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Section 706 of Title VII Covers EEOC Pattern-or-Practice Claims: Fifth Circuit
Practical Law Legal Update w-002-6984 (Approx. 6 pages)
Section 706 of Title VII Covers EEOC Pattern-or-Practice Claims: Fifth Circuit
by Practical Law Labor & Employment
| Law stated as of 28 Apr 2017 • USA (National/Federal) |
In Equal Employment Opportunity Commission v. Bass Pro Outdoor World, L.L.C., the US Court of Appeals for the Fifth Circuit held that the Equal Employment Opportunity Commission (EEOC) can pursue a pattern-or-practice claim under Section 706 of Title VII of the Civil Rights Act of 1964 (Title VII).
On June 17, 2016, in Equal Employment Opportunity Commission v. Bass Pro Outdoor World, L.L.C., the US Court of Appeals for the Fifth Circuit held that the EEOC can pursue a pattern-or-practice claim under Section 706 of Title VII. The Fifth Circuit also found that investigation and conciliation efforts by the EEOC are appropriate for a pattern and practice case even if the claim does not refer to specific individuals. ( (5th Cir. June 17, 2016).)
Background
The EEOC sued Bass Pro Outdoor World (Bass Pro) under Sections 706 and 707 of Title VII for damages and equitable relief. The EEOC claimed that Bass Pro engaged in a practice of racial discrimination against African-Americans, Hispanics, and Asians in hiring for its stores. Bass Pro argued that:
- Claims alleging a pattern or practice of discrimination can only be brought under Section 707, not 706.
- The EEOC failed to satisfy administrative prerequisites to bringing the lawsuit.
The district court allowed the litigation to proceed and Bass Pro appealed to the Fifth Circuit.
Outcome
The Fifth Circuit affirmed the decision by the district court and held that:
- The EEOC can seek monetary damages in a suit alleging a pattern-or-practice of discrimination under Section 706 or Section 707 of Title VII.
- The EEOC's investigation and conciliation efforts were appropriate for a pattern-or-practice case even if the claim did not refer to specific individuals.
On the question of the EEOC's authority to litigate pattern or practice cases, the Fifth Circuit noted that:
- Unlike Section 707, Section 706 does not explicitly authorize pattern-or-practice suits.
- Section 707 limits remedies to injunctive and declaratory relief, while Section 706 allows for compensatory and punitive damages (42 U.S.C. §§ 2000e-5 and 2000e-6).
- The framework set out by the US Supreme Court in International Brotherhood of Teamsters v. United States is normally reserved for private class actions and EEOC pattern or practice cases. Under the two-part framework in Teamsters:
- the plaintiff must prove that discriminatory practice was a standard operating procedure at the employer; and
- once that burden is met, the burden shifts to the employer to prove that each individual who suffered an adverse employment action did not experience discrimination.
- The US Supreme Court said in Teamsters that when a plaintiff alleges broad-based discrimination, the plaintiff can pursue a pattern or practice claim in a bifurcated proceeding (431 U.S. at 359, 360 n.46)
- The Sixth Circuit has previously held that the EEOC could use the Teamsters framework to analyze pattern-or-practice employment discrimination claims (Serrano v. Cintas Corp., 699 F.3d 884 (6th Cir. 2012); see Legal Update, EEOC Can Pursue Pattern-or-practice Claim Under Section 706 of Title VII).
- The US Supreme Court has previously held that the EEOC "may maintain its Section 706 civil actions for the enforcement of Title VII and may seek specific relief for a group of aggrieved individuals without first obtaining class certification pursuant to [Rule 23]" (General Telephone Company v. Equal Employment Opportunity Commission, 446 U.S. 318, 325 (1980)).
As to the EEOC's pre-suit obligation in pattern or practice cases, the Fifth Circuit noted that:
- In EEOC v. CRST Van Expedited, Inc., the US Court of Appeals for the Eighth Circuit dismissed claims brought by certain individuals because the EEOC failed to identify them to the defendants during the investigation and conciliation stages (679 F.3d 657 (8th Cir. 2012)).
- In a decision issued after CRST, the US Supreme Court held that judicial review of the EEOC's conciliation efforts is minimal, limited to verifying that the EEOC:
- informed the employer what employment practice it found discriminatory; and
- tried to engage the employer in discussion to give the employer a chance to remedy the alleged discriminatory practice.
- In Arizona ex rel. Horne v. Geo Group, Inc., the Ninth Circuit concluded that the EEOC:
- can meet its conciliation and investigation requirements without naming individual class members; and
- satisfies its pre-suit conciliation requirements to bring a class action if it "attempts to conciliate on behalf of an identified class of individuals prior to bringing suit."
The Fifth Circuit found that:
- Congress did not prohibit the EEOC from bringing pattern or practice suits under Section 706. Although Section 706 does not explicitly authorize pattern-or-practice claims, Congress gave the EEOC broad enforcement powers to eradicate employment discrimination.
- Since the EEOC is authorized to bring a pattern or practice suit under Section 706, the fact that it focused on pattern-or-practice evidence instead of individual claims during the investigation and conciliation process does not matter. This differs from CRST, in which the Eighth Circuit required the identification of plaintiffs; but in CRST, the Eighth Circuit noted that the EEOC was not bringing a pattern-or-practice suit.
- Under the Mach Mining standard, the EEOC fulfilled its obligation to attempt to settle the pattern-or-practice claim before the lawsuit because:
- the EEOC informed Bass Pro that it had reasonable cause to believe that Bass Pro had engaged in discriminatory hiring practices, and the parties negotiated for 11 months about the charges; and
- while not identifying specific victims, the EEOC notified Bass Pro of the class of individuals it had allegedly discriminated against.
- Regarding the EEOC's pre-suit investigation:
- an investigation under Section 706 does not necessarily rest on the identifiable individuals' claims; and
- over a three year period, the EEOC and Bass Pro exchanged letters and met at least three times, and Bass Pro produced over 230,000 pages of documents. The EEOC investigation yielded both statistical evidence of discrimination in Bass Pro's hiring nationwide and anecdotal evidence of racial discrimination.
Practical Implications
In Bass Pro, the Fifth Circuit joins the Sixth Circuit in finding that the EEOC can pursue pattern-or-practice claims under Section 706. This decision affirms similar district court decisions, both within and outside the circuit. The Fifth Circuit also joins the Second, Sixth, and Ninth Circuits in concluding that EEOC investigation and conciliation efforts focused on class-wide discrimination are appropriate for a pattern-or-practice case even if the claims of specific individuals are not investigated or conciliated. Employers should be aware of the post-Mach Mining trend limiting judicial review of the EEOC's investigation and conciliation efforts, especially in systemic discrimination cases. The Bass Pro decision allows for expanded agency lawsuits, and potentially exposes employers to more significant economic consequences under Section 706, as the EEOC has more power to seek damages for alleged discriminatory behavior.
UPDATE: On April 28, 2017, the US Court of Appeals for the Fifth Circuit declined to rehear the panel's decision en banc, as a rehearing was not voted for by a majority of the court's judges who were in regular active service and not disqualified (7-7) (Equal Employment Opportunity Commission v. Bass Pro Outdoor World, L.L.C., (5th Cir. Apr. 28, 2017)).