Seyfarth Synopsis: A federal court in Tennessee denied the EEOC’s application for an Order to Show Cause why its administrative subpoena should not be enforced. This ruling highlights the importance and benefits of employers understanding the contours of the charges being investigated by the EEOC, so that the employer can guard against improper fishing expeditions.

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Although courts typically grant the EEOC wide latitude to obtain information regarding its investigations of workplace discrimination, this access is not limitless. One such limit was recently highlighted in EEOC. v. Southeast Food Services Company, LLC d/b/a Wendy’s, Case No. 3:16-MC-46 (E.D. Tenn. Mar. 27, 2017 ), where Magistrate Judge H. Bruce Guyton of the U.S. District Court for the Eastern District of Tennessee denied the EEOC’s Application for an Order to Show Cause Why an Administrative Subpoena Should Not Be Enforced (“Application”). The Court refused to enforce the EEOC’s subpoena, finding that the request for contact information of all of Southeast Food Services Company, LLC, d/b/a Wendy’s (“Wendy’s”) current and former employees, among other things, was not relevant to the individual charge of discrimination being investigated by the EEOC.

This ruling illustrates the importance to employers of understanding the scope of the EEOC charge being investigated, and provides a roadmap for pushing back against agency overreach when the Commission seeks information that is not pertinent to the investigation at issue.

Case Background

In September 2014, Wendy’s hired Christine Cordero as a crew member at one of its restaurant locations. Id. at 2. Shortly thereafter, Wendy’s promoted Cordero to crew leader. Id. As part of her promotion, Wendy’s requested that Cordero sign a general release of all claims she may have against Wendy’s up to that point, but not including future claims. Id. For the past 20 years, Wendy’s had conditioned promotions on signing this release. Id. Despite not having any claims against Wendy’s, Cordero refused to sign the release. Id. As a result of her refusal, Cordero did not receive the promotion, but still received training for the position and a small raise that accompanied the promotion. Id.

Ms. Cordero continued to work for Wendy’s, but filed a charge of discrimination with the EEOC in December 2014. Id. In the charge, Cordero alleged that Wendy’s retaliated against her by not promoting her due to her refusal to sign the release. Id. In the course of its investigation of Cordero’s charge of discrimination, the EEOC learned of Wendy’s longtime practice of requiring employees to sign a release of claims as a condition of promotion, and thereafter sent Wendy’s a letter indicating it intended to expand the investigation. Id. In this letter, the EEOC also requested information from Wendy’s regarding current and former employees who had worked for Wendy’s since December 2012. Id. Wendy’s, however, refused to provide this additional information, and the EEOC then issued a subpoena seeking the same information. Id. at 2-3.

The EEOC’s subpoena sought the identity and contact information of all current and former employees since December 2012, including employees who signed the release of claims and who had been promoted. Id. at 3. In addition, the subpoena sought the employees’ dates of hire, promotion and termination, reasons for termination, and titles, as well as copies of all releases that Wendy’s had employees sign during that period, among other things. Id. Wendy’s continued to object, and refused to provide the information subpoenaed. Id. Thereafter, on November 18, 2016, the EEOC filed the Application with the Court, to which Wendy’s responded on February 22, 2017.

The Court’s Decision

The Court denied the EEOC’s Application and declined to enforce the subpoena. The EEOC argued that it “require[d] the contact information for [Wendy’s] employees to mail questionnaires in order to determine if those employees gave up any claim in order to receive promotions.” Id. at 4. In response, Wendy’s asserted that the sole issue with regard to the instant charge was whether its uniform policy regarding a signed release as a condition of promotion was sufficient to sustain Cordero’s Title VII retaliation claim, and that the information sought for the questionnaires was neither relevant nor necessary to the EEOC’s investigation. Id. at 4-5. Siding with Wendy’s, the Court rejected the EEOC’s argument, finding that “whether other ‘employees gave up any claim in order to receive promotions’ [was] irrelevant to resolving Ms. Cordero’s charge.” Id. at 5.

The EEOC further argued that sending the questionnaires to other employees was the only way to verify Wendy’s contention that no other employees aside from Cordero refused to sign the release. The Court again rejected the EEOC’s argument, noting it was “unclear how another employee’s refusal to sign a release ‘might cast light’ on the instant charge, particularly where there is no dispute that for the past 20 years, all employees have been required to sign a general release of all claims as a condition of promotion.” Id. at 6. The Court further reasoned that the potential unlawfulness of Wendy’s employment practice was not dependent on how many other employees signed a release. Id. at 7. Accordingly, the Court held that the EEOC did not meet its burden in demonstrating that the information subpoenaed is relevant to Cordero’s charge, and declined to enforce the subpoena.

Implication for Employers

In what has become “go-to” play in the EEOC’s investigation playbook, the Commission has been aggressive in taking individual charges of discrimination as means to seek company-wide personnel information from employers through subpoenas. Employers that encounter requests for expansive personnel data in the course of single employee investigations can add this ruling to their own playbooks in defending against overzealous EEOC investigations. While the Commission likely will continue to be aggressive in seeking massive amounts of information from employers in investigations, this ruling provides optimism for employers who are willing to firmly oppose such tactics.

Readers can also find this post on our EEOC Countdown Blog here.