Justices Clarify Test for Reviewing EEOC Information Demands

Bloomberg BNA Kevin McGowan
April 4, 2017

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

The U.S. Supreme Court’s ruling that appeals courts generally should defer to lower court decisions to enforce or deny EEOC demands for information related to bias charges was welcomed both by the agency and employment lawyers ( McLane Co. v. EEOC , 2017 BL 107793, U.S., No. 15-1248, 4/3/17 ).

A district court’s decision to enforce or deny an Equal Employment Opportunity Commission subpoena should stand unless the lower court clearly erred, an 8-0 Supreme Court said April 3.

The justices reversed a U.S. Court of Appeals for the Ninth Circuit decision that said appeals courts could review from scratch a lower court’s determination whether an EEOC subpoena can be enforced against an employer under Title VII of the 1964 Civil Rights Act.

The high court’s holding wasn’t a surprise, as even the EEOC argued before the justices that an abuse-of-discretion standard is the proper one. The Ninth Circuit was the only federal appeals court to deviate from that standard.

Court “Got It Right.’

A former EEOC general counsel who now represents workers said Justice Sonia Sotomayor’s opinion provides welcome uniformity and certainty on the procedural question.

The court certainly got it right ” regarding the standard of review, said P. David Lopez, a partner with Outten & Golden in Washington who served as EEOC general counsel until December 2016.

The district court is closest to the case and best suited to make the factual findings whether an EEOC subpoena is relevant to the underlying bias charge, Lopez told Bloomberg BNA April 3.

But Lopez said he agrees with Justice Ruth Bader Ginsburg’s partial dissent. Ginsburg said a district court’s refusal to enforce an EEOC subpoena against McLane Co. turned on a legal error and the Ninth Circuit therefore appropriately reversed the district court.

Something for All Sides

The Supreme Court also clarified that district courts don’t have to defer to the EEOC’s judgment about what information is relevant in a discrimination investigation, said Michael Bracken of NT Lakis in Washington. Bracken is senior counsel to the Equal Employment Advisory Council, an employers’ association.

The justices essentially told district courts they don’t need to rubber-stamp ” the EEOC’s subpoenas, Bracken told Bloomberg BNA April 3.

The EEAC filed an amicus brief supporting McLane Co. before the Supreme Court.

The court outlined in non-binding portions of its opinion the arguments an employer could make to challenge an EEOC subpoena, said Nicole Eichberger, a partner with Proskauer Rose in New Orleans.

It’s not just about relevance, Eichberger told Bloomberg BNA April 3. An EEOC subpoena also is vulnerable if it’s too indefinite, issued for an illegitimate purpose or unduly burdensome, she said.

The takeaway for employers is to build their arguments early if they plan to challenge the scope of an EEOC probe, said Eichberger, who practices in Proskauer Rose’s class action and employment litigation groups.

The court, however, also reaffirmed that the EEOC has a broad right of access to relevant evidence, ” said EEOC Acting General Counsel James L. Lee in an April 3 email to Bloomberg BNA.

Subpoenas are an important tool for the EEOC when it investigates, ” Lee said. The court’s recognition that the term “relevant’ must be given a generous construction will enable the EEOC to continue to perform its investigative obligation effectively. ”

Case Returned to Lower Court

The court’s ruling is limited to the scope of review issue. The justices last year denied McLane’s petition also to review the definition of relevance under Title VII for EEOC subpoena purposes.

The court left unanswered the question of possible limits on the extent of the EEOC’s investigative authority, Bracken said.

The justices also didn’t delve into the particulars of the McLane case, in which the EEOC demanded personal contact information, including Social Security numbers, for about 14,000 company employees nationwide while investigating a single discrimination charge.

A federal district court in Arizona partly denied enforcement of the EEOC subpoena, saying it wasn’t irrelevant to the pending sex discrimination charge. The Ninth Circuit reversed, saying the EEOC showed the personal contact data was relevant to its probe.

In her partial dissent, Ginsburg said the Ninth Circuit’s ruling was correct even under the deferential abuse of discretion test.

But the other justices said the Ninth Circuit on remand should apply the correct standard and reconsider its decision.

The Supreme Court procedurally took a safer route ” by returning the case to the Ninth Circuit rather than deciding itself if the district court abused its discretion, Eichberger said.

Morgan Lewis & Bockius LLP and Snell & Willmer LLP represented McLane Co. The Justice Department represented the EEOC. Stephen Kinnaird of Paul Hastings LLP in Washington was appointed by the court to defend the Ninth Circuit’s standard.

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