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Mach Mining-EEOC High Court Case Could Be 'Game Changer'

Law360—Ben James

The U.S. Supreme Court agreed Monday to wade into the legal fight between Mach Mining LLC and the U.S Equal Employment Opportunity Commission over whether courts can review the agency's required presuit efforts to settle bias claims, setting the stage for a decision that could limit how aggressive the EEOC can be during conciliation, lawyers say. 

Petitioner Mach Mining and the EEOC agreed that the nation's highest court should take the case because of the importance of the underlying issue and divergent appeals court rulings, even though the EEOC said that the Seventh Circuit's finding that EEOC conciliation efforts are beyond the scope of judicial review had been correctly decided.

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Management-side lawyers complain that the anti-discrimination watchdog doesn't always give employers an adequate chance to resolve claims before hauling them into court and in some cases adopts a "take it or leave it" approach that's not conducive to reaching a deal. 

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Different approaches to conciliation in different circuits have been around since before the Seventh Circuit's December decision that Mach Mining is challenging, said Mark Girouard, a shareholder with Nilan Johnson Lewis PA.

Girouard pointed to a case in which the EEOC was slapped with a $4.7 million tab for attorneys' fees CRST Van Expedited Inc. incurred fighting sweeping sexual harassment claims a district court found “unreasonable or groundless.” That fee award is currently on appeal to the Eighth Circuit.

“Since CRST has come down, I find that the EEOC has, at least in the Eighth Circuit, been more willing to do things like identify who the members of a proposed class are, or explain what their formula is for calculating damages, which I believe leads to much more productive conciliation,” Girouard said. “Frankly, it's hard for an employer to meaningfully respond to a conciliation demand If it doesn't know what the basis for that demand actually is.”

The EEOC has, in general, been more aggressive since the Obama administration took office, but in instances like the CRST case it has been reined in, Girouard said. In other circuits, however, where courts haven't shown a willingness to delve into the EEOC's pre-suit legwork, the agency still takes a “pretty aggressive approach” to conciliation, he added.

Lawyers said the Seventh Circuit was an outlier in terms of its outright rejection of judicial review for conciliation efforts. Mach Mining's February petition for high court review said that eight circuits have held that whether the EEOC's conciliation efforts were adequate is subject to court review.

The Fourth, Sixth and Tenth circuits require a “genuine effort” to conciliate before the EEOC takes an employer to court by examining whether the EEOC acted reasonably or in good faith, Mach Mining said. The Second, Fifth and Eleventh circuits use a more exacting three-factor test, while the Eighth and Ninth circuits haven't laid out a clear standard of review, according to the company.

If the Supreme Court sides with the EEOC and upholds the Seventh Circuit, an already emboldened EEOC would likely become even more aggressive, Girouard said.

“If we leave it to the EEOC to police itself, we could see more of this 'sue first and negotiate later' approach,” he said.

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... a win for Mach Mining would translate to a waste of EEOC resources, according to Outten & Golden LLP's Paul W. Mollica, who added that the ideally cooperative conciliation process would become “overlawyered.” 

“It would negate the very idea of conciliation because now it's just litigation by other means, and it would simply add another layer of documentation and support before they file a civil complaint to make sure that even the most skeptical judge could be convinced they did everything right,” Mollica said.

Mollica also noted — as did the Seventh Circuit — that Title VII doesn't lay out any standard of review for assessing when the EEOC's conciliation efforts are adequate, meaning that the high court would either have to adopt a standard or leave that question open for the lower courts.

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Regardless of who wins and loses, the Mach Mining case should bring with it some welcome certainty that can benefit both companies and the EEOC, said Girouard, who pointed out that both sides embraced high court review.  

“The EEOC is as interested in certainty and uniformity as employers,” he said.