Justices Hear Debate on Judicial Review Of EEOC Conciliation Efforts Under Title VII

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By Kevin McGowan

Jan. 13 — A court's “modest inquiry” into whether the Equal Employment Opportunity Commission has satisfied the “rudiments” of attempting to settle a discrimination charge is permissible to enforce the EEOC's obligation under Title VII of the 1964 Civil Rights Act to conciliate charges prior to filing suit, attorney Thomas C. Goldstein argued to the U.S. Supreme Court Jan. 13. 

Representing Mach Mining LLC, Goldstein urged the justices to reverse the U.S. Court of Appeals for the Seventh Circuit's decision that no judicial review of conciliation is available once the EEOC submits documents indicating it initiated conciliation and was unable to reach an agreement acceptable to the commission (738 F.3d 171, 121 FEP Cases 327 (7th Cir. 2013).

Every other federal circuit to consider the question has ruled at least some judicial review is available, but those courts are split between applying a “good faith” standard and a more structured three-step inquiry to evaluate the EEOC's conciliation efforts. The Supreme Court granted Mach Mining's petition for review, which the EEOC didn't oppose.

Representing the EEOC, Assistant to the Solicitor General Nicole A. Saharsky argued Congress committed conciliation to the EEOC's discretion and judicial review undermines Title VII's intent for a confidential, informal process to attempt voluntary settlement of discrimination claims.

If the justices adopt Mach Mining's view, Saharsky warned, lower courts will get bogged down in “mini trials” on collateral issues that delay or avoid getting to the merits of discrimination claims.

Some Review Seems Likely

The justices' questioning suggested they seem inclined to rule at least some judicial review is permissible. But they pressed both lawyers about the possible elements of such review.

For example, Justices Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor questioned how judicial review can be reconciled with Title VII's command that matters discussed in conciliation aren't to be divulged in any subsequent proceedings.

Saharsky argued that in applying an amorphous “good faith” standard, lower courts have subjected the EEOC to searching inquiries about conciliation that can't be squared either with Title VII's confidentiality provision or statutory language that commits the substance of conciliation to the EEOC's discretion.

During Goldstein's argument, Justice Anthony Kennedy cited the Seventh Circuit's observation that “it's hard to imagine more discretionary language” than Congress enacted in Title VII when it said the EEOC “shall endeavor to eliminate the unlawful practice by informal methods of conference, conciliation and persuasion.”

“Those are very difficult words for your position,” Kennedy told Goldstein.

When Kennedy asked if Mach Mining was proposing that courts adopt the “good faith” standard used in the National Labor Relations Act to evaluate the EEOC's conciliation under Title VII, Goldstein indicated that wasn't necessary in order to reverse the Seventh Circuit.

“We are not asking you to import the good faith bargaining case law and regulations from the NLRA.” said Goldstein, who is with Goldstein & Russell in Bethesda, Md. “Our point is different, and that is, it is commonplace for courts to review this sort of thing.”

Kennedy subsequently decried the “morass” of law trying to apply the NLRA's good-faith bargaining standard, suggesting his reluctance to adopt such a standard for reviewing Title VII conciliation.

Sotomayor expressed concern about making “something that's designated by Congress as informal into a formal proceeding.”

“I think when Congress said informal methods of conference, conciliation and persuasion, it was contrasting bringing a lawsuit,” Goldstein replied. “There's no indication in the statutory structure or in the legislative history that what Congress was trying to do is say to the EEOC, do whatever you like.”

Colloquy on Confidentiality

In contrast to the government, Goldstein said if courts can't review the EEOC's conciliation efforts, the agency sometimes will be tempted to bypass or short-circuit the mandatory pre-suit process.

“The EEOC has an enormous incentive, because it does bring about 130 cases a year, to pick out the cases it wants to be very high profile,” Goldstein said. “It wants to send a message to employers.”

The confidentiality of conciliation can be exactly why the EEOC wants to curtail the process, he said. “The difficulty for [the EEOC] is that if they conciliate, Congress required that remain entirely confidential,” Goldstein said. “So the problem is that we have an agency that has an enormous incentive in the cases it picks out to bypass the mandatory process that Congress imposed.”

Title VII's language, that “nothing said or done as part of these informal endeavors can be used as evidence in a subsequent proceeding,” seems at odds with Mach Mining's position, Kagan said. The statute also “clearly gives” the EEOC discretion “to decide what's acceptable in the end,” she said.

Goldstein said when Congress enacted Title VII, the reference to “subsequent proceeding” was “unquestionably” a reference to trial on the merits of a discrimination case, since the EEOC didn't gain enforcement powers until 1972. A court inquiry into the EEOC's conciliation efforts isn't about the merits, he said.

“The point of the statute is to make sure that what happens in the conciliation process doesn't prejudice the merits of the case,” Goldstein said. “This isn't a secrecy provision. Under this provision, an employer can publish what happened in conciliation in the New York Times.”

Ginsburg said Goldstein's confidentiality analysis leaves out an important party—the employee who filed the discrimination charge. But Goldstein said the charging party isn't involved in the debate about whether the EEOC satisfied the conciliation process.

“It's about whether the EEOC responded to [the employer's] request to meet, whether it gave us an explanation of what it is that they were demanding,” Goldstein said. “How does it make any sense that Congress would have said the choice whether this evidence comes in is to the complainant, who wasn't even involved in this part of the process?”

Suggested Elements of Inquiry

The EEOC could resolve confusion about the conciliation process by issuing regulations, but the agency hasn't done so, Goldstein said. Ginsburg said Congress “intended a highly informal proceeding” and the EEOC doesn't want “a bunch of procedural regulations.”

But Goldstein replied “that's not quite right” as the EEOC admits some “firm requirements” exist. For example, the agency must send a letter to the employer inviting discussion and can only conciliate regarding the claim that's in the reasonable cause determination, Goldstein said.

“In my mind, there should be judicial review,” said Justice Stephen Breyer. “There is of everything, just about. But the issue is how much.”

Breyer analogized the EEOC situation to an Internal Revenue Service subpoena case in which an IRS agent usually just must attest to the agency's “good faith” but courts might find that in an “unusual case,” more is required. He asked if a “good faith” standard might be the best solution.

“We think that the [EEOC] here, if it claims the expertise and the flexibility and to know what's going on, ought to issue further elaborating regulations,” Goldstein replied. “But we think that minimum good faith does have some very easy, simple things to know.”

Among those steps are that the EEOC tell the employer “the minimum of what [the agency] will take” to resolve the case, Goldstein said.

In his rebuttal, Goldstein elaborated on the “rudiments” of the process that courts can review without encroaching on the EEOC's prerogative over the substance of conciliation.

The EEOC's first obligation is to “conference,” which means telling the employer to get in touch and to be willing to talk, Goldstein said. If the employer makes an offer, the EEOC “can't steadfastly refuse to say what would be an acceptable conciliation,” Goldstein said.

Kennedy interjected “that's just good faith bargaining” and under current NLRA law, that “is a morass.”

The NLRA is “quite different” from Title VII conciliation because “a mutual obligation and the subjects of bargaining are quite well known,” Ginsburg said.

The “persuasion” element of conciliation means the EEOC must “just provide the basics” of the agency's monetary offer to settle, Goldstein said.

That's an intrusive inquiry, Kagan objected. “You're doing your best job of proving [the EEOC's] point here, because you're saying they have to put all the reasons on the table, they have to say why it is that they are asking for what it is they're asking for” and the EEOC has to say “the last thing they would find acceptable,” Kagan said.

But Goldstein said he just meant to illustrate how courts have administered Title VII for 40 years, reviewing the “rudiments” of conciliation without harming the EEOC's ability to enforce the act.

Tough Questions for EEOC's Advocate

Meanwhile, Saharsky faced tough questioning from Chief Justice John Roberts and others about when, if ever, courts can look beyond the facial validity of the EEOC's documents attesting conciliation has occurred and has failed.

What if an employer says that despite the agency inviting conciliation, no one from EEOC ever contacted me, Roberts asked. Can the employer get judicial review of that claim?

“No, but we do not think that there are any situations in which that will arise,” Saharsky replied. “That's just assuming [the EEOC] is always right,” Roberts said.

Breyer suggested an alternative to Saharsky's reply that the EEOC's efforts can never be reviewed, even if an employer raises a factual conflict.

“The answer is the agency has broad discretion, and because they have broad discretion, the court can review it, but unless it's very unusual, they have to decide for the agency,” Breyer said.

Eight federal circuits have followed that reasoning, Breyer said. “I haven't found anything in your brief that says in the last 40 years, the EEOC has, as a result, found its functioning seriously hampered,” he said.

Saharsky said she might have “misinterpreted” Roberts's question, but in the hypothetical case, the EEOC's letters “wouldn't exist” if no conciliation had actually occurred. But Roberts said his question was meant to raise a case in which it would be “utterly unreasonable” to argue no judicial review is available.

“I just wanted you to tell me which it is, that there's no authority for a court to review government action alleged to be in violation of law, or is that the scope of judicial review for various reasons is sharply circumscribed,” Roberts asked.

It's the latter, Saharsky replied. But if the EEOC produces letters facially indicating conciliation has occurred, “the agency's activities, its day-to-day workings would be entitled to a presumption of regularity and it would take really something extraordinary to look behind that,” she said.

Justice Antonin Scalia asked if courts can review whether the EEOC made an offer to settle the claim. Saharsky replied that “just leads the courts into questions about how much detail was in the offer and is it sufficient,” substantive matters Title VII forecloses from review.

Other justices tried to get Saharsky to describe the minimal judicial review consistent with Title VII. Courts applying a good-faith standard are “putting very onerous requirements on the EEOC,” Saharsky said.

Scalia clarified he wasn't looking for a good-faith standard, just “a few things” the EEOC must do in conciliation, such as make an offer to settle.

But Saharsky said “several problems” exist even with that requirement, because it would add “a level of formality” that Congress never intended in conciliation.

“We're looking for a safety net,” Kennedy said. “You have not articulated a minimum rule. All you can say is I can't think of one.”

That doesn't answer the court's “general question,” which is, “how do you want us to write what you want [us] to hold in this case,” Kennedy said.

Saharsky replied the court's opinion should focus on the EEOC's obligations based on “the particular text” Congress enacted in Title VII.

If the employer disputes the EEOC performed its obligations, then the court should consider the letters submitted by the EEOC and “as a general matter, not look beyond those,” Saharsky said.

Dispute Over Incentives

So the argument is “just trust you,” Roberts asked. Saharsky replied the EEOC has “significant incentives” even absent judicial review, to settle claims without litigation because of limited agency resources, congressional oversight and other constraints.

But there also is “considerable incentive on the EEOC to fail in conciliation so that it can bring a big-deal lawsuit and get a lot of press and put a lot of pressure on this employer,” Scalia said. “There are real incentives to have conciliation fail.”

Saharsky disagreed, saying even in high-profile cases, “it is always easier” for the EEOC “to come to an agreement than to have to go through the burdens of litigation.”

Sotomayor pressed Saharsky again to offer the court a formula for minimal judicial review, “the least intrusion [on the EEOC] but more than what you want to do.”

But Saharsky said the “struggle” is that even when courts articulate a deferential standard of review, “we have seen these standards spiral out of control and lead to significant collateral litigation.”

“We're talking about mini trials on a collateral issue that's not the merits of the discrimination [claim] but on this question of whether the EEOC tried hard enough, and it is not the case that the EEOC is failing to conciliate,” Saharsky said.

Courts also struggle to develop standards of review that appear nowhere in Title VII, Saharsky said. For example, the guidelines Mach Mining is suggesting for court review appeared for the first time in their Supreme Court brief, Saharsky said.

Judicial review would erode the statute's confidentiality provisions, Saharsky said. Mach Mining's view “essentially destroys the benefits of informal settlement processes” that they can be informal, inexpensive and stay confidential, she said.

If “nothing's going to stay confidential,” then “employers don't have an incentive to conciliate, and courts have to expand this massive effort” on proceedings that are “really ancillary to the main event,” Saharsky said.

When employers know they have a potential defense and could get a case dismissed based on the EEOC's conciliation efforts, they start treating conciliation as an opportunity to set up their defense, Saharsky said.

“You're kind of assuming bad faith on their part,” Roberts said. “We're supposed to assume complete good faith on the government's part and bad faith on the employer's part.”

Saharsky denied that was so. But she said the EEOC's experience is that because of the federal circuit opinions allowing review, “there's been a real problem with folks not using conciliation to try to come to an agreement, the manipulation by employers.”

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

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

The oral argument transcript is available at http://op.bna.com/dlrcases.nsf/r?Open=kmgn-9sqp59.