District Court May Examine Whether EEOC Conducted Requisite Nationwide Pre-suit Investigation | Practical Law

District Court May Examine Whether EEOC Conducted Requisite Nationwide Pre-suit Investigation | Practical Law

In E.E.O.C. v. Sterling Jewelers, Inc., the US District Court for the Western District of New York held that in a Title VII of the Civil Rights Act of 1964 (Title VII) pattern or practice of discrimination claim the district court may examine whether the Equal Employment Opportunity Commission (EEOC) conducted the requisite nationwide pre-suit investigation of employment practices.

District Court May Examine Whether EEOC Conducted Requisite Nationwide Pre-suit Investigation

by Practical Law Labor & Employment
Published on 25 Mar 2014 • USA (National/Federal)
In E.E.O.C. v. Sterling Jewelers, Inc., the US District Court for the Western District of New York held that in a Title VII of the Civil Rights Act of 1964 (Title VII) pattern or practice of discrimination claim the district court may examine whether the Equal Employment Opportunity Commission (EEOC) conducted the requisite nationwide pre-suit investigation of employment practices.
On March 10, 2014, in E.E.O.C. v. Sterling Jewelers, Inc., the US District Court for the Western District of New York held that in a Title VII pattern or practice discrimination claim the district court may examine whether the EEOC conducted the requisite nationwide pre-suit investigation of employment practices (08-CV-00706-A, (W.D.N.Y. Mar. 10, 2014)).

Background

In September 2008, the EEOC commenced an action against Sterling Jewelers, Inc., a nationwide jewelry store chain. The EEOC alleged that Sterling had engaged in "unlawful employment practices throughout its stores nationwide" by engaging in pattern or practice discrimination against female retail sales employees by paying them less than male employees and denying them promotion opportunities in violation of Title VII.
Sterling moved for partial summary judgment, arguing that since there is no evidence that the EEOC conducted a nationwide investigation of its employment practices before commencing this action, its claims of nationwide pattern or practice discrimination must be dismissed. The EEOC responded that the courts should not inquire into the sufficiency of its investigation.

Outcome

The district court held that:
  • The district court could inquire into the scope of the EEOC's pre-suit investigation.
  • None of the EEOC investigators conducted a nationwide investigation of Sterling's employment practices. Therefore, dismissal with prejudice of the EEOC's claim of a nationwide pattern or practice of employment discrimination claim was warranted.
In its analysis, the district court first considered whether it may inquire as to the scope of the EEOC's pre-suit investigation. The court found that:
  • Before the EEOC is able to file a lawsuit, it must establish that it has met four conditions precedent, including the fact that it conducted an investigation.
  • Sterling's affirmative defense denying that the EEOC conducted a pre-suit investigation does not shift the burden of proof on that issue to Sterling. It is the EEOC's burden to prove performance of that condition.
  • Although the district court should not examine the adequacy of an EEOC investigation, it can examine whether the investigation occurred at all, that is a proper issue for the district court to decide. To rule against the district court deciding this issue would undermine the multistep enforcement procedure of Title VII.
  • Therefore, while courts will not review the sufficiency of the EEOC's pre-suit investigation, they will review whether or not an investigation occurred (EEOC v. JBS USA, LLC, 940 F.Supp.2d 949 (D.Neb. 2013)).
  • The district court may also examine the scope of the EEOC's investigation. Any violations that the EEOC discovers during the course of its investigation of the complaint are actionable. However, it must discover the violations in the course of its investigation and may not use discovery in the resulting lawsuit as a fishing expedition to uncover more violations (E.E.O.C. v. CRST Van Expedited, Inc. 679 F.3d 657 (8th Cir. 2012)).
  • Courts have limited EEOC complaints if they exceed the scope of the investigation (E.E.O.C. v. Dots, LLC, (N.D.Ind. 2010)).
Having established that it could examine whether the EEOC investigation took place and its scope, the district court concluded that it must next decide whether there is a triable issue of fact in this case as to whether the EEOC conducted a nationwide investigation of Sterling's employment practices before commencing this action. The court found that:
  • Since the EEOC bears the burden of proving it satisfied the required conditions allowing it to maintain this action, Sterling does not have to prove that the EEOC did not conduct a nationwide investigation. Instead, to avoid summary judgment, the EEOC must prove that it did.
  • The EEOC admits that:
    • there is not much investigative material in the files beyond the charges, Sterling's responses and some correspondence; and
    • the sole EEOC investigator on the case does not have much memory of actions he undertook in the investigation over seven years ago.
  • The EEOC may not use the inherent ambiguity of the word "class" to its favor. A class can also mean a local or regional class. Therefore the sole EEOC investigator's statement that he investigated "class charges" does not show that he investigated a nationwide class.
  • The EEOC's argument that Sterling would not provide them with its nationwide pay and promotion data fails because:
    • the parties had agreed that Sterling was not obligated to provide additional information in connection with the EEOC administrative investigation; and
    • the EEOC could have subpoenaed the information from Sterling.
  • The EEOC has already had one opportunity to conduct the requisite pre-suit investigation and is not entitled to another opportunity (Harleysville Lake States Insurance Co. v. Granite Ridge Builders, Inc., (N.D.Ind. 2009)).
  • Where, as in this case, the EEOC completely abdicates its role in the administrative process, the appropriate remedy is to bar the EEOC from seeking relief and dismiss its complaint. Therefore, the EEOC's claim that Sterling engaged in a nationwide pattern or practice of employment discrimination should be dismissed with prejudice.

Practical Implications

Employers faced with a pattern or practice of employment discrimination claim from the EEOC may be able to establish a defense if they can show that the EEOC failed to conduct a nationwide investigation of the employer's employment practices. In this situation, dismissal with prejudice of the EEOC's claim may be warranted.