and punitive damages, as provided for in Section 706, and was not limited to injunctive relief as the case would be under Section 707. The EEOC in this case alleged that its investigation revealed that between 2008 thru 2012 Mavis hired only two women among the more than 2,600 applicants selected for various store positions. According to the EEOC, during the period in question, Mavis hired 80 Store Managers, 655 mechanics and 1,688 tire installers and/or alignment technicians. None was a woman. But then, after the EEOC filed its lawsuit, Mavis hired one female Store Manager and one female
Assistant Store Manager. The EEOC claims that it identified over 40 female applicants whose credentials, at least on paper, made them well-qualified for any number of the Mavis jobs. The EEOC asserted that given these facts, Mavis was guilty of not only discriminating against specific individual females, but also of engaging in a “pattern or practice” of discrimination against females as a class.
Under these circumstances, the EEOC’s reasons for attempting to bring a pattern or practice claim under Section 706 were most likely: (1) because, although the burden-shifting requirements under Section 706 pertaining to class actions provided for in Teamsters v. United States (S. Ct. 1977) are a bit more complicated (i.e. a showing that the discriminatory practice was the employer’s “standard operating procedure”), Section 706 does allow for compensatory and punitive damages; (2) on the other hand, pattern or practice claims under Section 707 only allow for equitable relief (mainly injunctive relief) but may be proved by a somewhat simpler burden of proof (i.e. the McDonnell Douglas framework including a showing of “adverse impact”). Obviously, the EEOC wanted to take advantage of the shifting burdens of proof in the case given the investigative facts that were developed.
Mavis, in its defense, asserts that the EEOC has no authority to bring a pattern or practice case under Section 706, and argues that such cases can only be brought under Section 707. The district court, as stated above, disagreed with Mavis and held that the EEOC may bring a pattern or practice case under Section 706. The district court in this case relied heavily on the Sixth Circuit’s reasoning in the case of Serrano v Cintas Corp. 699 F.3d 884 (6th Cir. 2012) which also held that the EEOC does have authority to pursue pattern or practice claims under Section 706.
It is expected that Mavis will appeal the decision to the Second Circuit. At this point the Second Circuit has not rendered an opinion on this specific issue.
The main point here is that in this case and other cases the EEOC is noticeably trying to expand its enforcement authority with respect to the development and litigation of systemic cases. Hence, it may be important for employers (especially large employers) to understand that the development of systemic charges is a “top priority” under the Agency’s Strategic Enforcement Plan (SEP) for FY 2012 through 2016, and that the EEOC is making significant progress in processing such cases through the administrative process as well through litigation: For example it may not be known that:
- District Office Plans. In furtherance of the National Strategic Enforcement Plan, District Offices are being encouraged to develop District Complement Plans (DCP’s) for the purpose of focusing on local businesses where the alleged discrimination may have a broad impact on a given industry, profession or geographic area. District Offices are also encouraged to establish “Lead Systemic Investigators” to develop and coordinate systemic investigations. Hence, EEOC systemic targets in the near future will no doubt include many local as well as national businesses and employers.
- The Systemic Watch List. The EEOC has developed a “systemic watch list” to keep updating its technology and improve its capacity to identify systemic violations and to manage systemic investigations and litigation. The Systemic Watch List is a software tool that matches ongoing investigations or lawsuits and is designed to improve the coordination between the investigators who are engaged in similar systemic investigations.
- The CaseWorks System. The EEOC is expanding this system to provide a central shared source of litigation support tools that facilitate the collection and review of electronic discovery. The system enables the EEOC investigators to collaborate in the development of cases for litigation. For example, data on large employers who operate regionally or nationwide. The EEOC has increased its CaseWorks storage capacity by 150 percent. The system presently hosts over 30 million pages of electronic documents.
- Systemic Investigations in FY 2014. According to the EEOC’s Performance Results for FY 2014 (the results for 2015 are not yet available), the EEOC completed 260 systemic investigations. 78 of the investigations were resolved by voluntary agreements. 34 of these were resolved by a “predetermination settlement” (i.e. before a finding of “cause” was made); 44 were resolved by a conciliation agreement. The EEOC in FY 2014 obtained approximately $13 million in monetary relief on behalf of affected class members.
- Systemic Lawsuits. The EEOC filed 17 systemic lawsuits in FY 2014. At the end of FY 2014 systemic lawsuits made up 13% of all the EEOC’s lawsuits filed on the merits. In total at the end of FY 2014 there were 57 systemic cases on the EEOC’s active docket making up 25% of all active cases on the EEOC’s docket for that year. This was the largest proportion of systemic cases on the EEOC’s active docket since FY 2006 when the agency began keeping record of such cases individually. It is expected that the number of systemic cases in the administrative process and in litigation will increase in FY 2015. Additionally, as outlined above employers should be aware of the fact that the EEOC is gradually acquiring all of the tools it will need to aggressively investigate and prosecute systemic cases.
Thus, having made the development of systemic cases a major priority under the EEOC’s Strategic Enforcement Plan for FY 2012 through 2016; it is not surprising that the Agency is now taking the above steps to implement that plan. However, it should be clear from cases such as EEOC v Mavis Discount Tire that the EEOC is not merely trying to increase the number of systemic cases, but is also trying to expand, depending on the facts, the scope of its discretion under Title VII to investigate and litigate systemic cases.