Supreme Court Permits Employers to seek Review of EEOC's Conciliation Efforts

On April 29, in a relatively employer-friendly decision, the U.S. Supreme Court determined that the EEOC's conciliation efforts are subject to judicial review.

As most employers are aware, once the EEOC takes charge of an employee's claim, if the matter is not promptly resolved, the employer will be invited to engage in conciliation efforts. (This is required by 42 U.S.C. section 2000e-5(b).) Conciliation can take a number of different forms, from active discussions and negotiations to— as in this case — something much less.

In this particular situation, the EEOC was in the process of investigating a sex discrimination charge, and believed that the employer engaged in unlawful hiring practices. The EEOC sent a letter to both the employer and the employee, inviting them to participate in informal conciliation proceedings. The letter further advised that an EEOC representative would contact them to start the process. A year later, the EEOC advised the employer that conciliation efforts were unsuccessful, and it filed suit against the employer. The employer, however, challenged the EEOC's ability to prosecute the action because it did not believe that the EEOC's letters constituted a good faith conciliation effort as required by statute. The EEOC argued that by sending the letters, it fulfilled its statutory duty and that, regardless, its conciliation efforts were not subject to review. 

The district court disagreed and determined that the courts could review the conciliation efforts, but granted the EEOC leave to immediately file an appeal. The U.S. Court of Appeals for the Seventh Circuit reversed, finding that the EEOC's conciliation efforts were not reviewable. This Seventh Circuit's position was premised upon 42 U.S.C. section 2000e-5(b), which provides that "[n]othing said or done during" the conciliation process may be "used as evidence in a subsequent proceeding without written consent of the persons concerned." The EEOC, and indeed, many courts, have long taken the position that such efforts simply are not reviewable, leaving employers unable to challenge those efforts and forced to proceed with defending litigation which might not have had to be filed in the first place. 

Today, however, in Mach Mining, LLC v. Equal Opportunity Commission, No.13-1019, the U.S. Supreme Court clarified the issue. The Court unanimously held that "courts have authority to review whether the EEOC has fulfilled its Title VII duty to attempt conciliation."  The Court reached this conclusion because there is a "strong presumption" that Congress intended to allow judicial review of administrative action, such as the actions of the EEOC. Though Congress afforded the EEOC the ability to decide which of the various methods it wishes to undertake in terms of effectuating resolution, it did not deprive the courts of the ability to review this process. 

While this is good news, especially for employers who have been sued after conciliation efforts have failed — as significant or minimal as those efforts may be — the Court was quick to note that this ruling does not mean that wholesale review of the EEOC's conciliation activities is permissible. To the contrary, the Court expressly advised that only a limited review is allowed whereby the courts can review whether the EEOC fulfilled its statutory obligation to give the employer notice and an opportunity to resolve the dispute.  In this particular case, the Court noted, to follow the EEOC's proposed interpretation of the statute would result in courts simply accepting the EEOC's word that it followed the law.  This expanded — yet still narrow — review will allow the courts to take their inquiry a step further and "verify that the EEOC actually tried to conciliate a discrimination charge." 

In the end, with respect to the EEOC's obligation to invite informal conciliation, the Court concluded:

In order to comply with [the statute], the EEOC must inform the employer about the specific discrimination 
allegation.  Such notice must describe what the employer has done and which employees (or class of
employees) have suffered.  And the EEOC must try to engage the employer in a discussion in order to give
the employer a chance to remedy the alleged discriminatory practice.  A sworn affidavit from the EEOC stating
that it has performed these obligations should suffice to show that it has met the conciliation requirement. 
Should the employer present concrete evidence that the EEOC did not provide the requisite information about
the charge or attempt to engage in a discussion about conciliating the claim, a court must conduct the fact
finding necessary to resolve that limited dispute.

This is a good decision for employers. It will hopefully prevent the EEOC from prematurely filing suit before truly engaging in appropriate conciliation efforts. In the event that the EEOC jumps the gun and files anyway, the employer is no longer without recourse. The employer can now ask for judicial review of the conciliation process and present evidence to demonstrate that the EEOC's efforts did not comply with the law. Furthermore, if a court determines that the EEOC did not comply with the law, it is authorized to order the EEOC to undertake the required conciliation efforts. 

Employers who have been invited to participate in the conciliation process should not ignore those requests and should immediately consult with counsel to determine the appropriate manner of responding, as it can ultimately affect the course of proceedings going forward. With questions, contact Hinshaw's San Francisco office.