What is an employer to do when an EEOC investigation goes beyond the bounds of reasonableness? Or when the EEOC's "conciliation" efforts seem more like a joke that a good-faith effort to resolve the claims. There have been a smattering of decisions in the past few years by courts across the country answering this question in a variety of different ways--some more favorable to the EEOC and others strongly in favor of the employer. For an excellent overview of this line of cases, see this post at the Hunton Employment and Labor Perspectives Blog.
A recent decision from the Middle District of North Carolina addressed a case involving a particularly disturbing set of facts. The timeline is complicated and, frankly, a bit depressing, so I'll summarize to spare you the gory detail.
While investigating a temporary staffing agency used by the employer, the EEOC came across what it contended was evidence that the employer favored Hispanic over non-Hispanic employees in its hiring decisions.
The EEOC filed a charge and initiated its own investigation (there was no Charging Party as is the norm). The investigation went on for more than four years, during which time the employer cooperated in full with the many, many requests for information propounded by the EEOC. To give you some perspective on the scope of the requests, the EEOC asked for and received so much data about the employer's workforce that it actually created its own database to house all of that information.
Finally, after years of investigation stops and starts, the EEOC issued a Letter of Determination in which it found that there was cause to believe that the employer had engaged in unlawful discrimination. The Letter, however, contained no explanation of the reasons for the EEOC's determinations.
The parties scheduled to meet for the mandatory conciliation but the EEOC canceled it when it was unable to provide the employer with any kind of damages calculation--kind of a necessary element for any productive settlement discussion. The EEOC eventually rescheduled the meeting but still could not produce the numbers requested by the employer or even identify all of the employees it contended had been affected by the allegedly discriminatory practices.
You'd think that, with that big 'ole database that it created, this wouldn't be such a difficult task!
The story goes on but, as promised, I'll spare you the rest. Needless to say, the EEOC was not deterred and eventually filed a complaint in federal court.
The employer moved to dismiss the complaint on several grounds. The court rejected most of the employer's arguments but did limit the size of the potential class. More interesting, though, was the court's discussion of the employer's motion for summary judgment, which was brought pursuant to the doctrine of laches.
This particular defense permits dismissal of a claim where the plaintiff unreasonably delayed in bringing its claim and where the delay prejudiced the defendant. Here, the court agreed that the EEOC had, indeed, been unreasonable in pursuing its claim. (Amen!) But the court found that there was not enough of a record to determine whether the employer had been prejudiced because of the delay.
I'm sure that there is not an employer in this country who would reach the same conclusion after reading the facts of the case but, putting that aside, . . . I'll turn to the good news. The court ordered the parties to engage in limited discovery only on the issue of prejudice. Once discovery on that issue is complete, the employer will have the opportunity to renew its motion seeking dismissal under the doctrine of laches. I'll be interested to see whether the case makes it to that stage--but I'd be willing to wage that it does. The EEOC tends not to let go once it gets its teeth sunk in. Still, I'll keep my fingers crossed that the employer makes out better on its renewed motion and maybe, if all goes really well, that it is awarded fees for its troubles.
EEOC v. PBM Graphics, Inc., No. 1:11-cv-805 (M.D.N.C. June 28, 2012).