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Is the US Supreme Court's McLane Decision on EEOC Subpoenas Really a Win for Employers?

Litigation Column
A recent US Supreme Court decision gives lower courts and employers guidance on responding to administrative subpoenas issued by the US Equal Employment Opportunity Commission (EEOC). In McLane Company, Inc. v. EEOC, the Court clarified that a court of appeals should review a district court's decision to enforce or quash an EEOC subpoena for abuse of discretion, rather than engaging in a de novo review. While it reversed the Ninth Circuit's decision enforcing the subpoena, the Court also reiterated the broad powers that the EEOC has to obtain information the agency considers necessary to investigate discrimination claims. (2017 WL 1199454 (US Apr. 3, 2017)).

Background

A woman filed a charge with the EEOC under Title VII of the US Civil Rights Act of 1964 (Title VII), claiming that her employer fired her because of her gender. The woman worked in a physically demanding job for McLane Company, a supply-chain services company. McLane required that new employees in these positions and those returning from medical leave to take a physical evaluation. The woman took three months of maternity leave and failed the evaluation three times when she tried returning to work, so McLane terminated her employment.

After learning that McLane used the evaluation nationwide, the EEOC expanded the scope of its investigation to cover McLane's nationwide operations and to investigate whether McLane also discriminated against its employees based on age. The EEOC requested McLane provide information about the evaluation, plus "pedigree information" of the employees who had been asked to take the evaluation, including their names, social security numbers, addresses, and telephone numbers.

McLane provided general information about the evaluation and a list of employees who had taken the evaluation. McLane did not give the employees' names, but identified each employee's gender, role at the company, evaluation score, and the reason each employee had been asked to take the evaluation. The EEOC used its authority under Title VII to subpoena the pedigree information. When McLane still refused to produce it, the EEOC filed subpoena enforcement actions in federal district court.

Case outcome

Title VII authorizes the EEOC to access or copy "any evidence of any person being investigated or proceeded against that relates to unlawful employment practices…relevant to the charge under investigation" (42 U.S.C. § 2000e-8(a)). The district court declined to enforce the EEOC's subpoena seeking pedigree information. It reasoned that even if the EEOC had the names of employees who took the evaluation, or an opportunity to interview them, that information would not shed light on whether McLane's use of the evaluation was discriminatory (EEOC v. McLane Co., 2012 WL 5868959 (D. Ariz. Nov. 19, 2012)).

The US Court of Appeals for the Ninth Circuit reviewed the district court's decisions de novo, consistent with its precedent, and reversed. The Ninth Circuit panel questioned in a footnote why de novo review applied, observing that other circuits reviewed subpoena enforcement decisions for abuse of discretion. The Supreme Court granted certiorari to resolve the split between the Ninth Circuit and other circuits over the appropriate standard of review.

The Court held that the proper standard of review for a district court's decision to enforce or quash an EEOC subpoena is abuse of discretion. The Court noted that this standard of review has been used in every circuit to review the same subpoena-issuing authority the National Labor Relations Act confers on the National Labor Relations Board. Nearly all other circuit courts of appeals reviewed EEOC subpoena enforcement cases under the abuse of discretion standard. Finally, the abuse of discretion standard is similar to longstanding practices in other contexts, including in reviewing district court decisions on evidentiary issues at trial and the scope of pretrial criminal subpoenas. The Court reversed the Ninth Circuit's decision — a nominal win for McLane — and remanded the case to reconsider the EEOC subpoena under the proper standard.

Practical implications for employers

The Court's decision changes the standard of review for EEOC subpoena enforcement actions in the Ninth Circuit, and brings it in line with the practice of most circuits across the country. Of more significance to employers, the Supreme Court also took the opportunity to remind lower courts and litigants that the EEOC may subpoena any evidence relevant to the charge under investigation. As described in earlier Supreme Court cases, the term "relevant" should be given "generous" construction and covers "virtually any material that might cast light on the allegations against the employer" (McLane Company, Inc. v. EEOC, 2017 WL 1199454 at *4, quoting EEOC v. Shell Oil Co., 466 U.S. 54, 68-69 (1984)).

A district court must not use a subpoena enforcement proceeding as an opportunity to test the strength of the allegations in the underlying charge. Rather, it should only "satisfy itself that the charge is valid and that the material requested is relevant to the charge" (McLane Company, Inc. v. EEOC, 2017 WL 1199454 at *4, quoting Univ. of Pa. v. EEOC, 493 U.S. 182, 191 (1990)). The district court should enforce the subpoena unless the employer establishes that the subpoena is "too indefinite," has been issued for an "illegitimate purpose," or is unduly burdensome (McLane Company, Inc. v. EEOC, 2017 WL 1199454 at *4, quoting EEOC v. Shell Oil Co., 466 U.S. at 72 n. 26).

Best practices for employers facing EEOC information requests and subpoenas

During an investigation, the EEOC frequently sends a respondent employer written requests for information, documents, or data it considers relevant to the allegations. Given the broad standard of relevance described above, the EEOC may request anything from employee handbooks to personnel data to copies of internal discrimination complaints. The EEOC often requests pedigree information, especially when it suspects widespread or systemic discrimination.

Employers may be understandably reluctant to produce this type of sensitive information. However, refusing to produce the requested information is likely to cause the EEOC investigator to assume the employer has something to hide. An employer's adversarial or aggressive response during an investigation essentially dares the EEOC to subpoena the information it wants and to file a subpoena enforcement action in federal court if it doesn't get it.

If the requested information is relatively easy to gather and produce, and demonstrates no discrimination, a savvy employer should produce the requested information and explain that the EEOC should dismiss the charge. Even when information is available, employers sometimes feel the EEOC is deaf to concerns about overbroad information requests and employee data confidentiality. In these situations, an employer's best strategy is usually to negotiate an appropriate response with the EEOC investigator.

The employer should explain to the EEOC investigator what information it is and is not willing to produce, and why. The employer can also ask for additional time to respond or suggest alternative methods of production. For example, the employer could offer to produce a representative sample or invite the investigator to inspect hard-to-produce sources. Because EEOC charge files are confidential, investigators are not usually persuaded by an employer's concerns about personnel data confidentiality.

If gathering and producing the requested information would be truly burdensome, the employer should specifically explain these burdens to the EEOC investigator. Describe the number of personnel hours it would take the gather the requested information and the costs to copy, export, transcribe, or otherwise prepare the information for production. The EEOC and most courts regard these basic requirements as the cost of doing business; however, they may be sympathetic if the request presents an undue burden and would significantly disrupt operations.

If the EEOC issues a subpoena, a respondent employer has several options. It may simply comply with the subpoena as written. It may partially respond and wait to see if the EEOC finds the response acceptable enough to give up on any portions the employer did not produce.

The employer may also petition the EEOC to revoke or modify the subpoena. The employer must file this petition within five business days (29 C.F.R. § 1601.16(b)). Failing to file within the deadline may waive the employer's right to later challenge the subpoena. There is no authority that allows the EEOC to extend the time to file a petition to revoke or modify and the agency does not give extensions.

An employer's last resort against an EEOC subpoena is to convince a federal judge that the charge is not valid or the information requested is not relevant to the charge, citing the "too indefinite" or "illegitimate purpose" language from the McLane decision. Employers, however, should expect the EEOC to rely on the Court's "generous construction" and "virtually any material" language to justify the agency's broad interpretation of what information it considers relevant to a charge. Moreover, a subpoena enforcement action makes an otherwise-confidential EEOC charge part of the public record.

McLane underscores the importance of looking before you leap to challenge an EEOC subpoena. Particularly if the enforcement action brings negative publicity about a company's employment practices, a subpoena challenge may be riskier than compliance. 

About the Author

Anna PohlAnna M. Pohl is the senior legal editor of labor and employment at Practical Law.


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