A federal appeals court in Chicago has departed from several other federal circuits by ruling that judicial review is not appropriate over efforts by the U.S. Equal Employment Opportunity Commission to settle employment discrimination complaints.
Title VII of the Civil Rights Act directs the EEOC to try to negotiate an end to an employer’s unlawful employment practices before it seeks a judicial remedy but it does not require the EEOC to actually reach a settlement.
Nevertheless, several federal appeals courts have allowed employers to raise an affirmative defense in employment discrimination cases that the EEOC failed to engage in good faith settlement negotiations prior to filing a lawsuit. This is referred to as a “failure-to-conciliate” defense.
A three-judge panel of the U.S. Court of Appeals for the Seventh Circuit in Chicago ruled last week that an implied failure-to-conciliate defense would add an “unwarranted mechanism” in Title VII by which employers could avoid liability for unlawful discrimination. “They can do so through protracted and ultimately pointless litigation over whether the EEOC tried hard enough to settle,” said the panel.
In addition, the panel said, the implied failure-to-conciliate defense runs “flatly contrary to the broad statutory prohibition on using what was said and done during the conciliation process ‘as evidence in a subsequent proceeding.’”
Six other federal circuits – the Second, Fourth, Fifth, Sixth, Tenth and Eleventh Circuits – allow some form of judicial review over the sufficiency or good faith of the EEOC’s conciliation efforts.
The 7th Circuit ruling came in a 2008 sex discrimination case filed against Mach Mining, which allegedly refused to hire female applicants for coal mining jobs. After investigating, the EEOC found there was reasonable cause to believe Mach had discriminated against a class of female job applicants at its Johnston City site. The EEOC engaged in informal conciliation with Mach but in 2011 the EEOC concluded the parties could not agree and filed a lawsuit.
Mach argued the suit should be dismissed because the EEOC failed to conciliate in good faith. The EEOC did not contend that its efforts were either sincere or reasonable, only that they were not reviewable as a defense to unlawful discrimination.
The 7th Circuit panel said the U.S. Congress gave the EEOC broad discretion to negotiate as it sees fit, including the power to accept or reject any offer or proposed settlement for any reason. “Nor can Mach Mining explain just how many offers, counteroffers, conferences, or phone calls should be necessary to satisfy judicial review, despite repeated invitations to provide the court with a workable standard,” it added.
The U.S. Chamber of Commerce filed a brief in the case arguing that it was necessary to keep the EEOC on a tight leash to avoid “agency shenanigans” but the 7th Circuit panel noted the EEOC filed only 122 merit lawsuits in 2012. “That so few unsuccessful efforts at conciliation end up in court shows how constrained the agency is by practical limits of budget and personnel,” said the appeals court.
The panel remanded the case, EEOC v. Mach Mining, No. 13-2456, to the lower court for further proceedings.
In brutally harsh decision last fall in EEOC v. CRST Van Expedited, Inc., Chief Judge Linda R. Reade of the U.S. District Court of Iowa ruled that the EEOC must pay CRST, one of the nation’s leading transport companies, a judgment of $4,694,422.14 stemming from a lawsuit filed by the EEOC alleging sex discrimination. Judge Reade dismissed at least 67 class members from that case because the EEOC’s allegedly failed to conciliate with CRST with respect to each individual class member.
