Over the past year, the EEOC has been under fire for its failure to conciliate with employers before filing a case in federal court. Conciliation is a mandatory step the EEOC must take and employers view it as is an essential function of the agency. Conciliation goes to the core of the EEOC’s underlying mission to seek voluntary compliance with anti-discrimination laws as it gives employers an opportunity to fix potential problems before the government resorts to costly litigation. In a number of cases (here and here), courts have rebuked the EEOC for its failure to reasonably investigate its claims and participate in good faith in the conciliation process.
The U.S. District Court for the Southern District of Texas recently issued an Order in EEOC v. Bass Pro Outdoor World, LLC, Case No. 11-CV-3425 (S.D. Tex. Mar. 4, 2014), evaluating the sufficiency of the EEOC’s conciliation efforts. The decision is a mixed bag for employers. While the Court held that the EEOC must apprise an employer of the basis for any type of claim it would intend to bring in a lawsuit, the Court also ultimately held the EEOC to a lower standard than that applied more recently by other courts. In doing so, the Court adopted in part the reasoning of a recent Seventh Circuit decision, EEOC v. Mach Mining, a decision one of the five Commissioners of the EEOC recently noted was the most important of 2013 because of its approval of the government’s minimal, pre-lawsuit conciliation efforts.
The Background In EEOC v. Bass Pro Outdoor World, LLC
In EEOC v. Bass Pro Outdoor World, LLC, et al., the EEOC brought a lawsuit alleging discriminatory hiring practices in violation of Title VII on behalf of: (1) a class of individuals allegedly discriminated against on the basis of their gender or race, both as a representative action (called a “706” action) and based on a pattern or practice theory (called a “707” action). Id. at 9. Defendants filed a motion for summary judgment, urging dismissal of the case based on the EEOC’s failure to attempt conciliation in good faith. Id. at 1.
As an initial matter, the Court concluded that the EEOC was obligated to conciliate both types of claims brought by the EEOC — the individual claims and the pattern or practice claims — because each type of claim is based on distinct theories and litigated using different standards. Id. at 9-12. In doing so, the Court expressly rejected the EEOC’s argument that it had no duty to conciliate each claim. Id. at 10-11. However, the Court also noted that “while the Commission cannot wholly ignore any of the claim it intends to eventually bring in court, and certainly must apprise the would-be defendant of some basis for any claim it will ultimately press in litigation,” it would not require the EEOC to “undertake separate and distinct conciliation processes for each of its claims.” Id. at 11-12.
The Court then concluded that the EEOC had sufficiently conciliated its pattern or practice claims based upon a number of letters exchanged and one in-person meeting over a five-month period. Id. at 12-15. The Court noted that it was clear from the beginning of the conciliation process that the EEOC intended to bring a pattern and practice claim based on statistical evidence. Id. at 13. Even though the EEOC refused to share its statistical model supporting the alleged “shortfall,” the Court found it sufficient that the employer had a broad outline of how the EEOC computed its statistical analysis and knew that the EEOC considered the “shortfall” to be. Id. at 16. More important to it analysis, however, appears to be the Court’s characterization of both the employer and the EEOC as “frustratingly obstinate.” Id. Even though the Court expressly noted it was not “particularly impressed by the EEOC’s conciliation efforts,” it ultimately concluded that it would “not require the EEOC to conduct Sisyphean negotiations to meet its statutory mandate to conciliate” where the parties proposals “were so divergent as to seem irreconcilable.” Id. at 19.
The Court next concluded that the EEOC had prematurely ended conciliation efforts with respect to the claim brought on behalf of a class of aggrieved individuals. Id. at 20-29. The Court noted that the EEOC was not required to conciliate each potential class member’s claim or to disclose the names of each and every member of the potential class. Id. at 24-26. But, “the EEOC must share . . . the outline of the class and provide the employer with sufficient information to understand the basis of the allegations and fully engage in the conciliation process.” Id. at 28.
But the Court held that “to dismiss the case would be too harsh a sanction.” Id. at 30. The Court relied heavily on EEOC v. Mach Mining, noting that dismissal “should be resorted to only in truly extraordinary cases” in order to ensure that “incentives for employers will [not] fall out of balance.” Id. at 35. The Court dismissed the idea that “imposing too high a hurdle for dismissal will incentive the EEOC to abandon conciliation altogether or misuse it,” asserting that internal issues give the EEOC “powerful incentives to conciliate.” Id. The Court went even further, disagreeing with the standard set in both CRST and Bloomberg, reasoning that an “exacting standard may help to prevent employers from abusing the conciliation process.” Id. at 36.
Closing The Temporal Door On The EEOC Class
Finally, although only a small part of the Court’s written opinion, the dismissal of all post-conciliation claimants could have a significant precedential impact. In EEOC v. Bass Pro, the EEOC had, over the course of the case, identified a number of claimants on behalf of whom it sought relief. Many were discovered and identified for the first time in litigation. The Court held that the Commission could not possibly have learned about these individuals during its investigation and, therefore, could not possibly have conciliated their claims, dismissing all of those post-determination claimants. Id. at 38-39. Indeed, the Court noted that there was “no piece of information [the EEOC] could have shared that would have alerted Defendant to the existence of classmembers who had not even yet applied for employment.” Id. at 39. The fallout from this portion of the decision could be far-reaching. One could persuasively argue that this very intuitive and practical limitation should apply to all EEOC systemic cases, and could provide a guidepost for other judges faced with where to draw the line on the endpoint to an EEOC “class.”
Implications For Employers
The EEOC v. Bass Pro decision is a mixed bag for employers — certainly all would have preferred the case to have been dismissed outright. Instead, the Court took a “pox on both your houses” view of the conciliation efforts, noting that neither side had the high ground. Employers entering the conciliation process should read EEOC v. Bass Pro, if only to see one Judge’s views on what could and should have been done differently. But the fact that the Bass Pro court examined the conciliation history in such detail is, itself, encouraging, given the EEOC’s view that conciliation should not be second-guessed by the courts at all. Finally, the dismissal of the post-determination claimants could serve as valuable ammunition for employers seeking to explain to the court that at some point, the EEOC’s expansive view of its class must be reined in.