Seyfarth Synopsis: Court ordered enforcement of the EEOC’s subpoena and authorized the Commission to conduct an on-site investigation without the employer’s consent.

The EEOC has conducted on-site inspections of employers’ business premises for decades, federal court rarely have explored the authority of the Commission to conduct a warrantless, non-consensual search of such private commercial property.

In EEOC v. Nucor Steel Gallatin, Inc., No. 15-CV-53 (E.D. Ky. Apr. 28, 2016), the EEOC sought a ruling authorizing it to enter the private commercial property of defendant employer Nucor Steel Gallatin, Inc. (“Gallatin”), without Gallatin’s consent and without an administrative warrant, to investigate a hiring discrimination claim. Judge Van Tatenhove of the U.S. District Court of the Eastern District of Kentucky ordered enforcement of the EEOC’s subpoena and authorized the Commission to conduct the on-site investigation of Gallatin’s property.

This decision arms the EEOC with precedent that it may conduct on-site investigations regardless of whether an employer consents, something employers should consider when contemplating whether to deny the EEOC access to its business during an investigation.

Case Background

On October 1, 2014, a Gallatin applicant filed a charge of employment discrimination with the EEOC alleging that Gallatin unlawfully rescinded a job offer after discovering his record of disability. He also suggested that in his initial interview, a representative of Gallatin told him the job — titled Hot Rolling Department Shift Manager — would require only “hands off” work. Gallatin answered the charge by stating that it rescinded his offer only after the occupational doctor who conducted his post-offer, pre-employment medical examination determined that he could not safely perform the essential functions of the highly safety sensitive position, with or without reasonable accommodation.

After issuing a Request for Information, the EEOC eventually procured a list of the persons involved in the applicant’s recruiting and interview process. In an email sent to Gallatin on March 5, 2015, the EEOC’s investigator informed the company that “the next step in my investigation is to conduct an on-site visit and conduct interviews with individuals that I think will have relevant information to aid in my investigation.” Id. at 2. In its April 16, 2015 response, Gallatin replied, “we simply do not feel that coming onsite is necessary []or relevant to your investigation.” Id. Instead, the company offered to provide the individuals requested for interviews at the EEOC office or an alternative offsite location.

Shortly thereafter, the EEOC issued a subpoena requiring Gallatin to permit on-site access “to conduct witness interviews, examine the facility, and obtain/request any additional information as it pertains to the Rolling Shift Manager position.” Id. On May 5, 2015, Gallatin filed a Petition to Revoke and/or Modify the Subpoena with the EEOC, claiming that on-site interviews were not relevant nor material, placed an unnecessary burden on the employer, and required a judicial warrant. The EEOC denied Gallatin’s petition in June 2015, directing Gallatin to permit an on-site examination of its facility within ten days of the receipt of the Determination. In a letter sent to the EEOC a few days later, Gallatin informed the EEOC that it would not consent to an on-site visit “without a court order and/or valid warrant.” Id. at 3.

The EEOC then petitioned the Court to order Gallatin to show cause why it should not be compelled to comply with the subpoena issued upon it. The Court ordered the parties to convene for an oral argument, which was held on January 6, 2016, and thereafter directed the parties to file additional briefing. In its April 28, 2016 ruling, the Court ordered (1) Gallatin shall permit an investigator of the EEOC to perform an on-site inspection of Gallatin’s business premises; and (2) the investigator shall limit his or her inspection to evidence directly related to the Hot Rolling Department Shift Manager position and its associated responsibilities. Id. at 17.

The Decision

Before reaching the warrant issue, the Court addressed the threshold question raised by Gallatin. Although Gallatin only objected to the EEOC’s warrantless entry in its initial briefing and at oral argument, the company tangentially claimed that the EEOC simply does not have the statutory authority to conduct any on-site examination of commercial property, regardless of whether an owner consents to that entry. Id. at 3. The Court rejected this argument, noting that Gallatin’s position failed to account for the EEOC’s long and untroubled history of conducting myriad on-site investigations of private commercial property throughout the United States. Id. at 3-4.

Further, the Court addressed Gallatin’s argument that, regardless of whether the EEOC has the statutory right to enter private commercial property, that entry cannot take place without an administrative warrant. To address this argument, the Court noted its present task was to (1) consider the “probable cause” standard for issuing an administrative warrant, and (2) compare that standard to the pre-compliance review procedures embedded in the EEOC’s enabling statute and implementing regulations. Id. at 8. The Court noted that to be consistent with the Fourth Amendment, the EEOC’s statute and implementing regulations must permit the Court to ensure that (1) the EEOC’s request for access flows from specific evidence of an existing violation, and (2) the investigator’s search bears an appropriate relationship to the violation alleged in the complaint. Id. at 8-9 (quotations omitted). Further, when the EEOC seeks enforcement of a subpoena, reviewing courts must determine whether the subpoena is within the agency’s authority, the agency has satisfied its own due process requirements, compliance would be unduly burdensome, and the information sought is relevant to the charges filed. Id. at 10 (quotations omitted). Ordering Gallatin to submit to the on-site investigation, the Court found that “[j]ust as the warrant process requires courts to identify ‘specific evidence of an existing violation’ and order only those inspections that bear ‘an appropriate relationship to the violation,’ the Commission’s statutory and regulatory schemes permit only those inspections that are ‘relevant to the charges filed’ and ‘not unduly burdensome.’” Id. at 10-11.

Having concluded that a formal judicial warrant was not required here, the Court then addressed Gallatin’s five specific challenges to the EEOC’s subpoena. First, the Court rejected Gallatin’s argument that it provided the EEOC more than sufficient information concerning the allegations, and agreed with the EEOC’s position that it cannot merely accept employer declarations as true without conducting appropriate investigations. Id. at 12. Second, the Court dismissed Gallatin’s argument that an on-site investigation would be “irrelevant,” noting that an on-site visit would aid in determining (1) the amount of time spent performing the function, (2) the consequences of not requiring performance of the function, and (3) the current work experience of incumbents in similar jobs.

Third, Gallatin claimed the EEOC’s subpoena was overbroad given that it did not state with any specificity what was being sought. The Court found that the subpoena’s nebulous request to ‘examine the facility,’ without any limitation to those areas of the facility that specifically relate to the job functions in dispute, was overbroad; at the same time, the Court held that Gallatin’s related claim that the subpoena should “state with . . . specificity what is being sought” was unpersuasive. Id. at 13. In view of these two competing considerations, the Court ordered that the EEOC’s investigator may only inspect those areas of the facility that he or she reasonably believes to be relevant to the charges filed. Id. at 14. Specifically, the Court directed the investigator to focus his or her inquiry on those items of evidence directly relevant to the position at issue, noting that “[a]lthough the investigator cannot anticipate with particularity every piece of relevant information that he or she may uncover at the facility, this uncertainty does not provide the Commission with an unmitigated license to roam the property in search of relevant information.” Id.

Fourth, Gallatin asserted that the amount of time necessary for the investigator to gain a reliable understanding of the essential functions of the shift manager position would be unduly burdensome and disruptive to business operations. The Court rejected this argument, finding that Gallatin did not persuasively explain how the presence of an investigator at the facility would actually impose an undue burden. Id. Finally, Gallatin claimed that permitting the EEOC to enter the facility would raise safety concerns related to the inherent dangers of the work environment and industrial equipment machinery. Id. at 16. The Court dismissed this argument, noting that the EEOC is well-equipped to take reasonable precautions before inspecting potentially dangerous worksites. Id. at 16-17.

Accordingly, the Court ordered (1) Gallatin shall permit an investigator of the EEOC to perform an on-site inspection of Gallatin’s business premises; and (2) the investigator shall limit his or her inspection to evidence directly related to the Hot Rolling Department Shift Manager position and its associated responsibilities, and that “[t]he investigator may not generally or indiscriminately search the facility for evidence relevant to [the] claims, and must only inspect those areas that he or she reasonably believes will provide evidence relevant to the position.” Id. at 17.

Implications For Employers

Most employers are well aware that the EEOC routinely conducts on-site investigations. For employers who may have considered challenging that governmental authority, this ruling is instructive in demonstrating how courts will likely enforce EEOC subpoenas to conduct such investigations. Further, if the EEOC ever did have any hesitance about conducting an on-site investigation without an employer’s consent, this ruling likely alleviates any such concern. Accordingly, employers should choose their battles carefully when thinking about opposing an EEOC on-site investigation.