EEOC Wins Broad Right to Employee Data in Sex Bias Probe

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By Kevin McGowan

Oct. 27 — The Equal Employment Opportunity Commission while investigating a sex discrimination charge must be given access to personal information about other employees who took the same physical abilities test failed by the female employee who filed the bias charge, the U.S. Court of Appeals for the Ninth Circuit ruled Oct. 27.

Reversing a district court in Arizona, the Ninth Circuit said McLane Co., a supply chain company that serves retailers, must provide the EEOC with the names, Social Security numbers, home addresses and telephone numbers of employees who took the test that former employee Damiana Ochoa had failed, causing her to lose her warehouse job. The district court erred in ruling that the EEOC's request for this “pedigree information” about the other test takers wasn't relevant to Ochoa's sex bias charge under Title VII of the 1964 Civil Rights Act, the appeals court said.

The decision is a victory for the EEOC, which has used Ochoa's pregnancy and sex discrimination charge to initiate a nationwide investigation of McLane's testing practices. Federal courts generally have given the EEOC broad leeway when deciding disputes over agency subpoenas to employers.

McLane argued that since it already has supplied the EEOC with the other employees' test results, as well as their sex and employee identification numbers, the agency doesn't need the additional information to conduct its sex bias probe.

“But the governing standard is not ‘necessity'; it is relevance,” the Ninth Circuit said. “Congress has not left it up to employers accused of discrimination to decide what evidence may be necessary for the EEOC to complete its investigation.”

Agency Applauds Ruling

The decision reaffirms that when the EEOC seeks information from employers during bias investigations, the agency is “entitled to ‘relevant’ information, broadly defined,” said Jennifer S. Goldstein, the EEOC's associate general counsel in Washington.

“If the information sought meets that broad definition, Congress did not leave it to employers accused of discrimination to decide what evidence is necessary for EEOC to complete its investigation,” Goldstein said in an Oct. 27 e-mail to Bloomberg BNA. “We are pleased that the court's ruling now will enable EEOC to complete its investigation of McLane's practices.”

Company representatives weren't available for comment Oct. 27.

‘Relevance' Standard Controls

The Ninth Circuit cited a U.S. Supreme Court ruling that under Title VII, the EEOC doesn't have to show “particularized necessity of access, beyond a showing of mere relevance” when it seeks data from an employer charged with unlawful discrimination (University of Pennsylvania v. EEOC, 493 U.S. 182, 51 FEP Cases 1118 (1990).

The district court erred when it said the pedigree information sought by the EEOC wasn't relevant “at this stage” of the agency's investigation, Judge Paul J. Watford wrote.

The district court said the information McLane already had supplied would allow the EEOC to determine if the physical abilities test systematically discriminated based on sex (226 DLR A-3, 11/23/12). The lower court reasoned that if the EEOC's analysis of that information reveals “systemic discrimination,” then the pedigree information might become relevant and necessary to divulge.

“As we have explained, however, that line of reasoning is invalid,” the Ninth Circuit said. “The EEOC's need for the evidence—or lack thereof—simply does not factor into the relevance determination. Because the pedigree information meets the broad standard for relevance, the EEOC is entitled to obtain the information now.”

McLane also argued the pedigree information isn't relevant because Ochoa's charge alleges only a “neutrally applied” strength test, which by definition can't give rise to disparate treatment, as that requires proof of intentional discrimination.

But McLane “misconstrues” Ochoa's charge, which alleges the company requires all employees returning from medical leave to take the strength test but doesn't allege the test is neutrally applied, the court said.

Even if McLane requires everyone returning from leave to take the test, it could be applied in a discriminatory manner if, for example, male employees who fail the test sometimes returned to their jobs but McLane never exempted female employees who fail, the court said.

“The very purpose of the EEOC's investigation is to determine whether the test is being neutrally applied; the EEOC does not have to take McLane's word for it on that score,” the court said.

SSNs Not Exempt From EEOC's Reach

As for the Social Security numbers, the EEOC seeks that information so it can accurately identify individual test takers in the data sets it has received from McLane, the court said. Information that helps the EEOC determine whom to contact to learn more about McLane's use of the tests is relevant to the agency's investigation, the court said.

McLane argued the employee ID numbers it already gave the EEOC should suffice. But that's not the employer's call to make, the court said. The company also failed to assert any “undue burden” associated with producing the Social Security numbers, the court said.

McLane also said it is trying to protect its employees' privacy interests by withholding their Social Security numbers. But the Supreme Court in University of Pennsylvania rejected an analogous privacy argument by the university facing an EEOC probe, the court said.

“Congress has struck the balance between granting the EEOC access to relevant evidence and protecting confidentiality interests by imposing strict limitations on the public disclosure of information produced during the course of an EEOC investigation,” the court said. “McLane's dissatisfaction with that balance does not entitle it to withhold information relevant to a charge of discrimination.”

In a concurring opinion, Judge Milan D. Smith agreed that University of Pennsylvania supports requiring McLane to hand over Social Security numbers. But the Supreme Court's 1990 decision “predates the rash of ‘data breach' incidents that plague a world connected by computers,” he wrote.

The U.S. government's recent “dismal performance” in protecting even its own employees' sensitive data might give the EEOC some pause, Smith wrote.

The EEOC by demanding the McLane employees' Social Security numbers might “endanger the very employees it seeks to protect” by exposing them to increased risk of identity theft, Smith wrote.

Although the court isn't suited to “weigh the concerns present in any particular data gathering and storage protocol,” the EEOC “would be well advised to consider those issues” as it collects data from McLane, Smith wrote.

Judge J. Clifford Wallace also joined in the decision.

In addition to Goldstein, Justin Tucker, P. David Lopez, Lorraine C. Davis and Daniel T. Vail of the EEOC in Washington represented the agency. Ronald E. Manthey and Ellen L. Perlioni of Morgan Lewis & Bockius in Dallas and Joshua R. Woodard and Ashley T. Kasarjian of Snell & Wilmer LLP in Phoenix represented McLane Co.

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