Seventh Circuit Rules That The EEOC Can Investigate Alleged Workplace Discrimination Even After a Charge of Discrimination Has Been Dismissed
By Jolianne S. Walters
On a matter of first impression, the Seventh Circuit Court of Appeals has ruled in EEOC v. Union Pacific R’R Co., 867 F.3d 843 (7th Cir. 2017), that the Equal Employment Opportunity Commission (“EEOC”) may continue an investigation after it issues a right-to-sue letter to a private party and even after the civil action brought on the basis of the right-to-sue letter has been terminated.
The underlying case giving rise to the Seventh Circuit’s opinion involved two entry-level African-American employees of Union Pacific Railroad Company (“Union Pacific”). After their probationary periods, both employees became eligible for possible promotion, attainable after taking a test. Although both employees applied to take the promotion test, neither was provided with the opportunity to do so. Instead, Union Pacific eliminated the employees’ entry-level positions and terminated their employment. Shortly thereafter, each employee filed a Charge of Discrimination with the EEOC alleging race discrimination.
During the course of its investigation, the EEOC requested additional information from Union Pacific which gave rise to a dispute between the EEOC and Union Pacific. The EEOC commenced an enforcement action against Union Pacific. While this action was eventually resolved, the EEOC contended that Union Pacific did not comply with the terms of the resolution. Simultaneously, the EEOC issued right-to-sue letters to the two complaining employees on their Charges. Following receipt of the right-to-sue letters, the employees filed a joint complaint in the United States District Court for the Northern District of Illinois alleging discrimination claims under Title VII. The complainants’ claims were eventually dismissed in Union Pacific’s favor on a motion for summary judgment, which was later affirmed by the Seventh Circuit in a separate action.
While the district court action was pending, the EEOC issued to Union Pacific a second request for information seeking company-wide information about employees who were similarly-situated to the complainants. Union Pacific refused the EEOC’s request and the EEOC moved to enforce the subpoena, which is the focus of the instant case. On this subpoena, Union Pacific challenged the legal authority of the EEOC to continue an enforcement action after issuing a right-to-sue letter and after the subsequent resolution of the complainants’ underlying charges of discrimination in their private lawsuits.
Question before the Court: As a matter of first impression in this Circuit, the Seventh Circuit was tasked to answer whether the EEOC is authorized by statute to continue investigating an employer after issuing a notice of right-to-sue to the charging individuals and the dismissal of those individuals’ subsequent civil lawsuits on the merits.
The Court’s Analysis: In answering this question in the affirmative, the Seventh Circuit, quoting the U.S. Supreme Court in Gen. Tel. Co. of Nw. v. EEOC, 446 U.S. 318 (1980), began with the premise that Title VII was amended in 1972 to provide the EEOC with the authority to sue employers as a means “to implement the public interest as well as to bring about more effective enforcement of private rights.” In so quoting, the Court reasoned that the EEOC’s critical role in preventing employment discrimination extends beyond the private charge filed by an individual.
To counter, Union Pacific argued that the EEOC’s investigatory authority, nonetheless, ends when the charging individual commences a lawsuit on their discrimination claim. Recognizing that Union Pacific’s argument presented a matter of first impression, the Court looked to authority in other jurisdictions and found that the circuits were split. For example, the Fifth Circuit, in EEOC v. Hearst, 103 F.3d 462 (5th Cir. 1997), has held that the EEOC’s authority to investigate a charge ends when it issues a right-to-sue letter. By contrast, the Ninth Circuit, in EEOC v. Fed. Express Corp., 558 F.3d 842 (9th Cir. 2009), held that the issuance of a right-to-sue letter does not strip the EEOC of authority to continue to process the charge. On review of these decisions, the Seventh Circuit declined to follow the Fifth Circuit’s precedence because it determined that the Fifth Circuit was “motivated by speed” to resolve EEOC charges, which—the Court reasoned—was not a sufficient basis to divest the EEOC of its statutory authority to independently investigate charges of systemic discrimination. In so holding, the Court found that Title VII does not support an interpretation which restricts the EEOC’s enforcement authority.
The Court found further support for its holding in U.S. Supreme Court decision, EEOC v. Waffle House, Inc., 534 U.S. 279 (2002). In that case, the Supreme Court held that Title VII “clearly makes the EEOC the master of its case and confers on the agency the authority to evaluate the strength of the public interest at stake.” As additional support, the Court also looked to the EEOC’s Regulations, which expressly contemplates the continuation of an investigation after the issuance of a notice of right to sue. The EEOC Regulations provide that the “issuance of a notice of right to sue shall terminate further proceeding of any charge…” unless the EEOC determines that “it would effectuate the purpose of Title VII…to further process the charge.” 29 C.F.R. § 1601.28(a)(3). Thus, the Court concluded that the issuance of a right-to-sue letter does not bar further investigation by the EEOC of the underlying charge. Additionally, by the same reasoning, the Court also concluded that the termination of the charging parties’ lawsuit has no bearing on the EEOC’s authority to continue its investigation.
What this means for employers: The Court’s holding could potentially lead to an employer having to both defend itself in an employment discrimination lawsuit while being subject to an EEOC investigation based upon the same underlying facts in the lawsuit, even if the lawsuit is resolved in the employer’s favor. Should you have any questions regarding how the Court’s holding could impact your organization, please contact Maureen Murphy at [email protected] or 312-506-4475.