The U.S. Supreme Court has unanimously provided some guidance about whether conciliation efforts between the Equal Employment Opportunity Commission (EEOC) and an employer accused of employment discrimination can be judicially reviewed. This guidance came in the case of Mach Mining, LLC, v. EEOC, decided on April 29, 2015.

Here’s how this tale begins. Sometime in 2009, a woman applied to Mach Mining in Illinois to be coal miner (clearly a non-office job). When she wasn’t hired, she filed a complaint with the EEOC alleging that she wasn’t hired because of her sex. Upon investigating the claim, the EEOC found reasonable cause to believe that not only had the complainant not been hired because of her sex, but that many other women had also been denied jobs as coal miners because of their sex. In its documentation filed in the trial court in this case, the EEOC asserted that the mining company had never hired a woman as a coal miner and didn’t even have a women’s bathroom on the mine’s premises.

As it is supposed to do as provided in Title VII of the Civil Rights Act of 1964, the commission sent the mining company and the complainant a letter inviting them to participate in informal methods of dispute resolution and indicating that an EEOC representative would contact them soon.

And we can’t tell you what really happened after this first letter, but we can tell you what the mining company claimed happened, as we have been able to glean from documents filed with the U.S. District Court for the Southern District of Illinois. But before we get to those claims, let’s make sure we understand the way this process is supposed to work.

  1. An aggrieved party files complaint with the EEOC.
  2. The EEOC notifies the employer of the complaint and investigates the complaint.
  3. As a result of the investigation—
    1. If the EEOC finds no reasonable cause to believe the complaint has merit, it dismisses the complaint and the aggrieved party may file her own lawsuit.
    2. If it does find reasonable cause, the EEOC must use informal methods of conference, conciliation, and persuasion (typically referred to as simply “conciliation”). Nothing discussed nor any of the documents exchanged during the conciliation can be used as evidence in any later proceeding unless the parties agree to that use in writing.
  4. If an agreement to resolve the complaint is not reached to the satisfaction of the EEOC, the EEOC can then sue the employer in federal court.

Now, let’s talk about what the employer said happened during the conciliation. Remember these are the claims asserted in the employer’s pleadings filed with the district court. No court has found that these claims are “legally true.” Apparently, the EEOC and the employer either exchanged letters or emails about the charges. During that communication, the employer claims the EEOC refused to—

  1. Provide any information about the claimants’ damages, qualifications for positions, or even whether the claimants had filed applications for employment.
  2. Meet in person to discuss a resolution.
  3. Furnish information requested by the employer to explain the basis for the settlement amount proposed by the EEOC (which was higher than the amount made in a counteroffer from the employer).

At this point, about a year after the first letter, the EEOC sent a second letter indicating it had met its legal requirement to conciliate the case, those efforts were unsuccessful, and further efforts would be futile. The EEOC then filed suit against Mach Mining in federal court. In its answer to the EEOC’s complaint, the mining company raised the defense that the EEOC had not conciliated in good faith. In fact, the mining company’s attorney sought to introduce evidence from the conciliation efforts to prove that contention, even introducing a letter to himself from an EEOC official threatening him with criminal prosecution if he were to reveal documents from the conciliation process. (Again, keep in mind that a court has never adjudicated the veracity of that claim about criminal prosecution, but the attorney did make it.)

The district court issued a protective order for the documents, ruled in favor of the mining company on the issue of good-faith conciliation, and allowed an immediate appeal to the U.S. Seventh Circuit Court of Appeals. The circuit court found that the EEOC’s conciliation efforts were not subject to judicial review at all. That decision was appealed to the U.S. Supreme Court, which ruled in favor of the mining company.

What does this mean for an employer responding to a discrimination complaint made to the EEOC?

First, as with any legal complaint or charge, it’s still a good idea to try to settle the matter through negotiation before litigation. Perhaps the best thing about the Supreme Court’s decision is that it affirmed that federal law mandates that the EEOC pursue some type of conciliation efforts.

After that, the decision provides some good news and bad news for employers facing an EEOC complaint and potential conciliation.

Good news

First, the conciliation efforts of the EEOC are subject to judicial review.

Second, the decision sets out some minimum information that the EEOC must communicate to the employer: the specific allegation along with a description of what the employer has done wrong and the effects of the employer’s actions on the individual complainant or class of employees. Failure to provide this information would appear to be failing to conciliate.

Third, the EEOC must engage the employer in some type of discussion, whether written or oral, to give the employer an opportunity to remedy the allegedly discriminatory practice. In fact, my experience has been that conciliation is often a productive approach for the employer.

Bad news

First, the good-faith test for conciliation was rejected, and the nature of any judicial review is bare boned. Normally, an affidavit from the EEOC official indicating that he or she has attempted to conciliate the claim will suffice to show that the EEOC has met its legal requirements. Only if the defendant employer asserts that the EEOC didn’t attempt to engage the employer in a discussion can the court then gather evidence to determine whether a discussion took place. (The discussion can be written and does not have to be oral.) Hypothetically, this means that the “discussion” could be a letter from the EEOC that says to the employer: “Hire women to be coal miners and pay $1 million. If you don’t, we’re going to sue you.”

Second, a number of lower-court decisions were apparently overruled. So this means that the following behaviors by the EEOC will probably not show a lack of conciliation efforts.

  1. Not meeting in person.
  2. Not providing any more information than that required in the “good news” paragraph above.
  3. Not indicating the smallest remedial reward the EEOC will accept.
  4. Not setting forth the complete factual and legal basis for the EEOC’s positions.
  5. Not supplying the basis for its calculation of a demanded monetary payment.
  6. Not participating in a back-and-forth discussion. (The EEOC is free to make a take-or-leave-it offer.)
  7. Not offering an opportunity for voluntary compliance.
  8. Not responding in a flexible or reasonable manner.
  9. Not responding in a timely manner. (Because the EEOC is free to set the pace of the conciliation, it can speed up or drag out the process.)

Some of the lower-court rulings had indicated that the required conciliation was sufficient only if it provided an opportunity for voluntary compliance with federal discrimination laws, and a lawsuit should only be filed when conciliation proved impossible, but the Supreme Court decision indicates the EEOC may sue any time it is unable to secure terms acceptable to the EEOC.

Third, even if the employer prevails in showing that the EEOC did not attempt conciliation by participating in a “discussion,” the EEOC gets a mulligan; that is, the lawsuit is not “won” or dismissed, but the case is simply sent back to the EEOC so that it can get the process right. In fact, contesting whether conciliation occurred may only lead to higher legal fees for the employer.

Furthermore, when the EEOC does its do-over, all the EEOC has to do is send a letter that indicates what the employer did wrong, indicate how employees were adversely affected, what the EEOC expects the employer to do, and how much the EEOC expects the employer to pay. The employer can make a counteroffer, but there is nothing that requires the EEOC to negotiate with employer before refiling its lawsuit.