Why it matters

In what is believed to be the first decision interpreting the U.S. Supreme Court’s Mach Mining v. EEOC decision from the most recent term, a federal court judge in Ohio sided with an employer to stay a lawsuit because the EEOC failed in its effort to conciliate prior to filing suit. Earlier this year, the justices ruled that courts may consider the sufficiency of the Equal Employment Opportunity Commission’s (EEOC) conciliation efforts prior to bringing suit against an employer. In the case at hand, the agency filed a complaint alleging violations of the Americans with Disabilities Act (ADA) in August 2013. The employer responded with a motion to dismiss, arguing that the agency did not comply with the pre-suit conciliation requirement. To counter the EEOC’s sworn affidavit attesting to the agency’s efforts, the employer filed its own declaration that the agency presented it with a “take it or leave it” demand and then said conciliation had failed, without engaging in actual negotiations. Given the numerous conflicting facts—and noting that the agency never presented the employer with a dollar amount for a settlement, despite promising to—the court stayed the case and ordered the EEOC to engage in the conciliation process. Importantly for employers looking for guidance in similar cases, the court hewed closely to the language found in Mach Mining and awarded the employer a victory with the chance for a do-over in pre-suit conciliation.

Detailed discussion

The battle over pre-suit conciliation efforts began when a woman filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) claiming that Mach Mining LLC refused to hire her as a coal miner because of her sex. The agency sent a letter to the employer announcing that it found reasonable cause to believe discrimination had occurred against a class of women who applied for similar jobs and invited the company to participate in “informal methods” of dispute resolution with the complainant.

Roughly one year later, the EEOC sent a second letter, stating that conciliation efforts “have occurred and have been unsuccessful.” The agency then filed suit in Illinois federal court. Mach Mining answered the complaint, arguing that the EEOC had failed to conciliate in good faith. A federal court sided with Mach Mining but the Seventh Circuit Court of Appeals reversed and the U.S. Supreme Court granted certiorari, noting a split among the circuits on the issue of whether courts are permitted to review the agency’s attempts at conciliation.

In June, the justices held that courts may consider the sufficiency of the EEOC’s conciliation efforts prior to bringing suit against an employer. The unanimous Court acknowledged that the federal agency has discretion on “how to conduct conciliation efforts and when to end them,” and emphasized that the review should be “narrow” and not a “deep dive.”

Closely tracking the Mach Mining decision, a federal court in Ohio stayed an EEOC suit because the agency failed to complete its statutorily required pre-suit conciliation efforts.

In that case, the EEOC filed suit in August 2013 against OhioHealth Corporation, alleging the company failed to provide Laura Stone with a reasonable accommodation for her purported disability and then terminated her because of that disability.

OhioHealth responded with a motion for summary judgment in February, arguing that the EEOC had failed to satisfy all conditions precedent to the filing of the action. The agency countered that conciliation efforts took place, while OhioHealth told the court that the EEOC’s efforts did not satisfy its statutory duties.

U.S. District Court Judge Gregory L. Frost agreed.

“It is well settled that in order to satisfy the conciliation condition precedent to suit, the EEOC must perform two basic acts,” he wrote. “First, the EEOC must inform the employer about the specific allegations, as the Commission typically does in a letter announcing its determination of ‘reasonable cause.’ Such notice properly describes both what the employer has done and which employees (or what class of employees) have suffered as a result.”

The parties did not dispute that the EEOC fulfilled the first required act, instead focusing on the second, where “the EEOC must try to engage the employer in some form of discussion (whether written or oral), so as to give the employer an opportunity to remedy the allegedly discriminatory practice.”

In a declaration, an EEOC District Director stated the agency issued a determination finding reasonable cause to OhioHealth on September 15, 2011. The EEOC then “engaged in communications” with the employer to provide it with the opportunity to remedy the discriminatory practices, including sending a conciliation proposal and engaging in telephone conferences regarding a counterproposal and the EEOC’s final offer. The agency then sent a letter on October 14, 2011 stating that conciliation efforts had not been successful.

OhioHealth presented a different perspective. The employer argued the EEOC presented its demand as a “take-it-or-leave-it proposition,” failed to provide information requested by the company, demanded a counteroffer, and then declared the efforts had failed.

Judge Frost was careful to note that he was examining whether the EEOC attempted to confer about the charge and not what happened (such as the statements made or positions taken) during the discussions. The EEOC specifically contended that a final offer was made but OhioHealth specifically denied that a final offer was made.

“[T]his conflict hardly suggests that conciliation efforts were unsuccessful or clear—and it possibly suggests that the EEOC was not even aware of OhioHealth’s position when the EEOC declared that position dispositive of the conciliation effort,” the court wrote. “Or it might even suggest that the EEOC was engaged in the production of bookend letters that failed to reflect a good faith conciliation effort. All of this supports finding the conciliation condition precedent unsatisfied because if the proceedings were for appearances only, then there never was a real attempt to engage in conciliation as the law requires.”

A second reason existed for the court to find the conciliation condition precedent unsatisfied, Judge Frost said. “The EEOC’s determination letter indicated that a commission representative would prepare a dollar amount that includes lost wages and benefits, applicable interest, and any appropriate attorney fees and costs,” the court said. “Nothing that the EEOC has submitted to this Court in its declaration or the attachment indicates that this was ever done.”

“Absent disclosure of this calculation to OhioHealth, the conciliation process could have been nothing but a sham,” the judge said. “The Supreme Court has stated that ‘conference, conciliation, and persuasion’ as used in [Title VII] ‘necessarily involve communication between parties, including the exchange of information and views.’ But an unsupported demand letter such as the one involved here alone cannot logically constitute an attempt to inform and engage in the conciliation process. The bookend letters here, similar to the bookend letters that failed in Mach Mining, ‘do not themselves fulfill the conciliation condition.’ This is not to say that the bookend letters before this Court suggest an insufficient effort at conciliation; rather, the evidence suggests no actual attempt at conciliation.”

As the court concluded the EEOC failed to show that it met the conciliation requirement, it stayed the action for 60 days and ordered the agency to engage in a good faith conciliation effort with OhioHealth.

Judge Frost added “a cautionary notice” as well. He wrote that the EEOC’s counsel represented to the court that it was the agency’s policy that because the EEOC had filed a complaint against OhioHealth, only a public resolution would be possible and that the agency would not reach a private resolution via conciliation.

“This policy or position is of course contrary not only to the purpose of the workplace discrimination statutes upon which the EEOC bases this case, but it is also directly contrary to the holding of Mach Mining,” the court said, where the justices “expressly endorsed” implementing a stay and ordering conciliation efforts when the EEOC has failed to engage in conciliation efforts before filing suit.

Calling the EEOC’s position “ridiculous,” Judge Frost said it “defies the statutory scheme, binding case law, this Court, and common sense. Accordingly, if the EEOC continues down this dangerous path and fails to engage in good faith efforts at conciliation as ordered, this Court will impose any or all consequences available, including but not limited to contempt and dismissal of this action for failure to prosecute.”

To read the opinion and order in EEOC v. OhioHealth Corporation, click here.