In a limited victory for employers, the Supreme Court held last week in Mach Mining, LLC v. EEOC that courts have jurisdiction to review whether the Equal Employment Opportunity Commission ("EEOC") fulfilled its statutory obligation to conciliate with an employer before filing a lawsuit against it.
Executive Summary: In a limited victory for employers, the Supreme Court held last week in Mach Mining, LLC v. EEOC that courts have jurisdiction to review whether the Equal Employment Opportunity Commission ("EEOC") fulfilled its statutory obligation to conciliate with an employer before filing a lawsuit against it. A court's scope of review is extremely limited, however, with little inquiry into the quality or nature of the EEOC's conciliation efforts. Courts may review whether the EEOC: 1) informed the employer about the nature of the alleged discrimination and which employee(s) have allegedly suffered from such discrimination, and 2) tried to "engage the employer in some form of discussion," written or oral. If the court finds the EEOC neglected these "barebones" requirements to conciliate prior to litigation, the employer's remedy is a stay of the lawsuit and an order requiring the EEOC to undertake the mandated conciliation efforts.
Mach Mining, LLC v. EEOC:
Under Title VII, the EEOC is required to "endeavor to eliminate" alleged discriminatory practices by "informal methods of conference, conciliation, and persuasion." Only when the EEOC is "unable to secure" a conciliation agreement is it permitted to commence litigation against the employer. In Mach Mining, the Seventh Circuit held that whether the EEOC met this requirement was unreviewable, departing from the positions of several other circuit courts, which had all held that courts could review an EEOC's conciliation efforts, but had disagreed as to the scope of such review. On April 29, 2015, the Supreme Court reversed the Seventh Circuit, holding that a "barebones" review was appropriate under Title VII.
Mach Mining urged the Court to adopt a thorough standard analogous to one under the National Labor Relations Act ("NLRA"), citing numerous factors that the Court should consider, such as whether the EEOC provided the employer with the minimum settlement amount it would accept to resolve the claim(s), the factual and legal bases for its claim(s), and a reasonable time to review and respond. The EEOC, on the other hand, argued that no judicial review was available, and that if it was, that its two "bookend" letters were sufficient to satisfy such review—one letter announcing the EEOC's reasonable cause determination and stating that it would be "in contact" with Mach Mining to begin a conciliation process, and another letter some time later stating that the conciliation attempt had "occurred" and failed.
The Court rejected Mach Mining's method of analyzing the conciliation process, holding that Title VII's conciliation provision, unlike the NLRA, was not focused on procedure but rather on "a substantive mission" to "eliminate" unlawful discrimination. Further, the Court observed that Mach Mining's approach failed to acknowledge that "every aspect" of Title VII's conciliation provision "smacks of flexibility." The Court held that the EEOC has discretion over the "amount of time or resources" it puts toward conciliation, the "pace and duration" of conciliation efforts, the "plasticity or firmness" of its negotiating positions, the content of its demands for relief, and, in the end, whether to enter into an agreement or to resort to litigation because it was "unable to secure" an agreement it finds "acceptable." Because Title VII's conciliation provision is not focused on procedure, the Court noted that the employer, for its part, also "has no duty at all to confer or exchange proposals."
The Court also rejected the EEOC's approach, finding that a court was not required to accept at "face value" the EEOC's letters that it had completed its statutorily mandated conciliation efforts. The Court held that the appropriate scope of review is to verify that conciliation met the Title VII standards. Specifically, to meet its obligations, the EEOC must inform the employer about the specific allegations—what the employer has done and which employee(s) has suffered. Additionally, the EEOC must try to "engage the employer in some form of discussion," written or oral, to give the employer a chance to voluntarily remedy the alleged violation. The Court found that limiting judicial review to these issues also complies with Title VII's non-disclosure requirement, which requires that nothing said or done during the conciliation process may be made public or used as evidence in a later proceeding without the consent of both the EEOC and the employer.
The EEOC can demonstrate that it met its conciliation duties through a sworn affidavit. Where the employer "provides credible evidence of its own" to the contrary, through an affidavit or otherwise, the court will engage in its own fact-finding on the issues. If the court concludes that the EEOC did not satisfy Title VII's conciliation requirements, it may order the EEOC to undertake the requisite conciliation efforts. Such conciliation order does not dismiss the lawsuit; it merely stays the legal proceedings.
Employers' Bottom Line: While this is a partial victory for employers, the Mach Mining Court has affirmed the wide latitude given to the EEOC in its pre-suit conciliation efforts. Even if an employer proves that the EEOC failed to engage in its conciliation duties under Title VII, the employer likely will have only a pyrrhic victory, as the only remedy is to have the EEOC undertake this process. As such, employers should continue to think and act cautiously before, during, and after any EEOC investigation, as the mandatory Title VII conciliation provision offers no guarantee of good faith conciliation and remains an unreliable buffer against costly litigation.
If you have any questions regarding the Court's decision or other labor or employment related issues, please contact the authors of this Alert, Gordon Berger, firstname.lastname@example.org, a partner in our Atlanta office, or Roshni Chaudhari, email@example.com, a senior associate in our New York City office. You may also contact the FordHarrison attorney with whom you usually work.