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Posted April 29th, 2015 in Legal Insights

Supreme Court Affirms Judicial Review of EEOC, Requires Agency to Discuss Specific Claims and Allow Employer to Rectify Practices

The Equal Employment Opportunity Commission (EEOC) must give an employer an opportunity to discuss and remedy specific discriminatory practices prior to bringing a Title VII discrimination lawsuit, and federal courts may review the EEOC’s actions to enforce that requirement, the U.S. Supreme Court ruled today.

This “manageable standard of review”—announced by a unanimous Court—requires the EEOC to demonstrate that, prior to commencing a lawsuit, it notified the employer of the discriminatory practice and identified “which employees (or what class of employees) had suffered as a result.” The EEOC must also give the employer an opportunity to discuss and remedy the practice prior to suing.

The ruling in Mach Mining, LLC v. Equal Employment Opportunity Commission (No 13-1019) reversed a December 2013 decision by the Seventh Circuit Court of Appeals, which had held that the EEOC’s conduct during the conciliation process was not subject to judicial review. In overturning the Seventh Circuit’s decision, the Supreme Court chose not to adopt a “good faith” standard of review previously adopted by the Fourth, Sixth, and Tenth Circuits and familiar in labor union negotiation cases. The Court also rejected the more stringent standards for scrutinizing EEOC conciliation efforts that had been applied by the Fifth, Eighth, and Eleventh Circuits.

Title VII requires that the EEOC, as a precondition to filing a civil action in federal court, “shall endeavor to eliminate any such alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” The EEOC may file suit only after it “has been unable to secure from the respondent a conciliation agreement acceptable to the Commission.”

In the Mach Mining case, the EEOC issued a probable cause finding that the employer had discriminated against a class of female applicants for coal miner positions. The EEOC made a verbal conciliation demand, but otherwise there was no evidence that the EEOC made any further conciliation effort before it determined a year later that the conciliation process had failed and commenced its lawsuit.

When the employer in Mach Mining asserted in its answer that the case should be dismissed because the EEOC had failed to conciliate in good faith, the EEOC moved to dismiss that defense. The district court denied the EEOC’s motion and the EEOC appealed. The Seventh Circuit concluded that the adequacy of the EEOC’s conciliation efforts should not be subject to judicial inquiry.

In today’s decision written by Associate Justice Elena Kagan, the Supreme Court reversed the court of appeals and remanded the case to the district court for further proceedings to permit the EEOC a chance to prove that it had met its obligation to conciliate under the new standard. The Court noted that such proof would normally require no more than an affidavit from the EEOC.

For its part, an employer may present evidence that “the EEOC did not provide the requisite information about the charge or engage in a discussion.” If the employer prevails, the appropriate remedy is a delay of the proceedings until the EEOC properly engages in conciliation, as opposed to a more serious sanction, such as dismissal.

Finally, the Court stressed that the scope of the district court’s inquiry should be narrow and limited, and should give substantial deference to the EEOC’s final determination as to what constitutes an acceptable conciliation agreement.

Employers will be pleased that the high court has recognized that the EEOC’s obligation to conciliate is enforceable in court, and that its obligation includes a requirement to disclose and discuss the essential elements of its claims and identify the parties for which it seeks relief. This standard should also allow employers a more meaningful opportunity to assess the risks associated with the EEOC’s claims, as well as the potential value of an early settlement, rather than simply having to accept or reject a demand without fully understanding what the EEOC is actually seeking, or for whom. The evidentiary threshold for demonstrating the EEOC’s non-compliance is a high one, but may not be insurmountable. Employers threatened with EEOC litigation can anticipate circumstances that may be considered in assessing the EEOC’s conciliation conduct, including whether the EEOC (a) correctly sets forth all claims it plans to assert in a subsequent lawsuit; (b) specifies the parties for whom it seeks relief; and (c) allows the employer a reasonable opportunity to discuss and consider its conciliation proposal. A lapse by the EEOC on one or more of these factors may provide a basis for attacking the adequacy of the agency’s conciliation efforts.

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