Category Archives: Investigations

It ain’t Over ’til it’s Over (and Even Then, it Might not Be Over): How long can the EEOC Continue Investigating – after Issuing a Right-to-Sue Letter?

EEOC charges are a fact of life for employers.  Even with comprehensive equal employment policies, top-notch human resources personnel, and a great workplace culture, many employers will at some point encounter a charge of discrimination or retaliation.  While any charge is an unwelcome event, the stakes increase even further if the EEOC decides to take the employer to court.  The prospect of litigating against the EEOC can be daunting.  So employers tend to breathe a sigh of relief when they learn that the EEOC has issued a right-to-sue letter in response to a pending charge, because this typically signals the end of the EEOC’s investigation (and involvement in the matter).  Although the charging party may still sue, after the EEOC issues a right-to-sue letter, is it safe for employers to assume the EEOC is safely in the rear view mirror?

On August 15, 2017, the United States Court of Appeals for the Seventh Circuit decided EEOC v. Union Pacific Railroad Company, adding to current uncertainty about when the EEOC’s authority to act comes to an end.  Prior court of appeals decisions had split over the question of whether the EEOC can continue investigating after issuing a right-to-sue letter.  The Seventh Circuit sided with the Ninth Circuit in holding that the EEOC can continue to investigate, and go on to file its own enforcement action, even after issuing a right-to-sue letter.  This conflicts with an older decision from the Fifth Circuit—which held that such action exceeded the agency’s authority.  As with any circuit split, there is a chance the Supreme Court might weigh in.

The underlying facts are straightforward, but the procedural history is not.  In 2011, two African-American men began entry-level jobs with Union Pacific.  They unsuccessfully applied for promotions and were eventually terminated in October 2011, when their positions were eliminated.  Both men filed EEOC charges alleging discrimination and retaliation (they had filed earlier charges after being denied the promotions).  Union Pacific grudgingly responded to the charges and to the EEOC’s first request for information, requiring an EEOC subpoena and enforcement action.  The EEOC eventually issued a right-to-sue letter pursuant to 42 U.S.C. § 2000e-(5)(f)(1), which requires the agency to issue notice of a charging party’s right to sue within 180 days after receiving a charge.  The charging parties sued in federal court.  But they ultimately lost on summary judgment, and the Seventh Circuit affirmed.  Case closed, right?

Not so fast.  While the lawsuit was pending in the district court, the EEOC issued a second request for information.  When Union Pacific refused to respond, the EEOC filed suit to enforce its subpoena.  Union Pacific moved to dismiss, arguing that the EEOC lacked authority to continue investigating given that it had already issued a right-to-sue letter.  The district court denied the motion, and Union Pacific appealed.

The Court of Appeals framed the legal question as “whether the EEOC is authorized by statute to continue investigating an employer by seeking enforcement of its subpoena after issuing a notice of right-to-sue to the charging individuals and the dismissal of the individuals’ subsequent civil lawsuit on the merits.”  The answer, at least in the Seventh Circuit, is “yes.”

The court noted that the EEOC’s governing statutes give it the authority to request information or records only in the context of investigating a charge.  In other words, the EEOC cannot simply call up employers and ask to sift through their personnel files.  Although the EEOC must issue a right-to-sue letter within 180 days of receiving a charge, the governing statutes are silent as to what effect such a letter has on the agency’s investigative powers.

With no clear-cut statutory answer, the Seventh Circuit looked to analogous cases, including the Supreme Court’s decision in EEOC v. Waffle House, Inc., 534 U.S. 279 (2002).  In Waffle House, the Supreme Court held that a charging party’s agreement to arbitrate the claims giving rise to a charge did not prevent the EEOC from pursuing victim-specific judicial relief on behalf of the charging party.  In other words, the EEOC could go to court even though the employee could only go to arbitration.  Following Waffle House, the Seventh Circuit itself addressed a similar issue, holding that even when a charging party withdraws a charge, the EEOC can continue its investigation.  See Watkins Motor Lines, Inc. 553 F.3d 593 (7th Cir. 2009).  These decisions, buttressed by the EEOC’s own regulations, see 29 C.F.R. § 1601.28(a)(3), led the Seventh Circuit to conclude that the agency can continue investigating employers and subpoenaing their records even after issuing a right-to-sue letter.

But what about the fact that the charging parties’ underlying case had been decided on the merits?  Union Pacific argued that this resolution terminated the EEOC’s authority to investigate.  Once again, the Seventh Circuit disagreed.  According to the court, the EEOC’s authority does not derive from a charging party’s claims; a valid charge irrevocably triggers the agency’s investigative and enforcement powers.  Tethering the EEOC to the private interests of the parties would undermine the agency’s mission to serve the public interest.  In short, the court held that the EEOC gets to decide when it is done investigating, not the parties.

This decision has at least two important implications for employers.  First, EEOC charges are serious matters with potentially significant consequences.  Whether employers respond to charges themselves or engage outside counsel, they should ensure that their submissions to the agency are comprehensive and persuasive.  The same goes for responses to requests for information.  In 2016, the EEOC issued its first-ever nationwide procedures on how to effectively respond to charges, outlining the elements that the agency considers most important.  See U. S.  Equal Empt. Opportunity Comm’n, Effective Position Statements.  Employers are well advised to familiarize themselves with these expectations to achieve the best possible result at the agency level.

Second, employers should consider pursuing a “no probable cause” finding, even after the EEOC issues a right-to-sue letter.  The agency rarely pursues an investigation after issuing a right-to-sue letter, but Union Pacific proves that—at least for now—it can still happen.  Employers and their outside counsel may want to request findings of no probable cause as a matter of course for every EEOC charge, even after the agency issues a notice of right-to-sue.

Given the disparate views among the circuit courts regarding the scope of the EEOC’s authority, employers should stay tuned for future developments in this key area.  Employers should also be aware of how courts view this issue in their jurisdictions to ensure they understand the potential consequences after a right-to-sue notice issues.  Finally, employers should consider seeking legal guidance when responding to any agency charge—given the high stakes involved.

Quirky Question #285: Potholes on the Ethical “High Road”

Question:  We learned that some of our employees may have been engaging in unethical, and perhaps even illegal, behavior.  We don’t tolerate this, so we hired a law firm to conduct an investigation, and based on the results of that investigation, we terminated the employees.  The terminated employees were high-profile employees, and we told some people why they were fired.  Also, when we fired the employees, we briefly referenced the investigation, but didn’t provide them with any substantive information about it.  Do you see any problems with that?

Answer→

“Cat’s Paw Theory Endorsed by U.S. Supreme Court” — Staub v. Proctor Hospital

On March 1, 2011, the Supreme Court decided the case of Staub v. Proctor Hospital, No. 09-400.  The decision was unanimous (8-0), with Justice Scalia writing the Court’s opinion, Justice Alito writing a concurrence in which Justice Thomas joined, and Justice Kagan taking no part in the case.  The Court overturned the Seventh Circuit, holding that a reasonable jury could have determined that Proctor Hospital violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), on a “cat’s paw” theory, when Proctor’s human resources director terminated Vincent Staub based in part on recommendations of Staub’s supervisors who allegedly were motivated by hostility towards Staub’s responsibilities as a member of the Army Reserves.

(For those unfamiliar with the “cat’s paw” concept, Justice Scalia explained: “The term “cat’s paw” derives from a fable conceived by Aesop, put into verse by La Fontaine in 1679, and injected into United States employment discrimination law by Posner in 1990. See Shager v. Upjohn Co., 913 F. 2d 398, 405 (CA7).  In the fable, a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes off with the chestnuts and leaves the cat with nothing.  A coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform services on the king’s behalf and receive no reward.”)

Background Facts

Staub, a member of the United States Army Reserve, worked at Proctor Hospital as an angiography technician.  Staub’s immediate supervisor, Janice Mulalley, and her supervisor, Michael Korenchuk, disliked Staub’s Reserve obligations, which included training one weekend per month plus two to three weeks each year, because the obligations made scheduling difficult.  Both Mulally and Korenchuk made disparaging remarks regarding Staub’s Reserve service, and Mulally indicated to a co-worker that she wanted to “get rid of” Staub. Korenchuk was aware that Mulally was “out to get” Staub. Answer→

Witnesses at Investigative Interviews, Quirky Question # 84

Quirky Question # 84:

We periodically have to investigate alleged wrongful conduct by our employees.  Some of these employees want to bring another person with them to the investigative interview.  Over the years, I’ve received conflicting reports about whether we have to allow this practice, or not.  One employee who was insisting on having someone with her during the investigation told me that even though she is not a union employee, she has “Weingarten” rights.  What’s that?  Do I have to allow her to bring someone with her to the interview? Answer→

Quirky Question # 42, Investigation Inquiries

Quirky Question # 42:

This week I’ve decided to take a slightly different approach to my Quirky Question Blog.  I recently presented a Continuing Legal Education seminar on Workplace Investigations, at the end of which I received a number of thoughtful questions from the audience.  Although these questions are not particularly quirky, I thought they were worth addressing.  The following questions will be addressed next Monday.

1)         Is there a time frame you recommend for employers to commence an investigation into workplace misconduct?  Is there a time period by which the investigation should be completed?

2)         If a lawsuit is filed on the morning the investigation is commenced, must that fact be disclosed to the interviewees?  Would this assessment change if the interviewee is named as a defendant?

3)         How do you prevent an interviewee from sharing with other employees the discussion that takes place in an investigative interview?  Would you recommend disciplining a witness who does not maintain the confidentiality of the interview discussion?  Should that person be terminated?

4)         What if an employee surreptitiously records an interview session?  What can be done to retrieve the tape recording?  What consequences can be imposed for this conduct?  If the tape is recovered, can it be destroyed?

5)         How can you evaluate witness credibility if the interviews are being conducted telephonically?

6)         What right does the employee accused of wrongful conduct have to obtain the investigative report?  How about the witnesses who are interviewed?  How about the person making the accusations?

Tune in next week for a discussion of these inquiries. Answer→

Unethical Conduct By Employee, Quirky Question # 41

Quirky Question # 41:

I am the Director of Human Resources for a manufacturing firm.  I was recently contacted by the manager of a motel located near our office.  The manager informed me that one of our employees (an outside salesperson) has been stopping at the motel in the morning, picking up one of the “free” newspapers, eating the “free” breakfast, and then leaving.  The second time this happened, the manager confronted him, told him that this was stealing, and asked how he would feel if she showed up at his place of business and started taking things.  According to the motel manager, our salesperson reportedly responded by saying that if she wanted to do that, “they could talk.”  The motel manager eventually followed our employee to our office and alerted us to the situation.  What should we do? Answer→