The EEOC can’t force a Wendy’s restaurant franchisee to turn over broad information about its former and current employees based on a single discrimination charge, a federal district court in Tennessee decided ( EEOC v. Se. Food Servs. Co. , 2017 BL 96513, E.D. Tenn., No. 16-46, 3/27/17 ).
The decision is a victory for employers that complain the Equal Employment Opportunity Commission sometimes uses individual charges to justify expansive investigations into matters unrelated to the underlying charge.
Employers are more apt to challenge EEOC subpoenas if the agency attempts to build a case of systemic or class discrimination from a single bias charge. The EEOC has broad power to investigate alleged discrimination but must show its information requests are relevant to the underlying charge.
The EEOC failed to satisfy that standard when Southeast Food Services Co. balked at the agency’s request for information on all its former and current employees dating back to 2014, the U.S. District Court for the Eastern District of Tennessee said March 27.
The court was “dead on” when it said the EEOC already had “everything it needs” to decide whether to file a Title VII complaint against Southeast, said Rae Vann, a partner with NT Lakis in Washington who is general counsel of the Equal Employment Advisory Council, an employer association.
The EEOC is reviewing the decision to determine its next steps, a commission spokeswoman told Bloomberg BNA March 28.
Attorneys representing Southeast Food didn’t respond to Bloomberg BNA’s requests for comment.
A Southeast employee filed an EEOC charge alleging the company unlawfully retaliated against her because she refused to sign a general release of past claims as a condition of promotion.
The EEOC said Southeast must turn over contact information for all its employees since December 2014, including all who signed releases and all who were promoted. That information must include dates of hire, job titles and termination information, if applicable, the agency said.
Such information isn’t relevant to the individual charge, the court said.
The agency’s subpoena power is broad but not unlimited under Title VII of the 1964 Civil Rights Act. The EEOC can’t use a single charge as “a backdoor means” to expand its probe and obtain information irrelevant to the pending charge, Magistrate Judge H. Bruce Guyton said.
The EEOC must show “it has a realistic expectation rather than an idle hope” the requested data will advance its investigation, the court said. The agency’s decision to expand its investigation doesn’t justify its broader information request. If the EEOC wants to conduct a broader investigation, it can file a new commissioner’s charge, the court said.
It’s a “very straightforward” application of the standard governing EEOC subpoena enforcement, Vann told Bloomberg BNA March 28.
The most significant passage was the court’s statement that an EEOC “decision to expand its investigation does not statutorily expand its investigative power,” Vann said.
The EEOC filed 28 subpoena enforcement actions in fiscal year 2016, after filing 32 such actions in fiscal 2015 and 34 enforcement actions in fiscal 2014, according to agency statistics.
Most EEOC subpoena actions are resolved through an employer’s agreement to provide the requested information or part of it, when the parties reach a compromise, the agency spokeswoman said.
The case raises issues similar to those in McLane Co. v. EEOC, a pending U.S. Supreme Court case regarding an employer’s challenge to an agency subpoena demanding contact information for thousands of employees based on a single discrimination charge.
The justices Feb. 21 heard oral argument, but their decision might be limited to the standard for review of district court rulings to enforce or quash an EEOC subpoena.
EEOC attorneys in Nashville and Memphis represented the commission. Woolf, McClane, Bright, Allen & Carpenter PLLC represented Southeast Food Services.
To contact the reporter on this story: Kevin McGowan in Washington at firstname.lastname@example.org
Text of the opinion is available at http://www.bloomberglaw.com/public/document/EEOC_v_Southeast_Food_Servs_Co_No_316MC46TAVHBG_2017_BL_96513_ED_ .
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