Justices Will Examine EEOC Subpoena Review Standard

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By Patrick Dorrian

Sept. 29 — The level of deference federal appeals courts must give to district court decisions on whether to enforce EEOC investigative subpoenas will be examined by the U.S. Supreme Court ( McLane Co. v. EEOC , U.S., No. 15-1248, cert. granted 9/29/16 ).

The justices said Sept. 29 they will consider if the U.S. Court of Appeals for the Ninth Circuit used the correct standard when it chose to review from scratch a lower court’s order that partly refused to enforce a subpoena the Equal Employment Opportunity Commission had issued during its investigation of a sex discrimination charge.

Damiana Ochoa, who worked for a national distributor of consumer products, was required to take a “physical abilities” test when she tried to return to work from maternity leave, and she was fired after failing the test three times.

The appeals court decided that personal, or “pedigree,” information—names, addresses, Social Security numbers, etc.—about other employees nationwide who took the same test as Ochoa was relevant to the EEOC’s investigation of Ochoa’s charge.

The EEOC had initially limited its investigation to the Arizona location where Ochoa had worked, but the agency broadened its focus after McLane Co.—the parent company of Ochoa’s former employer—acknowledged it used the same test nationwide on employees returning from leave to “physically demanding” positions, according to the EEOC.

Deferential or De Novo Review?

At issue in the case is whether the Ninth Circuit’s “de novo,” or “no deference,” review was proper, or whether federal appeals courts owe at least some deference to district courts’ handling of EEOC subpoena enforcement.

According to McLane, which filed the petition for review, eight other circuits use more deferential “abuse of discretion” or “plain error” standards of review, which are consistent with Supreme Court precedent.

The case is another aspect of the employer community’s yearslong battle with the EEOC over what some employers believe is the agency’s over-aggressive approach to enforcement of U.S. job discrimination laws.

The Supreme Court addressed one aspect of that fight in April 2015 in Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 126 FEP Cases 1521 (2015). The justices ruled in that case that attempts by the EEOC to settle bias allegations before suing are subject to judicial review, but that courts typically must defer to the agency’s efforts if the EEOC shows it notified the employer of the claims against it, provided the employer with a chance to negotiate a resolution, and the parties failed to reach an agreement acceptable to the agency.

Employer Association Warns of Adverse Consequences

The Equal Employment Advisory Council, a Washington-based employers’ association, filed an amicus brief supporting McLane’s bid for Supreme Court review.

It argued that the Ninth Circuit’s ruling, if allowed to stand, will embolden the EEOC in its “steady shift” away from its core function of investigating individual charges of job bias and toward encouraging its “staff to seek out claims with potentially broad-based, systemic implications.”

That will only lead to the EEOC increasing its issuance “of fantastically broad and irrelevant investigative subpoenas” and deprive employers of their right to due process, the EEAC said.

It also will increase the chances of sensitive employee information being disclosed, either by EEOC charging parties or in data breaches, the group added.

Other Issues Not Yet in Play

The justices declined, however, to review the separate question of whether the Ninth Circuit defined “relevant” information too broadly in siding with the EEOC regarding the permissible scope of the subpoena it served on McLane.

In remanding the case to the U.S. District Court for the District of Arizona, the Ninth Circuit left it to that court to decide whether requiring McLane to produce the nationwide pedigree information would be unduly expensive, time-consuming or otherwise burdensome for the company.

Because McLane appealed the case further to the Supreme Court, the district court hasn’t yet had a chance to reach that issue.

Snell & Wilmer LLP and Morgan, Lewis & Bockius represent McLane. EEOC attorneys in Washington represent the commission. NT Lakis LLP represents the EEAC.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

For More Information

Text of the petition for review is available at http://src.bna.com/i0f, the EEOC’s brief in opposition at http://src.bna.com/i0g, McLane’s reply brief at http://src.bna.com/i0h, and the EEAC’s amicus brief at http://www.eeac.org/briefs/McLanevEEOC.pdf.

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