Thursday, April 30, 2015

Supreme Court Gives Employers a New, But Not Very Sharp, Tool for their Defense Arsenal Against the EEOC

Earlier this week, the U.S. Supreme Court issued a much anticipated ruling on the question of whether courts have the authority to review the adequacy of the Equal Employment Opportunity Commission’s (EEOC) pre-lawsuit efforts to settle a case under Title VII of the Civil Rights Act of 1964. The EEOC’s website contains a press release declaring the Court’s Mach Mining ruling a “step forward” for discrimination victims, but other commentators have declared the ruling to be a victory for employers. This mixed reaction likely stems from the fact that the Court’s opinion, when read carefully, is a careful balancing act between permitting judicial review and giving deference to the EEOC.

The Supreme Court’s decision was issued on April 29, 2015, in the case of Mach Mining, LLC v. EEOC. Under Title VII, the EEOC is required, after finding probable cause on a Title VII charge, to “endeavor to eliminate” the alleged illegal practice “by informal means of conference, conciliation, and persuasion.” In addition, before the EEOC can sue an employer, it must be unable, within a specified time, to obtain a settlement agreement acceptable to the EEOC. In the Mach Mining case, the EEOC filed a lawsuit alleging that Mach Mining engaged in a pattern and practice of sex discrimination against female applicants. Mach Mining claimed that the EEOC case should not be permitted to proceed, because the EEOC had not participated in good faith pre-suit settlement efforts.

The Supreme Court sided with Mach Mining in finding that federal courts do have the authority to review whether the EEOC satisfied its conciliation obligations. The Court held that, while Congress gave the EEOC wide latitude as to the nature of its settlement efforts, it did not deprive the parties of the right to judicial review.

The Court also held, however, that the authorized scope of its judicial review is narrow. The Court rejected the EEOC’s position that only a facial examination of EEOC documentation was proper and Mach Mining’s position, at the other end of the spectrum, that a “deep dive” review was proper. Instead, the Court held that federal court review is limited to determining if the EEOC gave the employer notice of the claim and tried to engage the employer in some form of discussion to give the employer a chance to remedy the alleged illegal practice. In landing on this scope of review, the Court noted that Title VII’s conciliation provision “smacks of flexibility.” Under Title VII, the EEOC must make a conciliation endeavor, but can use any methods it wishes and has the sole discretion as to its settlement strategy, offers, and the ultimate decision as to whether to settle or litigate. The Supreme Court further noted that, in most cases, the EEOC will be able to present a sworn affidavit demonstrating it satisfied its conciliation obligations, with the court only needing to do further review if the employer provides credible opposing evidence.

While a partial victory for employers, those who had hoped the Mach Mining case would reign in some of the EEOC’s aggressive litigation tactics are bound to be disappointed. Mach Mining does provide employers a vehicle for requiring the EEOC to make a genuine effort at conciliation, but does not go so far as to require “good faith” settlement positions or tactics on the part of the EEOC.

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