Earlier this month, the US Court of Appeals for the Seventh Circuit found that the EEOC was within its investigatory powers to administratively subpoena broad information about a staffing agency’s clients even though it was not investigating a specific charge of discrimination. The EEOC was investigating Aerotek, one of the nation’s largest temporary staffing firms, for potential violations of the Age Discrimination in Employment Act (ADEA). After producing some but not all of the subpoenaed information, Aerotek balked at producing its clients’ names on the grounds that producing the information would harm its business relationships with its clients.
The EEOC moved to enforce the subpoenas, and the United States District Court for the Northern District of Illinois ordered Aerotek to disclose the names of approximately 22,000 clients. Aerotek appealed, and the Seventh Circuit affirmed the order.
Aerotek argued that the district court had erred in ordering Aerotek “to produce the names of more than 22,000 clients when the vast majority of those clients were not related in any manner to the hundreds of job requisitions that the EEOC identified as potentially problematic.” Aerotek argued that the EEOC was simply engaged in a fishing expedition; the Seventh Circuit, however, disagreed. According to the Seventh Circuit, “Aerotek’s objection to the relevance of the information must be considered in this context of the EEOC’s broad power to investigate on suspicion that the ADEA is being violated, without the necessity of bringing a charge.” It further noted that in determining the enforceability of a subpoena, a district court’s function is “narrowly limited . . . it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant.” A court may restrict disclosure that “would impose an unreasonable or undue burden on the party from whom production is sought.” The Seventh Circuit found that Aerotek did not show an unreasonable or undue burden.
Not surprisingly, the EEOC has weighed in on the Seventh Circuit’s ruling. According to the EEOC’s Chicago Regional Attorney John Hendrickson, “The EEOC consistently prevails in court with its subpoena enforcement actions. Prudent and penny-wise employers should consider using subpoenas as an opportunity to show the government that they complied with EEOC laws and produce the material they have, in lieu of expending resources to delay the investigation. Courts, as the Seventh Circuit did here, defer to the EEOC’s determination as to what should be investigated.”
Jack Rowe, the director of the EEOC’s Chicago District office, also noted “Aerotek has spent significant time and resources fighting the September 2009 subpoena. . . . It ignored the EEOC’s determination that the subpoena was valid, as well as the district court’s determination that EEOC acted within its authority to investigate allegations of discrimination. This is a reminder that no matter how many times EEOC investigations are challenged, we will remain committed to our congressional mandate to investigate and ferret out discrimination.”
What are some takeaways from this decision? First, do not forget that the EEOC has broad powers to investigate discrimination and does not need to wait for a charging party to do so. Second, the standard for enforcement of the EEOC’s subpoena is not a high bar—is the inquiry (1) within the authority of the agency, (2) not too indefinite, and 3) seeking information reasonably relevant without imposing an unreasonable or undue burden? Finally, the EEOC is willing to enforce its subpoenas and it, unlike most private companies, does not care how much it costs to do so.