The EEOC continues to push the limits of its subpoena authority across the country in various systemic investigations, and no doubt will be further emboldened by its recent victory in EEOC v. Schwan’s Home Services, No. 10-3022 (8th Cir. July 13, 2011).This terse 8-page decision addresses a number of subpoena-related issues, all of which were decided in the EEOC’s favor. To that end, it ought to be required reading for corporate counsel and HR managers dealing with EEOC systemic investigations.

In this case, Kim Milliren filed a discrimination charge in 2007 against Schwan's Home Services ("SHS") claiming that she was harassed, demoted, and ultimately lost her job because of her gender. In particular, Milliren claimed she was not promoted to Local General Manager, even though she had completed the required General Manager Development Program (“GMDP”). 

The EEOC subsequently launched an investigation, and requested the names and genders of employees who had participated in the GMDP in 2006 and 2007. SHS provided partial information for 2007, but did not provide information for 2006 and refused to provide any gender information other than for a handful of employees who had failed the course in 2007.

After the EEOC made its original request for information, Milliren made additional allegations about her treatment by certain managers and discrimination against other female job applicants. The EEOC sent a second request to SHS concerning these new allegations, and again demanded the GMDP data the employer had declined to produce in response to the first request. SHS did not respond at all. In July 2008, the EEOC issued a subpoena for the requested information. SHS petitioned to revoke that subpoena, and the EEOC denied the employer's petition. SHS then complied in part, but still refused to give the gender breakdown of successful GMDP graduates.

Months later, Milliren filed an amended charge, repeating her original allegations but now including a specific class-related claim. SHS objected to the amended charge, noting that it was untimely because it was more than 300 days after Milliren separated from the company. The EEOC nevertheless served a second subpoena seeking the information that SHS had refused to provide in response to the first subpoena, and SHS refused to comply even after its second petition to revoke was rejected.

The EEOC filed a subpoena enforcement action, and the magistrate judge assigned to the case in the U.S. District Court for the District of Minnesota ordered SHS to comply with the subpoena. SHS filed objections with the district court, which were overruled. SHS then appealed to the Eighth Circuit.

Broad View Of What Constitutes A Valid Charge

SHS argued that the basis for the EEOC's second subpoena was Milliren’s amended charge, and because that charge was untimely, the subpoena was unenforceable. The Eighth Circuit rejected this argument out of hand, noting that the time to argue about the procedural propriety of the charge was when and if the EEOC filed a lawsuit, not at the subpoena stage. Id. at 6.

The Eighth Circuit similarly rejected SHS's argument that the systemic allegations were based on nothing more than Milliren’s hunch that there was a pattern or practice of discrimination. The Eighth Circuit noted that the charge itself was valid “regardless of the strength of its evidentiary foundation.” Id. The Eighth Circuit went on to observe that viewing the amended charge in the context of her other allegations, that her systemic allegations were “more than a mere boilerplate charge of discrimination.” Id. at 7.

Expansive View Of EEOC’s Subpoena Authority

Having found the underlying charge was valid (or at least presumptively so), the Eighth Circuit next turned its focus to whether the EEOC’s subpoena was enforceable. SHS claimed the information sought was irrelevant to Milliren’s claims. The Eight Circuit acknowledged that an EEOC subpoena “cannot … wander into wholly unrelated areas” but here, the request for GMDP data was relevant to the determination of whether SHS ran that program to the detriment of women. Id. at 7-8. In fact, the Eighth Circuit reasoned that, even if SHS was correct that Milliren’s systemic claims were procedurally flawed, the EEOC still had authority to seek broad information concerning the company’s programs because the EEOC’s investigation had arguably revealed potential systemic discrimination.

Implications For Employers

While the reasoning behind the Eighth Circuit’s decision was not entirely novel, this case once again signals an increasing deference of federal courts to the EEOC's subpoena powers during the investigative stage. One possible take away from EEOC v. Schwan’s Home Services is a reminder to employers to pick one’s battles carefully during an EEOC investigation. Even where, as here, it was not unreasonable for SHS to argue that an EEOC subpoena based on a defective charge was unenforceable, an employer must make a judgment call as to providing otherwise benign or even favorable information. The EEOC may not have the resources to review all information it is given, but has recently shown it will spare no expense to defend the scope of its investigatory powers.