Why it matters

Providing a valuable lesson for employers, a federal court judge in Illinois ordered Groupon to comply with two subpoenas from the Equal Employment Opportunity Commission (EEOC) as part of its investigation into an employee complaint. An African-American applicant told the agency that he was rejected from a position with the company because of his race, triggering an investigation and a request from the EEOC for information about Groupon’s applicants and employees over a two-year period. Groupon objected, but the court wrote that the data was relevant because the agency was investigating a possible pattern or practice of discrimination claim. Neither was the request unduly burdensome, the court said, not persuaded by Groupon’s contention that producing the information would be expensive, time consuming and technologically challenging.

Detailed discussion

Adrian Stratton applied for the position of Vice President of Merchandising with Groupon in January 2014. When he was not hired, Stratton filed a charge of discrimination with the EEOC, accusing the employer of discriminating against him based on his race in violation of Title VII.

The EEOC sent Groupon notice of the charge and launched an investigation. Groupon denied the allegations but, in February 2015, the agency asked to conduct on-site interviews of the individual who reviewed Stratton’s application and other related employees. Groupon complied and the EEOC conducted the interviews.

In March 2015, the EEOC followed up with a request for additional information. Groupon objected, arguing that it was overbroad but providing some information it deemed directly related to the position for which Stratton applied. In May, the agency requested access to Groupon’s Chicago headquarters to conduct an on-site investigation. Groupon refused.

The agency then issued two administrative subpoenas, asking the employer for a host of additional information, including a database of all employees (with details on race, date of application, source of application, position, date of separation, address and, if applicable, the name and race of the individual who referred the employee), a similar database of all applicants, a database of the same characteristics for the 192 applicants for the position to which Stratton applied and access to the premises, software and technology related to Groupon’s hiring and recruiting processes.

Groupon balked. The company argued the subpoenas were overbroad and not relevant. In response, the EEOC modified the subpoenas to narrow the time period to Jan, 1, 2014 to the present and limit the geographic scope to the Chicago headquarters. The employer provided some materials but not all the information requested and the agency filed an application to enforce the subpoenas with an Illinois federal court.

Noting that she was not considering the merits of the underlying charge of discrimination, U.S. District Court Judge Sara L. Ellis sided with the EEOC, finding the subpoenas were not overly broad, did not request irrelevant information and did not place an undue burden on Groupon.

“The Subpoenas seek information about other Groupon employees and applicants for employment at Groupon’s Chicago headquarters as well as information about Groupon’s recruiting and hiring practices at the Chicago headquarters,” the court wrote, and the agency argued the information could illustrate discriminatory patterns of conduct to support an inference that race was the motivation behind the failure to hire Stratton.

“EEOC may request evidence about a company’s employment practices beyond those specifically contained in the Charge during the course of an investigation,” the judge said. “Evidence regarding whether Groupon discriminates in recruiting and hiring based on race at its Chicago headquarters will advance EEOC’s investigation into whether Groupon discriminated against Stratton based on his race.”

The information sought by the agency is relevant, the judge added, because racial discrimination is by definition class discrimination, and information concerning whether an employer discriminated against other members of the same class may cast light on whether an individual person suffered discrimination. Further, the temporal proximity of the requested information to Stratton’s application “is sufficiently close that the relevance of the information is not substantially diminished,” meaning the subpoenas were not overbroad.

As for creating an undue burden, Judge Ellis said Groupon failed to demonstrate that the EEOC’s subpoenas were more trouble than they were worth.

The information requested was voluminous, the court acknowledged, and the employer estimated production could take four months and necessitate the hiring of three to five temporary employees, plus another five to ten hours per week from a current Groupon employee. On top of that, the company has used “at least” three different methods to track applicant data since 2008 and two systems to track hiring information, with data from the old systems no longer stored in a usable format, meaning converting the data posed a “significant” amount of effort.

However, measuring the likelihood that the evidence would cast light on whether Stratton suffered discrimination against the resources available to Groupon, the court said the burden placed on the employer did not appear unconscionable, particularly as racial discrimination “continues to be a matter of grave public concern.”

“The Court finds that the subpoenas are relevant to the underlying charge and not overly broad,” Judge Ellis wrote. “Additionally, the Court finds that Groupon fails to demonstrate that compliance with the subpoenas would be unduly burdensome. Therefore, the Court grants the application and enforces the subpoenas.”

To read the opinion and order in EEOC v. Groupon, Inc., click here.