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EEOC Investigations: Effective Employer Strategies Responding to Discrimination Investigations and Prevailing in Claims

presents

Today's panel features:

Alison B. Marshall, Partner, Jones Day, Washington, D.C.

Diana L. Hoover, Partner, Mayer Brown, Houston

Teresa R. Tracy, Principal, Berger Kahn, Los Angeles

Tuesday, April 28, 2009

The conference begins at:1 pm Eastern12 pm Central

11 am Mountain10 am Pacific

The audio portion of this conference will be accessible by telephone only. Please refer to the dial in instructions emailed to registrants to access the audio portion of the conference.

A Live 90-Minute Audio Conference with Interactive Q&A

R E L E A S E S A N D T H E L A W O F R E T A L I A T I O N : T H E O R I E S A N D R E C E N T D E V E L O P M E N T S

By

ERIC S. DREIBAND AND COURTNEY MUELLER1

I. INTRODUCTION

The United States Equal Employment Opportunity Commission (“EEOC” or “Commission”) maintains that some release agreements violate the anti-retaliation protections of the federal anti-discrimination employment laws. EEOC has challenged releases by suing employers, and some courts have agreed with the EEOC’s position. Others have rejected it.

This article examines the law about retaliation and employment releases, the EEOC’s position about releases generally and, particularly, EEOC’s various theories about how releases can violate the anti-retaliation protections of EEOC-enforced laws. This article also describes and discusses the relevant statutory, regulatory, and sub-regulatory guidance that informs the EEOC’s release-related retaliation theories. And, this article discusses the relevant federal court decisions about when and whether certain releases are unlawful.

Generally, the courts are divided about whether conditioning settlement of a claim on the signing of a release can constitute retaliation, but the EEOC’s position is unambiguous. According to the EEOC, a release violates the laws enforced by the Commission if it prevents an individual from filing an EEOC charge of discrimination. The Commission also maintains that releases may not interfere with the Commission’s processes – investigations and litigation – and EEOC views any such release as both unenforceable and unlawful.

EEOC has articulated other theories about releases as well. For example, EEOC maintains that a release is unlawful if it would permit former employees to become independent contractors only if they released EEOC-related claims.

The law about releases and the retaliation protections of the federal anti-discrimination laws is still in flux. The courts are mixed; EEOC continues to sue employers over releases and to file amicus curiae briefs in release cases; and employers should be careful about how they draft releases.

1 Eric S. Dreiband is a partner in the labor and employment practice of Jones Day. He is the former

General Counsel of the Equal Employment Opportunity Commission. Courtney Mueller is an associate in the labor and employment practice of Jones Day. She previously served as counsel to Chairman Robert J. Battista of the National Labor Relations Board.

II. CHALLENGES TO RELEASES AND THE EVOLVING CONCEPT OF RETALIATION

Cases that involve challenges to releases come in a variety of forms. For example, litigation has included challenges to severance pay agreements that require an employee to waive all claims under various federal laws. Plaintiffs and the EEOC have challenged separation or release agreements that include a ban on filing charges. Some courts have agreed that such releases violate the anti-retaliation prohibitions of EEOC-enforced laws. Other courts have found that the releases are not retaliatory, but only that the offensive clause is itself unenforceable, or the entire agreement may be unenforceable, but not an affirmative violation of the anti-retaliation protections of the federal civil rights employment laws.

Challenges to releases tend to fall within one of a few categories. The most common challenge to a release involves the issue of enforceability. This refers to situations in which a current or former employee signed a release with the employer in exchange for money or other consideration, and subsequently files a lawsuit against the employer. The employer responds by citing the release and seeking dismissal of the case, and the employee counters by asserting that the release is not enforceable. If the employee prevails, the lawsuit proceeds to the merits.

Retaliation challenges are different. The EEOC asserts that the language of releases can violate the anti-retaliation protections of the EEOC-enforced laws. In these cases, the EEOC or, occasionally private litigants, attempt to demonstrate that the release itself was or is a form of coercion, interference, or “retaliation” against a person’s right to file a charge, or right to participate in EEOC proceedings, and that the release unlawfully “interferes” with or “coerces” a person in the exercise of rights protected by the federal anti-discrimination laws.

III. APPLICABLE STATUTORY AND REGULATORY AUTHORITY

Four laws frame EEOC’s ongoing challenges to releases: Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 1981a, 2000e to 2000e-17 (“Title VII”), the Equal Pay Act of 1963, 29 U.S.C. § 206(d) (“EPA”), the Age Discrimination in Employment Act of 1967, 29 U.S.C. §§ 621 to 634 (“ADEA”), and the Americans with Disabilities Act of 1990 (“ADA”), 42 U.S.C. §§ 12101 to 12213 (“ADA”). The EEOC typically cites and relies upon all four of these laws when it challenges releases.

A. Title VII of the Civil Rights Act of 1964

Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. Section 704(a) of Title VII prohibits two forms of retaliation: so-called “participation” retaliation and “opposition” retaliation. The “participation” clause states:

It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment . . . because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.

42 U.S.C. § 2000e-3(a).

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Section 704(a) also contains Title VII’s “opposition” clause:

It shall be an unlawful employment practice for an employer to discriminate against any of his employees or applicants for employment . . . because he has opposed any practice made an unlawful employment practice by this subchapter . . . .

42 U.S.C. § 2000e-3(a).

Title VII’s participation and opposition clauses say nothing about releases, nor does any other language of Title VII. The EEOC’s Title VII regulations likewise contain no reference to releases.

B. The Equal Pay Act of 1963

The Equal Pay Act, enacted in 1963 as an amendment to the Fair Labor Standards Act (“FLSA”), requires men and women be given equal pay for equal work in the same establishment. The EEOC typically cites the EPA’s “discrimination” provision when it challenges releases as retaliatory. That provision states:

(a) . . . it shall be unlawful for any person –

. . . .

(3) to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify in any such proceeding . . . .

29 U.S.C. § 215(a)(3).

Again, however, the EPA contains no reference to releases, and the EEOC’s EPA regulations omit any reference to releases.

C. The Age Discrimination in Employment Act of 1967

Unlike Title VII and the EPA, the ADEA seeks explicitly to regulate the language of releases. The ADEA protects individuals who are 40 years of age or older from age-based employment discrimination. The ADEA, like Title VII, contains two anti-retaliation prohibitions. The ADEA’s anti-retaliation provisions are virtually identical to those set forth in Title VII.

The ADEA’s anti-retaliation participation clause states that:

It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment . . . because such individual . . . has made a charge, testified, assisted, or

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participated in any manner in an investigation, proceeding, or litigation under [the ADEA].

29 U.S.C. § 623(d).

Similarly, the ADEA’s anti-retaliation opposition clause states that:

It shall be unlawful for an employer to discriminate against any of his employees or applicants for employment . . . because such individual . . . has opposed any practice made unlawful by this section.

29 U.S.C. § 623(d).

D. The Older Workers Benefit Protection Act of 1990

The Older Workers Benefit Protection Act (“OWBPA”), enacted in 1990 as an amendment to the ADEA, prohibits employers from denying benefits to older employees. The OWBPA establishes specific minimum standards that must be met in order for a release or waiver to be considered “knowing and voluntary” and, therefore valid. If a release or waiver of claims does not comply with the OWBPA, the courts will find it unenforceable.

With limited exceptions, a waiver may not be considered knowing and voluntary unless, at a minimum:

• the waiver is part of an agreement between the individual and the employer that is written in a manner calculated to be understood by such individual, or by the average individual eligible to participate;

• the waiver specifically refers to rights or claims arising under the OWBPA;

• the individual does not waive rights or claims that may arise after the date the waiver is executed;

• the individual waives rights or claims only in exchange for consideration in addition to anything of value to which the individual already is entitled;

• the individual is advised in writing to consult with an attorney prior to executing the agreement;

• the individual is given a period of at least 21 days within which to consider the agreement or, if a waiver is requested in connection with an exit incentive or other employment termination program offered to a group or class of employees, the individual is given a period of at least 45 days within which to consider the agreement;

• the agreement provides that for a period of at least seven days following the execution of such agreement, the individual may revoke the agreement, and the

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agreement shall not become effective or enforceable until the revocation period has expired; and,

• the employer, if requesting the waiver in connection with an exit incentive or other employment termination program offered to a group or class of employees, the employer (at the commencement of the 45 day consideration period), informs the affected individual in writing in a manner calculated to be understood by the average individual eligible to participate, as to – (i) any class, unit, or group of individuals covered by such program, any eligibility factors for such program, and any time limits applicable to such program; and (ii) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.

29 U.S.C. § 626(f)(1).

The OWBPA also states that these requirements must be met for any waiver in settlement of an EEOC age discrimination charge and, in addition, that “the individual is given a reasonable period of time within which to consider the settlement agreement.” 29 U.S.C. § 626(f)(2). This “reasonable period of time” requirement is instead of the 21, 45, and seven day limits for other releases of age discrimination claims. Id.

Although the OWBPA imposes relatively specific requirements for establishing that a release is “knowing and voluntary,” courts have not been receptive to claims that a violation of the OWBPA waiver provisions may itself establish a violation of the ADEA. In perhaps the leading case on the issue, Whitehead v. Oklahoma Gas & Elec. Co., 187 F.3d 1184 (10th Cir. 1999), the United States Court of Appeals for the Tenth Circuit observed that “the OWBPA simply determines whether an employee has, as a matter of law, waived the right to bring a separate and distinct ADEA claim.” Id. at 1192. The Tenth Circuit affirmed the district court’s dismissal of the plaintiffs’ age discrimination claims, and concluded that “[t]he OWBPA does not, by itself, determine in the first instance whether age discrimination has occurred.” Id.

Whitehead involved claims of age discrimination by private litigants. The EEOC has also attempted to establish a cause of action for OWBPA violations, but it has likewise failed to persuade the courts.

In EEOC v. UBS Brinson, Inc., No. 02-3748, 2003 U.S. Dist. LEXIS 570 (S.D.N.Y. Jan. 15, 2003), Kinnie Yon worked as a managing director for both UBS AG and UBS Brinson. Following a merger of the two companies, the defendants planned to discharge Yon, but also regarded her as a “critical” employee. Id. at *7. UBS offered Yon a “Lock-In Agreement” that provided that she would receive her salary and benefits through the end of 1998, plus a bonus equal to her 1997 bonus of $ 225,000, and a discretionary payment which would have yielded a value of $92,219. Id.

Before Yon agreed to the terms of the Lock-In Agreement, she asked to see a copy of the accompanying release agreement. Id. The defendants denied her request, and Yon protested to the defendants’ chief legal counsel. Id. Defendants responded by withdrawing Yon’s Lock-In

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Agreement offer and terminating her employment effective ninety days from the date of the letter informing her of this decision. Id. Yon alleged that, as a result of this withdrawal, she “had no choice but to accept the standard severance package offered…which had a value approximately $448,000 less than the lock-in package.” Id.

The EEOC brought suit on Yon’s behalf, and alleged that the defendants violated the ADEA “on the ground that the Release did not conform to the OWBPA,” among other things. Id. at *10. Yon filed her own complaint alleging substantially the same facts and the same theory as the EEOC. Id. at *1.

The district court dismissed both complaints for failure to state a claim, noting that “[v]irtually every court that has decided the issue of whether a violation of the OWBPA, by itself, establishes age discrimination has concluded that it does not.” Id. at *12-13. The district court explained that “the OWBPA waiver requirements were intended to be ‘a shield for plaintiffs in an ADEA action when an employer invokes the waiver as an affirmative defense,’ not a sword that provides an independent (age discrimination) claim.” Id. at *17 (quoting Whitehead, 187 F.3d at 1191). Accordingly, the court dismissed the EEOC and Yon’s complaints. Id. at *29.

Other EEOC cases that asserted this theory also were unsuccessful. See, e.g., EEOC v. Sears, Roebuck & Co., 883 F. Supp. 211, 215 (N.D. Ill. 1995) (“The fact that Congress could have created a separate cause of action, but chose not to, precludes this Court from reading one into the statute now. Accordingly, to the extent the EEOC is attempting to create a cause of action based solely on an OWBPA violation, 29 U.S.C. § 626(f), the Court concludes that such a claim must be dismissed as a matter of law.”).

In short, the courts generally will enforce a release will generally be enforceable if it complies with OWBPA. A release that does not satisfy OWBPA will not be enforceable, but failure to meet OWBPA’s requirements does not create an independent ADEA claim.

E. EEOC OWBPA Regulations

Although the ADEA provides relatively precise guidance about waivers, the EEOC maintains that a waiver or release may comply with all of the OWBPA’s requirements, but still be unenforceable. According to the EEOC, “[o]ther facts and circumstances may bear on the question of whether the waiver is knowing and voluntary, as, for example, if there is a material mistake, omission, or misstatement in the information furnished by the employer to an employee in connection with the waiver.” 29 C.F.R. § 1625.22(a)(3).

F. Wording of Waiver Agreements

Because waivers and releases must be “written in a manner calculated to be understood by . . . the average individual,” waiver agreements must be drafted in “plain language geared to the level of understanding of the individual party to the agreement or individuals eligible to participate.” 29 C.F.R. § 1625.22(b)(3). According to the EEOC, employers should take into account such factors as the level of comprehension and education of typical participants. Consideration of these factors usually will require the limitation or elimination of technical jargon and of long, complex sentences. 29 C.F.R. § 1625.22(b)(3).

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G. Informational Requirements

EEOC regulations also establish guidance about information that should be provided as part of exit incentive or other employment termination programs. 29 C.F.R. § 1625.22(f). Any employer that is considering seeking releases in exchange for severance pay as part of a reduction in force should consult the EEOC’s regulations about the type and scope of information that should be included in any such reduction in force or other exit incentive or other termination program offered to a group or class of employees. Generally, the EEOC takes the position that the purpose of the informational requirements is to provide an employee with enough information about the program to allow the employee to make an informed choice about whether to sign a waiver agreement. 29 C.F.R. § 1625.22(f)(iv).

H. OWBPA and EEOC’s Enforcement Powers

The OWBPA contains a section that addresses releases and the right to file a charge. Section 7(f)(4) of the ADEA, which is codified at 29 U.S.C. § 626(f)(4), states:

No waiver agreement may affect the Commission’s rights and responsibilities to enforce [the ADEA]. No waiver may be used to justify interfering with the protected right of an employee to file a charge or participate in an investigation or proceeding conducted by the Commission.

According to the EEOC, this clause means that no waiver agreement may include any provision imposing any condition precedent, any penalty, or any other limitation adversely affecting any individual’s right to:

1. File a charge or complaint, including a challenge to the validity of the waiver agreement, with the EEOC, or

2. Participate in any investigation or proceeding conducted by the EEOC.

29 C.F.R. § 1625.22(i).

The Commission asserts that the OWBPA “reaffirmed the public policy against interference with EEOC enforcement efforts, including the right to file a charge.” See EEOC, Notice: Enforcement Guidance on Non-Waivable Employee Rights Under the EEOC Enforced Statutes, No. 915-002 (Apr. 10, 1997) (“EEOC Notice No. 915-002” or “Enforcement Guidance”).

Further, the EEOC notes that courts have consistently recognized that individuals possess a non-waivable right to file charges with the EEOC. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 28 (1991) (individual who signs an agreement to submit an employment discrimination claim to arbitration remains free to file a charge with EEOC); EEOC v. Cosmair, Inc., 821 F.2d 1085, 1090 (5th Cir. 1987) (invalidating former employee’s promise not to file a charge with EEOC because it “could impede EEOC enforcement of the civil rights laws” and is void as against public policy). See also EEOC Notice No. 915-002 (agreements that restrict the right to file an EEOC charge are null and void as a matter of public policy).

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The EEOC additionally asserts that the OWBPA principles about releases “apply equally to all of the statutes enforced by the EEOC.” EEOC Notice No. 915-022. Whether the courts agree with this assertion is an open question. Although the ADEA is the only statute enforced by the EEOC that contains specific language authorizing the use of knowing and voluntary waiver agreements, such agreements are widely used with respect to right protected under all statutes enforced by the EEOC.

I. The Americans with Disabilities Act2

In addition to the protections against retaliation that are included in all of the laws enforced by the EEOC (i.e., the anti-retaliation participation and opposition clauses), the ADA also protects individuals from coercion, intimidation, threats, harassment, or interference in their exercise of their own rights under the ADA. The ADA also protects any person’s encouragement of another individual’s exercise of rights granted by the ADA. The ADA’s interference provision provides:

It shall be unlawful to coerce, intimidate, threaten, or interfere with any individual in the exercise or enjoyment of, or on account of his or her having exercised or enjoyed, or on account of his or her having aided or encouraged any other individual in the exercise or enjoyment of, any right granted or protected by this chapter.

42 U.S.C. § 12203(b).

The ADA interference provision is modeled on a similar provision of the Fair Housing Act. See 42 U.S.C. § 3617 (“It shall be unlawful to coerce, intimidate, threaten, or interfere with any person in the exercise or enjoyment of, or on account of his having exercised or enjoyed, or on account of his having aided or encouraged any other person in the exercise or enjoyment of, any right granted or protected by [the Act]”). The EEOC has argued that the ADA’s interference provision is broader than the anti-retaliation participation and opposition clauses. Some courts have accepted the EEOC’s argument. See, e.g., Brown v. City of Tucson, 336 F.3d 1181, 1189 n.13, 1193 (9th Cir. 2003) (“the plain language of § 503(b) [of the ADA] clearly prohibits a supervisor from threatening an individual with transfer, demotion, or forced retirement unless the individual foregoes a statutorily protected accommodation.”); Fogleman v. Mercy Hosp. Inc., 283 F.3d 561, 570 (3d Cir. 2002) (“the text of this provision does not expressly limit a cause of action to the particular employee that engaged in protected activity”). The meaning and scope of the ADA’s interference provision remain somewhat unclear as neither the courts nor the Commission have provided guidance to indicate whether, or to what extent, this provision regulates releases.

2 On September 25, 2008, President Bush signed the Americans with Disabilities Act Amendments Act of

2008 (“ADAAA”), which will take effect on January 1, 2009. The ADAAA makes several changes to the definition of the term “disability,” but it does not alter the ADA’s prohibitions against retaliation and coercion.

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J. Other Regulatory Guidance About Releases

In addition to its ADEA regulations, the EEOC has issued guidance that addresses the anti-retaliation provisions of the federal civil rights statutes. For example, in EEOC Notice No. 915-002, the EEOC stated that an employer may not interfere with the protected right of employees to file a charge or participate in any manner in an investigation, hearing, or proceeding under the laws enforced by the EEOC. See EEOC Notice No. 915.002, at Sect. I. According to the EEOC, “[a]n employer may not interfere with the protected right of an employee to file a charge, testify, assist, or participate in any manner in an investigation, hearing, or proceeding [under the civil rights statutes]. These employee rights are non-waivable under the federal civil rights laws.” Id.

The EEOC’s position is premised on two fundamental cornerstones. First, public policy prohibits interference with statutorily-protected rights. Second, the anti-retaliation provisions of the federal civil rights statutes prohibit interference with the rights set forth therein. Id. The Commission explained:

Notwithstanding the format or context of the agreement in which such language might appear, promises not to file a charge or participate in an EEOC proceeding are null and void as a matter of public policy. Agreements extracting such promises from employees may also amount to separate and discrete violations of the anti-retaliation provisions of the civil rights statutes.

Id., at Sect. II.

The EEOC notes the “strong public policy prohibit[ing] interference with governmental law enforcement activities,” and states that “[a]greements that prevent employees from cooperating with the EEOC during enforcement proceedings interfere with enforcement activities because they deprive the Commission of important testimony and evidence needed to determine whether a violation has occurred.” Id., at Sect. III.A. The EEOC further notes that unlawful discrimination is a public wrong, not merely a private dispute between employers and individuals. Id. The EEOC “acts to vindicate the public interest in the eradication of employment discrimination” and is not “merely a proxy for the victims of discrimination.” Id.

IV. APPLICATION OF LEGAL AND REGULATORY GUIDANCE TO RELEASES

The Commission’s Enforcement Guidance cited EEOC v. Astra USA, Inc., 94 F.3d 738 (1st Cir. 1996) to support its position that employees enjoy a non-waivable right to participate in EEOC investigations and proceedings, and, thus, any interference with such right violates the federal civil rights laws. In Astra, the employer entered into settlement agreements with several employees who theretofore had pursued sexual harassment claims against the employer. The settlement agreement prohibited the settling employee from: (a) filing an EEOC charge; (b) assisting other employees who file an EEOC charge; and, (c) discussing the incident that gave rise to her sexual harassment claim. Id. at 741. The EEOC filed a lawsuit seeking injunctive relief pursuant to § 706(f)(2) of the Title VII. The district court granted the request, enjoining the employer from “entering into or enforcing provisions of any Settlement Agreements which

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prohibit current or former employees from filing charges with the EEOC and/or assisting the Commission in its investigation of any charges.” Id. at 742. The employer appealed.

The U.S. Court of Appeals for the First Circuit affirmed the injunction, stating that “the EEOC act not only on behalf of private parties, but also to vindicate the public interest in preventing employment discrimination.” Id. at 744 (citing General Tel. Co. v. EEOC, 446 U.S. 318, 326 (1980)). The First Circuit noted that “Congress entrusted the Commission with significant enforcement responsibilities in respect to Title VII . . . [and] it is crucial that the Commission’s ability to investigate charges of systemic discrimination not be impaired.” Id. (citing EEOC v. Shell Oil Co., 466 U.S. 54, 69 (1984)). Further, the court warned that “if victims of or witnesses to [employment discrimination] are unable to approach the EEOC or even to answer its questions, the investigatory powers that Congress conferred would be sharply curtailed and the efficacy of investigations would be severely hampered.” Id. Accordingly the First Circuit found that “any agreement that materially interferes with communication between an individual and the Commission sows the seeds of harm to the public interest.” Id. at 744 (citing Cosmair, 821 F.2d at 1090).

A. Retaliation Theories & EEOC Guidance

The EEOC’s Guidance further provides that “[a]greements that attempt to bar individuals from filing a charge or assisting in a Commission investigation run afoul of the anti-retaliation provisions because they impose a penalty upon those who are entitled to engage in protected activity under one or more of the statutes enforced by the Commission.” EEOC Notice No. 915.002, at Sect. III.B. According to the EEOC, “such agreements have a chilling effect on the willingness and ability of individuals to come forward with information that may be of critical import to the Commission as it seeks to advance the public interest in the elimination of unlawful employment discrimination.” Id.

Nonetheless, the Commission states that an individual who has signed a waiver agreement or has otherwise settled a claim may not recover on a charge filed with the Commission subsequent to settlement. In such a circumstance, the employer is shielded against any further recovery by the charging party, provided the settlement agreement is deemed valid under applicable law. This is true regardless of whether the settling employee brings a subsequent action, or whether the EEOC brings a subsequent action on the settling employee’s behalf. EEOC Notice No. 915.002, at Sect. III.C. While a private settlement agreement, if deemed valid, extinguishes the settling employee’s right to personal recovery, it does not impact, or in any way limit, the EEOC’s right to enforce the federal civil rights statutes by seeking relief on behalf of the public or other employees who have not validly waived their claims. Id. “Enforcement actions for the purpose of advancing the public interest in the elimination of employment discrimination are squarely within the EEOC’s authority to vindicate rights belonging to the United States as sovereign.” Id.

This premise is aptly illustrated in EEOC v. Lockheed Martin Corp., 444 F. Supp. 2d 414 (D. Md. 2006). Following the merger Lockheed Martin Corp. and COMSAT Corp., Lockheed eliminated several positions held by former COMSAT employees, including the position held by Denise Isaac. Lockheed, 444 F. Supp. 2d at 416. Isaac received a letter from Lockheed, dated October 16, 2000, stating that her position would be eliminated effective October 30, 2000, and

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offering a severance package “in exchange for” signing the attached Release of Claims. Id. The release prohibited Isaac from pursuing any claim or charge against Lockheed for monetary relief or other remedies, whether on her own behalf or on behalf of another individual. Id. The release did not “affect [the signatory’s] ability to cooperate with any future ethics, legal or other investigations, whether conducted by the Corporation or any governmental agencies.” Id.

Isaac did not sign the release and, instead, filed a charge with the EEOC. In correspondence with Isaac’s attorney, Lockheed stated that “[i]f [] Isaac decides to sign the release as is and receive severance benefits, she will have to dismiss her EEOC charge against the company.” Id.

The EEOC sued Lockheed on Isaac’s behalf, alleging violations of the anti-retaliation provisions of the ADEA, EPA, Title VII. Id. The Commission argued that Lockheed unlawfully interfered with Isaac’s protected activity in two respects. First, by conditioning Isaac’s severance benefits on the withdrawal of her EEOC charge, Lockheed had violated the EEOC-enforced anti-retaliation provisions. Second, because the release itself prohibited the signor from filing an EEOC charge, the release violated the anti-retaliation protections. Id. at 417-18.

The U.S. District Court for the District of Maryland found that Lockheed had conditioned Isaac’s receipt of severance benefits on withdrawal of her EEOC charge and that, by doing so, Lockheed violated the anti-retaliation provisions of the federal civil rights laws. Id. at 418. The court further found that, while Lockheed was not required to offer severance benefits, if it opted to do so, it could not refuse to provide benefits to individuals who had filed an EEOC charge. Id. at 419. In so finding, the court relied heavily on the fact that Lockheed conditioned its offer of severance benefits on Isaac’s withdrawal of her EEOC charge.

The court also found that the release facially violated the anti-retaliation provisions of the federal civil rights laws. The court explained that “the release does not bar only [c]laims by employees; it prohibits [employees’] ability to pursue any [c]laims or charges against the [Lockheed] seeking monetary relief or other remedies for [themselves] and/or as a representative on behalf of others.” Id. at 421 (emphasis in original). The court concluded that the release prohibited the settling employee from filing an EEOC charge, relying again on the fact that Lockheed conditioned its offer of severance benefits on Isaac’s withdrawal of her EEOC charge. Id.

Similarly, in EEOC v. Cosmair, Inc., 821 F.2d 1085 (5th Cir 1987), the U.S. Court of Appeals for the Fifth Circuit concluded that an agreement waiving one’s right to file a charge with the EEOC is void as against public policy. Cosmair, 821 F.2d at 1089-90. The court further held, however, that an agreement waiving one’s right to file a cause of action under the federal civil rights statutes is not void as against public policy. Id. at 1091. The court reasoned that, by filing a charge, an employee is simply bringing discriminatory matters to the attention of the EEOC. Id.

In EEOC v. Ventura Foods, LLC, File No. 05-CV-00663 (D. Minn. 2005), the Commission brought suit against an employer, contending that a release of claims offered to employees violated the anti-retaliation provisions of the federal civil rights statutes. The release language at issue provided:

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I have not filed or caused to be filed any . . . charge with respect to any claim this Agreement purports to waive, and I promise never to file or prosecute a . . . charge based on such Claims. I promise never to seek any damages, remedies or other relief for myself personally (any right to which I hereby waive) by filing or prosecuting a charge with any administrative agency with respect to any such claim. I promise to request any administrative agency or other body assuming jurisdiction of any . . . charge to withdraw from the matter or dismiss with prejudice.

A former employee who was asked to sign an agreement that contained the challenged release language filed an EEOC charge alleging unlawful discrimination in violation of the ADEA. While the EEOC did not find evidence of age discrimination, it sued the employer on the theory that, because the release requires a wavier of the right to file an EEOC charge, it is facially unlawful under the EEOC-enforced statutes.

The employer settled with EEOC, and entered into a consent decree. Among other things, Ventura Foods agreed as part of the settlement to: (1) refrain from requiring, as part of any agreement with employees or former employees, that they would not file charges with the EEOC; (2) send a notice to former employees who had signed such agreements since 2003 that the company had severed the charge-filing ban and that the employees had the right to file a charge with the EEOC without losing severance benefits; and, (3) re-offer enhanced severance benefits to former employees who had refused to sign the agreement. See September 1, 2006 Consent Decree, EEOC v. Ventura Foods, LLC (D. Minn. Sept 1, 2006) (attached hereto as Exhibit 1).

The U.S. Court of Appeals for the Sixth Circuit reached a similar conclusion in EEOC v. SunDance Rehabilitation Services, 466 F. 3d 490 (6th Cir. 2006). In SunDance, the employer informed employee Elizabeth Salsbury, that she was selected for termination in connection with a reduction-in-force. The employer sent Salsbury a letter offering a severance pay if she signed a separation agreement. The release provided:

Releasor on behalf of herself and other releasors expressly agrees that she will not institute, commence, prosecute or otherwise pursue any proceeding, action, complaint, claim, charge, or grievance against Company or any other released parties in any administrative, judicial or other forum whatsoever with respect to any acts or events occurring prior to the date hereof in the course of Releasor’s dealings with Releasee.

Id. at 493.

Salsbury claimed that she was denied a promotion and laid off because of sex. Salsbury did not sign the release, and subsequently filed an EEOC charge alleging sex discrimination. Her charge stated that she had been “asked to sign a separation agreement, general release and covenant not to sue agreement in order to get a lump sum payment of 80 hours. I did not sign this release because I believe it violates the Laws administered by the EEOC.” Id. at 494.

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The EEOC sued the employer in the U.S. District Court for the Northern District of Ohio, alleging violations of the anti-retaliation provisions of the ADEA, ADA, EPA, and Title VII, and requesting an injunctive and affirmative relief, including: (1) reforming the relevant severance agreement to expressly permit employees to file charges with the EEOC and participate in EEOC investigations or proceedings without losing their severance pay; (2) severance pay for Elizabeth Salsbury and similarly situated individuals; and (3) instituting further measures to remove obstacles to participation in EEOC proceedings. The EEOC also sought an order that would require the employer to deliver a corrective notice to former employees and toll all limitations periods for filing charges or claims. Id. at 496.

The district court granted the EEOC’s motion for summary judgment, but the Sixth Circuit reversed, holding that conditioning severance pay on the waiver of one’s right to file charges with the EEOC is not retaliation. Id. at 503. The court noted that the release was unenforceable, but held that the agreement, in its entirety, did not violate the anti-retaliation provisions of the federal civil rights laws. The court explained that “the charge-filing ban may be unenforceable; but its inclusion in the Separation Agreement does not make [the employer’s] offering that Agreement in and of itself retaliatory.” Id. at 501 (emphasis in original).

Despite the Sixth Circuit’s decision in SunDance, employers must remain cautious. The EEOC may continue to assert similar retaliation theories in other jurisdictions, and, given the evolving case law, employers should be particularly wary of conditioning severance or other benefits on an employee’s agreement not file an EEOC charge.

B. Additional Retaliation Theories

Plaintiffs and the EEOC have asserted other retaliation theories against one major employer, Allstate Insurance Corp., after Allstate transitioned certain employees to independent contractor status. In Isbell v. Allstate Insurance Corp., 418 F.3d 788 (7th Cir. 2005), the U.S. Court of Appeals for the Seventh Circuit considered and rejected a “novel” retaliation theory about releases.

In November 1999, Allstate announced a company-wide plan to change the nature of its business relationship with a significant number of the people who sold insurance for the company. Allstate determined that it would no longer sell insurance through employees, known as “employee agents,” but would do so instead through a network of exclusive independent contractors. To accomplish this conversion, the company decided to terminate, effective June 30, 2000, all of its approximately 6,400 employee agents-regardless of age, productivity, or performance. Id. at 790-91.

Allstate offered each of the 6,400 employee agents, including plaintiffs Isbell and Schneider, four options. The first two of these options allowed an employee to enter into an independent contractor relationship with Allstate. Both options would grant the new contractors the opportunity to have an economic interest in the “book of business” they wrote for the company as well as certain other benefits, including a $5,000 bonus. The third option (“Option Three”) terminated the individual’s relationship with Allstate in exchange for the release and a year’s severance pay. The fourth option (“Option Four”) also included an immediate end to the

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parties’ business relationship and a simple severance pay-out for up to thirteen weeks’ salary. Id. at 791.

The first three options offered by Allstate required the terminated employee to sign a release (the “Release”) that purported to waive any claim that an employee might have against Allstate under the ADEA, Title VII, the ADA, and other laws. If an employee did not sign a release, the employee received fewer severance benefits but retained the right to sue Allstate. Id.

James Schneider signed the release, and then filed an EEOC charge and lawsuit. Doris Isbell did not sign the release, and filed an EEOC charge and lawsuit. Both made claims of retaliation in violation of the ADEA, Title VII, the ADA, and other laws, and they also asserted age discrimination violations. The district court granted summary judgment for Allstate, and Ms. Isbell appealed. Mr. Schneider did not appeal. Id. at 792. Ms. Isbell advanced what the court described as a “a novel theory of retaliation.” Id. at 793. She claimed that Allstate retaliated against her when it refused her “the opportunity to work for Allstate albeit under a different contract unless she signed the release.” Isbell thus argued that Allstate could not require her to sign the Release as a condition to becoming an independent contractor with the Company. Id. at 793.

The Seventh Circuit disagreed and concluded that Ms. Isbell “was not a victim of retaliation.” Id. She lost her job, the court said, because Allstate eliminated all agent-employee positions. Id. The court also rejected her age discrimination claim because, the court explained, “every employee in [the employee-agent] position lost his job, regardless of age.” Id. at 795.

Isbell is not the end of the matter. The EEOC and private plaintiffs advanced similar theories in Romero v. Allstate, No. 01-3894 2004 WL 692231 (E.D. Pa. Mar. 30, 2004); rev’d on other grounds, 404 F.3d 212 (3d Cir. 2005). In that case, the court considered the same restructuring program that was at issue in Isbell. In Romero, the EEOC argued that requiring the employee-agents to release all of their claims under the ADEA, the ADA, and Title VII in order to continue working as sales agents was retaliation in violation of those statutes. Romero, 2004 WL 692231 at *3. The EEOC argued further that requiring employee-agents to release such claims constituted interference, coercion, and intimidation in violation of Section 503(b) of the ADA. Id.

The district court observed that over 300 agents filed charges of discrimination, but stated that “we have no way of knowing how many other employee-agents failed to pursue charges before the EEOC simply because they accepted the release language at face value.” Id. The court added, “[t]hose employees who did not sign releases were in fact treated less favorably than those who did sign, and the signers had all been threatened with such an outcome if they exercised their right to refuse to sign the proposed release.” Id. The district court, further observed that “it is illegal to either retaliate , or threaten to retaliate, against an employee to prevent him from exercising rights under the EEOC, Title VII, ADEA, ADA, etc.” Id. Accordingly, the district court concluded that the releases were “voidable at the option of the employee-agent,” granting plaintiffs’ motion for summary judgment on that issue. Id.

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V. CONCLUSION

Given the unsettled and evolving nature of the law about releases and retaliation, employers face difficult choices. The benefits of a comprehensive release are relatively high for employers, but only when the release avoids spurring enforcement actions or litigation in its own right. That said, there are steps employers can take to protect themselves.

Other than the OWBPA, no law enforced by the EEOC specifically addresses the precise language that must be included in a release. Further, neither the OWBPA, nor any other law enforced by the EEOC requires employers to include release language that mentions the right to file a charge with the EEOC or other government entity.

Employers may, however, decide to include such language. For example, a release could include the following language:

Nothing in this Agreement shall interfere with [the undersigned’s] right to file a charge, cooperate or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or other federal or state regulatory or law enforcement agency. However, the consideration provided to [the undersigned] in this Agreement shall be the sole relief provided for the claims that are released by [the undersigned] herein and [the undersigned] will not be entitled to recover and [the undersigned] agrees to waive any monetary benefits or recovery against Employer in connection with any such claim, charge or proceeding without regard to who has brought such complaint or charge.

Understandably, employers may be wary of encouraging outgoing employees to pursue administrative remedies through the EEOC or other government entity. Nonetheless, including such language in a release may ultimately serve to insulate employers from large-scale enforcement actions or subsequent litigation based on the language of a particular release.

MADISON\727792.1

UNITED STATES DISTRICT COURTDISTRICT OF MINNESOTA

EQUAL EMPLOYMENT OPPORTUNITY )COMMISSION, )

)Plaintiff, )

v. ) Civil Action No. 05-663 (RHK/JSM))

VENTURA FOODS, LLC, ) CONSENT DECREE))

Defendant. ))

Introduction

Plaintiff Equal Employment Opportunity Commission (hereinafter the

"Commission") has instituted this action alleging that Defendant Ventura Foods

retaliated against certain of its employees by requiring them to agree not to file a charge

of discrimination as a condition of receiving enhanced severance benefits. In its

Complaint, the EEOC alleged that this violated the Age Discrimination in Employment

Act of 1967 ("ADEA"), Title VII of the Civil Rights Act of 1964 (ATitle VII@), and the

Equal Pay Act (AEPA@). Defendant filed an answer in which it denies any such

violation(s). The Commission and Defendant have agreed to settle these claims.

THEREFORE, it is the finding of this Court, made on the pleadings and on

the record as a whole and upon agreement of the parties, that: (i) this Court has

jurisdiction over the parties to and the subject matter of this action, (ii) the requirements

of the ADEA, Title VII and the EPA will be carried out by the implementation of this

Decree, (iii) this Decree is intended to and does resolve all matters in controversy in this

lawsuit among the parties, and (iv) the terms of this Decree constitute a fair and

equitable settlement of all issues in this lawsuit.

MADISON\727792.1

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED as follows:

I. Injunctive Relief

1. Defendant shall not require as part of any agreement with employees or former

employees that they will not file charges with the EEOC. Defendant will not

institute or maintain a Severance Agreement and General Release, or any other

similar agreement, which prohibits an employee from filing a charge with the

EEOC or participating in an EEOC investigation or proceeding.

2. Within fifteen (15) days of the entry of the Consent Decree, Defendant will send a

notice, by certified mail to the last known address, to all former employees who,

between 2003 and the present, signed an agreement that contained language

prohibiting the filing of an administrative charge with the EEOC. The notice will

inform the employees that Ventura Foods is severing that clause of the

agreement. The employees will be advised that they have a right to file a charge

of discrimination with the EEOC and participate in EEOC proceedings without

losing severance benefits or violating the agreement. Ventura Foods will copy the

EEOC on the letters to the former employees.

3. Ventura Foods waives the limitation periods for filing a charge of discrimination

with the EEOC. Ventura Foods will advise the employees receiving the notice in

subsection (2) that they have 300 days from the date of actual receipt of the

certified letter to file a charge of discrimination with the EEOC. If, after sending

such a notice by Certified Mail, no receipt acknowledgement is returned, the

measure of 300 days will begin on the date the notice was mailed.

MADISON\727792.1

4. Defendant will re-offer enhanced severance benefits under the Severance

Agreement and General Release as revised to any employee who refused to sign

the agreement earlier and with whom Defendant has not reached a subsequent

agreement or otherwise paid the enhanced severance amounts.

5. Defendant will not retaliate against any employee or former employee for making

a charge, testifying, assisting, or participating in an investigation, proceeding or

hearing, or for exercising the right to oppose any practice made an unlawful

employment action by the ADEA, Title VII, or the EPA.

II. Reporting

6. Within thirty (30) days of the entry of this Decree, Defendant shall prepare and

submit to the undersigned EEOC attorney a letter indicating that it has complied

with the provisions of this Decree.

7. During the term of this Decree Defendant shall allow representatives of the

Commission to review Defendant's compliance with this Decree by inspecting and

photocopying relevant documents and records, interviewing employees and

management officials on their premises. Such review of compliance shall be

initiated by written notice to the Defendant's attorney of record at least seven (7)

business days in advance of any inspection of a Defendant's documents.

III. Term and Effect of Decree

8. This Decree constitutes the full, final and complete resolution of the EEOC's claim

that Ventura Foods violated the ADEA, Title VII, and the EPA by retaliating

against former employees by requiring that they waive their right to file a charge

with the EEOC as a condition of receiving severance pay.

MADISON\727792.1

9. This Decree shall be for a period of two years and can only be extended for good

cause shown. During the Decree's term the Court shall retain jurisdiction of this

cause for purposes of compliance.

10. Each party shall bear that party's own costs and attorneys fees.

DATE:

9/1/06 s/Richard H. KyleRichard H. KyleUnited States District Court Judge

BY CONSENT:

FOR DEFENDANT:

s/Thomas P. GodarThomas P. GodarWhyte Hirschboeck Dudek S.C.1 East Main Street, Suite 300Madison, WI 53703-3300(608) 234-6064

BY CONSENT:

FOR PLAINTIFF:

EQUAL EMPLOYMENT OPPORTUNITY COMMISSION

RONALD S. COOPERGeneral Counsel

JAMES L. LEEDeputy General Counsel

MADISON\727792.1

GWENDOLYN YOUNG REAMSAssociate General Counsel

1801 L Street, N.W.Washington, DC 20507

Dated: 8/31/06 s/John C. HendricksonJOHN C. HENDRICKSONRegional Attorney

Chicago District Office500 West Madison Street, Suite 2800Chicago, IL 60661(312) 353-8550

Dated: 8/31/06 s/Laurie A. VasichekLAURIE A. VASICHEK (#0171438)Senior Trial Attorney

Minneapolis Area Office330 Second Avenue South, Suite 430Minneapolis, MN 55401(612) 335-4061laurie.vasichek@eeoc.gov

EEOC INVESTIGATIONS:EFFECTIVE EMPLOYER STRATEGIES

The EEOC’s Investigative Process

__________________________________________________________________

April 28, 2009

Diana L. HooverGayle C. HanzMayer Brown LLP700 Louisiana St., Ste. 3400Houston, TX 77002Phone: (713) 238-2628Fax: (713) 238-4628

EEOC Investigations: Effective Employer Strategies

I. UNDERSTANDING THE EEOC’S INVESTIGATIVE PROCESS1

The administrative processes established for the resolution of equal employment claims,including especially the pre-litigation involvement of the EEOC in such claims, often enablesemployers to resolve employment disputes early and at a relatively low cost. This is due in nosmall part to the EEOC’s commitment to resolving claims through early settlement, mediationand conciliation.

However, an investigation by the EEOC of even a seemingly small and discreet claim canraise very complex issues for an employer. The EEOC has its own language, its own proceduralrules, broad subpoena power, and uncertain and complicated rules for preserving theconfidentiality of information discovered during the course of an investigation. As a result, it iscritical for employers and their attorneys to be familiar not only with the federal employmentlaws under the EEOC’s purview, but also with the manner in which the agency seeks to enforcethose laws.

In very general terms, each explored more thoroughly below, the pre-litigation phase ofan equal employment claim involves the filing of a charge of discrimination; an investigation bythe EEOC or an equivalent state or local agency; and a determination of cause. If the EEOCfinds there to have been no cause to support the charge, the EEOC issues the charging party aDismissal and Notice of Rights letter (commonly known as a “right-to-sue” letter). The chargingparty may, within 90 days of receipt of the letter, bring a private civil suit in federal court. If, onthe other hand, the EEOC finds there to have been cause, the EEOC will attempt conciliation, oran informal resolution of the charge. If conciliation fails, the EEOC will either issue thecharging party a right-to–sue letter or prosecute a civil action itself based on the charge.

A. Know Your Jurisdiction

Charges may be processed differently in some states and localities.

As a preliminary matter, it is important to know where a charge has been filed. TheEEOC has primary jurisdiction over claims arising out of violations of Title VII of the CivilRights Act of 1964 (“Title VII”), the Age Discrimination in Employment Act (“ADEA”), theAmericans with Disabilities Act (“ADA”) and the Equal Pay Act (“EPA”).2 However, manystates and certain municipalities have state or local laws whose provisions overlap those of TitleVII, the ADEA, the ADA, and the EPA. In these jurisdictions, there is often a state or localagency charged with enforcing the relevant state or local laws, which the EEOC calls FairEmployment Practices Agencies, or “FEPAs.”

1 EEOC charge intake and investigation procedures differ depending on whether the charging party is afederal or private employee. See EEOC Compliance Manual § 1.8 (CCH 2006) [“Compliance Manual”]. Thedetails of taking, investigating and resolving charges brought by federal employees are not addressed in this paper.The EEOC’s website, however, provides an excellent summary of those details. Seehttp://www.eeoc.gov/federal/fedprocess.html.2 Title VII and the ADA apply only to those employers who employ 15 or more employees; the ADEAapplies only to those employers who employ 20 or more employees; and the EPA applies to most employers whoemploy one or more employees.

3

The EEOC follows a complex regime of referrals, deferrals, and worksharing to allocatethe rights and responsibilities of processing claims subject to both its jurisdiction and that of oneor more FEPAs. How, and by which agency (the EEOC or a FEPA), the claims will beprocessed depends in part on such factors as the nature of the claim being brought, whether theclaim was first filed with the EEOC or whether it was first filed with the FEPA, whether theFEPA is “certified” by the EEOC, and whether the EEOC has a specific worksharing agreementwith the FEPA.

A detailed discussion of the allocation of responsibilities between the EEOC and FEPAsis beyond the scope of this discussion. However, because the various FEPAs have their ownprocedural guidelines that may, in some circumstances, be materially different from those wediscuss, the practitioner should be familiar with state and local laws in the relevant jurisdiction,any FEPAs charged with enforcing those laws, and the manner in which the processing ofvarious types of claims might be allocated amongst the EEOC and the FEPAs.3

B. Evaluating the Charge

Charge intake often involves the creation or maintenance of anumber of documents, any one of which may prove valuable infuture discovery.

Charges may assert more claims than the EEOC actually plans toinvestigate.

The charge intake process may be initiated by a phone call to the EEOC by an aggrievedemployee or applicant, or anyone calling on his or her behalf.4 Alternatively, the process mayinitiate as a result of the EEOC’s receipt of “any correspondence … which indicates a potentialviolation of any statutes.”5 Finally, an aggrieved employee or applicant, or his or herrepresentative, may initiate a charge by visiting the local EEOC office.6

When a charge is initiated over the telephone or in person, or when writtencorrespondence indicates a violation of a fair employment law but is otherwise deficient,7 theEEOC performs a pre-charge interview of the would-be charging party.8 A Form 283 ChargeQuestionnaire may be filled out as a means of documenting the interview.9 During the course ofthe interview, the EEOC will counsel the would-be charging party on such things as the scope of

3 For a detailed review of the EEOC’s approach to these issues, see Compliance Manual §§ 5.1 – 5.8.4 Compliance Manual § 2.3. However, as discussed infra, to be valid, the ultimate charge will have to bereduced to writing and signed and verified by the charging party. 29 C.F.R. § 1601.9. Thus, while a phone call mayset the EEOC in motion, the entire process cannot be completed over the telephone.5 Id. at § 2.2.6 See, e.g., id. at §§ 1.7, 2.4.7 The Compliance Manual provides that a pre-charge interview should be performed upon receipt of a chargeby mail when, for example, the EEOC determines that the charging party has more information than was presentedin the correspondence; there is not a clear request in the correspondence for EEOC action; the statute of limitationshas run; or the EEOC is unable to determine exactly which statutes are implicated by the allegations in thecorrespondence. Id. at § 2.2(a).8 Id. at § 2.4.9 See id. at Exh. 1-B.

4

the various fair employment laws, the effects of filing a charge, the limitations periods for filingclaims, and available remedies.10 If a would-be charging party wishes, after the pre-chargeinterview, to proceed with filing a charge, the EEOC must take the charge even if the EEOCinterviewer thinks there may be insufficient information to support the party’s claims.11

There are few formal requirements the charging party must meet to file a valid charge.Whether initial contact is made with the Commission by telephone, mail, or in person, theultimate charge filed by a charging party must be reduced to writing and signed and verified bythat party.12 To be valid, a charge need only contain as much information as necessary to be“sufficiently precise to identify the parties, and to describe generally the action or practicescomplained of.”13

However, since the claims asserted in the charge will likely limit the claims anyemployee can later bring in litigation, there may be some incentive for a charging party to be farmore inclusive in the charge than is required under the regulations.14 When the Commissionissues a right-to-sue letter to a charging party, that right is described as a right to bring a suit thatis “based on” the original charge.15 Courts considering the question have generally held that thefair employment claims a party may bring in litigation after the issuance of a right-to-sue letterare limited to those claims that are reasonably related to the claims in the underlying EEOCcharge.16 To preserve the employer’s right to respond at the administrative level to all potentialclaims, some courts have taken a fairly strict approach to determinations of what is “reasonablyrelated” to the claims in an EEOC charge, making the penalty for failing to assert a claim at theadministrative level somewhat harsh.17

The EEOC Compliance Manual appears to recognize the costs of an employee’s failingto assert particular allegations in his or her EEOC charge, even if they appear irrelevant or notessential to the employee’s primary complaint. In the EEOC Compliance Manual, EEOC intakepersonnel are instructed not to “leave out allegations which aggrieved persons might wish to

10 Id. at § 2.4.11 Id. at § 2.5(a).12 29 C.F.R. § 1601.9.13 29 C.F.R. § 1601.12(b).14 For a more thorough discussion of this notion, see Julie R. Rubin, EEOC Complaints: Keep Your ParingKnife in the Kitchen, 38-DEC Md. B.J. 50 (2005).15 See, e.g., Compliance Manual Exh. 6-B (form of right-to-sue letter issued upon request before investigationis complete, referring to the right being granted as a “right to sue based on this charge”) (emphasis added); Exh. 4-B(form of right-to-sue letter upon finding of no cause, stating that the charging party “may file a lawsuit against therespondent(s) under federal law based on this charge in federal or state court”) (emphasis added); Exh. 66-D (noticeof right to sue upon finding of cause and failure of conciliation, stating same).16 See, e.g, Harper v. Godfrey Co., 45 F.3d 143, 148 (7th Cir. 1995) (claims not explicitly made in an EEOCcharge may be litigated only when those claims are (a) like or reasonably related to the claims in the EEOC chargeand (b) could reasonably have been expected to grow out of an investigation of the claims in the EEOC charge);Almendral v. New York State Office of Mental Health, 743 F.2d 963, 967 (2nd Cir. 1984) (claims not explicitly madein an EEOC charge may be litigated only when those claims are reasonably related to the EEOC charges).17 See, e.g., McGaw v. Biovail Pharms., 300 F.Supp.2d 371, 373 (D. Md. 2004) (where EEOC chargecomplained that employee was retaliated against for filing age and gender discrimination claims with the EEOC,court refused to allow litigation of a claim that employee was also retaliated against for making age and genderdiscrimination claims in employer’s internal grievance system), and the discussion of McGaw in Rubin, supra note14.

5

pursue in court.”18 The Compliance Manual further warns, “EEOC may not delete from a chargeany allegation made, without the charging party’s permission.”19 Finally, the ComplianceManual instructs, “[a]lways take a charge the party wishes to file,” even where there isinsufficient information at the outset of the investigation to support the charge.20

Nevertheless, employers should take comfort in the Compliance Manual’sacknowledgement that the EEOC must take all charges a charging party wishes to file, “eventhough EEOC might not fully investigate them.”21 In other words, the EEOC must take thecharge, but may not necessarily investigate each assertion in it. In fact, the EEOC is generallyreasonable in defining the scope of an investigation, and remains true to its statutory mandate of“prevent[ing] any person from engaging in any unlawful employment practice.”22 If nothingelse, the EEOC is unlikely to waste its scarce resources pursuing unreasonable claims.23 Thus,when served with a charge asserting an unreasonable array of claims, employers should approachthe EEOC investigator and attempt to determine which of the assertions the EEOC is actuallyplanning to pursue.

If the employee’s claims proceed to litigation, knowing the charge intake process willhelp the employer or practitioner craft discovery requests. Since the documents prepared uponintake of a charge often represent the very first record statements by the employee, they mayserve valuable purposes at trial, including especially for impeachment of the employee should hisor her story come to differ over time.24 Additionally, knowing the liberal scrutiny employees,their attorneys and the EEOC give to the breadth of claims asserted in an initial charge shouldhelp prepare employers to respond to overbroad and far-reaching charges.

C. Responding to the Initial Complaint and to Requests for Information

Typically, the employer benefits from cooperating in theinvestigation process.

There are few limits on the EEOC’s investigatory powers.25 For example, it is notlimited to investigating only the claims explicitly asserted in a charge. Instead, the EEOC hasthe authority to demand and review “any evidence of any person being investigated or proceededagainst that relates to unlawful employment practices, and is relevant to the charge underinvestigation.”26 Furthermore, EEOC investigators are instructed to consider during their

18 Compliance Manual § 2.5(a).19 Id.20 Id. (emphasis added).21 Id. (emphasis added).22 42 U.S.C.A. § 2000e-5(a).23 See, e.g., Amy Noel Ecchialino & Daniel Vail, Why the EEOC (Still) Matters, 22 Hofstra Lab. & Emp. L.J.671, 703 (2005) (The EEOC’s “perennial struggle has been to determine how to most efficiently allocate its scarceresources, given the backbreaking number of charges it receives each year and its annual budget shortfalls.”).24 See Weyers v. Lear Operations Corp., 359 F.3d 1049, 1053-54 (8th Cir. 2004) (It was reversible error todeny employer the opportunity to impeach the employee using the Form 283 Questionnaire employee had filled outduring intake, since employee’s answers on the questionnaire differed dramatically from her testimony at trial.).25 Anthony P. Zana, Comment, A Pragmatic Approach to EEOC Misconduct: Drawing a Line onCommission Bad Faith in Title VII Litigation, 73 Miss. L.J. 289, 299.26 42 U.S.C.A. § 2000e-8(a).

6

investigation whether the Commission should investigate additional locations, if a charge appliesonly to a single employer location.27 Investigators also are instructed to be mindful of additional,unrelated violations of employment laws discovered during the course of an investigation and areinstructed to report these violations so the Commission can consider filing separate charges forthese violations.28 Thus, employers should ensure their strict compliance with all fair labor lawsbefore they are subject to a probing EEOC investigation.

The EEOC has broad authority and considerable tools to investigate charges ofdiscrimination. Employers should be mindful that some commentators believe the agency iscapable of using these tools and authority in ways that may impose a substantial burden on theemployer that go beyond the individual merits of a given charge.29 To avoid such risks andpromote a favorable outcome, it is important to build credibility with the investigator and toavoid any potentially disruptive behaviors, such as failing to treat the investigator or EEOC staffwith civility and respect, which may cause a current or future investigation to become far moreintrusive, extensive, or public than necessary.30 The first-line investigator, whom many regard asunimportant in the EEOC’s decision-making process, may be the very person who will have thegreatest impact on the scope and direction of the investigation and whose recommendation willbe given the greatest deference by the EEOC’s district director or regional attorney.31

When the EEOC investigator receives a new charge, he or she will typically make aninitial recommendation as to the scope of the investigation to be performed in connection withthat charge.32 Thereafter, the EEOC often prepares a written investigative plan to guide theCommission’s investigation of the charge.33 The investigation plan will almost always involve aRequest for Information (“RFI”), will often involve an employer position statement, and mayinvolve witness interviews, on-site investigations, or other investigative tools.34 If necessary, theEEOC will employ the use of subpoenas to obtain documents or testimony needed to aid in itsinvestigation.35

1. Strategies in Responding to Requests for Information

Most documents can be disclosed to the charging party.

Some documents can be disclosed to other parties with chargesagainst the same employer.

The investigation plan will typically involve issuance of an RFI to the respondentemployer as a first step in the investigation.36 According to the Compliance Manual, the EEOC

27 Compliance Manual § 22.3(c).28 See, e.g., id. at §§ 22.3(a); 25.7.29 Donald R. Livingston, EEOC LITIGATION AND CHARGE RESOLUTION 297 (Charles A. Shanor ed., TheBureau of National Affairs, Inc. 2005) (“EEOC LITIGATION”).30 Id.31 Id. at 299.32 Compliance Manual at § 2.7(g).33 Id. at § 22.2.34 2 Defense of Equal Employment Claims 2d § 11:6.35 Compliance Manual § 24.36 Id. at § 22.2.

7

investigator should draft the RFI to be “specific and tailored to the scope of the investigation asdefined in the” investigation plan.37 The EEOC investigator may call an employer beforeserving it with an RFI expected to require extensive production of documents.38 The purpose ofsuch a call is to learn what documents may exist and how the employer keeps those documents,so as to make a request that “lessen[s], wherever possible, the burden placed upon the respondentto compile and/or produce the necessary evidence … .”39 It is therefore in the employer’sinterest to cooperate with the investigator making such a call.

While it has been our experience that the EEOC generally follows the guidelines set inthe Compliance Manual, and reasonably tailors its RFIs, others contend that the EEOC moretypically issues overbroad and unreasonable requests.40 In addition, because the EEOC maydemand production within a relatively short period of time, some employers, on whom theburden to produce ultimately falls, may find a request overbroad or overly burdensome evenwhen it is objectively reasonable in scope.

If necessary to object to the RFI on the grounds of undue burden, employers shouldaddress whether the same or similar information is available in an alternative form. Theemployer should talk to the EEOC investigator and explain what business records are availableand how the information sought could be provided in a manner closely resembling the mannerrequested before submitting information in a format different from that requested or refusing tocomply altogether.41 In our experience, offering to work with the EEOC investigator to resolveany such objections benefits the employer in the long run by avoiding costly and drawn outdisputes. A simple phone call to the EEOC investigator may be beneficial in narrowingdiscovery requests and avoiding any misunderstandings related to the type or form ofinformation sought by the agency. Most of these situations can be worked out so that EEOC getsthe information it needs without the employer feeling unduly burdened.

Often the EEOC will not object to an employer providing responses to the RFI in“batches,” particularly where the EEOC has requested a significant amount of information to beproduced in a short amount of time.42 The first batch of responses should be submitted timelyunder the EEOC deadline if at all possible, with additional time requested to supply the rest.43

By the second submission to the EEOC, the employer should endeavor to include as much of therequested materials as possible so as to demonstrate a good faith effort at compliance as well asto give the EEOC sufficient information to reconsider whether additional information is evennecessary.44 The employer is in a much better position to discuss the difficulties in collecting

37 Id. at § 22.2(b).38 Id. at § 26.3(a)(1).39 Id.40 See, e.g., 2 Defense of Equal Employment Claims 2d § 11:6 (“Typically the RFI is extremely broad, oftenquite lengthy, and sometimes rather plainly burdensome – even to the point of over-reaching. It may demandinformation from the distant past, far beyond any limitations period; it may demand company wide data, eventhough the charge is limited to one department; or, it may demand data on all protected groups, even though theclaimant is only in one of the those groups.”).41 See “When A Charge is Filed Against My Company,” available athttp://www.eeoc.gov/employers/chargesfiled.html#what%20records (last visited October 27, 2008).42 EEOC LITIGATION at 311.43 Id.44 Id.

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and assembling information or the breadth of the requests (and negotiate a reduction) if somedata has already been produced which demonstrates the true breadth and unreasonableness of theoriginal request.45 At times, the combination of the seemingly overbroad array of claims assertedin the charge and the burdensome nature of the RFI may result in an employer – especially oneunfamiliar with the EEOC – assuming an unproductively hostile posture at an early stage of theinvestigation. Remember, the EEOC can and often will give an employer additional time inwhich to respond to an RFI, and may also engage in a give and take resulting in a reduction ofthe RFI’s burden to a cooperative employer.46 In most cases, there is little to be gained fromrendering the relationship with the investigator adversarial at this stage.47

2. Document Retention Obligations

Preserve relevant documents until final disposition.

Once a charge is filed with the EEOC, the employer has an duty to preserve hard andelectronic documents and records relating to the employee’s claims. An employer must preserve“all personnel records relevant to the charge” until final disposition of the charge or any lawsuitthat may thereafter be filed.48 The EEOC Notice of Charge form that the employer receivesshould explain the agency’s record keeping requirements.49 When an EEOC charge has beenfiled against a company, the company should retain personnel or employment records relating tothe issues under investigation as a result of the charge, including those related to the chargingparty or other persons alleged to be aggrieved and to all other employees holding or seekingpositions similar to that held or sought by the affected individual(s).50 Such records will benecessary to use in the preparation of the employer’s defense as well as responding to theEEOC’s RFI.

A timely “litigation hold” should be sent to key employees advising of the types ofdocuments which must be preserved until the final disposition of the matter as the inadvertentdestruction of records (even if done pursuant to an existing records retention policy) can havegrave consequences to an employer’s defense. When a charge is not resolved after investigation,and the charging party has received a notice of right to sue, “final disposition” means the date ofexpiration of the 90-day statutory period within which the aggrieved person may bring suit or,where suit is brought by the charging party or the EEOC, the date on which the litigation isterminated, including any appeals.51

3. Strategies in Preparing the Employer’s Position Statement

Draft a thorough, but careful, position statement.

45 Id. at 311-12.46 Id.47 See 2 Defense of Equal Employment Claims 2d § 11:6 (“The RFI should not be the beginning of adeteriorating relationship with the agency. Instead, it should be understood as the agency’s first step to determiningthe merits, or lack thereof, of the charge.”).48 See 29 C.F.R. § 1602.14.49 See “When a Charge is Filed Against My Company,” available athttp://www.eeoc.gov/employers/chargesfiled.html#what%20records (last visited October 27, 2008).50 Id.51 Id.

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Assume the statement will be disclosed to the charging party and,perhaps, others.

Understand that, like a charging party’s initial charge, statementsin the position statement may be admissible at trial.

As part of its investigation, the EEOC often will ask an employer to prepare a writtenresponse to the allegations in the charge. In fact, the form letter the EEOC sends to notifyemployers of charges filed against them contains, as one option, a preprinted request for aposition statement.52 The employer may be instructed to submit position statements in as little as14 days from the date it received notice of the charge.53 However, employers can and shouldrequest additional time, which the EEOC typically grants if the requested extension isreasonable. Furthermore, settlement discussions and mediation may postpone the time in whichan employer must otherwise provide its position statement.

Generally, the position statement should respond fully to each allegation in a charge.Since the position statement is the employer’s first – and, sometimes, only – opportunity toexplain its side of the dispute in writing before the EEOC, the employer should usually take theopportunity to do more than merely affirm or deny the allegations in a charge. Instead, theemployer should provide as many details as it can that support its case and should be prepared tosupport these details with relevant documents or affidavits from witnesses. Finally, the employershould assert that its position statement is the product of only a preliminary investigation of thematters raised in the charge, and may be subject to change.

The employer must treat even the most frivolous of charges with care. The positionstatement will probably be shown to the charging party as a matter of course.54 In somecircumstances, if the position statement contains statistics or information about the employer’sgeneral practices, it may disclosed to other parties who assert similar charges against the sameemployer. Furthermore, the statements made by an employer in its position statement might laterbe used against the employer in any trial of the allegations in the charge.55

4. Interviews and On-Site Investigations

Cooperate in scheduling site visits and interviews, if given theopportunity.

Be prepared for surprise site visits and interviews.

Ensure that all worksites comply with all employment laws.

52 See Compliance Manual Exh. 3-A.53 Kay H. Hodge, Handling the Anti-Discrimination Agency Investigation, SK08 ALI-ABA 23, 28 (2005).54 Compliance Manual § 83.5(a).55 See Olitsky v. Spencer Gifts, Inc., 964 F.2d 1471, 1476-77 (5th Cir. 1992); see also Maschka v. GenuineParts Co., 122 F.3d 566 (8th Cir. 1997) (employer’s position statement was admissible to show that employer hadasserted contradictory positions); Brooks v. Grandma's House Day Care Ctrs., Inc. 227 F. Supp. 2d 1041, 1044-465(E.D. Wis. 2002) (same).

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Pre-interview potential witnesses.

Interviews and on-site investigations may play a role in the EEOC’s investigation of acharge. Typically, the EEOC will schedule an on-site investigation in advance.56 TheCommission, however, need not necessarily give an employer notice of an on-site investigation,and may choose instead to show up at the employer’s place of business unannounced. This maybe the Commission’s preferred approach if it is anticipating a lack of cooperation from theemployer.57 Employers faced with such “drop-in” visits by EEOC investigators will need todecide whether to allow the investigator access to the site, or whether to require the investigatorto compel an inspection by subpoena.

Interviews may be conducted at the worksite unless the witness requests anonymity.58

The Compliance Manual instructs investigators to schedule interviews at a time when they wouldresult in minimal interference with the employer’s business.59 Interviews planned for theworkplace should be scheduled with the employer’s prior knowledge and consent. The EEOC,however, may begin interviewing key witnesses identified by the charging party before theemployer has provided a position statement or its response to any RFI.60 Finally, while theemployer’s attorney may be present for interviews of the employer itself, or its managementpersonnel, neither the employer nor its attorney may be present for the interviews of otheremployees.61

The potential for surprise is fairly significant in the context of site visits and interviews.Much may be taking place during the course of an investigation without the employer’s full orpartial knowledge. An employer is well advised to begin ensuring that it is in compliance withall employment laws well before such an investigation is threatened and certainly no later thanimmediately upon receipt of a charge it thinks may lead to a site visit. Similarly, the employershould in the majority of cases, immediately upon learning of a charge, begin interviewingpotential witnesses, with the caveat that such interviews must be taken with care. Implicit threatsor suggested retaliation could raise substantial problems for the employer.

5. Subpoenas

Generally, the EEOC’s subpoena power is as broad as its investigatory scope,62 and theEEOC is likely to gain access to virtually all non-privileged materials within its investigativeplan. The EEOC may subpoena “any person who has custody or control of relevant evidence.”63

Those subpoenas generally are enforced so long as the subpoena is sufficiently clear to allow fora response, and the information sought is relevant.64 As the Supreme Court acknowledged,“[s]ince the enactment of Title VII, courts have generously construed the term ‘relevant’ and

56 See, e.g., Compliance Manual § 25.2(a).57 Id. at § 25.2(b)(1).58 Id. at § 23.6.59 Id.60 See id. at § 23.4.61 Id. at § 23.6(c).62 A complete discussion of the EEOC’s various subpoena powers is beyond the scope of this paper. Formore information, see Compliance Manual §§ 24.1-24.14.63 Id. at § 24.1.64 2 Defense of Equal Employment Claims 2d § 11:14.

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have afforded the Commission access to virtually any material that might cast light on theallegations against the employer.”65

Though the subpoena powers are broad, the EEOC instructs its investigators to usesubpoenas in most circumstances “only after other investigative methods have been attempted.”66

It also requires the investigator to take into consideration several relevant factors including therespondent’s ability to produce the requested information.67

6. Strategic Considerations for the Treatment of Confidential Information

Employers should carefully consider whether they should resistproduction of trade secrets and other confidential materials.

When reviewing the EEOC’s RFI, an employer should take care in analyzing theinformation to be provided to determine if a response can be made without producing otherwiseconfidential or proprietary information. Because of the substantial possibility documentsproduced to the EEOC will be disclosed to others, an employer may ultimately need to makecertain difficult decisions about when to oppose production of responsive but confidential orprivileged documents.68 The EEOC will disclose nearly all information in a charging party’s file– including information obtained via RFI – to the charging party.69 Furthermore, the EEOC willdisclose information in a charging party’s file, including information obtained via RFI, reflecting“statistics and other information about an employer’s general practices” to other charging partieswith claims against the same employer.70 And, the EEOC has been criticized for beinginconsistent in applying its own rules regarding disclosure of documents containing sensitivematters such as trade secrets and attorney-client communications.71

Employers, therefore, must give due consideration to producing confidential or privilegeddocuments voluntarily in response to an RFI. There are several strategies that employers shouldbe aware of to challenge and/or limit the type of information sought by such requests.Specifically, an employer should not hesitate to contact the investigator directly if it believe thereis a risk that documents to be produced might reveal confidential or proprietary information.72

An employer should seek the investigator’s agreement that disclosure of trade secret andconfidential information will not be made.73 In the absence of an agreement or the appropriateassurances from the EEOC’s investigator, the employer may have no choice but to refuse tocooperate with the RFI and seek judicial relief prior to disclosure—either in the form of aninjunction or a motion to quash any subpoenas issued by the agency on the grounds of

65 EEOC v. Shell Oil Co., 466 U.S. 54, 68-69 (1984).66 Compliance Manual § 24.1.67 Id. at § 24.4.68 See 2 Defense of Equal Employment Claims 2d § 11:6.69 Compliance Manual §§ 83.5 – 83.7.70 Id. at § 83.7.71 See, e.g., Venetian Casino Resort, L.L.C. v. E.E.O.C., 530 F.3d 925 (D.C. Cir. 2008) discussed infra PartI.D.72 2 Defense of Equal Employment Claims 2d § 11:6.73 Id.

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confidentiality.74 Finally, if such documents must be produced, clearly label them“confidential.”

Although some courts have adopted the concept of “selective waiver”75 – permittingparties to produce otherwise privileged documents to a federal agency without waiving theprivilege – many courts have rejected the doctrine in the context of attorney-client privilege andthe attorney work product doctrine. The Tenth Circuit, for example, found that a companywaived its privileges raised in connection with the production of over 200,000 documents to theSEC and the Department of Justice. The production was made as a result of a negotiatedconfidentiality agreement, but in a separate shareholder action, the company was ordered toproduce those same documents to the plaintiffs. Qwest Communs. Int’l, Inc. v. New EnglandHealth Care Employees Pension Fund, 450 F.3d 1179 (10th Cir. 2006). In short, the courtdeclined to enforce the confidentiality agreement and found that Qwest had waived its privilegesby producing the documents. On November 13, 2006, the U.S. Supreme Court denied review ofthe decision. Qwest Communs. Int’l, Inc. v. New England Health Care Employees PensionFund, 127 S.Ct. 584 (2006).76

As described by one court, “the case law addressing the issue of limited waiver is in astate of hopeless confusion.”77 Whether and when disclosure to the EEOC constitutes a waiverof privilege will depend on the jurisdiction of any litigation, the types of documents produced,and the specific facts under which those documents were produced. 78 Given the existing statusof the law on limited or selected waiver, in the near term, employers must exercise caution indetermining whether to produce otherwise privileged documents. Though the Supreme Courtdeclined review of the issue, it has been raised in Congress and by the Advisory Committee onEvidence Rules.

D. Freedom Of Information Act Requests

Consider filing a FOIA request as necessary to gain access to theEEOC investigative file.

74 Id.75 See, e.g., Diversified Indus. v. Meredith, 572 F.2d 596, 611 (8th Cir. 1977).76 At least one court, however, has held that, where an employer refused to produce privileged commercialand financial documents until the EEOC issued a subpoena, and then produced those documents only after theEEOC agreed it would not disclose those documents, the employer had made only a limited waiver of its privilege,and the EEOC could not disclose the documents to third parties. McDonnell Douglas Corp. v. EEOC, 922 F.Supp.235, 241-43 (E.D. Mo. 1996).77 In re Columbia/HCA Healthcare Corp. Billing Prac. Litig., 293 F.3d 289, 294-95 (6th Cir. 2002).78 The EEOC has at least once come to an agreement with an employer designed to maintain theconfidentiality of documents in order to receive production of those documents, only to later strenuously argue incourt that those same documents should be disclosed pursuant to a FOIA request. In McDonnell Douglas, theEEOC sent a letter to the employer stating, “ ‘The Commission recognizes that some documents may be protectedby the attorney-client privilege and that [the employer] and its components have not waived this privilege.’ ” 922 F.Supp. at 238. The letter “went on to suggest a procedure for the submission of privileged documents to the agency.”Id. Yet, some time thereafter, the EEOC “strenuously” contested whether the documents eventually produced werestill privileged. Id. at 241.

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Work with the agency to prevent or limit dissemination ofconfidential information pursuant to FOIA requests.

The Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, is a statute providing aprocess for persons to request access to federal agency records or information. Federal agencies,such as the EEOC, are required to disclose records upon receiving a written request for themunless those records are protected from disclosure by any of the nine exemptions and threeexclusions of the FOIA.79 FOIA can provide a valuable tool for unlocking access to a variety ofEEOC documents.80 FOIA applies only to records kept in the custody of the EEOC and it doesnot require the EEOC to do research, analyze data, answer written questions, or to create recordsin order to respond to a request.81

Under certain circumstances, EEOC documents are available without a FOIA request.82

Pursuant to Section 83 of the Compliance Manual, the EEOC will release information containedin Title VII and ADA employment discrimination charge files to the parties of the chargewithout a FOIA request.83 However, files for ADEA and EPA charges are only availablethrough the EEOC’s FOIA regulations.84

Although the charging party has fairly liberal access to the information in his or hercharge file pursuant to Section 83 of the Compliance Manual, a respondent’s access to Title VIIand ADA EEOC file information is restricted until after the charging party has filed a lawsuit.85

The EEOC’s position that the target of an investigation should not be provided with informationfrom an open agency investigation file because it might hamper an ongoing investigation hasbeen upheld by the courts in the FOIA context.86 For example, in J.P. Stevens & Co. v. Perry,the Fourth Circuit held that the premature disclosure of documents pursuant to an employer’searly FOIA request might have a “chilling effect” upon an ongoing investigation by, forexample, hindering the free flow of information and affecting the cooperation of witnesses.87

Information that would not impede an ongoing investigation, however, may be revealed to anemployer during an ongoing investigation at the discretion of the EEOC investigator, yet anotherreason to maintain a cooperative, working relationship with the investigator.88

With regard to information pertaining to individual ADEA and EPA charges, neither theADA nor the EPA contains confidentiality provisions like those found in Title VII.89 Therefore,disclosure of the EEOC files under these statutes is governed by the EEOC’s regulations underFOIA, the Privacy Act of 1974, and the ADEA.90 Access to an employer’s confidential

79 5 U.S.C. § 552(b).80 EEOC LITIGATION at 93.81 Id. at 94. For specific information on filing an FOIA request with the EEOC, a reference guide is availableat http://www.eeoc.gov/foia/handbook.html (last visited October 27, 2008).82 See 5 U.S.C. §§ 552(a)(2), (5); see also 29 C.F.R. §§ 1610.4, 1610.18.83 EEOC LITIGATION at 89.84 Id., n. 24.85 See, e.g., Compliance Manual §§ 83.4(b), 83.5(d).86 EEOC LITIGATION at 91(citations omitted).87 710 F.2d 136, 142-43 (4th Cir. 1983).88 EEOC LITIGATION at 91.89 Id. at 92; see also 29 U.S.C. § 621 et seq.90 EEOC LITIGATION at 92-93.

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information via a FOIA request in an ADEA case was recently addressed in Venetian CasinoResort, L.L.C. v. E.E.O.C., 530 F.3d 925 (D.C. Cir. 2008). In this case, the D.C. Circuit enjoinedthe EEOC’s disclosure of certain documents (designated as “confidential”) obtained from theVenetian Casino during an EEOC investigation of an age discrimination claim. The Courtreversed and remanded the district court’s earlier ruling which held that the EEOC’s disclosurepolicy and practice did not violate federal law even if it allowed disclosure of trade secrets orother confidential information to third parties without prior notice to the employer. The Courtnoted there were two conflicting, “irreconcilable” EEOC policies: (1) the EEOC’s ComplianceManual allowing the EEOC to disclose confidential information to plaintiffs or other third partieswithout notifying the submitter in advance of the disclosure; and (2) the EEOC’s regulationsimplementing the FOIA which prohibit the EEOC from disclosing confidential information tothird parties without notifying the submitter before the disclosure.91

The Court held:

[W]e remand this case to the district court to enjoin theCommission from disclosing Venetian’s confidential informationwithout adhering to the notice and other requirements of theagency’s regulations implementing the FOIA. The EEOC’s policyof permitting disclosure of confidential information withoutnotifying the submitter is “arbitrary and capricious” in violation ofthe Administrative Procedures Act (APA) because the disclosurewithout notification policy is inconsistent with the EEOC’s ownpolicies under the Freedom of Information Act (FOIA), whichrequire notification to a submitter before any confidential or otherinformation is disclosed. If and when the EEOC provides anadequate justification for the conflict between its policies, theinjunction may be dissolved.92

The Venetian ruling suggests that unless the EEOC provides an “adequate justification”reconciling its inconsistent pre-disclosure notification policies in such cases, it must notify theemployer before disclosing the employer’s confidential information to a charging party or thirdparty. With such notification, the employer can seek judicial relief prior to disclosure. TheVenetian case underscores the importance of an employer designating as “confidential” anyproprietary information disclosed to the EEOC during an investigation. Additionally, asdiscussed earlier, an employer should seek guidance from the EEOC as to the agency’s plan forhandling any confidential disclosures in advance of making such disclosures and work with theagency towards an agreement for the treatment of such disclosures to prevent or limit thedissemination of confidential information.

91 530 F.3d. at 935.92 Id.

EEOC INVESTIGATIONS: EFFECTIVE EMPLOYER STRATEGIES

Responding to Discrimination Investigations

and Prevailing in Claims

Tuesday, April 28, 2009

Teresa R. Tracy, Esq. Berger Kahn, A Law Corporation 4551 Glencoe Avenue, Ste. 300

Marina del Rey, CA 90292 (310) 821-9000, x717

ttracy@bergerkahn.com

© 2009 Berger Kahn, A Law Corporation 2

II. STRATEGIC USE OF PRIVILEGES IN RESPONDING TO EEOC’S DISCOVERY REQUESTS AND OBTAINING DISCOVERY FROM EEOC

A. Responding to EEOC’s Discovery Requests

Rapid internal investigations can be critical in developing the strategy for defending a collective or class action. However, they raise numerous potential problems related to preserving privileges.

Furthermore, it is not uncommon for the EEOC to request information and documents that would otherwise be considered private and personal, perhaps even subject to protection under various statutory or judicially-created privileges. Thus, a response to such a request should strategically consider whether, when, and how to assert these privileges.

1. Protect Employer’s Privileges

One of the first decisions in any internal investigation is whether and how to conduct the investigation with respect to protections offered by the attorney-client privilege and work product doctrine.

General Counsel and outside counsel should be consulted on this important issue. Assuming that the decision is made to take advantage of all possible protections, the investigation must be carefully structured to avoid losing the protections through inadvertent discussions and disclosures. This will generally mean that counsel and their staff (whether inside or outside the company) will be involved in developing, analyzing, discussing, and presenting the information.

It is likely that at some point in the administrative stage or later litigation, some or all of the information developed will be disclosed to the EEOC and perhaps even the other side. While this may require at least a partial waiver of the protections afforded by the attorney-client privilege, attorney work product should be carefully protected. Thus, it is important to include the person identified as the person who will ultimately testify about the information in the development of the information.

The most likely participants in the investigation include:

1. Internal company resources with critical expertise who will make good witnesses, if necessary (e.g., Human Resources, Payroll, IT)

2. Consultants and testifying experts

3. Subject matter experts

Discussions with and among these individuals must be conducted so as to protect against losing the privileged status of the discussion.

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Furthermore, while the “advice of counsel” defense may serve to blunt the effect of the EEOC’s (or later, an employee/plaintiff’s) attack on the reasons for the employer’s decisions and perhaps serve as the basis for arguing that punitive damages should not be awarded, the use of this defense may waive the attorney-client privilege even as to trial counsel. Thus, this issue should be carefully considered in deciding who as counsel should be involved in the investigation and advice, the jurisdiction in which any action may be litigated, and the likelihood that the “advice of counsel” defense will be used.

Cases that have considered the “advice of counsel” defense include: » In re Seagate Technology, LLC, 2007 U.S. App. LEXIS 19768 (Fed. Cir. 2007)(as

a general proposition, asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel)

» Informatica Corp. v. Bus. Objects Data Integration, Inc., 454 F.Supp.2d 957 (N.D. Cal. 2006)(waiver applied to trial counsel)

» Collaboration Props., Inc. v. Polycom, Inc., 224 F.R.D. 473, 476 (N.D. Cal 2004); Ampex Corp. v. Eastman Kodak Co., 2006 U.S. Dist. LEXIS 48702 (D. Del. July 17, 2006)(waiver not extended to trial counsel)

» Intex Recreation Corp. v. Team Worldwide Corp., 439 F.Supp.2d 46 (D.D.C. 2006); Beneficial Franchise Co., Inc. v. Bank One, N.A., 205 F.R.D. 212 (N.D. Ill. 2001); Micron Separations, Inc. v. Pall Corp., 159 F.R.D. 361 (D. Mass. 1995)(waiver extended to trial counsel only for communications contradicting or casting doubt on the opinions asserted)

» Nguyen v. Excel Corp., 197 F.3d 200 (5th Cir. 1999)(employer contended that it consulted with its attorneys regarding the obligations imposed upon it by the FLSA, but it had not asserted and would not assert reliance on advice of counsel as a predicate for its good faith beliefs; court found that privilege had been waived and ordered limited depositions of both the trial counsel and in-house counsel based on the employer’s failure to object to questions designed to elicit privileged information and failure to halt executive/deponents’ responses to all such questions, and one executive indicated that the employer had solicited advice equally from these attorneys)

» Scholtisek v. Eldre Corp., 441 F.Supp.2d 459 (W.D.N.Y. 2006)(employer’s in limine motion to preclude the use of any testimony concerning certain conversations between its former human resources manager and its former executive vice president was denied where the statements were made in response to the human resources manager’s inquiry concerning certain wage matters on behalf of a particular employee; former vice president had responded that she was told that the handbook had been gone over by the company’s attorneys and

© 2009 Berger Kahn, A Law Corporation 4

everything in it was legal)

» Newman v. Countrywide Home Loans, Inc., 144 Lab. Cas. (CCH) P34, 368; (N.D.Tex. 2001)(employer denied that its conduct was willful and asserted a defense of good faith based on the advice of counsel; both its assertion of this defense and its disclosure of its attorney’s opinion letters constituted waiver of the attorney-client privilege insofar as it related to communications to or from counsel seeking and giving advice with respect to the exempt or non-exempt status of account executives and the employer was thus ordered to produce documents relating to the methodology or formulae used to classify the employer’s employees and documents used or relied upon in determining that the plaintiff’s position as an account executive was an exempt position)

» Dawson v. New York Life Ins. Co., 901 F.Supp. 1362 (assertion of advice of counsel defense to claim to violation of FLSA resulted in waiver of privilege as to certain discovery)

Tips for Establishing and Maintaining Privileged Status

• Appropriately mark privileged documents • Maintain privileged documents in a confidential manner • Include counsel in interviews and discussions • Be careful of non-privileged discussions • Have preliminary database construction and manipulation performed by non-

testifying personnel at direction of counsel • Identify who will make and receive reports, and what type of report will be made Discrimination laws include non-retaliation provisions. Therefore, make sure that

everyone involved in the investigation is familiar with these provisions. In particular, when involved in EEOC investigations initiated by one of the Commissioners or a class-based claim, do not attempt to identify the employee(s) who were the basis for initiating the complaint.

Plan the scope of the investigation. Most often, the investigation will first focus on the allegations of any complaint. However, if concerns arise during the scope of the initial investigation that there may be additional violations, decide whether and to what extent to expand the investigation. Be careful that any expanded investigation is appropriately insulated from the original investigation and that it, too, is conducted in a way so as to maximize the availability of the attorney-client privilege and the work product doctrine. Do not assume that a “self-critical analysis” privilege will apply; many courts have not recognized such a privilege, and those that have recognized it have done so in limited contexts.

© 2009 Berger Kahn, A Law Corporation 5

The investigation will almost certainly include the review of documents (e.g., personnel files, medical records), training given, and systems. If an area is lacking, consider what other information is available to “fill in the gaps.”

Prepare a witness interview outline for use at the various levels and types of employees who will be interviewed. Include non-retaliation language. Make sure that the interview focuses the questions on the facts that will be important for the defense of the case.

Counsel should be involved in making reports so as to maximize available protections. It is more important in class actions to keep upper management advised due to the larger potential damages and implications for the company’s manner of conducting its business. The person(s) designated to receive the reports should be cautioned about ways to avoid waiving any privilege protections.

The way in which reports are delivered can also be important. For example, where there is the likelihood of liability and high damages, it may be better to make informal, oral reports particularly if the problem is not likely to be remedied so as to minimize the possibility of a willful violation being found. Reports should be carefully worded to avoid conclusory language that will bury the company if it turns out that the report must be – or is inadvertently – disclosed.

Sample cases in which privilege issues have arisen:

» United States v. BDO Seidman, LLP, 492 F.3d 806 (7th Cir. 2007) (In the context of an IRS attempt to enforce administrative summonses against an accounting firm that allegedly failed to disclose potentially abusive tax shelters that it promoted, the court reviewed whether the attorney-client privilege was maintained through the common interest doctrine. The common interest doctrine is really an exception to the rule that no privilege attaches to communications between a client and an attorney in the presence of a third person and, in effect, extends the attorney-client privilege to otherwise non-confidential communications in limited circumstances, i.e., where the parties undertake a joint effort with respect to a common legal interest, and the communication is made to further an ongoing enterprise. Here, the memo in question was originally addressed to the company’s outside counsel from a company employee and requested advice on a legal question. The memo was subsequently forwarded to a different law firm. The company successfully argued that it was forwarded as part of the company’s effort to coordinate with the second firm regarding a common legal position that the company and the second firm would later communicate to their joint clients and that the document remained privileged despite the fact that the second firm voluntarily disclosed the memo in response to an IRS subpoena.)

The First, Federal, Fourth, Second, Ninth and Seventh Circuits have held that litigation need not be actual or imminent for communications to be within the common interest doctrine; the Fifth Circuit has held otherwise.

© 2009 Berger Kahn, A Law Corporation 6

» Herrman v. Gutterguard, Inc., 199 Fed. Appx. 745 (11th Cir.2006) (defendant in FLSA collective action successfully disqualified the plaintiffs’ lead counsel and his firm on the ground that a conflict of interest existed because he had previously worked at an employment defense firm which had performed a compliance audit for the parent company and affiliated companies which were now the defendants in the case)

» In re Qwest Communications International, Inc., 450 F.3d 1179 (10th Cir.

2006)(court declined to adopt a “selective waiver rule” which would have continued the attorney-client privilege and work product protection to certain documents, despite the company’s voluntary disclosure to the SEC and DOJ).

The First, Second, Third, Fourth, and D.C. Circuits have also rejected the “selective waiver rule.”

» Pichler v. UNITE, 446 F.Supp.2d 353 (E.D.Pa. 2006) (The Driver’s Privacy

Protection Act of 1994, 81 U.S.C.S. §§ 2721-2725 does not allow a person to acquire personal information from the motor vehicle records for the purpose of finding and soliciting clients for a lawsuit. In order for the litigation exception to apply, there must be an actual investigation, litigation must appear likely at the time of the investigation, and the protected information acquired during the investigation must be of “use” in the litigation, meaning that there is “a reasonable likelihood that the decision maker would find the information useful in the course of the proceeding.”)

» Colindres v. Quietflex Mfg., 228 F.R.D. 567 (S.D.Tex. 2005) (In this

discrimination class action, the defense expert sent defense counsel an unsolicited email discussing two specific questions which the court had asked. The expert subsequently submitted his supplemental report that addressed one of the two questions he discussed in the email. The email addressed the expert’s understanding of the payroll data and the ability to use that data to calculate back pay, while taking into consideration individual variations caused by the piece rate wage. Defendants offered his expert testimony on the issue of calculating back pay. The court held that the email was not privileged and ordered that it be disclosed.)

B. Providing Information on “Confidential” Basis

The EEOC has taken the position that information and documents that are provided to it can be disclosed to the charging party, and at least under Title VII, has prevailed on this issue. EEOC v. Associated Dry Goods Corp., 449 U.S. 590 (1981)(EEOC can disclose information from a charging party’s file to that party, but not information from the files of other charging parties who had brought claims against employer, because limited disclosure enhanced EEOC’s

© 2009 Berger Kahn, A Law Corporation 7

ability to resolving charges through informal conciliation and negotiation, but Court noted that issues concerning the Trade Secrets Act and the FOIA were not before the Court).

The courts have grappled with the issue of what information an employer can withhold from providing to the EEOC on confidentiality grounds. In general, unless the employer can prove a compelling reason, e.g., trade secret status, the courts will require production. However, an employer should, if the information is sufficiently sensitive, request a confidentiality agreement with the EEOC. Although the EEOC itself is reluctant to enter into such agreements, it is a good first step to requesting protection from the courts. The courts have demonstrated their willingness to review confidentiality issues on specific items of information, and when they believe it to be appropriate, to require the EEOC to enter into such confidentiality agreement on specified items of information.

Cases in which the courts have considered confidentiality arguments include:

» University of Pennsylvania v. EEOC, 493 U.S. 182 (1990) (employer in Title VII case required to disclose peer review materials from an EEOC subpoena where statutory language was broad, precedent for the privilege was nonexistent, and disclosure did not infringe the right of “academic freedom” because the subpoena was content neutral).

» Adkins v. Christie, 488 F.3d 1324 (11th Cir. 2007) (medical peer review privilege did not apply in § 1983, 1981, 1985 racial discrimination case; by arguing that the physician fell below its standards, the hospital put other peer reviews at issue)

» EEOC v. HWCC-TUNICA, Inc., 2008 U.S. Dist. LEXIS 85830 (N.D. Miss. 2008) (EEOC filed motion to compel production pursuant to a demand for production of records; request sought “any and all documents used to respond to the Complaint filed in this action” as well as documents from non-party personnel files. The court found that the former was not overbroad nor did it impinge on the attorney-client privilege or attorney work product to the extent that the company internally investigated claims of discrimination as much to resolve them as to prepare for anticipated litigation but excluded from production confidential communications between defense counsel and client and documents prepared in anticipation of litigation subject to preparation of privilege log as to the latter, the court declined to require production of the entire personnel files of the employer’s former human resources personnel on the ground that it was highly unlikely that they would contain relevant information and the EEOC had contact information for these individuals)

» EEOC v. CRST Van Expedited, Inc., 2008 U.S. Dist LEXIS 28113 (N.D. Iowa 2008) (in pattern and practice litigation, the employer successfully argued that the EEOC was not entitled to the name of an employee and the name of the alleged harasser unless and until the employee indicated an intent to be included in the

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litigation)

» EEOC v. Sheffield Financial LLC, 2007 U.S. Dist. LEXIS 43070 (M.D.N.C. 2007) (in this national origin discrimination case, the employer sought discovery of medical information relating to the employee’s health care, mental health treatment, counseling, and similar medical information; the EEOC resisted, claiming that the request was overbroad, irrelevant, and that the employee’s mental state and medical history were not at issue because the EEOC was only seeking “garden-variety” compensatory damages; the court had little difficulty finding the requested discovery to be relevant to the issue of damages because the employee was seeking damages for “past and future emotional distress, humiliation, anxiety, inconvenience, and loss of enjoyment of life;” that there was no privilege that applied, and that any privacy concerns were adequately addressed through a consent protective order)

» Martinez v. EEOC, 2004 U.S. Dist. LEXISS 23182 (W.D. Tex. 2004) (employee sought the EEOC’s entire investigative file of his administrative charge against his former employer; EEOC produced “public information” but withheld 17 pages on the ground that it was privileged on the ground of personal privacy and confidential source (because the investigator had promised two witnesses confidentiality); court upheld withholding everything but two envelopes)

» Venetian Casino Resort, L.L.C. v. EEOC, 530 F.3d 925 (D.C.C. 2008) (In response to subpoena from EEOC in an ADEA case, employer submitted commercial information that it deemed and identified as confidential. The EEOC subsequently subpoenaed more documents. When the EEOC later denied the employer’s petition to revoke the subpoena, this case ensued. After finding that the details of the EEOC’s disclosure policy were unclear on the record before it, the court nevertheless concluded that the record left no doubt that the EEOC had the policy of disclosing confidential information without notice to the submitter. The court remanded the case to the district court to enjoin the EEOC from disclosing the employer’s confidential information without adhering to the notice and other requirements of the EEOC’s regulations implementing the FOIA. The EEOC ran into trouble in this case because it had two irreconcilable policies, one of which – the Compliance Manual (Section 82) relating to the Privacy Act – apparently enabled the EEOC or, for that matter, any person asking for information, to circumvent the other regulation (29 CFR § 1610.19, et seq.) that implemented the FOIA and required pre-release notification for confidential commercial information.)

» EEOC v. Bessemer Group, Inc., 105 Fed. Appx. 411 (3rd Cir. 2004) (employer lost argument that it should not have to comply with EEOC subpoena because it asserted that its practices were legal and thus the absence of a statutory violation rendered the purpose of the investigation illegitimate; court agreed with EEOC that more information was necessary before a dispositive legal determination

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could be made as to whether the employer was in compliance with law)

» EEOC v. Ocean City Police Department, 820 F.2d 1378 (4th Cir. 1987) (en banc)(quashing subpoena relating to Title VII charge because the charge was untimely)

» EEOC v. Group Health Plan, 212 F.Supp.2d 1094 (E.D. Mo. 2002) (quashing subpoena because the charge against the employer did not involve practices covered by the ADA)

» EEOC v. WinCo Foods, Inc., 2006 U.S. Dist. LEXIS 64521 (E.D. Cal. 2006) (court rejected EEOC’s argument that employer failed to exhaust its administrative remedies by failing to object to subpoena and therefore waived objections; court held that compliance with 29 CFR sec. 1601.16(b) – which provides that any person served with subpoena who intends not to comply shall petition the issuing director – was not jurisdictional and inconsistent with 29 USC 161 which made such a petition discretionary)

This does not mean that an employer cannot take action where an employee violates the privacy rights of others. See, e.g., Vaughn v. Epworth Villa, 537 F.3d 1147 (10th Cir. 2008)(plaintiff filed EEOC charge alleging she was discriminatorily disciplined for errors; she later submitted the copy of the redacted medical record to prove her point. When the employer later found out about this disclosure, it terminated her. The Tenth Circuit held that the plaintiff engaged in a “protected activity” when she submitted the unredacted medical records to the EEOC. However, because she was unable to show that others who had violated the employer’s policy – and possibly federal law protecting the confidentiality of medical records – had not been terminated, she failed to prove that her termination was unlawful retaliation.)

C. Deliberative Process Privilege

This privilege protects certain predecisional, internal agency information, such as recommendations and analysis, from disclosure during litigation. The government may withhold evidence in litigation in any of the following circumstances: (1) where a statute makes certain documents or information confidential; (2) where a privilege or objection is available to any other litigant under the Federal Rules of Civil Procedure (for example, relevance, undue burden, or attorney-client privilege); or (3) where a special privilege exists unique to the government – such as the deliberative process privilege.

The EEOC typically asserts this privilege in litigation in order to protect the confidentiality of internal, deliberative material, such as documents containing the analyses, opinions, or recommendations of enforcement unit staff, and attorney memoranda containing analysis or recommendations.

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There are few cases that extensively address this privilege.

» EEOC v. American International Group, Inc., 1994 U.S. Dist. LEXIS 9815 (S.D.N.Y. 1994) (the court noted that the privilege only protects information which is predecisional and deliberative. It does not protect factual findings or factual material which may be severed from the deliberative portion of a report)

» EEOC v. Fina Oil and Chemical Co., 14 F.R.D. 74 (E.D. Tex. 1992) (court noted that since the purpose of the privilege is to protect the full and free exchange of information in the agency, the test is whether disclosure would serve only to reveal the evaluative process by which a member of the decision-making chain arrived at his/her conclusion)

» EEOC v. Albertson’s LLC., 2007 U.S. Dist. LEXIS 32003 (D. Col. 2007) (EEOC’s assertion of this privilege in response to a Rule 30(b)(6) deposition notice was found to be premature where not a single question had yet been asked)

» EEOC v. Continental Airlines, 395 F.Supp.2d 738 (N.D. Ill. 2005) (example of case in which the employer argued that even where the privilege is found to exist, its need for the information outweighs the need for the privilege)

Although EEOC attorneys can assert this privilege in litigation on their own authority (for example, in responses to discovery requests or when defending depositions), the privilege must be formally asserted by the head of the EEOC whenever the applicability of the privilege becomes an issue before a court (for example, in connection with motions to compel, for protective orders, or to quash subpoenas.

D. Work-Product Doctrine

In EEOC v. Carrols Corp., 215 F.R.D. 46 (N.D.N.Y. 2003), the court ruled that questionnaires which the EEOC had sent to the employer’s employees using a database supplied by the employer constituted the EEOC’s work product, even though the questionnaires were completely filled out by the individuals and simply returned to the EEOC. Furthermore, the EEOC had offered to supply the employer with witness summaries that would serve to identify the witness and provide at least some insight into the witnesses’ likely testimony. Thus, although the EEOC was ordered to provide the summaries that it had offered, but was not ordered to produce the actual questionnaires. Since the court made a ruling based on this doctrine, it did not address the EEOC’s argument that the claimant communications were protected by the attorney-client privilege; however, it commented that it “is not at all clear that the EEOC has satisfied its obligation to factually demonstrate each of the recited elements” to successfully invoke that privilege.

On another matter in dispute, the Carrols court ordered the EEOC to ascertain whether it had developed statistical data relating to the incidence of sexual harassment or retaliation

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complaints in workforces comparable in size, turnover rate, dispersion or working conditions similar to that of the employer, rejecting the EEOC’s work product doctrine argument.

E. Attorney-Client Privilege

The EEOC can also assert an attorney-client privilege.

Numerous cases have held that the EEOC bears the burden of establishing which allegedly aggrieved parties it represents and the bases upon which the EEOC claims to have an attorney-client relationship with the party. This can involve an evaluation of the “client’s” indication of any desire for such a relationship, as well as when such a relationship was actually established.

Some cases that have reviewed this question include:

» EEOC v. Int’l Profit Assocs., 206 F.R.D. 215 (N.D. III. 2002) (the court found that certain allegedly aggrieved employees had established an attorney-client relationship with the EEOC. In doing so, however, the court did not rely merely on the fact that the EEOC claimed that the particular employees were among the allegedly aggrieved parties; instead, the court noted that the women had “contacted the EEOC via returned questionnaires or telephone calls” and that “each woman identified as a class member was asked if she wished the EEOC to act on her behalf in this lawsuit and each class member replied in the affirmative.”)

» EEOC v. Johnson & Higgins, Inc., 1998 U.S. Dist. LEXIS 17612, (S.D.N.Y. 1998) (holding that in connection with an EEOC enforcement action “[w]hether a privileged attorney- client relationship exists rests upon the client’s intent to seek legal advice and the client’s belief that he is consulting an attorney. . . . The burden of sustaining the privilege is on the proponent - here, the EEOC”)

» EEOC v. Chemtech Int’l Corp., 1995 U.S. Dist. LEXIS 21877 (S.D. Tex. 1995) (finding that an attorney-client relationship existed between an aggrieved party and the EEOC based on an affidavit from the client stating that he believed that an attorney-client relationship existed)

» EEOC v. Georgia-Pacific Corp., 1975 U.S. Dist. LEXIS 15377 (D. Ore. 1975) (finding an attorney-client relationship based on the contents of the client’s letters clearly indicating that she was contacting the EEOC litigation center for expert legal advice and that she expected her communications to remain confidential). See also, EEOC v. HBE Corp., 64 Fair Empl. Prac. Cas. (BNA) 1518 (E.D. Mo. 1994), rev’d in part on other grounds, 135 F.3d 543 (8th Cir. 1998); EEOC v. Collegeville/Imagineering Ent., 2007 U.S. Dist. LEXIS 3764 (D. Ariz. 2007)

» Equal Employment Opportunity Comm’n v. Morgan Stanley & Co., Inc., 206

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F.Supp.2d 559, 561 (S.D.N.Y 2002) (“[t]he case law is not definite regarding the moment when the EEOC enters into an attorney-client relationship with the members of the class it seeks to represent.” The United States Supreme Court has made clear that any order limiting communications between parties and potential class members should be based on “a clear record and specific findings that reflect a weighing of the need for a limitation and the potential interference with the rights of the parties.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 101-02, 101 S. Ct. 2193, 68 L. Ed. 2d 693 (1981))

» EEOC v. Albertson’s Inc., 2006 U.S. Dist. LEXIS 73278 (D. Col. 2006) (the court considered a motion by the EEOC to prohibit defense counsel from contacting allegedly aggrieved parties outside of the presence of the EEOC’s lawyers. It denied the EEOC’s request. The EEOC’s actions merely in filing an enforcement case and identifying a group of people as being among the allegedly aggrieved parties, without more, is insufficient to create an attorney-client relationship between the allegedly aggrieved parties and the EEOC. The case cites numerous prior cases which will be helpful to defense counsel on this issue)

» EEOC v. TIC, 90 Fair Empl. Prac. Cas. (BNA) 737 (E.D. La. 2002) (considered the EEOC’s motion for protective order in which it asked that the employer be precluded from engaging in ex parte communications with all potential claimants in the action. The EEOC argued that although it did not have an attorney-client relationship with all potential claimants, it was entitled to invoke the attorney-client privilege and the American Bar Association’s Model Rule of Professional Conduct 4.2 to prevent the employer from talking with potential claimants because the EEOC represents all claimants’ interests in this action. After reviewing prior judicial decisions on this issue, the court concluded that the EEOC had simply not provided evidence to support its position. In addition, since the EEOC was suing with respect to applicants who had not been hired, the fear of retaliation was minimal)

III. WHEN CHARGES ARE NOT SETTLED EARLY

A. Constraints on Agency Investigations

The EEOC has an arsenal of weapons at its disposal if the charge does not resolve at a very early stage. Some of the most common are further requests for information, and interviews.

Interviews of claimants and potential claimant-supportive witnesses can either be done on-site or off-site, and either in person or by telephone. Thus, an employer should consider who is likely to be contacted by the EEOC and whether or not to approach these individuals about the potential interview. It may be helpful to let the person know that the EEOC – a governmental agency – may be contacting them and an overview of the individual’s rights in such a circumstance, including the right not to talk to the EEOC and the right to have an attorney paid for by the employer present during any such interview. However, such discussions must be done

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very carefully and should be documented, so as to avoid charges that the employer was interfering in the EEOC’s investigation or implicitly discouraging the individual from talking to the EEOC or threatening retaliation for doing so.

If the EEOC wants to schedule an on-site visit, including interviews, the employer has more control of the situation. It can, and should, attempt to arrange the visit and interviews to have minimal disruption on its operations. It can, and should, conduct its own “on-site” inspection prior to the EEOC’s arrival, to ensure that required posters are actually posted and in good condition, and that objectionable materials are removed. Furthermore, if the EEOC identifies management-level individuals (the employer should consider at what level it will designate positions as having this status) on its interview list, the employer should have pre-interview discussions with those individuals to advise them that the company has the right to have its attorney present and that the company’s decision to do so can also benefit the individual during the interview by clarifying questions, etc.; to go over issues and facts that the EEOC is likely to ask about; and to remind the individual of the instruction to tell the truth. The EEOC does have the authority to conduct unannounced on-sites; this is a bad sign for the employers, since it signals that the EEOC believes the employer is being unreasonably uncooperative in the investigation.

The interview should be set up in a confidential place. We prefer someplace that is acceptably comfortable yet away from an area where the EEOC interviewer is likely to “run into” employees, since the interviewer often takes the opportunity to conduct impromptu interviews.

The employer should make copies for itself of any documents inspected by the EEOC during the visit.

In our experience, the EEOC is generally cooperative in scheduling on-site visits and the interview schedule suggested by the employer, as long as the employer does not appear to be unduly uncooperative or appearing to unreasonably be delaying the visit.

The employer should be aware that the EEOC could widen the investigation if it has reason to believe that there are violations beyond what is alleged in the charge.

During the investigation stage, the EEOC can issue subpoenas. Employer actions that lead to such a step should be carefully considered because (a) the need for a subpoena usually indicates that the EEOC believes the employer is not cooperating, thus increasing the level of suspicion on the part of the EEOC; (b) it shows the EEOC is committed to the investigation. There are times that an employer may believe that a subpoena is advisory because of the nature of the information that the EEOC is requesting, i.e., to protect the employer in cases of severe employee unhappiness that information is being provided. In such situations, the employer should have a frank discussion with the EEOC investigator.

In the event a subpoena is issued, the employer is required to comply, just as with a subpoena issued in other litigation. Under each of the laws enforced by the EEOC except two

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(the ADEA and the EPA), the employer can file a petition to revoke or modify the subpoena. Under the ADEA and EPA, these procedures are not an option and the employer’s only choice is to refuse to comply; this is likely to trigger an enforcement action, which is a public proceeding.

If the evidence obtained in an investigation does not establish that discrimination occurred, this will be explained to the charging party. A required notice is then issued, closing the case and giving the charging party 90 days in which to file a lawsuit.

If the evidence establishes that discrimination has occurred, the employer and he charging party will be informed of this in a letter of determination that explains the finding. The EEOC will then attempt conciliation with the employer. If the case is successfully conciliated, if a case has previously been successfully mediated or settled, neither the EEOC nor the charging party can go to court unless the employer fails to fulfill the terms of the settlement.

If the EEOC is not able to conciliate the case, it will decide whether to bring suit in federal court. If it decides not to sue, it will issue a notice closing the case and giving the charging party 90 days in which to file a lawsuit. In Title VII and ADA cases against state or local governments, the DOJ takes these actions.

Prior to filing litigation, charging parties are almost interviewed by one of the EEOC legal unit attorneys and, where practicable, other individuals who will have significant roles in the litigation as either witnesses or claimants will also be interviewed. Typically, the interviews are done in person and will explore the individual’s basis for recovery as well as other knowledge he/she may have relevant to the suit, such as information on the employer’s operations and employment practices and other individual and class claims. The EEOC attorney is also supposed to discuss with the claimant the relief to which he or she may be entitled (including the effect of any personal bankruptcy on such relief) and should obtain at least general information on back pay accrual, mitigation, and any pecuniary compensatory damages the claimant may have incurred. The EEOC attorney should also discuss the standards of obtaining nonpecuniary compensatory damages and the kinds of inquiries the employer will be entitled to make about the claimant if such damages are sought (e.g., obtaining testimony from the claimant and friends, family members, and medical professionals who may have information on subjects that may be normally private and sensitive to the individual; the possibility of a required physical or mental examination, etc.).

Although the EEOC brings suit to further the public interest in preventing employment discrimination, the considerations relevant to seeking compensatory damages are unique to each individual. Thus, claims for nonpecuniary compensatory damages should be made only for individuals who have given their express consent following discussion with the EEOC attorney regarding the possible consequences of such a claim.

Lastly, the EEOC attorney is supposed to explain during the interview the EEOC’s public interest role in the litigation, the possibility that the EEOC’s and the claimant’s interests may diverge during the litigation, and the claimant’s individual suit and intervention rights, if any. Thus, the claimant is informed that the EEOC may decide to act in a manner that the claimant

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believes is against his/her individual interests. If the individual has intervened in the suit, the individual will be able to pursue his/her individual interests separately if the EEOC’s interests diverge from the individual’s at any point. The individual has an unconditional right to intervene if done in a timely manner, but the court can deny intervention if the case has progressed substantially by the time the request for intervention is made.

In ADEA and EPA cases, the claimant is also informed that the EEOC’s suit will cut off any private right of action the claimant may have.

B. Resolution of Commissioner’s Charge

A Commissioner’s Charge under Title VII and the ADA is one that is initiated by one of the EEOC Commissioners. While the ADEA and EPA do not specifically refer to Commissioner Charges, the EEOC can conduct a “directed investigation” and litigation on its own initiative under those statutes, either concurrently with the processing of a charge or as a separate matter.

Such EEOC-initiated matters can be based on the whim of the Commissioner, but is typically filed when a Commissioner believes that an employer is in violation of the law. This can be triggered by reading something in the paper, or talking to someone in a social setting. Usually a Commissioner’s Charge will be focused on allegations of systemic violations. Under the EPA and the ADEA, the EEOC can conduct an investigation even in the absence of a charge.

Most typically, a field office will believe an employer is discriminating but no individual charge has been filed, so the office will obtain public information and submit it to a Commissioner; if the Commissioner agrees, he/she will sign off and return it to the field office, thus initiating a Commissioner’s Charge. Alternatively, the Commissioner or a field office personnel has been approached by a public interest group about a suspected systemic violation.

There is no legal significance to a charge as being the traditional charge or a Commissioner’s charge, but there is a very practical significance to the employer: a Commissioner’s charge signals a particular interest on the part of a Commissioner, so it is likely that the EEOC field personnel will take particular care to thoroughly investigate and prosecute the matter.

VI. WHEN MATTERS ESCALATE TO LITIGATION

Once the case is in litigation, the general rules of litigation apply. Counsel for the defense should take advantage of the regular discovery procedures, and should expect the EEOC to do the same. Thus, for example, defense counsel can notice a PMK deposition on specific issues, just as could be done in litigation against an entity that was not the EEOC. Defense counsel should, as a matter of routine, request the entire EEOC file under either a FOIA request or a production demand.

Title VII prohibits disclosure to the public of charges filed with the EEOC, and of information obtained during the EEOC’s investigation of the charges. This changes once

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litigation has been filed. After a lawsuit has been filed, the matter becomes a publicly-litigated case with the same potential for publicity as any other litigation.

Thus, an employer should seriously consider whether to resolve an EEOC charge prior to litigation being filed. Where particularly sensitive information is involved, resolution may be the wiser course of action.

EEOC attorneys are subject to the same ethical restrictions on disclosures as other attorneys. However, in appropriate circumstances, EEOC attorneys will respond to inquiries from the media. In addition, the EEOC now routinely issues a press release about new cases that it files. It also routinely issues a press release about case resolutions. In cases that have significant public interest implications, the EEOC may authorize a press conference, although such publicity is used sparingly.

A. Clas Litigation Involving the EEOC

1. No Rule 23 Compliance Required

The EEOC may either bring suit in its own name or intervene in a suit brought by a private plaintiff.

If the EEOC brings suit in its own name, class certification is not subject to Rule 23 certification procedures. In General Telephone Company of the Northwest v. EEOC, the Supreme Court upheld the EEOC’s authority to seek class-wide relief for victims of discrimination, without being restricted by the class action rules applicable to private litigants. The Court emphasized that when the EEOC files suit, it acts to vindicate the “overriding public interest in equal employment opportunity.” However, if the EEOC has already filed an action on their behalf, individual employees cannot sue on their own behalf. 29 U.S.C. § 216(b)-(c).

The above principles have several consequences for employers facing EEOC litigation and their defense counsel.

First, due to the lack of any need to meet Rule 23 requirements, (a) numerosity, “similarly situated” and other factors used in class certification have no applicability; (b) the “class” can be – and often is - very small; (c) the “class” can be – and often is – not well-defined; (c) the EEOC typically does extensive and invasive discovery to determine the definition and scope of the “class;” and (d) there is no opportunity to decertify the class.

Thus, if the EEOC intervenes in a case, it can easily turn a single-plaintiff case into a “class action,” albeit it one not subject to Rule 23.

Class actions can be filed under the Equal Pay Act, but they are subject to the FLSA class procedures that require each member to “opt in” by filing a written consent to be included in the action. 29 U.S.C. § 216(b).

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B. EEOC Intervention in Individual and Class Cases

Under both Title VII and the ADA, intervention is contingent on the EEOC’s certification that the case is of “general public importance.” Generally this means that the case directly affects a large number of aggrieved individuals, involves a discriminatory policy or practice requiring injunctive relief, or has potential for addressing significant legal issues.

Other factors relevant to intervention include:

1. The EEOC’s contribution to the success of the litigation. This is the most important secondary factor in the EEOC’s decision and can include personnel and financial resources, and it is of prime importance to defense counsel. EEOC intervention means that the resources of the federal government will be brought to bear against the employer.

2. Private counsel’s ability to litigate the case effectively without EEOC participation. This factor, while related to the factor above, can also include the attorney’s general competence as an attorney, related litigation experience, and financial resources. Even where private counsel is highly skilled and able to adequately fund the case, the EEOC may intervene if to do so significantly increases the likelihood of success in an important case, e.g., if the case is particularly large or complex, or if there is a need for injunctive relief beyond what is being sought by the private plaintiff(s). If the results of the private action are not likely to be affected by the EEOC’s participation, intervention becomes less likely.

3. Because it is in the EEOC’s interest for private attorneys to accept meritorious cases, the extent to which intervention in a particular case may encourage such private litigation (separate from the case at issue) is a factor in determining whether the EEOC will intervene.

4. Normally, intervention has to occur early in the case for the EEOC to play a significant role in the litigation. Thus, the timing of the intervention is a factor.

Prior to intervention, the EEOC also has an understanding with private counsel regarding the EEOC’s role, including personnel and financial commitments, litigation strategy, relief sought (including the value of the private plaintiff’s claims), and the EEOC’s nonconfidentiality policy on settlements. Where this understanding cannot be reached, the EEOC typically declines the opportunity to intervene, although it may participate as an amicus curiae.

The EEOC’s intervention in a case can turn a relatively simple case into a class action.

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Teresa R. Tracy is chair of Berger Kahn’s Labor & Employment Group. She has practiced exclusively in labor and employment law for 28 years and has extensive experience representing employers in wrongful termination, discrimination, harassment, wage and hour matters, class actions and traditional labor law. She also advises clients on compliance with the myriad of state and federal regulations governing employers. Ms. Tracy is the author of numerous articles. She has been selected six times by her peers as a Southern California Super Lawyer in the area of Labor and Employment. In 2005, the Los Angeles Daily Journal named her one of the “Top 75 Women Litigators”. J.D., Loyola University School of Law (310) 821-9000, x717 ttracy@bergerkahn.com